Commissioner of Labor v. Talbert Manufacturing Co. , 593 N.E.2d 1229 ( 1992 )

STATON, Judge.

Talbert Manufacturing Co. discharged Randle Bougher, an employee and a member of the United Steelworkers of America Local 6928, for allegedly violating several work rules. Before the discharge, Bough-er had been suspended for five days. Later, Bougher filed a grievance contesting his suspension under the procedures set forth in the contract between Talbert and the Union. Under the terms of the contract, Talbert had the right to convert the suspension to a discharge. It did and Bougher was discharged.

On June 29, 1990, the Commissioner of Labor for the State of Indiana (Commissioner) filed a complaint on Bougher’s behalf, alleging that Talbert discharged Bougher for filing a complaint under the Indiana Occupational Safety and Health Act (IOSHA), in violation of IND.CODE 22-8-1.1-38.1 (1988). While this lawsuit was pending, the parties submitted the grievance to arbitration, in accordance with the terms of the contract. In a decision issued March 5, 1991, the arbitrator denied Bougher’s grievance claim. Thereafter, the trial court granted Talbert’s motion for summary judgment, ruling that the doctrines of res judicata and collateral estop-pel barred the Commissioner’s claim by virtue of the binding decision entered against Bougher in arbitration. The Commissioner now appeals, contending that the entry of summary judgment in this case was improper.

We reverse.

On an appeal from a summary judgment, we must determine whether the record reveals a genuine issue of material fact and whether the trial court correctly applied the law. Shuamber v. Henderson (1991), Ind., 579 N.E.2d 452, 454. Summary judgment will be affirmed if it is sustainable upon any theory supported by the record. Kolczynski v. Maxton Motors, Inc. (1989), Ind.App., 538 N.E.2d 275, 276, trans. denied.

The Commissioner first argues that summary judgment was inappropriate in this case because his complaint is subject to a well-recognized exception to the doctrines of collateral estoppel and res judicata. In support of this position, the Commissioner cites to a trilogy of U.S. Supreme Court cases dealing with this issue: Alexander v. Gardner-Denver Co. (1974), 415 U.S. 36, 94 S.Ct. 1011, 39 L.Ed.2d 147; Barrentine v. Arkansas-Best Freight System, Inc. (1981), 450 U.S. 728, 101 S.Ct. 1437, 67 L.Ed.2d 641; and McDonald v. City of West Branch, Mich. (1984), 466 U.S. 284, 104 S.Ct. 1799, 80 L.Ed.2d 302. Talbert contends that these cases are irrelevant because the Commissioner, by failing to challenge the factual findings of the arbitrator in the grievance proceeding, did not come forth with specific facts to establish a genuine dispute of material fact under Ind.Trial Rule 56(C).

In Gardner-Denver, the petitioner filed a racial discrimination complaint with the Equal Employment Opportunity Commission (EEOC) under Title VII of the 1964 Civil Rights Act following his discharge by the respondent, his employer. Prior to filing this complaint, however, the petitioner filed a grievance under the collective-bargaining agreement between his union and the employer. The arbitrator found against the petitioner, ruling that the discharge was “for cause.” Later, after the EEOC determination that there was no reasonable ground to believe that a violation had occurred, the petitioner sued the employer in federal district court, alleging that his discharge resulted from a racially discriminatory employment practice. The district court granted the employer’s motion for summary judgment, concluding that the petitioner had no right to sue because he was bound by the prior arbitral decision, and the court of appeals affirmed.

A unanimous United States Supreme Court reversed, concluding that the anti-discrimination provisions of Title YII were designed to supplement, rather than supplant, existing laws relating to employment discrimination. The Court noted that Title VII vests federal courts with plenary powers to enforce statutory requirements, and that enactments in this area evinced a general intent to provide parallel or overlapping remedies against discrimination. Id. at 47-48, 94 S.Ct. at 1019. As the Court held, “Title VIPs purpose and procedures strongly suggest that an individual does not forfeit his private cause of action if he first pursues his grievance to final arbitration under the nondiscrimination clause of a collective-bargaining agreement.” Id. at 48-49, 94 S.Ct. at 1020. The Court further noted:

In submitting his grievance to arbitration, an employee seeks to vindicate his contractual right under a collective-bargaining agreement. By contrast, in filing a lawsuit under [the statute], an employee asserts independent statutory rights accorded by Congress. The distinctly separate nature of these contractual and statutory rights is not vitiated merely because both were violated as a result of the same factual occurrence, And certainly no inconsistency results from permitting both rights to be enforced in their respectively appropriate forums.

Id. at 49-50, 94 S.Ct. at 1020. In addition, the Court in Gardner-Denver observed that an arbitrator is generally without authority or the expertise to invoke or interpret statutes, but merely interprets the contract between the parties. This authority to resolve only questions of contractual rights remains regardless of whether these rights are similar to, or duplicative of, the rights accorded by statute. Id. at 53-54, 94 S.Ct. at 1022.

