Alaska Supreme Court Opinions made Available by Touch N' Go Systems and Bright Solutions

Touch N' Go, the DeskTop In-and-Out Board makes your office run smoother. Visit Touch N' Go's Website.
  This site is possible because of the following site sponsors. Please support them with your business.
www.gottsteinLaw.com

You can search the entire site. or go to the recent opinions, or the chronological or subject indices.

Alaska v. Beard (5/29/98), 960 P 2d 1


     Notice:  This opinion is subject to correction before publication in
the Pacific Reporter.  Readers are requested to bring errors to the attention of
the Clerk of the Appellate Courts, 303 K Street, Anchorage, Alaska, 99501,
telephone (907) 264-0607, fax (907) 264-0878.  



             THE SUPREME COURT OF THE STATE OF ALASKA


STATE OF ALASKA, CAROLINE     )
VENUSTI and WILLIAM McMULLEN, )    Supreme Court Nos. S-6378/6438
                              )
          Appellants and      )    Superior Court No.
          Cross-Appellees,    )    4FA-87-369 CI
                              )
     v.                       )
                              )    O P I N I O N
BURLE S. BEARD,               )
                              )    [No. 4996 - May 29, 1998]
          Appellee and        )
          Cross-Appellant.    )
______________________________)



          Appeal from the Superior Court of the State of
Alaska, Fourth Judicial District, Fairbanks,
                        Jay Hodges, Judge.


          Appearances: Randy M. Olsen, Assistant
Attorney General, Fairbanks, and Bruce M. Botelho, Attorney
General, Juneau, for Appellants and Cross-Appellees.  Thomas R.
Wickwire, Fairbanks, for Appellee and Cross-Appellant.  


          Before:  Compton, Chief Justice, Rabinowitz,
Matthews, and Eastaugh, Justices. [Moore, Justice, not
participating.] 


          EASTAUGH, Justice.
          RABINOWITZ, Justice, concurring.  
          COMPTON, Chief Justice, dissenting.  
          


I.   INTRODUCTION
          This is the third appeal involving Burle Beard's claims
against the State of Alaska and several State employees.  See Beard
v. Baum, 796 P.2d 1344 (Alaska 1990) (Beard I); Cameron v. Beard,
864 P.2d 538 (Alaska 1993) (Beard II).  In Beard II, we remanded
for an evidentiary hearing to determine whether Beard's failure to
exhaust his administrative remedies barred his claims.  The
superior court excused Beard's failure to exhaust.  The State and
the individual defendants now appeal this ruling (and others).
Beard's consolidated cross-appeal argues that the State's agreement
to indemnify the individual defendants violates public policy. 
Concluding that Beard failed to exhaust his administrative
remedies, we reverse. 
II.  FACTS AND PROCEEDINGS
          We have previously detailed the events which culminated
in Beard's lawsuit.  See Beard I, 796 P.2d at 1347-48; Beard II,
864 P.2d at 540-44.  In Beard I, we held, inter alia, that the
superior court erroneously dismissed Beard's claims against the
State defendants for failing to exhaust the remedies available
under his collective bargaining agreement (CBA).  Beard I, 796 P.2d
at 1349.  We observed:
          [Bruce Senkow, Beard's union representative,
stated in an affidavit submitted to the court] that Beard had
complained to him that his supervisors were harassing him to make
his work environment intolerable.  Senkow told Beard that he could
not pursue the grievance because the actions Beard complained of
fell under management's prerogative under Article 5 of the CBA. 
Under the CBA grievance procedures, Beard could not pursue his
grievance past the initial steps without the cooperation of an APEA
[Alaska Public Employees Association] representative. 

