National Treasury Employees Union and Joseph MacKin v. Jerome Kurtz, Commissioner

636 F.2d 411, 204 U.S. App. D.C. 139, 104 L.R.R.M. (BNA) 2533

• Court: Court of Appeals for the D.C. Circuit
• Decided: May 20, 1980
• Docket: 79-1086
• Status: Published

Opinions

Opinion for the court filed by District Judge JUNE L. GREEN.

Dissenting opinion filed by Senior Circuit Judge BAZELON.

JUNE L. GREEN, District Judge:

The issue in this ease is whether the District Court held correctly that appellants’ failure to exhaust their contractual remedies bars consideration of this suit. For the reasons stated below, we answer in the affirmative.

I.

Appellant Joseph Mackin, a Revenue Agent in the Internal Revenue Service (IRS) Philadelphia District Office, received a written reprimand for failing to report a bribery attempt. In response, Mr. Mackin and the appellant union, the National Treasury Employees Union (the Union) filed simultaneously a grievance and a lawsuit.

The grievance sought removal of the letter of reprimand from Mr. Mackin’s personnel file, because the IRS employee who originally interrogated him tape recorded their conversation without giving any Miranda -like warnings or assurances allegedly required by §§ 634.32(1) and 634.5(2) of the Internal Revenue Manual.¹ The grievance alleged, inter alia, violation of Article 33, § 1(e) of the Multi-District Agreement (Agreement) between the IRS and the Union, which states that “No bargaining unit employer (sic) will be the subject of a disciplinary action except for reasons which will promote the efficiency of the service.”

Mr. Mackin requested and the IRS agreed to waive Steps 1 and 2 of the grievance procedure. A Step 3 meeting was held between Mackin and his counsel, and the Chief of the Philadelphia District Collections Division. At this meeting, appellants argued that the IRS failed to follow its procedures and had used improper tactics by obtaining information from Mr. Mackin without issuing warnings or assurances. The IRS Chief denied the grievance, ruling that Mr. Mackin was properly given a written reprimand for failing to report an apparent bribe.

No appeal was filed, although a Step 4 hearing before the District Director was available within 10 days of an adverse Step 3 decision. If Step 4 were also adverse, Mr. Mackin could have requested arbitration.

The lawsuit alleged violation of the Internal Revenue sections cited above, sought destruction of the tape from the initial interrogation, prohibition of the use of the information gleaned from the investigation in any proceeding against Mr. Mackin, and a declaratory order that the IRS should obey the regulations at issue.

Upon cross-motions for summary judgment, the District Court declared that jurisdiction existed pursuant to 28 U.S.C. § 1331 for the alleged violation of the agency regulations at issue, but that it could not be invoked properly since Mr. Mackin had failed to pursue his grievance.

II.

The Agreement clearly could have provided Mr. Mackin with the relief he sought both in his grievance and lawsuit. Article 33 § 6.C states that the arbitrator’s authority and jurisdiction are “confined exclusively to the validity of the disciplinary action.” In our view, the word “validity” encompasses the procedural irregularity alleged here. Indeed, the appellant so argued in his grievance. Further, there is no practical difference between the relief sought in the grievance and lawsuit. While appellants sought destruction of the tape, such relief would be highly unlikely. Even in criminal cases, exclusion of tainted evidence, not destruction, is the rule. Fed.R.Crim.P. 41(f); 3 Wright and Miller, Federal Practice and Procedure § 673 (1978 Supp.).

Contractual remedies existed to afford appellant the relief he sought in court: Mr. Mackin’s record could have been cleared, and the IRS put on notice that such methods of investigation would not be tolerated.

The general rule requiring exhaustion of administrative remedies is applicable to labor-management disputes where the issue is subject to a contractual grievance and arbitration procedure. Republic Steel v. Maddox, 379 U.S. 650, 85 S.Ct. 614, 13 L.Ed.2d 580 (1965). This rule applies where, as here, the issue involves alleged violations of the employer’s regulations which are subject to the grievance procedure. Weitzel v. Portney, 548 F.2d 489 (4th Cir. 1977).²

Appellants’ argument that the violations of the Internal Revenue Manual alleged here create a separate and independent cause of action is foreclosed by the failure to attempt exhaustion of the contractual remedies. Weitzel v. Portney, supra, at 493.

The decision of the District Court is

Affirmed.

1 . The Internal Revenue Manual is the instructional handbook for inspectors of the Internal Security Division of the IRS. Section 634.32(1) requires Miranda -like warnings to be given to a subject or suspect (employee or non-employee) of a criminal investigation where prosecution is anticipated. Section 635.5(2) requires assurances of right to silence and non-prosecution where it has been ascertained that the employee will not be prosecuted.

2 . Appellants’ argument that the definition of “grievance” in Article 35 § 2 of the Agreement excludes remedying violations of the Internal Revenue Manual is undermined by their conduct in contesting the reprimand on these very grounds at the grievance hearing.