Exhaustion of Employer's Internal Grievance Procedure Not Always Required
Posted by Sarah N. Drechsler
An appellate court's recent decision in Ahmadi-Kasani v. The Regents of the University of California highlights the fact that an employee will not always be required to exhaust an employer's internal grievance procedure if that procedure fails to provide sufficient due process.
In that case, a university employee filed a grievance alleging that she had been sexually harassed by her supervisor. The university's internal four-step grievance procedure was set out in its collective bargaining agreement with the employee's union. However, after participating in the grievance procedure through the third step, the employee aborted the procedure and filed her lawsuit due to concerns that her grievance was not being adequately addressed by the university.
The university challenged the lawsuit, arguing that once the employee initiated the internal grievance procedure, she was required to complete the process before filing a lawsuit. The appellate court reviewing the matter determined that the employee was not obligated to fully exhaust the internal grievance procedure because it did not provide for a "quasi-judicial hearing with sufficient due process to generate a legally-binding result." Based on the facts of the case (i.e., there was no provision in the grievance procedure whereby the employee had the right to present sworn testimony or other evidence or to cross-examine witnesses; the employee had no right to invoke the arbitration, although the union did; and the decision of the arbitrator would not have had any binding effect in the subsequent lawsuit), the court held that it would make no sense to require an employee to fully exhaust all steps of an internal procedure before filing a lawsuit if full exhaustion would not even result in a finding that had any bearing on the subsequent lawsuit.
This decision should serve as a strong reminder that employers must ensure that their internal grievance procedures provide sufficient due process to encourage employees to avail themselves of internal remedies, and to result in findings that will be binding in subsequent litigation. If you have any questions regarding drafting such procedures or the implications of this decision for your business, please contact us directly.