Armstrong v. Goldblatt Tool Co.

747 P.2d 119, 242 Kan. 164, 2 I.E.R. Cas. (BNA) 1490, 1987 Kan. LEXIS 467, 127 L.R.R.M. (BNA) 2198

• Court: Supreme Court of Kansas
• Decided: December 11, 1987
• Docket: 59,464
• Status: Published

Opinions

The opinion of the court was delivered by

PRAGER, C.J.:

This case is before the court following the granting of a petition for review from an unpublished decision of the Kansas Court of Appeals filed on March 5, 1987. The appeal is from a summary judgment entered by the district court in which the court held that the plaintiff, Georgia Armstrong, an employee covered by a collective bargaining agreement, could not maintain a tort action against the defendant employer, Goldblatt Tool Company, for an alleged retaliatory discharge because the plaintiff had filed a workers’ compensation claim.

Plaintiff, a member of the United Steelworkers of America, had been an employee of defendant Goldblatt Tool Company since 1967. The employment relationship was covered by a collective bargaining agreement between the union and the employer. The collective bargaining agreement provided, in substance, that an employee could be discharged only for just cause and further provided a grievance procedure to a discharged employee culminating in binding arbitration. The plaintiff never attempted to use the grievance procedure provided in the collective bargaining agreement.

Plaintiff was injured at work in June 1982 and filed a workers’ compensation claim which was settled in August 1983. She testified that the personnel director of the company told her that she could not return to her former position or any other position with the company unless she received a lower disability rating. Plaintiff did not apply for other jobs at Goldblatt through the bidding procedures available to her under the contract, nor did she file a grievance under the specified contract procedure. Goldblatt maintained that plaintiff had never actually been discharged from her position. Plaintiff filed suit against defendant in Wyandotte County district court alleging that the defendant’s refusal to allow her to return to her former job constituted a retaliatory discharge resulting from her filing the workers’ compensation claim. The case was removed to the United States District Court for the District of Kansas and later remanded back to the Wyandotte County district court. The defendant employer then filed a motion for summary judgment. The trial court sustained defendant’s motion for summary judgment, concluding that plaintiff s state tort action for retaliatory discharge was preempted by federal law and that plaintiff s claim should have been resolved through the grievance procedure contained in the collective bargaining agreement.

Plaintiff then appealed to the Court of Appeals. The Court of Appeals affirmed, concluding that the case was controlled by the recent decision of this court in Cox v. United Technologies, 240 Kan. 95, 727 P.2d 456 (1986), which held, in substance, that an action based on the tort of retaliatory discharge is not available to an employee whose employment relationship is governed by a collective bargaining agreement which prohibits discharge of an employee except for just cause and which provides a grievance procedure including binding arbitration. The Court of Appeals, in its opinion, noted that the facts in the instant case were not in dispute and that the only question before the court was whether the defendant was entitled to judgment as a matter of law.

In Cox, the plaintiff was discharged 13 days after he settled a workers’ compensation claim with his employer’s insurer, on the basis of his employer’s claim that he failed to report to work following the conclusion of his workers’ compensation claim. Cox’s employment was covered by a collective bargaining agreement, which, as in the present case, contained the provision that an employee would not be terminated except for proper cause and also provided grievance procedures, including binding arbitration, for the resolution of disputes. Cox filed a grievance based upon his termination. The arbitrator restored Cox to his former position but did not award him back pay. Thereafter, Cox filed an action for retaliatory discharge against his employer, alleging that he was not allowed to return to work because he had filed a workers’ compensation claim. On appeal, this court held that an employee, who is adequately protected contractually from discharge except for just cause by a collective bargaining agreement, does not have an independent action in tort for retaliatory discharge. The court, in Cox, refused to extend the right to bring an action in tort for retaliatory discharge, which was judicially recognized for employees at will in Murphy v. City of Topeka, 6 Kan. App. 2d 488, 630 P.2d 186 (1981), to include an employee adequately protected by a collective bargaining agreement.

In reliance upon our holding in Cox, the Court of Appeals in this case held that the presence of an adequate grievance procedure in a collective bargaining agreement precludes the employee from bringing a retaliatory discharge action, even though the employee failed to pursue his or her contractual remedies. The plaintiff, while conceding the applicability of Cox, contended that the recognition of the right of an at-will employee to bring an action for retaliatory discharge for filing a workers’ compensation claim, while denying the same right to bring such an action to an employee covered by a collective bargaining agreement, is unconstitutional as unjust discrimination against the rights of the employee covered by a collective bargaining agreement. The Court of Appeals summarily rejected this contention and held that the distinction made in Cox was constitutional. The Court of Appeals affirmed the granting of summary judgment to the defendant, holding that the sole remedy of plaintiff Armstrong was contained in the collective bargaining agreement and not in a common-law action for retaliatory discharge. The Supreme Court granted the plaintiff s petition for review.

