A discharged employee of a carrier that was subject to the
Railway Labor Act, claiming diversity of citizenship and the
requisite jurisdictional amount, brought in a federal district
court in Missouri an action under Missouri law for wrongful
discharge. He failed to show that he had exhausted the
administrative remedies prescribed by his employment contract. The
employment contract was a Missouri contract, and the administrative
remedies prescribed therein were consistent with the Railway Labor
the District Court properly dismissed the
complaint. Pp. 345 U. S.
(a) A discharged employee of a carrier that is subject to the
Railway Labor Act is not precluded by that Act from resorting to a
state-recognized cause of action for wrongful discharge. Pp.
345 U. S.
(b) In an action under state law for wrongful discharge, brought
by a discharged employee of a carrier that is subject to the
Railway Labor Act, the employee must show that he has exhausted his
administrative remedies under his contract of employment, if the
applicable state law so requires. Pp. 345 U. S.
-657, 345 U. S.
( c) Under the law of Missouri, a discharged employee who brings
an action against his employer for wrongful discharge must show
exhaustion of administrative remedies under his employment contract
in order to sustain his cause of action. Pp. 345 U. S.
199 F.2d 117 reversed.
In an action brought by respondent against petitioner, based on
diversity of citizenship, the District Court set aside a verdict
for respondent and dismissed the complaint. The Court of Appeals
reversed and remanded the case for further proceedings. 199 F.2d
117. This Court granted a limited certiorari. 344 U.S. 933.
Reversed and remanded,
p. 345 U. S.
Page 345 U. S. 654
MR. JUSTICE BURTON delivered the opinion of the Court.
This case presents two questions: (1) whether a discharged
employee of a carrier that is subject to the Railway Labor Act is
precluded by that Act from resorting to a state-ecognized cause of
action for wrongful discharge and, if not, (2) whether, in such
action, he must show that he has exhausted his administrative
remedies under his contract of employment. For the reasons
hereafter stated, our answer to the first question is no, and to
the second, yes, provided the applicable state law so requires.
After stating the case, we shall discuss the second question
Respondent Koppal is a citizen of Kansas who, in 1949, was
employed as a master mechanic in Kansas City, Missouri, by
petitioner, Transcontinental & Western Air, Inc., a Delaware
corporation. At all times material to this case, petitioner has
been a carrier by air, engaged in interstate commerce and subject
to Title II of the Railway Labor Act. [Footnote 1
] The terms of respondent's employment contract
were stated in a written agreement between petitioner and the
International Association of Machinists. That association was a
union which, for collective bargaining purposes, represented
respondent and the other mechanics in the employ of petitioner,
although respondent was not a member of the union.
Page 345 U. S. 655
November 8, 1949, respondent reported to his employer by
telephone that he was not well, and would not be able to work that
day. Before noon, a representative from petitioner's Industrial
Relations Department made an unexpected call at respondent's home.
He found respondent there with two of petitioner's employees, one
of whom also had taken sick leave. While the testimony is
conflicting, there is substantial evidence to support a conclusion
that respondent was not sufficiently ill to justify his staying at
home, and that, by prearrangement, he met there with two other
employees while preparing to take an examination to qualify as a
flight engineer. On respondent's return to work the next day, he
was suspended from employment on a charge of abuse of the sick
leave provisions of his contract, and notified that a hearing would
be held on that charge November 11 pursuant to the grievance
procedure in his contract. He attended the hearing, which was held
before a representative of petitioner other than the one bringing
the complaint. At its conclusion, the hearing officer stated that
there had been a severe abuse of the sick pay policy, and that
respondent would be discharged. In view of respondent's past
favorable record, the hearing officer asked him whether he would
prefer to resign, and advised him that he could appeal even if he
Respondent resigned, stating that he did so "under protest." He
took no appeal under his employment contract, but, June 30, 1950,
instituted the present proceeding in the United States District
Court for the Western District of Missouri, claiming diversity of
citizenship and seeking $7,500 compensatory and $15,000 punitive
During the trial, which was before a jury, petitioner (then
defendant) moved for a directed verdict in its favor and made a
similar motion at the close of evidence. Both motions were denied,
and the jury returned a verdict
Page 345 U. S. 656
of $7,500 for respondent. The court set aside the verdict and
dismissed the complaint on the ground that respondent had failed to
appeal the original decision of the hearing officer and had
otherwise failed to exhaust the remedies prescribed in his
employment contract. The Court of Appeals, with one judge
dissenting, reversed that judgment and remanded the case for
further proceedings. 199 F.2d 117. Because of differing opinions
expressed as to the effect of our decisions in Moore v.
Illinois Central R. Co., 312 U. S. 630
Slocum v. Delaware, L. & W. R. Co., 339 U.
, and, due to the importance of the case in
relation to the Railway Labor Act, we granted certiorari. 344 U.S.
