Bowen v. United States Postal Service

459 U.S. 212, 103 S. Ct. 588, 74 L. Ed. 2d 402, 1983 U.S. LEXIS 123, 51 U.S.L.W. 4051, 112 L.R.R.M. (BNA) 2281

• Court: Supreme Court of the United States
• Decided: January 11, 1983
• Docket: 81-525
• Status: Published

Opinions

Justice Powell

delivered the opinion of the Court.

The issue is whether a union may be held primarily liable for that part of a wrongfully discharged employee’s damages caused by his union’s breach of its duty of fair representation.

I

On February 21, 1976, following an altercation with another employee, petitioner Charles V. Bowen was suspended without pay from his position with the United States Postal Service. Bowen was a member of the American Postal Workers Union, AFL-CIO, the recognized collective-bargaining agent for Service employees. After Bowen was formally terminated on March 30, 1976, he filed a grievance with the Union as provided by the collective-bargaining agreement. When the Union declined to take his grievance to arbitration, he sued the Service and the Union in the United States District Court for the Western District of Virginia, seeking damages and injunctive relief.

Bowen’s complaint charged that the Service had violated the collective-bargaining agreement by dismissing him without “just cause” and that the Union had breached its duty of fair representation. His evidence at trial indicated that the responsible Union officer, at each step of the grievance process, had recommended pursuing the grievance but that the national office, for no apparent reason, had refused to take the matter to arbitration.

Following the parties’ presentation of evidence, the court gave the jury a series of questions to be answered as a special verdict.¹ If the jury found that the Service had discharged Bowen wrongfully and that the Union had breached its duty of fair representation, it was instructed to determine the amount of compensatory damages to be awarded and to apportion the liability for the damages between the Service and the Union.² In explaining how liability might be apportioned, the court instructed the jury that the issue was left primarily to its discretion. The court indicated, however, that the jury equitably could base apportionment on the date of a hypothetical arbitration decision — the date at which the Service would have reinstated Bowen if the Union had fulfilled its duty. The court suggested that the Service could be liable for damages before that date and the Union for damages thereafter. Although the Union objected to the instruction allowing the jury to find it liable for any compensatory damages, it did not object to the manner in which the court instructed the jury to apportion the damages in the event apportionment was proper.³

Upon return of a special verdict in favor of Bowen and against both defendants, the District Court entered judgment, holding that the Service had discharged Bowen without just cause and that the Union had handled his “apparently meritorious grievance ... in an arbitrary and perfunctory manner . . . .” 470 F. Supp. 1127, 1129 (1979). In so doing, both the Union and the Service acted “in reckless and callous disregard of [Bowen’s] rights.”⁴ Ibid. The court found that Bowen could not have proceeded independently of the Union⁵ and that if the Union had arbitrated Bowen’s grievance, he would have been reinstated. Ibid.

The court ordered that Bowen be reimbursed $52,954 for lost benefits and wages. Although noting that “there is authority suggesting that only the employer is liable for damages in the form of backpay,” it observed that “this is a case in which both defendants, by their illegal acts, are liable to plaintiff. . . . The problem in this case is not one of liability but rather one of apportionment. . . Id., at 1130-1131. The jury had found that the Union was responsible for $30,000 of Bowen’s damages. The court approved that apportionment, ordering the Service to pay the remaining $22,954.⁶

On appeal by the Service and the Union, the Court of Appeals for the Fourth Circuit overturned the damages award against the Union. 642 F. 2d 79 (1981). It accepted the District Court’s findings-of fact, but held as a matter of law that, “[a]s Bowen’s compensation was at all times payable only by the Service, reimbursement of his lost earnings continued to be the obligation of the Service exclusively. Hence, no portion of the deprivations . . . was chargeable to the Union. Cf. Vaca v. Sipes, 386 U. S. 171, 195 . . . (1967).” Id., at 82 (footnote omitted). The court did not alter the District Court’s judgment in any other respect, but “affirmed [it] throughout” except for the award of damages against the Union. Id., at 83.