Similarly, in Barrentine, the Supreme Court rejected the argument that an arbi-tral decision precluded a subsequent suit based on the same underlying facts alleging a violation of the minimum wage provisions of the Fair Labor Standards Act (FLSA). The Court reasoned that, while the Labor Management Relations Act encourages employees to promote their interests collectively (e.g., by entering into a collective-bargaining agreement), “the FLSA was designed to give specific minimum protections to individual workers[.]” 450 U.S. at 739, 101 S.Ct. at 1444 (emphasis in original). Thus, reasoned the court, the judiciary should defer to arbitration where the employee’s claim is based on rights arising out of the collective-bargaining agreement, but different considerations apply where the claim is based on rights arising from a statute designed to provide minimum substantive guarantees to individual workers. Id. at 737, 101 S.Ct. at 1443. The Court also noted that the FLSA erects no procedural barriers nor creates an alternative forum for enforcement of such statutory rights, evincing an intent to grant individual employees broad access to the courts. Id. at 740, 101 S.Ct. at 1444.

Finally, in McDonald, the Supreme Court held that an unappealed arbitration determination, filed in accordance with the terms of a collective-bargaining agreement, had no preclusive effect in a civil rights suit filed under 42 U.S.C. § 1983. Relying extensively on Gardner-Denver and Bar-rentine, the Court concluded that “according preclusive effect to arbitration awards in § 1983 actions would severely undermine the protection of federal rights that the statute is designed to provide.” 466 U.S. at 292, 104 S.Ct. at 1804.

Upon facts similar to those in the case before us, the Seventh Circuit Court of Appeals held that a final arbitral decision is no bar to a subsequent lawsuit invoking the antidiscrimination provisions of the Federal Occupational Safety and Health Act (OSHA). Marshall v. N.L. Industries, Inc. (7th Cir.1980), 618 F.2d 1220. In Marshall, an employee filed a complaint with OSHA after being discharged for refusing to work in conditions he believed were unsafe. He also filed a grievance under the collective-bargaining agreement between his union and the employer. After arbitration had concluded, the Secretary of Labor commenced a lawsuit seeking an injunction against further OSHA violations, posting of notices, and back pay and vacation pay for the employee. The district court, acknowledging the holding in Gardner-Denver, nonetheless dismissed the suit, ruling that the employee waived the right to statutory relief.

The court of appeals reversed, holding that the Gardner-Denver case controlled despite the employee’s partial waiver. The court further found that, like Title VII (at issue in Gardner-Denver), OSHA was enacted “to mobilize the resources of the federal government in an effort to eradicate a specific group of problems confronting workers nationwide.” 618 F.2d at 1222. The Marshall court observed that “OSHA legislation was intended to create a separate and general right of broad social importance existing beyond the parameters of an individual labor agreement and susceptible of full vindication only in a judicial forum.” Id.

Similar policy considerations are demonstrated in the provisions of IOSHA. For instance, IC 22-8-1.1-2 mandates that employers establish and maintain work conditions that are “reasonably safe and healthful for employees,” and free from recognized hazards that may cause death or serious physical harm to employees. This policy is similar to that of the FLSA, found compelling by the Court in Barrentine, which was enacted to protect all covered workers from “labor conditions [that are] detrimental to the maintenance of the minimum standard of living necessary for health, efficiency, and general well-being of workers.” 450 U.S. at 739, 101 S.Ct. at 1444 (quoting 29 U.S.C. § 202(a)). In fact, Indiana has adopted all federal OSHA standards, unless replaced by a state-promulgated standard that is at least as effective in providing a safe and healthful workplace. IC 22-8-1.1-13.1. Finally, the Commissioner is required to bring an action in the circuit courts of Indiana if, after an investigation, he determines that an employer has violated the anti-discrimination provision of IC 22-8-1.1-38.1. This statute reads in pertinent part:

(a) No person shall discharge or in any way discriminate against any employee because such employee has filed a complaint or instituted or caused to be instituted any proceeding under or related to this chapter or has testified or is about to testify in any such proceeding or because of the exercise by such employee on behalf of himself or others of any right afforded by this chapter.

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Upon receipt of such complaint, the commissioner shall cause such investigation to be made as he deems appropriate. If after such investigation, the commissioner determines that the provisions of this section have been violated, he, through the attorney-general, shall, within one hundred twenty (120) days after receipt of said complaint, bring an action in the circuit courts of Indiana. The circuit courts of Indiana shall have jurisdiction to restrain violations of this section and order all appropriate relief, including rehiring, or reinstatement of the employee to his former position with back pay, after taking into account any interim earnings of the employee.

IC 22-8-1.1-38.1 (emphasis added).

This provision is nearly identical to its federal counterpart, under which the Secretary of Labor filed suit in Marshall. See 29 U.S.C.A. § 660(c). We believe that the rationale employed by the federal judiciary is applicable to this case. Like Title VII, the FLSA, § 1983, and OSHA, Indiana’s OSHA provisions were enacted to marshal the resources of the government “in an effort to eradicate a specific group of problems confronting workers[.]” Marshall, supra, at 1222. A collective-bargaining agreement is entered to protect the labor force as a whole, while the statutes in question are designed to benefit individual workers, particularly those who have filed a complaint with IOSHA. The Commissioner, proceeding under IC 22-8-1.1-38.1, is invoking a statutory right, as opposed to the contractual rights binding parties to a collective-bargaining agreement. The plain language of IC 22-8-1.1-38.1 evinces an intent to grant individuals broad access to the courts of Indiana. Therefore, we must conclude, as did the U.S. Supreme Court in Gardner-Denver, Barrentine and McDonald, and the court in Marshall, that the rights afforded by the statute are designed to supplement, rather than supplant, existing laws and institutions relating to employment discrimination.