Id.   
          On remand, the State defendants moved for summary
judgment on the exhaustion issue.  They based their motion on Bruce
Senkow's February 1991 deposition testimony which allegedly
contradicted his earlier affidavit.  Beard II, 864 P.2d at 543. 
The superior court denied this motion, and other pending defense
summary judgment motions, stating generally that "there are factual
issues to be resolved."  Id.  Nonetheless, the court agreed to hear
oral argument on the exhaustion issue if Beard prevailed at trial. 
Id. 
          At trial, the jury returned a $696,571 verdict for Beard. 
Beard II, 864 P.2d at 544. The individual defendants, William
McMullen, Caroline Venusti, and Harold Cameron, were each assessed
compensatory damages of $1,000 for intentional infliction of
emotional distress.  Id.  Another individual defendant, Sharon
McLeod, was found not liable for compensatory damages, but was
assessed punitive damages of $1,000.  Id.  The jury also awarded
Beard punitive damages against McMullen ($70,000), Venusti
($45,000), and Cameron ($45,000).  Id. 
          After the jury returned the verdict for Beard, the
superior court ruled that our Beard I decision had rendered the
exhaustion issue res judicata.  Beard II, 864 P.2d at 544. The
superior court entered judgment for Beard.  
          The defendants appealed.  They challenged various
superior court rulings, including its decision on exhaustion. 
Beard II, 864 P.2d at 540.  We held in Beard II that Beard I had
not conclusively resolved this question, and remanded.
               The superior court erroneously
interpreted our decision in Beard I as conclusively deciding the
exhaustion issue.  Our decision merely reversed the court's ruling
in favor of the State and did not constitute a final determination
that Beard was excused from pursuing his remedies under the
collective bargaining agreement.  Beard never sought summary
judgment on this issue and the State never had an opportunity to
rebut the evidence presented in Beard's opposition.  The doctrine
of res judicata does not apply when one party has not had an
opportunity to litigate an issue.  We therefore remand this issue
to the superior court for an evidentiary hearing.

Beard II, 864 P.2d at 545 (citations omitted).
          At the remand hearing, Senkow testified that he was very
familiar with Beard's grievance history because he had helped Beard
process five separate grievances while Beard was employed with DOT. 
According to Senkow, he had no significant contact with Beard
during the summer of 1986, although Beard contacted him in May
about a supervisor's request for a sick-leave slip, and at least
one of Beard's grievances was pending.  Senkow testified that Beard
never told him that he was going to quit because his work
conditions were intolerable or because his firing was imminent. 
Senkow also testified that his May 15, 1987, affidavit referred to
conversations he had with Beard earlier in the year.   
          Beard's attorney cross-examined Senkow about his 1991
deposition, where he had testified that he had never considered
Beard's work problems to be related or advised Beard to consider a
constructive discharge claim.  Senkow reiterated his view that
Beard's complaints concerning work assignments, sick-leave slips,
and "cold-shouldering"were not grievable.  He also testified that
he did not see a pattern in the complaints Beard brought to him.
          Q:   [by Beard's attorney] Your belief that
you can't grieve a year's worth of pattern is consistent with why
you didn't grieve the pattern; right?

          A:   No, that's not correct.  That's not
consistent.  In the context of that deposition and what I was
answering at that point, you know -- normally when somebody gets
disciplined, there's been progressive discipline.  That in itself
is a pattern.  We grieve -- we grieve that.  So we do grieve a
pattern.  I mean, we grieve the whole process of progressive
discipline.  So, I mean, you know, I know we can grieve the whole
disciplinary area.  That includes investigations and written
warnings, suspension, and ultimately termination.

          Q:   Right.  But your statement there that you
can't grieve a pattern, you have to grieve an incident.  And your
testimony we went over.  But Mr. Beard wanted to lump these all
together and you wanted to keep them all separate.

          A:   I don't know what . . . .

          Q:   Those are all consistent with your
affidavit . . . .

          A:   I don't know at what point . . . .

          Q:   . . . that says he told you about those
and you didn't think you could grieve them. Right?

          A:   I don't know at what point Beard asked me
to grieve a pattern.  I don't even know if he did.  I don't believe
he ever did.  I treated those incidents all separately because
that's the way they came in.  There was no pattern to those. 
          On re-direct, Senkow stated that Beard was familiar with
union procedures and that Beard had appealed Senkow's refusal to
grieve a March 1986 warning letter to the grievance committee.  He
also testified that he was unaware that Beard's problems at work
were affecting his health.  Finally, Senkow reiterated that he
would have filed a constructive discharge grievance if Beard had
asked him to do so. 
          Evie Seymore testified that she had been present during
at least two of Beard's meetings with Senkow, at which Senkow had
refused to grieve various issues. 
          I know in one meeting, he talked about the
harassment of having to write down his times at work where he had
to keep track of his time by hours and write it down.  I know he
talked about having to submit a sick leave form where no one else
in the office has ever had to submit one.  And I know he talked to
him about he was not given any real work to do, he was basically
given very little work.  Burle [Beard] was bored and preferred to
be working as opposed to sitting there doing nothing.  And Bruce
[Senkow] said, well, these were all things that he didn't consider
as harassment at all, that they were prerogatives of the
management.  So he wouldn't do anything about them. 