Thus, the Court of Appeals affirmed the District Court’s apportionment of fault and its finding that both the Union and the Service had acted “in reckless and callous disregard of [Bowen’s] rights.”⁷ Indeed, the court accepted the District Court’s apportionment of fault so completely that it refused to increase the $22,964 award against the Service to cover the whole of Bowen’s injury. Bowen was left with only a $22,964 award, whereas the jury and the District Court had awarded him lost earnings and benefits of $52,954— the undisputed amount of his damages.

HH HH

In Vaca v. Sipes, 386 U. S. 171 (1967), the Court held that an employee such as Bowen, who proves that his employer violated the labor agreement and his union breached its duty of fair representation, may be entitled to recover damages from both the union and the employer. The Court explained that the award must be apportioned according to fault:

“The governing principle, then, is to apportion liability between the employer and the union according to the damage caused by the fault of each. Thus, damages attributable solely to the employer’s breach of contract should not be charged to the union, but increases if any in those damages caused by the union’s refusal to process the grievance should not be charged to the employer.” Id., at 197-198.

Although Vaca’s governing principle is well established, its application has caused some uncertainty.⁸ The Union argues that the Court of Appeals correctly determined that it cannot be charged with any damages resulting from a wrongful discharge. Vaca’s “governing principle,” according to the Union, requires that the employer be solely liable for such damages. The Union views itself as liable only for Bowen’s litigation expenses resulting from its breach of duty. It finds support for this view in Vaca’s recognition that a union’s breach of its duty of fair representation does not absolve an employer of all the consequences of a breach of the collective-bargaining contract. See id., at 196. The Union contends that its unrelated breach of the duty of fair representation does not make it liable for any part of the discharged employee’s damages; its default merely lifts the bar to the employee’s suit on the contract against his employer.

The difficulty with this argument is that it treats the relationship between the employer and employee, created by the collective-bargaining agreement, as if it were a simple contract of hire governed by traditional common-law principles. This reading of Vaca fails to recognize that a collective-bargaining agreement is much more than traditional common-law employment terminable at will. Rather, it is an agreement creating relationships and interests under the federal common law of labor policy.

A

In Vaca, as here, the employee contended that his employer had discharged him in violation of the collective-bargaining agreement and that the union had breached its duty of fair representation by refusing to take his claim to arbitration. He sued the union in a Missouri state court for breach of its duty. On finding that both the union and the employer were at fault, the jury decided — and the Missouri Supreme Court agreed — that the union was entirely liable for the employee’s lost backpay. See id., at 195.

On appeal, this Court was required to resolve a number of issues. One was whether an employee who had failed to exhaust the grievance procedure prescribed in the bargaining agreement could bring suit for a breach of that agreement.⁹ In Republic Steel Corp. v. Maddox, 379 U. S. 650 (1965), the Court had held that “federal labor policy requires that individual employees wishing to assert contract grievances must attempt use of the contract grievance procedure agreed upon by employer and union as the mode of redress.”¹⁰ Id., at 652 (emphasis in original; footnote omitted). Because the employee in Republic Steel had made no attempt to exhaust the grievance procedure, it was necessary for the Court to consider only the union’s interest in participating in the administration of the contract and the employer’s interest in limiting administrative remedies. The Court noted, however, that if “the union refuses to press or only perfunctorily presses the individual’s claim,” federal labor policy might require a different result. Ibid.

