ROBERT D. BELL, Presiding Judge.
¶ 1 In this action for unjust termination from employment, Plaintiff/Appellant, Kevin Smith (Smith), appeals from the portion of the trial court's judgment entered upon a jury verdict overruling his motion for reinstatement to employment. Defendant/Appellee, the City of Oklahoma City (City), counter-appeals the trial court's order denying City's motion for judgment notwithstanding the verdict (JNOV). After considering the parties' briefs and arguments of counsel,
¶ 2 Smith worked for City in the Animal Welfare Division for approximately four and one-half years. City employed Smith as an animal control officer. Smith is a member of the American Federation of State, County and Municipal Employees Local 2406 (Union). The Union is the exclusive bargaining agent for City's employees covered by a Collective Bargaining Agreement (CBA). The CBA contains the following grievance process to resolve any controversy between City and Union's members concerning the interpretation, enforcement, or application of the CBA's provisions pertaining to employment terms and conditions:
¶ 3 Smith was accused of leaving a dog on a truck for nine days. Smith denied this accusation. A pre-termination hearing was held to assess whether Smith violated the Animal Welfare Division Policy. Smith was terminated for cause two days later. City alleged Smith's action showed a fundamental lack of judgment, was contrary to training, and constituted misfeasance. Smith requested the Union to file a grievance on his behalf. The grievance was timely filed and reviewed pursuant to Steps III and IV of the CBA. Smith's grievance was unsuccessful. Under the CBA, Union or City had the sole power to proceed to arbitration. Union did not submit the grievance to arbitration.
¶ 4 Smith thereafter initiated this wrongful termination lawsuit in district court. City moved for summary judgment in its favor alleging the trial court lacked subject matter jurisdiction to consider Smith's action because the CBA's grievance procedures were his sole avenue for redress. Since neither Smith nor Union timely submitted the grievance to arbitration, City alleged Smith forfeited any further appeal to an arbitrator or the court under the CBA. The trial court overruled City's motion and submitted the case to a jury.
¶ 5 The jury held Smith's termination was unjustified and awarded him damages for back pay in the amount of $7,200.00. Smith filed a motion to be reinstated to his employment pursuant to the CBA because the jury determined he was unjustly discharged. City filed a motion for JNOV asserting the judgment should be directed in favor of City because the district court lacked subject matter jurisdiction to determine whether Smith's employment termination was unjust or without cause. City alleged the district court lacked subject matter jurisdiction because this dispute was subject to the grievance procedures and arbitration mandate in the CBA. The trial court denied City's JNOV motion and Smith's motion for reinstatement. Smith appeals from the portion of the trial court's judgment denying his motion for reinstatement. City counter-appeals from the trial court's order denying its motion for JNOV.
¶ 6 City argues the trial court lacked subject matter jurisdiction to consider Smith's action for breach of the CBA because the CBA contained a mandatory arbitration clause, and since neither City nor Union pursued the final arbitration step, the dispute was deemed settled under the CBA and was not subject to judicial review. In overruling City's motion for JNOV, the trial court rejected City's challenge to its subject matter jurisdiction. The question as to whether a district court has subject matter jurisdiction presents a question of law. Tulsa Order of Police Lodge No. 93 ex rel. Tedrick v. City of Tulsa, 2001 OK CIV APP 153, ¶ 12, 39 P.3d 152, 155. We review issues of law de novo, and this Court has plenary, non-deferential authority to re-examine the trial court's legal rulings. Id.
¶ 7 As support for its argument, City cites City of Yukon v. International Ass'n. of Firefighters, Local 2055, 1990 OK 48, ¶ 8, 792 P.2d 1176, which reiterated that Oklahoma adopted the Steelworkers Trilogy
¶ 8 The Supreme Court affirmed, holding the union waived the employee's rights to proceed in district court by adopting the CBA and the grievance procedure in the CBA, including mandatory arbitration, was the plaintiff's exclusive remedy. Id. at ¶ 9, 618 P.2d at 928-29. Voss explained "[c]ourts generally favor arbitration statutes and collective bargaining agreements because they provide substantial justice by an immediate and speedy resolution with a minimum of court interference." Id. at ¶ 6, 618 P.2d at 928.
¶ 9 We find the instant case is distinguishable from Voss. Voss construed the Fire and Police Arbitration Act, 11 O.S. Supp.1978 § 51-101 et seq. This Act expressly requires arbitration of disputes in recognition of the public health, safety and welfare demands in prohibiting members of municipal fire and police departments from striking or engaging in work stoppage or slowdown. The instant case does not involve the interpretation or application of a CBA under the Fire and Police Arbitration Act. Furthermore, unlike Voss, the CBA in the instant case did
¶ 10 Section 8.4 of the instant CBA provides in part: "If the City Manager and the Union Grievance Committee have not settled the Grievance within that time, it may be submitted to arbitration for adjustment...." Unlike the word "shall," which normally signifies a directive or command, the word "may" has a well-established discretionary connotation. See White v. Heng Ly Lim, 2009 OK 79, 224 P.3d 679, 680 n. 2. Thus, although arbitration is the first choice for resolution, we view the act of requesting arbitration under Section 8.4 of the CBA as discretionary and not mandatory. Therefore, we cannot find that under this CBA, the Union waived Smith's right to proceed in district court.