933. [Footnote 2
The jurisdiction of the District Court rested upon diversity of
citizenship and an adequate amount in controversy. The complaint
sought judgment for damages resulting from the alleged unlawful
discharge of respondent in violation of a contract of employment
made in Missouri, to be performed in Missouri, and agreed by the
parties to be a "Missouri contract." Accordingly, if the Railway
Labor Act were not involved, there would be no question but that
the substantive law of Missouri should determine the requirements
of the cause of action, the interpretation of the contract, and the
measure of damages
Page 345 U. S. 657
to be applied, Erie R. Co. v. Tompkins, 304 U. S.
; Klaxon Co. v. Stentor Electric Mfg. Co.,
313 U. S. 487
No decision of the Supreme Court of Missouri has been cited on
the point, but the law of Missouri has been shown, by the following
cases, to be that an employee must exhaust the administrative
remedies under his contract of employment in order to sustain his
cause of action in such a case.
The United States Court of Appeals for the Eighth Circuit, in
1934, affirmed a decision of the United States District Court for
the Eastern District of Missouri to that effect. Harrison v.
68 F.2d 826. That was a diversity case, removed
from a Missouri state court, in which a discharged porter sued his
employer, the Pullman Company, for damages for his alleged unlawful
discharge in November, 1926. The terms of his employment were
stated in a printed agreement which contained a complete code for
the adjustment of such disputes. The code called for an initial
appeal by the employee to a district official of the company, a
subsequent appeal to the highest local officer of the company
designated to handle such matters, then an appeal to the Zone
General Committee, and finally to the Bureau of Industrial
Relations. The porter made no substantial attempt to follow this
procedure beyond the district official and none whatever to reach
the Zone General Committee. Instead, about five years later, he
brought suit and, in that litigation, the United States Court of
Appeals, in affirming a directed verdict for the employer,
"Appellant, in terms, sues because of an alleged breach of this
contract, and, to prevail, he must show that he has brought himself
within its terms and has been unable to secure a satisfactory
adjustment by the means therein expressly provided. This he has
Page 345 U. S. 658
failed to do, and, for this reason, he is unable to present his
case in court as a justiciable controversy."
68 F.2d at 827.
Similarly, in 1936, the St. Louis Court of Appeals, Missouri, in
Reed v. St. Louis S.W. R. Co.,
95 S.W.2d 887 (not
published in State Reports), took a like position. There, a
discharged conductor sued his employer, the St. Louis Southwestern
Railroad Company, for damages for his alleged unlawful discharge in
1928. The terms of his employment were stated in a written contract
between the Order of Railway Conductors and the railroad. This
prescribed a complete code for the hearing and review of
discharges. The conductor was charged with intoxication, and
attended a prescribed hearing, which was held on that charge,
before an assistant superintendent of the company. This resulted in
the conductor's discharge, but he resorted to none of the
administrative appeals prescribed in the code. Instead, he sued his
employer in a state court and won a verdict and judgment for
damages due to his discharge. The St. Louis Court of Appeals
reversed that judgment because the trial court had failed to
sustain the employer's demurrer, which was based on the ground that
the conductor had failed to exhaust the remedies prescribed in his
contract. [Footnote 3
Page 345 U. S. 659
Respondent's contract in the instant case consisted simply of
his employment by petitioner pursuant to the terms of a written
agreement between petitioner and the mechanics and related
employees in its service, as represented by the International
Association of Machinists. That agreement was entered into "in
accordance with the provisions of Title II of the Railway Labor
Act, as amended. . . ." It contained detailed provisions as to
grievance procedure and sick leave. It included provisions that no
employee in respondent's status shall be discharged --
"without a fair hearing before a designated representative of
the Company other than the one bringing complaint against the
employee. . . . At a reasonable time prior to the hearing, such
employee and his duly authorized representative will be apprised,
in writing, of the precise charge, and given a reasonable
opportunity to secure the presence of necessary witnesses. . . . A
written decision will be issued within five (5) workdays after the
close of such hearing. If the decision is not satisfactory, then
appeal may be made in accordance with the procedure prescribed in
Step 3 provided for an appeal to the chief operating officer of
the company. Notice of intent to appeal must be in writing and made
within ten work days after the above-entioned decision which is
part of Step 2. If the decision in Step 3 is not satisfactory to
the union, the matter then may be referred by the system general
chairman, acting for the union, to the system board of adjustment
or, by mutual agreement, to arbitration. This procedure is
comparable to that described in the Railway Labor Act, which
provides that disputes between an employee and a carrier "shall be
handled in the usual manner up to and including the chief operating
officer of the carrier designated to handle such disputes," then by
Page 345 U. S. 660
boards, and finally by the National Air Transport Adjustment
Board. 49 Stat. 1189-1190, 45 U.S.C. §§ 184, 185.
Under the law of Missouri, as shown above, respondent was
required to show exhaustion of administrative remedies under his
employment contract in order to sustain his cause of action. As he
did not do so, the District Court's dismissal of his complaint was
justified, unless the fact that petitioner was a carrier subject to
the Railway Labor Act or the fact that the employment contract was
drafted pursuant to that Act should make a difference.