          . . . .

          . . . Each time he managed to get Bruce to
finally proceed with [a grievance], they were overturned.  But he
kept trying to tell Bruce, there's a pattern here.  This is
happening, this is happening, this is happening, this is happening. 
But Bruce would only deal with one thing at a time and not perceive
it as a pattern.

She also testified that Beard had told Senkow that the situation at
DOT was causing him a great deal of stress. 
          During cross-examination by Beard's attorney, Senkow
testified that after quitting, Beard asked Senkow to grieve his
final evaluation, and nothing else.  As Beard requested, Senkow
grieved the final evaluation.
          At the close of the hearing, the superior court ruled
that the union knew or should have known that Beard wanted to
grieve his overall work situation at DOT even though Beard did not
use the specific term "constructive discharge." 
               The Court finds that the union did not in
fact present a grievance to take into account [the] overall context
of what was occurring.  It's sufficiently clear to the Court that
in Mr. Beard's contact with the union, it should have been clear to
the union what Mr. Beard wanted.  And that was basically to stop
the harassment and [present] him an acceptable work place.

               As even the testimony of Mr. Senkow
indicates, he was fighting the individual battles one at a time and
doing well and winning the battles.  But they lost sight of the
fact that the war was not being waged.  Mr. Senkow's affidavit, the
original affidavit is pretty clear in the sense that we are not
going to arbitrate or grieve the overall situation because it's not
grievable. His subsequent testimony is in a different light, in a
different context.  At the time these events were occurring, it's
clear that with respect to many of the -- it's the overall course
of conduct we're dealing with, not a specific event, that there was
a factual inconsistency in evaluation.  The fact that he was being
shunned by the people at DOT, the fact that he was being assigned
this and that, although not grievable, certainly was part of the
overall factual situation that led to his ultimate termination.

               The Court specifically finds that it
should have been sufficiently clear to the union that Mr. Beard
wanted to correct his intolerable situation at DOT.  They did not
proceed to represent him in connection with that.

The court also ruled that even if the union had been willing to
assist Beard in filing a grievance on these matters, such efforts
would have been futile.
          [E]ven if a grievance had been filed on that
based on what had occurred in connection with the factual
information that occurred at trial as well as the jury verdict, any
grievance concerning his work situation, any grievance concerning
his termination would have been entirely futile.  Even if he had
won the grievance and gone back to work, the situation still would
not have been corrected.  He might have won the grievance, but he
still would not have won the war.  
          Following post-hearing rulings on other issues, the
State, Venusti, and McMullen appealed.  Beard cross-appealed.
III. DISCUSSION
     A.   Exhaustion of Administrative Remedies

