gavelA recent decision of the 10th Circuit Court of Appeals, Ortega v. New Mexico Legal Aid, Inc., et al. (No. 15-2098, 10th Cir. March 29, 2016) reiterates that if a collective bargaining agreement contains a grievance process, that process must be completed before an employee can assert a breach of contract claim against the employer. Mina Ortega was an attorney with New Mexico Legal Aid, Inc (“NMLA”).  She was a member of a labor association that had a collective bargaining agreement with NMLA. The collective bargaining agreement contained a multi-level grievance procedure that provided for the resolution of disputes over discipline matters, including discharge.

Ortega commenced the grievance process over her discharge but stopped short of completing the process and instead initiated a lawsuit in federal district court. She alleged, among other things, that her discharge was a violation of the collective bargaining agreement. NMLA moved to dismiss the lawsuit on the basis that Ortega was required to exhaust the grievance process before she could proceed with a lawsuit. The district court agreed with NMLA and Ortega appealed. The 10th Circuit upheld the decision of the district court. Citing several Supreme Court cases, the 10th Circuit held that in the absence of a clear understanding that a union or employer are free to avoid a grievance procedure in a collective bargaining agreement, that procedure must be exhausted before any suit can be brought. Further, any doubt as to the clear understanding of the parties must be resolved in favor of the grievance process. While the collective bargaining agreement at issue in Ortega provided that “

[n]othing contained herein shall limit or otherwise exclude any grievant from seeking redress from any government agency, regulatory body or court of law” the court held that such language did not evidence an express agreement that particular matters are not subject to the grievance process. The court apparently agreed with NMLA that such language was intended to preserve an employee’s rights to pursue claims not subject to the collective bargaining agreement such as a charge of discrimination filed with the Equal Employment Opportunity Commission (EEOC). In any event, the court determined that such language did not evince an unequivocal intent to remove discharge claims from the grievance process and any doubt regarding that intent must be resolved in favor of the process.

The Ortega decision demonstrates that the doctrine of exhaustion of administrative remedies applies to breach of collective bargaining claims.  Employees subject to collective bargaining agreements that contain grievance procedures must exhaust those procedures before they may proceed to court. Their failure to do so is likely fatal to any claims they may bring.

If you’d like to learn more about this decision, please contact me.

Michael Schreiner is a senior litigator at Caplan and Earnest LLC. He may be reached at 303-443-8010 or [email protected].