Vaca presented such a situation. The union, which had the “sole power under the contract to invoke the higher stages of the grievance procedure,” had chosen not to take the employee’s claim to arbitration. See 386 U. S., at 185. Thus the Court faced a strong countervailing interest: the employee’s right to vindicate his claim. Vaca resolved these conflicting interests by holding that an employee’s failure to exhaust the contractual grievance procedures would bar his suit except when he could show that the union’s breach of its duty of fair representation had prevented him from exhausting those remedies. See ibid. The Vaca Court then observed:

“It is true that the employer in such a situation may have done nothing to prevent exhaustion of the exclusive contractual remedies to which he agreed in the collective bargaining agreement. But the employer has committed a wrongful discharge in breach of that agreement, a breach which could be remedied through the grievance process to the employee-plaintiff’s benefit were it not for the union’s breach of its statutory duty of fair representation to the employee. To leave the employee remediless in such circumstances would, in our opinion, be a great injustice.” Id., at 185-186.

The interests thus identified in Vaca provide a measure of its principle for apportioning damages. Of paramount importance is the right of the employee, who has been injured by both the employer’s and the union’s breach, to be made whole. In determining the degree to which the employer or the union should bear the employee’s damages, the Court held that the employer should not be shielded from the “natural consequences” of its breach by wrongful union conduct. Id., at 186. The Court noted, however, that the employer may have done nothing to prevent exhaustion. Were it not for the union’s failure to represent the employee fairly, the employer’s breach “could [have been] remedied through the grievance process to the employee-plaintiff’s benefit.” The fault that justifies dropping the bar to the employee’s suit for damages also requires the union to bear some responsibility for increases in the employee’s damages resulting from its breach. To hold otherwise would make the employer alone liable for the consequences of the union’s breach of duty.

Hines v. Anchor Motor Freight, Inc., 424 U. S. 554 (1976), presented an issue analogous to that in Vaca: whether proof of a breach of the duty of fair representation would remove the bar of finality from an arbitral decision. We held that it would, in part because a contrary rule would prevent the employee from recovering

“even in circumstances where it is shown that a union has manufactured the evidence and knows from the start that it is false; or even if, unbeknownst to the employer, the union has corrupted the arbitrator to the detriment of disfavored union members.” 424 U. S., at 570.

It would indeed be unjust to prevent the employee from recovering in such a situation. It would be equally unjust to require the employer to bear the increase in the damages caused by the union’s wrongful conduct.¹¹ It is true that the employer discharged the employee wrongfully and remains liable for the employee’s backpay. See Vaca, 386 U. S., at 197. The union’s breach of its duty of fair representation, however, caused the grievance procedure to malfunction resulting in an increase in the employee’s damages. Even though both the employer and the union have caused the damage suffered by the employee, the union is responsible for the increase in damages and, as between the two wrongdoers, should bear its portion of the damages.¹²

Vaca’s governing principle reflects this allocation of responsibility. As the Court stated, “damages attributable solely to the employer’s breach of contract should not be charged to the union, but increases if any in those damages caused by the union’s refusal to process the grievance should not be charged to the employer.” Id., at 197-198 (emphasis added). The Union’s position here would require us to read out of the Vaca articulation of the relevant principle the words emphasized above.¹³ It would also ignore the interests of all the parties to the collective agreement — interests that Vaca recognized and Hines illustrates.

B

In approving apportionment of damages caused by the employer’s breach of the collective-bargaining agreement and the union’s breach of its duty of fair representation, Faca did not apply principles of ordinary contract law. For, as the Court has noted, a collective-bargaining agreement “is more than a contract; it is a generalized code to govern a myriad of cases which the draftsmen cannot wholly anticipate.” Steelworkers v. Warrior & Gulf Navigation Co., 363 U. S. 574, 578 (1960). In defining the relationships created by such an agreement, the Court has applied an evolving federal common law grounded in national labor policy. See Steelworkers v. American Manufacturing Co., 363 U. S. 564, 567 (1960); Textile Workers v. Lincoln Mills, 353 U. S. 448, 456-457 (1957).