          We have repeatedly held that employees must first exhaust
their contractual or administrative remedies, or show that they are
excused from doing so, before they may pursue direct judicial
actions against their employers.  See, e.g., Beard II, 864 P.2d at
545.  See also Voigt v. Snowden, 923 P.2d 778, 781-83 (Alaska
1996).  This policy "promotes judicial efficiency by affording an
institution an opportunity to correct its own errors, so as to
render judicial action unnecessary."  Eidelson v. Archer, 645 P.2d
171, 181 (Alaska 1982).  See also Eufemio v. Kodiak Island Hosp.,
837 P.2d 95, 99 (Alaska 1992) (doctrine of exhaustion of remedies
also encourages the development of a factual record and discourages
the "deliberate flouting of its processes").  However, an employee
may be excused from exhausting administrative remedies if the
administrative process is tainted or biased, Eidelson, 645 P.2d at
179-83, or if the employee's union refuses to participate in the
grievance process.  Beard I, 796 P.2d at 1348-49; Casey v. City of
Fairbanks, 670 P.2d 1133, 1136-37 (Alaska 1983).
          The superior court ruled as follows on remand:
          The Court finds, number one, that the union
was certainly put on notice and was put on notice of what the
intolerable situation of Mr. Beard was with respect to the work. 
That the union did not grieve that aspect of the situation.  And
number two, even if there was -- he failed to present sufficient
information to the union so that they were on notice of what he
wanted them to do, it would have been futile to grieve that aspect
and it's therefore excused.   
          On appeal, the State asserts that the superior court's
ruling is both factually and legally flawed.  First, the State
asserts that the evidence presented at the remand hearing does not
support the court's finding that the union "knew or should have
known"that Beard felt his working conditions at DOT were
intolerable at the time he resigned.  Second, the State argues that
this court's decision in Casey requires, at a minimum, that the
employee establish that the union explicitly refused to grieve a
complaint before the employee can be excused from pursuing
administrative remedies.  Finally, the State asserts that the
superior court misapplied Casey in ruling that futility excused
Beard from exhausting his administrative remedies. 
          1.   Standard of review
          It is within the superior court's discretion to determine
whether a particular employee has exhausted the administrative
remedies available.  Eufemio v. Kodiak Island Hosp., 837 P.2d 95,
98 (Alaska 1992).  This court will reverse a ruling for abuse of
discretion only when "left with a definite and firm conviction,
after reviewing the whole record, that the trial court erred in its
ruling."  Id. (quoting Morgan v. State, Dep't of Revenue, 813 P.2d
295, 297 n.4 (Alaska 1991)).  
          We will review the superior court's conclusions of law
using our independent judgment.  Pedersen-Szafran v. Baily, 837
P.2d 124, 127 n.1 (Alaska 1992).  The superior court's factual
findings will only be reversed if "clearly erroneous."  City of
Hydaburg v. Hydaburg Co-op Ass'n, 858 P.2d 1131, 1135 (Alaska
1993). 
          2.   Refusal to grieve
          An employee may be excused from exhausting administrative
remedies if the union refuses to process the employee's grievance. 
Casey, 670 P.2d at 1135.  In that case, a former building inspector
sued the City of Fairbanks for wrongful discharge.  The superior
court granted summary judgment to the City, ruling that Casey had
failed to exhaust his administrative remedies.  Id.  In reversing
this ruling, we observed that Casey could not have pursued his
grievance without the assistance of his shop steward or supervisor
and that those individuals had refused to help him.  Id. at 1136-
37.  Therefore we concluded "as a matter of law that Casey made a
good faith effort to pursue his grievance.  Any further action that
Casey could have taken was excused because it would have been
futile."  Id. at 1137.  
          A majority of jurisdictions have held that a union's
refusal to pursue an employee's grievance will excuse the
employee's failure to exhaust where  
          the union has sole power under the contract to
invoke the higher levels of the grievance procedure and if the
union has prevented the employee from exhausting his remedies by
its wrongful refusal to process the grievance.