We are not persuaded by Talbert’s argument that summary judgment was appropriate because the Commissioner failed to raise an issue of material fact with respect to the arbitrator’s findings. Talbert has put the proverbial cart before the horse by claiming that Gardner-Denver and its progeny are irrelevant because there is no dispute of material fact; rather, the lack of a material fact in dispute is irrelevant because the cases originating with Gardner-Denver are applicable. Talbert was not entitled to judgment as a matter of law. T.R. 56(C).

Moreover, Talbert’s contention that the Commissioner was bound to defer to the arbitrator’s decision is meritless. The Courts in Gardner-Denver, Barrentine and McDonald recognized the federal policy favoring arbitration of labor disputes, yet held that this policy would not be subverted by affording the individual employee an additional judicial remedy. See, e.g., Gardner-Denver, supra, at 54-55, 94 S.Ct. at 1023.

In its order, the trial court relied upon the recent decision in Gilmer v. Interstate/Johnson Lane Corp. (1991), — U.S. -, 111 S.Ct. 1647, 114 L.Ed.2d 26, for the proposition that a party having made the bargain to arbitrate should be held to it unless Congress evinced an intention to preclude a waiver of judicial remedies for the statutory rights at issue. However, the Commissioner correctly observes that the Court in Gilmer made several important distinctions between the case before it and the Gardner-Denver line of cases.

First, those cases did not involve the issue of the enforceability of an agreement to arbitrate statutory claims. Rather, they involved the quite different issue whether arbitration of contract-based claims precluded subsequent judicial resolution of statutory claims. Since the employees there had not agreed to arbitrate their statutory claims, and the labor arbitrators were not authorized to resolve such claims, the arbitration in those cases understandably was held not to preclude subsequent statutory actions. Second, because the arbitration in those cases occurred in the context of a collective-bargaining agreement, the claimants there were represented by their unions in the arbitration proceedings. An important concern therefore was the tension between collective representation and individual statutory rights, a concern not applicable to the present case.

Gilmer, supra, at -, 111 S.Ct. at 1657 (citation omitted). Thus, the Gilmer case is inapplicable to the case at bar.¹

Accordingly, we hold that the completed arbitration proceeding does not bar a subsequent trial de novo under Indiana’s OSHA laws. Our resolution of this issue is dispositive of Talbert’s remaining arguments urging affirmance of the trial court.

Although we conclude that the trial court erred by giving preclusive effect to arbitration in this case, this does not necessarily render the transcript from the arbitration proceeding inadmissible at trial. As with other evidentiary materials, it should be left to the trial court’s discretion in admitting the arbitral decision and according it such weight as is appropriate. The weight given to such a decision must be determined on a case-by-case basis, mindful of the following considerations espoused by the Court in Gardner-Denver:

Relevant factors include the existence of provisions in the collective-bargaining agreement that conform substantially with [IOSHA], the degree of procedural fairness in the arbitral forum, adequacy of the record with respect to the issue of discrimination, and the special competence of particular arbitrators. Where an arbitral determination gives full consideration to an employee’s [IOSHA] rights, a court may properly accord it great weight. This is especially true where the issue is solely one of fact, specifically addressed by the parties and decided by the arbitrator on the basis of an adequate record.

415 U.S. at 60, 94 S.Ct. at 1025 n. 2. While it is true that the arbitral decision may ultimately sway the trier of fact, our legislature has indicated that the courts of Indiana have a duty to assure full availability of the judicial forum. See id.

Reversed.

HOFFMAN, J., concurs. SULLIVAN, J., dissents and files separate opinion.

1 . The dissent describes the Gilmer Court as deferring to the Gardner-Denver trilogy in the form of "tenuous” points of distinction. Infra, at 1235. Yet these same points of distinction led a unanimous Supreme Court to conclude that the binding arbitration procedures of a collective bargaining agreement under the Railway Labor Act did not preclude an employee’s individual action for statutory damages under the Federal Employers’ Liability Act. Atchison, Topeka & Santa Fe Ry. Co. v. Buell (1987), 480 U.S. 557, 107 S.Ct. 1410, 94 L.Ed.2d 563. In Buell, the court recognized that Gardner-Denver and its progeny allowed the assertion of statutory rights, "notwithstanding the strong policies encouraging arbitration!.]’’ Id. at 565, 107 S.Ct. at 1415. Inasmuch as the Court decided Buell two years after Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc. (1985), 473 U.S. 614, 105 S.Ct. 3346, 87 L.Ed.2d 444 (the case — along with its progeny — relied upon in the dissent), we agree with the U.S. Supreme Court in Buell and Gilmer that the distinctions are substantial enough to warrant a different outcome in cases arising out of collective bargaining agreements.