Fundamental to federal labor policy is the grievance procedure. See John Wiley & Sons, Inc. v. Livingston, 376 U. S. 543, 549 (1964); Warrior & Gulf Navigation Co., supra, at 578. It promotes the goal of industrial peace by providing a means for labor and management to settle disputes through negotiation rather than industrial strife. See John Wiley & Sons, Inc., supra, at 549. Adoption of a grievance procedure provides the parties with a means of giving content to the collective-bargaining agreement and determining their rights and obligations under it. See Warrior & Gulf Navigation Co., supra, at 581.

Although each party participates in the grievance procedure, the union plays a pivotal role in the process since it assumes the responsibility of determining whether to press an employee’s claims.¹⁴ The employer, for its part, must rely on the union’s decision not to pursue an employee’s grievance. For the union acts as the employee’s exclusive representative in the grievance procedure, as it does in virtually all matters involving the terms and conditions of employment. Just as a nonorganized employer may accept an employee’s waiver of any challenge to his discharge as a final resolution of the matter, so should an organized employer be able to rely on a comparable waiver by the employee’s exclusive representative.

There is no unfairness to the union in this approach. By seeking and acquiring the exclusive right and power to speak for a group of employees, the union assumes a corresponding duty to discharge that responsibility faithfully — a duty which it owes to the employees whom it represents and on which the employer with whom it bargains may rely. When the union, as the exclusive agent of the employee, waives arbitration or fails to seek review of an adverse decision, the employer should be in substantially the same position as if the employee had had the right to act on his own behalf and had done so. Indeed, if the employer could not rely on the union’s decision, the grievance procedure would not provide the “uniform and exclusive method for [the] orderly settlement of employee grievances,” which the Court has recognized is essential to the national labor policy.¹⁵ See Clayton v. Automobile Workers, 451 U. S. 679, 686-687 (1981).

The principle announced in Vaca reflects this allocation of responsibilities in the grievance procedure — a procedure that contemplates that both employer and union will perform their respective obligations. In the absence of damages apportionment where the default of both parties contributes to the employee’s injury, incentives to comply with the grievance procedure will be diminished. Indeed, imposing total liability solely on the employer could well affect the willingness of employers to agree to arbitration clauses as they are customarily written.

Nor will requiring the union to pay damages impose a burden on the union inconsistent with national labor policy.¹⁶ It will provide an additional incentive for the union to process its members’ claims where warranted. See Vaca, 386 U. S., at 187. This is wholly consistent with a union’s interest. It is a duty owed to its members as well as consistent with the union’s commitment to the employer under the arbitration clause. See Republic Steel, 379 U. S., at 653.

► — I > — ( I — I

The Union contends that Czosek v. O’Mara, 397 U. S. 25 (1970), requires a different reading of Vaca and a different weighing of the interests our cases have developed. Czosek, however, is consistent with our holding today.¹⁷ In Czosek, employees of the Erie Lackawanna Railroad were placed on furlough and not recalled. They brought suit against the railroad for wrongful discharge and against their union for breaching its duty of fair representation. They alleged that the union had arbitrarily and capriciously refused to process their claims against the railroad. See 397 U. S., at 26. The District Court dismissed the claim against the railroad because the employees had not pursued the administrative remedies provided by the Railway Labor Act.¹⁸ It dismissed the claim against the union because the employees’ ability to pursue an administrative remedy on their own absolved the union of any duty. The Court of Appeals for the Second Circuit affirmed the dismissal of the claim against the railroad but found that the employees had stated a claim against the union. Even though the employees had a right to seek full redress from an administrative board, the union still had a duty to represent them fairly. See Conley v. Gibson, 355 U. S. 41 (1957).

This Court affirmed. In so doing, it addressed the union’s concern that if the railroad were not joined as a party, the union might be held responsible for damages for which the railroad was wholly or partly responsible. The Court stated:

“[Jjudgment against [the union] can in any event be had only for those damages that flowed from [its] own conduct. Assuming a wrongful discharge by the employer independent of any discriminatory conduct by the union and a subsequent discriminatory refusal by the union to process grievances based on the discharge, damages against the union for loss of employment are unrecoverable except to the extent that its refusal to handle the grievances added to the difficulty and expense of collecting from the employer.” 397 U. S., at 29 (footnote omitted).