The important point is that, while the employment contract
conforms to the policy of the Railway Labor Act and the Act
provides a procedure for handling grievances so as to avoid
litigation and interruptions of service, the Act does not deprive
an employee of his right to sue his employer for an unlawful
discharge if the employee chooses to do so.
"[W]e find nothing in that [Railway Labor] Act which purports to
take away from the courts the jurisdiction to determine a
controversy over a wrongful discharge or to make an administrative
finding a prerequisite to filing a suit in court. . . . The
District Court and the Circuit Court of Appeals properly decided
that petitioner was not required by the Railway Labor Act to seek
adjustment of his controversy with the railroad as a prerequisite
to suit for wrongful discharge."
Moore v. Illinois Central R. Co., 312 U.
, 312 U. S. 634
We amplified the foregoing statement in Slocum v. Delaware,
L. & W. R. Co., 339 U. S. 239
339 U. S. 244
"Moore [in 312 U. S. 312
U.S. 630] was
discharged by the railroad. He could have challenged the validity
of his discharge before the Board, seeking reinstatement
Page 345 U. S. 661
and back pay. Instead, he chose to accept the railroad's action
in discharging him as final, thereby ceasing to be an employee, and
brought suit claiming damages for breach of contract. As we there
held, the Railway Labor Act does not bar courts from adjudicating
such cases. A common law or statutory action for wrongful discharge
differs from any remedy which the Board has power to provide, and
does not involve questions of future relations between the railroad
and its other employees. If a court in handling such a case must
consider some provision of a collective bargaining agreement, its
interpretation would, of course, have no binding effect on future
interpretations by the Board."
The result is that whereas, under the Railway Labor Act, the
Adjustment Board has exclusive jurisdiction to adjust grievances
and jurisdictional disputes of the type involved in the
case, that Board does not have like exclusive
jurisdiction over the claim of an employee that he has been
unlawfully discharged. Such employee may proceed either in
accordance with the administrative procedures prescribed in his
employment contract or he may resort to his action at law for
alleged unlawful discharge if the state courts recognize such a
claim. Where the applicable law permits his recovery of damages
without showing his prior exhaustion of his administrative
remedies, he may so recover, as he did in the Moore
under Mississippi law. [Footnote 4
Page 345 U. S. 662
On the other hand, if the applicable local law, as in Missouri,
requires an employee to exhaust his administrative remedies under
his employment contract in order to sustain his cause of action, he
must show that he has done so. Here, respondent was employed by a
carrier, subject to Title II of the Railway Labor Act, and his
employment contract contained many administrative steps for his
relief, all of which were consistent with that Act. Accordingly,
while he was free to resort to the courts for relief, he was there
required by the law of Missouri to show that he had exhausted the
very administrative procedure contemplated by the Railway Labor
Act. In the instant case, he was not able to do so, and his
complaint was properly dismissed.
The judgment of the Court of Appeals therefore is reversed. The
judgment of the District Court is affirmed and the cause is
remanded to it.
Reversed and remanded.
MR. JUSTICE DOUGLAS dissents.
MR. JUSTICE REED took no part in the consideration or decision
of this case.
49 Stat. 1189 et seq.,
45 U.S.C. §§ 181-188.
The grant was limited to questions 1 and 2 presented by the
petition for the writ, viz.:
"1. Whether in a diversity action for wrongful discharge by an
employee against a carrier subject to the provisions of the Railway
Labor Act, the Act precludes the application by the District Court
of state law, otherwise controlling, governing the right to bring
"2. Whether the decisions of this Court in Moore v. Illinois
Central R. Co., 312 U. S. 630
, and Slocum v.
Delaware, L. & W. R. Co., 339 U. S.
, bar the application of state law requiring an
employee to attempt to adjust his dispute with his employer before
he may seek redress in state courts for alleged breach of a
collective bargaining agreement made pursuant to the Railway Labor
". . . This assignment of error is based upon the rule that,
where a contract of employment provides, as in the instant case,
that a discharged employee may seek redress by appealing to certain
designated officers, boards, or tribunals, such an employee is
required to pursue and exhaust his contract remedy, and cannot
properly complain to a court for redress until he has exhausted the
remedies accorded him by his contract. The point is well
95 S.W.2d at 888-889.
". . . It is well settled that, where contracting parties either
agree or are required by law to resort to a designated tribunal for
the adjustment of controversies, they must exhaust such remedy
before resorting to the courts for redress."
Glass v. Hoblitzelle,
83 S.W.2d 796, 802. See also
Bell v. Western R. Co.,
228 Ala. 328, 153 So. 434. This
quotation and citation are relied on in the Reed
S.W.2d at 889.
Moore received a judgment for $4,183.20, as damages for his
wrongful discharge, without establishing his exhaustion of his
administrative remedies under his employment contract. For related
proceedings, see Moore v. Yazoo & M.V. R. Co.,
Miss. 65, 166 So. 395; Moore v. Illinois Central R. Co.,
180 Miss. 276, 176 So. 593; 24 F. Supp.
; 112 F.2d 959; 136 F.2d 412. See also Texas & N.O.
R. Co. v. McCombs,
143 Tex. 257, 183 S.W.2d 716.