Hines v. Anchor Motor Freight, Inc.

Background

Former truck drivers were fired for alleged inflated motel reimbursement claims. The union initially defended them and took the dispute to a joint arbitration committee, which upheld the firings under a contract clause making arbitration final. Later the motel clerk admitted falsifying records. The drivers sued the employer and the union in 1969, alleging wrongful discharge and that the union failed to fairly represent them. The district court granted summary judgment for the employer; the court of appeals reversed as to the local union but affirmed the employer. The Supreme Court reviewed whether a union's bad-faith representation can remove the arbitration finality bar to a suit against the employer.

Reasoning

The Court asked whether a union's bad-faith or arbitrary conduct can strip away a contract's promise that arbitration decisions are final. The majority held that if an employee proves both that the employer breached the contract and that the union's breach of its duty of fair representation contributed to an erroneous arbitration result, the arbitration's finality does not bar a suit against the employer. The Court emphasized employees must meet a substantial proof burden and cannot relitigate for ordinary mistakes.

Real world impact

The ruling lets workers in unionized workplaces sue employers for contract breaches when they can show that union misconduct tainted arbitration, even if the contract declared arbitration final. Employers may face renewed litigation in such cases and unions may face liability for bad-faith representation. The decision keeps a high proof threshold and does not allow relitigation for routine arbitration errors.

Dissents or concurrances

Justice Stewart concurred, saying employers who in good faith rely on an arbitral decision should not owe back pay for the interim period—the union should bear that loss. Justice Rehnquist dissented, warning the ruling weakens arbitration finality and is unnecessary.