Although the statement is broadly phrased, it should not be divorced from the context in which it arose. The Railway Labor Act provided the employees in Czosek with an alternative remedy, which they could have pursued when the union refused to process their grievances. Because the union’s actions did not deprive the employees of immediate access to a remedy, it did not increase the damages that the employer otherwise would have had to pay. The Court therefore stated that the only damages flowing from the union’s conduct were the added expenses the employees incurred. This is consistent with Vaca’s recognition that each party should bear the damages attributable to its fault.

> HH

In this case, the findings of the District Court, accepted by the Court of Appeals, establish that the damages sustained by petitioner were caused initially by the Service’s unlawful discharge and increased by the Union’s breach of its duty of fair representation. Accordingly, apportionment of the damages was required by Vaca.19 We reverse the judgment of the Court of Appeals and remand for entry of judgment allocating damages against both the Service and the Union consistent with this opinion.

It is so ordered.

1 The jury sat only as an advisory panel on Bowen’s claims against the Service. See 28 U. S. C. § 2402 (“Any action against the United States under section 1346 shall be tried by the court without a jury”).

2 Question 3 of the special verdict stated: “If [you find that the Union breached its duty of fair representation and/or the Service discharged Bowen without just cause], state from a preponderance of the evidence or with reasonable certainty the amount of compensatory damages to which [Bowen] is entitled.” App. to Pet. for Cert. A21-A22.

Question 8 stated: “If compensatory damages are awarded by your answer to Question 3, state the amount, if any, that should be attributable to the defendant Union and the amount, if any, that should be attributable to the defendant Postal Service.” Id., at A22.

3 Counsel for the Union stated: “Your Honor, in respect to this special verdict form, the [Union] would object to any verdict or any question here which would allow the jury to return a judgement against the [Union] for any form ... of wages. Traditionally, the Union does not pay wages. And these damages are wholly assessable to the [Service], if at all.” 3 Record 611-612.

In a motion for judgment notwithstanding the verdict, counsel for the Union reasserted that the “amount of back wages awarded [Bowen] by the jury against the [Union] is as a matter of law wholly assessable against the employer.” 1 Record, Item 37, ¶ 2.

4 The District Court had instructed the jury that both the Union and the Service could be liable for punitive damages if either had acted “maliciously or recklessly or in callous disregard of the rights of the Plaintiff [Bowen].” 3 Record 597. The jury found that the Service and the Union were liable for punitive damages of $30,000 and $10,000, respectively. App. to Pet. for Cert. A22. The District Court determined, however, that punitive damages could not be assessed against the Service because of sovereign immunity. 470 F. Supp., at 1131. Although the court found that the Union’s actions supported the jury’s award of punitive damages, it set the award aside. It concluded that it would be unfair to hold the Union liable when the Service was immune. Ibid. Bowen did not appeal the District Court’s decision on this point.

5 The grievance-arbitration clause contained in the contract between the Service and the Union provides for a four-step grievance procedure. The employee may initiate the grievance by discussing it with his supervisor. The Union has discretion to appeal on the employee’s behalf and can elect to pursue the grievance through the next three steps. If the grievance is not settled, the Union may refer the grievance to arbitration. See 1 Record, Item 25, Exhibit 1.

Although Bowen could have appealed his discharge to the Civil Service Commission, his right to do so expired 15 days after notice of the Service’s action. Moreover, by choosing to pursue his administrative remedies, Bowen would have “waive[d] access to any procedures under the National Agreement beyond Step 2B of the Grievance-Arbitration Procedures.” App. 90-91. By choosing the remedy provided by the grievance procedure, he was prevented from presenting his claim to the Civil Service Commission.