There is no dispute between the parties in this case that our decision in Cox, if constitutional, denies to plaintiff Armstrong an independent cause of action in tort for retaliatory discharge where the collective bargaining agreement, as in this case, prohibits her discharge except for just cause and provides an appropriate grievance procedure. The plaintiff urges us to overrule our holding in Cox on the basis of public policy. We have considered the arguments of the plaintiff in this regard and have concluded on public policy considerations that our decision in Cox should stand. The majority of the court has determined that the legal principles and rationale set forth in Cox should be adhered to and should be applied in this case to bar plaintiff Armstrong from bringing a cause of action in tort for retaliatory discharge. In Cox, we noted that the Court of Appeals in Murphy v. City of Topeka, 6 Kan. App. 2d 488, recognized an action could be brought by an employee at will for retaliatory discharge for filing a workers’ compensation claim. We noted that there is a strong public policy underlying the Workers’ Compensation Act (K.S.A. 44-501 et seq.) which favors the worker’s right to avail himself, or herself, of the benefits arising therefrom. We stated that, because an employee at will may be discharged with or without cause and because an unscrupulous employer could subvert this public policy by placing the employee at will in the position of having to choose between filing a workers’ compensation claim or keeping his or her employment, an independent action for retaliatory discharge should be judicially created to provide a remedy for a class of employees having no contractual remedy.

In Cox, we stated without equivocation that a discharge predicated upon an employee having exercised his right to file a workers’ compensation claim would not constitute “proper cause.” We considered a number of cases from other jurisdictions, both pro and con on the issue, and concluded that an employee covered by a collective bargaining agreement permitting discharge only for just cause and providing an adequate grievance procedure is adequately protected from retaliatory discharge. We concluded that the public policy of Kansas does not require that the tort of retaliatory discharge for filing a workers’ compensation claim recognized for employees at will be extended to employees fully covered and protected by a collective bargaining agreement. Justice Harold S. Herd dissented.

In adopting the rule set forth in Cox, the court reasoned that it was obligated to take into consideration the strong public policy which takes into account the right of parties to enter into contracts and that, where a union and an employer in their agreement decide the remedies that should be available and decide that those remedies should be final and binding, the intent of the agreement should be enforced by the courts and the remedies therein available, if adequate, should be preclusive of any others. We adhere to our conclusion that collective bargaining agreements made pursuant to federal law should be enforced by the courts unless there is some important state public policy present to deny their enforcement.

In passing, we note that the rule adopted in Cox was reaffirmed in January of this year in Smith v. United Technologies, 240 Kan. 562, 731 P.2d 871 (1987), which holds that no tort action for retaliatory discharge for filing a workers’ compensation claim exists where the employee is adequately protected contractually from such discharge by a collective bargaining agreement.

We turn now to the constitutional issues raised by plaintiff. Plaintiff, in substance, argues that this court’s decision in Cox v. United Technologies is unconstitutional for three reasons:

(1) It denies unionized workers due process of law;

(2) it creates impermissible and irrational classifications of employees and employers; and

(3) it violates the First Amendment. Plaintiff argues, in substance, that the tort of retaliatory discharge was created by the Kansas Court of Appeals in Murphy v. City of Topeka, 6 Kan. App. 2d 488, and that this court in Cox limited the previous cause of action so as to deprive this plaintiff of due process of law. We believe this contention is without merit. The effect of Murphy was to establish a limited public policy exception to the generally accepted rule that an at-will employee may be terminated for any reason, good or bad, just or unjust. In Anco Constr. Co. v. Freeman, 236 Kan. 626, 693 P.2d 1183 (1985), it is stated in Syl. ¶ 4 as follows:

“The employment-at-will doctrine in Kansas stems from the judicial determination that, in the absence of a contract covering the duration of employment, the employment is terminable at the will of either party, and the employee has no cause of action by alleging he was discharged.”

The rule established in Murphy and subsequently followed in Kansas was a judicially created rule applicable only to at-will employees in order to protect the at-will employees from discharge in violation of some public policy of the state.

In Morriss v. Coleman Co., 241 Kan. 501, 738 P.2d 841 (1987), the opinion discusses in depth the termination-at-will doctrine as traditionally applied in Kansas and other jurisdictions. In Morriss, we noted that the termination-at-will or employment-at-will doctrine, although generally applied throughout the United States, has in recent years been criticized by legal scholars and the courts. The opinion discusses the various methods used by the courts to avoid the inherent injustice of the doctrine. One of the exceptions to the termination-at-will doctrine arose from the creation of an action in tort for retaliatory discharge based upon the theory that the dismissal of employees for reasons violative of a particular public policy should be actionable. Our decision in Morriss made it clear that the creation of a cause of action in favor of an at-will employee who is discharged for reasons violative of public policy was designed to avoid the injustice of the traditional rule. It was not designed to create a new cause of action for employees who are adequately protected from wrongful discharges by a collective bargaining agreement which prohibits discharge or termination of employment unless just cause is established.