¶ 11 Furthermore, the later case Shaffer v. Jeffery, 1996 OK 47, 915 P.2d 910, clarified agreements to arbitrate are enforceable, but do not deprive district courts of subject matter jurisdiction. Shaffer explained a right to arbitrate arises from a written contract and is treated as an affirmative defense and that right (to compel arbitration) may also be waived; thus, that right "does not fit within the category of a traditional challenge to a district court's subject matter jurisdiction." Id. at ¶ 7, 915 P.2d at 913.
Id. (Citations omitted.) See also City of Muskogee v. Martin, 1990 OK 70, ¶ 22, 796 P.2d 337, 344, which held the district court had subject matter jurisdiction to consider a petition for declaratory relief in a dispute under a collective bargaining agreement notwithstanding that the parties had contractually agreed to submit all contract disputes to arbitration.
¶ 12 We also reject City's contention that the Union's decision to forgo the final step in the grievance procedure settled Smith's grievance and extinguished Smith's remedies under the CBA. Generally, exhaustion of administrative remedies is a jurisdictional prerequisite to judicial review and is
¶ 13 We conclude the district court properly exercised subject matter jurisdiction. Accordingly, we hold the trial court did not err when it denied City's motion for JNOV.
¶ 14 On appeal, Smith contends the trial court erred when it refused to consider his claim for reinstatement. Smith points out Section 9.2 of the CBA provides: "In the event it should be decided under the grievance procedure that the employee was unjustly suspended or discharged, the Employer shall reinstate employee...." Because Smith prevailed on the merits of his claim at trial, he contends his wrongful termination claim was meritorious; thus, the trial court should have considered his claim for reinstatement.
¶ 15 City counters the trial court properly denied Smith's claim for reinstatement. City argues the proper remedy in this breach of employment contract case, not involving an issue of public policy, is monetary compensation and not reinstatement. As support, City cites Hall v. Farmers Ins. Exch., 1985 OK 40, 713 P.2d 1027. Hall held: "The general rule of damages for breach of employment contracts is that the aggrieved party is entitled to recover an amount which will compensate him for all the detriment proximately caused by such breach, or which will be likely to result therefrom." Id. at ¶ 21, 713 P.2d at 1031.
¶ 16 Alternatively, City argues the only way Smith could have been reinstated to employment was through arbitration, but the Union waived Smith's rights to this remedy when it voted against pursuing arbitration. City mentions that Smith may have an action against Union for breach of its fiduciary duty; nevertheless, Smith is bound by the actions of his exclusive bargaining representative.
¶ 17 Because Smith's claim is based upon breach of the CBA, we agree he is bound by terms of the CBA. Under the CBA, an employee who prevails under the grievance procedures may seek reinstatement as a remedy. Smith was the prevailing party in the district court case; however, he did not prevail under the CBA's contractual grievance procedures. We therefore hold Smith was not entitled to judicial review of his reinstatement claim because he failed to secure affirmative relief through the CBA's grievance procedures. We are cognizant Smith may well have been prevented from prevailing under the grievance procedures due to Union's failure to take his meritorious grievance to arbitration, but Smith's claim for loss of this contractual remedy lies against Union and not City. The trial court's judgment denying Smith's claim for reinstatement is affirmed.
¶ 18 AFFIRMED.
HETHERINGTON, J., concurs.
MITCHELL, J., dissents.
¶ 19 Because the district court lacked subject matter jurisdiction to hear Smith's claim for wrongful termination, I respectfully dissent. The central issue in this case is whether Section 8.3 of the Collective Bargaining Agreement (CBA) entered into between the
¶ 20 Section 8.3 provides:
The CBA then outlines the procedures to be followed should a grievance arise. The final step in the process is the optional submission of the grievance to arbitration. The majority focuses on the use of the term "may" rather than "shall" when stating that grievances "may be submitted to arbitration for adjustment," concluding that the result of this use of language is a finding that the entire grievance procedure was not intended by the parties to be the exclusive procedure available to employees. However, the use of the term "may" in Section 8.4 only establishes the discretion that exists on behalf of the Union, whom the employees, including Plaintiff, elected as their bargaining agent for purposes of entering into the CBA with Employer. The Union may determine which grievances are meritorious and should be submitted to arbitration. Section 8.3 makes clear that the grievance procedure is the only procedure intended to be used to settle disputes with Employer. Should the Union elect to submit a grievance to arbitration, it may do so pursuant to the terms of the CBA; however, it is not necessary that the CBA provide that all grievances shall be submitted to arbitration. If all grievances were required to go to arbitration it would render meaningless the several other previous steps in the grievance process.
¶ 21 In Voss v. City of Oklahoma City, 1980 OK 148, 618 P.2d 925, the Oklahoma Supreme Court interpreted a provision in a collective bargaining agreement nearly identical to the provision at issue in this case.
¶ 22 There is further support for this conclusion in City of Yukon v. Int'l Ass'n of Firefighters, Local 2055, 1990 OK 48, ¶ 8, 792 P.2d 1176, 1179, in which the Oklahoma Supreme Court recognized the Voss Court's adoption of the U.S. Supreme Court's opinions in the Steelworkers Trilogy cases.
¶ 24 I am persuaded that this authority is in accordance with the law in Oklahoma, and that a proper construction of the language in the CBA in this case renders the district court without jurisdiction to hear Plaintiff's claim, absent extenuating circumstances which Plaintiff did not allege.