6 The District Court found as a fact that if Bowen’s grievance had been arbitrated he would have been reinstated by August 1977. Lost wages after that date were deemed the fault of the Union: “While the [Service] set this case in motion with its discharge, the [Union’s] acts, upon which [Bowen] reasonably relied, delayed the reinstatement of [Bowen] and it is a proper apportionment to assign fault to the [Union] for approximately two-thirds of the period [Bowen] was unemployed up to the time of trial.” 470 F. Supp., at 1131.

7 In a footnote added after the opinion was first filed, the court noted that it made “no revision in the judgment of $22,954.12 against the Postal Service. In this connection we note that no appeal was entered by [Bowen] from the judgment against the Service in the amount of $22,954.12.” 642 F. 2d, at 82, n. 6.

The court’s view that the judgment against the Service could not be increased because of Bowen’s failure to appeal is erroneous. Bowen won an unambiguous victory in the District Court. He established that he had been discharged by the employer without just cause and that the Union had breached its duty of fair representation. The amount of lost wages and benefits was not in dispute, and the jury and the District Court awarded him all of his damages, apportioning them between the Union and the Service. Bowen had no reason to be unhappy with the award and should not have been deprived of the full amount of his compensatory damages because of his failure to cross-appeal.

8 Justice White’s dissent asserts that the “rationale” of apportioning damages, applied by the Court today, “has been rejected by every Court of Appeals that has squarely considered it.” See post, at 231, and n. 1. Apart from the fact that we apply the rationale — the “governing principle” — articulated in Vaca, few Courts of Appeals have stated a rationale nor has there been the consistency in result perceived by the dissent. Only one case cited by the dissent has declined to apportion damages after considering the issue fully. See Seymour v. Olin Corp., 666 F. 2d 202 (CA5 1982). Others, such as the opinion below, have rejected apportionment after giving the issue only minimal consideration. See 642 F. 2d 79, 82 (CA4 1981) (simply citing Vaca, but not Vaca’s governing principle); Milstead v. International Brotherhood of Teamsters, Local Union 957, 649 F. 2d 395, 396 (CA61981) (finding that damages may not be apportioned on the basis of St. Clair v. Local 515, 422 F. 2d 128 (CA6 1969), which found that damages may be apportioned). Some courts have not apportioned damages, but have articulated apparently conflicting rationales. See Wyatt v. Interstate & Ocean Transport Co., 623 F. 2d 888, 892-893 (CA4 1980) (refusing to hold union liable for portion of damages caused by its breach but stating that damages can be apportioned when the union “exacerbate[s the employee’s] loss or diminution of wages, beyond that for which the employer could be charged”); De Arroyo v. Sindicato de Trabajadores Packinghouse, 425 F. 2d 281, 289-290 (CAI) (refusing to hold union liable for portion of damages caused by its default but stating that apportionment would be proper where there was evidence “that but for the Union’s conduct the plaintiffs would have been reinstated or reimbursed at an earlier date”), cert, denied, 400 U. S. 877 (1970). While it is true these cases reach the same result as the dissent, they do not represent an affirmation of its reasoning.

Other cases have recognized that damages should be apportioned between the union and the employer. See Smart v. Ellis Trucking Co., 580 F. 2d 215, 219, n. 6 (CA6 1978) (on remand, trial court to determine “the extent to which the employer’s liability for any backpay may be limited” because of its reliance on arbitration proceeding); Harrison v. Chrysler Corp., 558 F. 2d 1273, 1279 (CA7 1977) (“union which breaches its duty of fair representation may be sued by an employee for lost pay attributable to the breach”); Ruzicka v. General Motors Corp., 523 F. 2d 306, 312 (CA6 1975) (“Union . . . liable for that portion of Appellant’s injury representing ‘increases if any in those damages [chargeable to the employer] caused by the union’s refusal to process the grievance’ ”) (brackets in Court of Appeals opinion); St. Clair v. Local 515, supra, at 132 (holding union “liable for nothing more [than damages measured by backpay] and perhaps for less” because Vaca requires those damages to be apportioned between the employer and union according to each party’s fault). See also Feller, A General Theory of the Collective Bargaining Agreement, 61 Calif. L. Rev. 663, 817-824 (1973) (employer’s liability should not be increased by union’s default); Comment, Apportionment of Damages in DFR/Contract Suits: Who Pays for the Union’s Breach, 1981 Wis. L. Rev. 155 (same). In sum, a fair reading of these cases reveals that, contrary to the dissent’s assertion, the Courts of Appeals have been far from unanimous in either their results or their rationales.