Under the circumstances, we have no hesitancy in holding that the due process rights of plaintiff Armstrong in this case have not been violated. As an employee under the collective bargaining agreement, she cannot be discharged unless just cause is shown. Furthermore, a specific remedy is provided by a grievance procedure. The remedy by arbitration was surely adopted in the contract by the parties as an alternative method of resolving employment disputes in order to avoid the expense of litigation in the courts. We hold that the claim of denial of due process in this case is without merit.

The plaintiff next contends that our decision in Cox created impermissible and irrational classifications of employees and employers in violation of the equal protection clause of the United States Constitution. We do not agree. The rule established in Cox creates no unreasonable classification of employers or employees. The remedy of a cause of action for retaliatory discharge was created by the Kansas courts to benefit a limited group of employees at will who otherwise were completely without a remedy. In Cox, we simply refused to extend the remedy to employees covered by a collective bargaining agreement who did not require the remedy of an action for retaliatory discharge in order to protect their rights.

The United States Supreme Court has at least impliedly recognized that a state-created tort remedy may properly be made available to at-will employees which is unavailable to employees subject to a collective bargaining agreement. In Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 85 L. Ed. 2d 206, 105 S. Ct. 1904 (1985), the United States Supreme Court reversed the Supreme Court of Wisconsin which held that an employee subject to a collective bargaining agreement was entitled to pursue an action against his employer based on the tort of bad faith. The court stated:

“Since nearly any alleged willful breach of contract can be restated as a tort claim for breach of a good-faith obligation under a contract, the arbitrator’s role in every case could be bypassed easily if § 301 is not understood to pre-empt such claims. Claims involving vacation or overtime pay, work assignment, unfair discharge — in short, the whole range of disputes traditionally resolved through arbitration — could be brought in the first instance in state court by a complaint in tort rather than in contract. A rule that permitted an individual to sidestep available grievance procedures would cause arbitration to lose most of its effectiveness, [Citation omitted], as well as eviscerate a central tenet of federal labor-contract law under § 301 that it is the arbitrator, not the court, who has the responsibility to interpret the labor contract in the first instance.” (Emphasis supplied.) pp. 219-20.

See also the annotations in 72 A.L.R.2d 1439 and 32 A.L.R.4th 350, where many cases are cited holding that an action for wrongful discharge may not be maintained where the right of action is derived from a collective bargaining agreement unless the employee has first exhausted the grievance procedures established by such an agreement.

In Viestenz v. Fleming Companies, Inc., 681 F.2d 699 (10th Cir.), cert. den. 459 U.S. 972 (1982), a diversity action was brought was in the United States District Court for Kansas by a former employee against his employer, a Kansas corporation, alleging wrongful discharge from his job in Missouri for union activities. The court affirmed the lower court’s dismissal of the wrongful discharge claim, because it was barred by the employee’s failure to avail himself of the grievance procedure provided by the collective bargaining agreement between the employer and the employee’s union.

The plaintiff relies on Peabody Galion v. Dollar, 666 F.2d 1309 (10th Cir. 1981), which case is clearly distinguishable from the present case. The employee’s cause of action for retaliatory discharge in that case was created by an Oklahoma statute applicable to all Oklahoma employees, not just employees at will. The court specifically stated:

“We note also that the Oklahoma statute which is here considered is a law of general applicability and is not one whose object is to regulate relations between employees, their union, and their employer. It applies to all Oklahoma employees, not just union members or employers governed by collective bargaining agreements negotiated under federal law.” p. 1317.

The court emphasized that the employee’s right to bring an action for retaliatory discharge was based upon an Oklahoma statute which did not distinguish between employees. Thus, the decision in Peabody Galion v. Dollar is not applicable to the case now before us.

Simply stated, there is no legitimate basis for a claim of denial of equal protection in this case. The rule of Murphy and Cox permits the filing of an action in tort for wrongful discharge for filing a workers’ compensation claim only where the employee is an employee at will and terminable without just cause. Such an employee falls within an entirely different category than do employees who are fully protected from wrongful discharge by collective bargaining agreements. There is definitely a rational basis for distinguishing between such employees. The purpose of the public policy exception protecting at-will employees is to guarantee them protection from wrongful discharge, a protection which is not required where a collective bargaining agreement specifically provides such protection.

We also find no merit to the contention of the plaintiff that our ruling in Cox violates the First Amendment right of free association of organized workers because it penalizes workers who have joined unions by denying them state tort remedies available to at-will employees. This is essentially an equal protection argument which we have just discussed and rejected.

For the reasons set forth above, we hold that the decision of this court in Cox v. United Technologies, 240 Kan. 95, controls the determination of this appeal and bars plaintiff from bringing an action in tort for a retaliatory discharge, because a full and complete remedy is provided by the collective bargaining agreement.

The judgments of the district court and of the Court of Appeals are affirmed.