9 The Court had previously held in Smith v. Evening News Assn., 371 U. S. 195 (1962), that an employee may sue his employer for a breach of the collective-bargaining agreement under § 301 of the Labor Management Relations Act. See 29 U. S. C. § 185. Because the contract in Smith did not contain a grievance-arbitration procedure that required exhaustion, Smith did not reach the issue presented in Vaca. See 371 U. S., at 196, n. 1.

10 The Court based its decision on Congress’ express approval of contract grievance procedures as a preferred method of settling disputes, the union’s interest in actively participating in the continuing administration of the contract, and the employer’s interest in limiting the choice of remedies available to aggrieved employees. See 379 U. S., at 653.

11 We note that this is not a situation in which either the union or the employer has participated in the other’s breach. See Vaca, 386 U. S., at 197, n. 18.

12 Although the union remains primarily responsible for the portion of the damages resulting from its default, Vaca made clear that the union’s breach does not absolve the employer of liability. Thus if the petitioner in this ease does not collect the damages apportioned against the Union, the Service remains secondarily liable for the full loss of backpay.

13 In Vaca, the jury had found the union responsible for the entire amount of damages suffered by the employee. The judgment upholding the verdict therefore was reversed. Justice White’s dissent reasons that because Vaca found that the employer is not absolved from liability by the union’s breach, the employer must be solely responsible. The first proposition, however, does not require the second. Thus, Vaca’s recognition that the employer “may not hide behind the union’s wrongful act” does not answer the question posed by this case, how damages should be apportioned as between the two wrongdoers, the union and the employer. On this point, the explicit language of Vaca’s governing principle makes clear that the union is responsible for increases in the employee's damages flowing from the wrongful discharge, a point which the dissent glosses over.

Although the Court in Vaca concluded that the union had not breached its duty, it observed that “[i]n this case, even if the Union had breached its duty, all or almost all of [the employee’s] damages would still be attributable to his allegedly wrongful discharge.” Id., at 198. Assuming that such a breach did occur, the facts are not sufficiently clear to determine when the breach would have occurred or the portion of damages attributable to each party’s fault. Thus this speculative observation is not inconsistent with the Court’s precisely worded statement of the governing principle.

14 The parties to the collective-bargaining agreement, of course, may choose not to include a grievance procedure supervised by the union or, if they do, may choose not to make the procedure exclusive. See Vaca, supra, at 184, n. 9; Republic Steel Corp. v. Maddox, 379 U. S. 650, 657-658 (1965); cf. 29 U. S. C. § 159(a) (employee may present grievances to his employer “without the intervention of the bargaining representative, as long as the adjustment is not inconsistent with the terms of a collective-bargaining contract or agreement then in effect. . .”). Most collective-bargaining agreements, however, contain exclusive grievance-arbitration procedures and give the union power to supervise the procedure. See Feller, supra n. 8, at 742, 752-753. When the collective-bargaining agreement provides the union with sole authority to press an employee’s grievance, the union acts as the employee’s exclusive representative in the grievance-arbitration procedure. See Vaca, supra, at 191-192.

15 Under the analysis of Justice White’s dissent, the employer may not rely on the union’s decision not to pursue a grievance. Rather it can prevent continued liability only by reinstating the discharged employee. See post, at 238-239. This leaves the employer with a dubious option: it must either reinstate the employee promptly or leave itself exposed to open-ended liability. If this were the rule, the very purpose of the grievance procedure would be defeated. It is precisely to provide the exclusive means of resolving this kind of dispute that the parties agree to such a procedure and national labor policy strongly encourages its use. See Republic Steel, supra, at 653.

When the union has breached its duty of fair representation, the dissent justifies its rule by arguing that “only the employer ha[s] the continuing ability to right the wrong... by reinstating” the employee, an ability that the union lacks. See post, at 239. But an employer has no way of knowing that a failure to carry a grievance to arbitration constitutes a breach of duty. Rather than rehiring, as the dissent suggests, the employer reasonably could assume that the union had concluded the discharge was justified. The union would have the option, if it realized it had committed an arguable breach of duty, to bring its default to the employer’s attention. Our holding today would not prevent a jury from taking such action into account. See n. 19, infra.

Moreover, the rule urged by the dissenting opinion would allow the union and the employee, once the case goes to trial, to agree to a settlement pursuant to which the union would acknowledge a breach of its duty of fair representation in exchange for the employee’s undertaking to look to his employer for his entire recovery. Although we may assume that this would not occur frequently, the incentive the dissent’s rule would provide to agree to such a settlement demonstrates its unsoundness.

16 Requiring the union to pay its share of the damages is consistent with the interests recognized in Electrical Workers v. Foust, 442 U. S. 42 (1979). In Foust, we found that a union was not liable for punitive damages. The interest in deterring future breaches by the union was outweighed by the debilitating impact that “unpredictable and potentially substantial” awards of punitive damages would have on the union treasury and the union’s exercise of discretion in deciding what claims to pursue. Id., at 50-52. An award of compensatory damages, however, normally will be limited and finite. Moreover, the union’s exercise of discretion is shielded by the standard necessary to prove a breach of the duty of fair representation. Thus, the threat that was present in Foust is absent here.

17 In cases following Vaca and Czosek, the Court has not had occasion to address the question presented here. In Hines v. Anchor Motor Freight, Inc., 424 U. S. 554 (1976), we held that proof of a breach of the duty of fair representation will remove the bar of finality from arbitral decisions. We did not consider the scope of the remedy available, but stated that if the employer had wrongfully discharged the employee and the union had breached its duty, the employee was “entitled to an appropriate remedy against the employer as well as the Union.” Id., at 572. In Foust, we reviewed the principles announced in Vaca as bearing on the question of whether a union can be held liable for punitive damages. Although Foust’s discussion of Vaca could be read as suggesting a contrary principle to that stated in Vaca, the holding in Foust — that a union may not be held liable for punitive damages — is consistent with our holding here. Finally, in Clayton v. Automobile Workers, 451 U. S. 679, 690, n. 15 (1981), the Court reiterated Vaca’s governing principle. Although the Court did not apply that principle, the context in which it was discussed bears on the question presented here. In considering whether the remedies available to the employee in an internal union procedure were equivalent to the remedies available to an employee in a § 301 suit, the Court found it significant that the union procedures allowed an employee to recover backpay against the union. This was a recognition of Vaca’s explicitly announced governing principle.

18 See 45 U. S. C. §§ 153 First (i), (j). These sections provide that an employee who is unsuccessful at the grievance level can seek relief on his own from the National Railroad Adjustment Board. The Board is authorized to provide remedies similar to those available in a court suit. See Republic Steel, 379 U. S., at 657, n. 14.

19 We need not decide whether the District Court’s instructions on apportionment of damages were proper. The Union objected to the instructions only on the ground that no back wages at all could be assessed against it. It did not object to the manner of apportionment if such damages were to be assessed. Nor is it necessary in this case to consider whether there were degrees of fault, as both the Service and the Union were found to have acted in “reckless and callous disregard of [Bowen’s] rights.”