Croston v. Burlington N. R. Co., 999 F.2d 381, 386 (9th Cir. 1993)
(emphasis in original) (citation omitted); see also Vaca v. Sipes,
386 U.S. 171, 185-86 (1967); Thompson v. Modernfold Indus., 373
N.E.2d 916, 919 (Ind. App. 1978); Gilstrap v. Mitchell Bros. Truck
Lines, 529 P.2d 370, 374-76 (Or. 1974).  Most courts have equated
a "wrongful refusal"to process a grievance with a breach of the
union's duty of fair representation.  See Thompson, 373 N.E.2d at
923 (holding that a union breaches its duty of fair representation
by conduct which is "arbitrary, discriminatory or in bad faith");
Gilstrap, 529 P.2d at 375 (holding that a union has a duty to
protect an employee's rights in good faith and in a nonarbitrary
manner).
          In this case, the superior court found that based on
Beard's contacts with Senkow, the union knew or should have known
that Beard wished to grieve his overall work situation and that the
union failed to file such a grievance.  Like Casey, Beard needed
the cooperation of a union representative to process a grievance
past the initial steps. [Fn. 1]  Finding that the union failed to
grieve, the superior court concluded that Beard was excused from
exhausting his administrative remedies.  The State asserts that
this finding is both clearly erroneous and an improper extension of
Casey. [Fn. 2]  
          Our review of the record leads us to conclude that the
superior court erred in determining that Beard is excused from
exhausting his remedies.  The record suggests that up until mid-May
1986, about three months before he quit, Beard tried to resolve his
work conditions through the available grievance procedures.  See
Casey, 670 P.2d at 1136 (holding that employee had made a "good
faith"effort to pursue his grievance where the individuals
required to process his grievance refused to process an employee's
complaint).  Beard grieved several incidents either on his own or
with the union's help in the twelve months before his resignation. 
At the time he resigned, the union was still processing at least
two grievances.  The union, through its representative, Senkow, had
refused to grieve several of Beard's complaints.  Both Senkow's
affidavit and his testimony at the hearing indicate that Beard
asked Senkow to grieve various aspects of his work environment, but
that Senkow told him that such matters were not grievable since
these actions might be considered management prerogative. [Fn. 3] 
For example, Senkow refused to grieve Beard's complaint about a
supervisor who had required Beard to justify his use of sick leave
in May 1986.  Seymore's testimony also indicates that Senkow
refused to grieve two of Beard's complaints, including his
complaint that his supervisors forced him to keep detailed time
sheets and avoided assigning work to him.  Seymore also testified
that Senkow refused to see a "pattern"in the conduct of Beard's
supervisors.
          Nonetheless, Beard last asked the union to grieve his
work conditions several months before he resigned.  (He last sought
union assistance concerning work conditions in May 1986, and
resigned on August 22, 1986. [Fn. 4])  Following termination, Beard
did not renew any earlier request that the union grieve a pattern
and did not ask the union to grieve his resignation as a
termination or constructive discharge.  His only post-termination
grievance request related to the "bad"final evaluation, not work
conditions.  Senkow testified that he would have filed a
constructive discharge grievance had Beard asked him to do so. 
Because Beard never asked the union to grieve his departure from
office, the union was never given a chance to participate in the
grievance process with respect to Beard's resignation.  See Casey,
670 P.2d at 1136-37.  
          Where an ongoing pattern of harassment in the workplace
culminates in an employee's resignation, the employee must attempt
to grieve this involuntary termination even if the union has
previously been unresponsive to the employee's complaints of
harassment.  In other words, the union must be afforded a
reasonable opportunity to represent the employee, and the employer
must be given an opportunity to remedy any wrongs through non-
judicial means.  To hold otherwise would undermine this court's
strong policy favoring the resolution of labor disputes through
administrative procedures. 
          Given the facts, we hold that the superior court's
findings that Beard made a good faith effort to file grievances and
that the union did not support him in his effort were clearly
erroneous with respect to an incipient constructive discharge
claim.  We therefore hold that the superior court abused its
discretion in ruling that Beard's failure to exhaust his
administrative remedies was excused under Casey. 
          3.   Futility
          The superior court reasoned that even if Beard had
exhausted his remedies and filed and won a grievance and gone back
to work, the "situation still would not have been corrected.  He
might have won the grievance, but he would not have won the war." 
          We cannot conclude that a successful grievance would have
provided Beard with a remedy so inadequate as to render futile his
pursuit of the grievance procedure.  Had Beard successfully grieved
a constructive discharge, he would have been entitled to
reinstatement with back pay.  Even if we assume that reinstatement
would have returned him to the same unsatisfactory environment,
recovery of back pay for the period he was off work would
nonetheless have given him a substantial remedy and would also have
tended to discourage further harassing conduct by supervisors. 
Continued harassment would presumably have led to further
successful grievances, up to and including another successful
constructive discharge claim, leaving the State with the prospect
of having a vacant position in the interim, or potentially paying
both a salary to a replacement employee and back pay to Beard.  The
record reflects that Beard's collective bargaining agreement
contained a five-step grievance process culminating in binding
arbitration.  Article 10, section 2, paragraph 3 of the CBA states:
"The arbitrator shall have the power to return a grievant to
employee status with or without restoration of back pay, or
mitigate the penalty as equity suggests under the facts."  There
was no evidence reinstatement with back pay was beyond the
authority of the arbitrator.  Further, the record reflects that
Beard had successfully used the grievance process in the past. 
Senkow testified that he had processed five grievances for Beard
and was successful in each case.  The demonstrated success of the
grievance process on those occasions refutes any argument that the
grievance process was doomed to failure.  In the absence of
evidence that reinstatement and a monetary remedy were not
available administratively, the superior court's conclusion of
futility is wrong as a matter of law.   
          We also note that the superior court's decision makes a
fundamental assumption about something that should not be assumed:
that the arbitrator could not have provided an adequate remedy. 
Article 10, section 1 of the CBA extends the agreement to "any
. . . controversy or dispute having occasion to arise between the
parties."  Article 10, section 7 stipulates that "the arbitrator
shall have the authority to rule on arbitrability issues . . . ." 
In the first instance, it was the arbitrator who had the authority
and responsibility to determine the scope of the arbitrator's
powers.  Beard cannot base his futility argument on the theory the
CBA did not allow the remedy he seeks when it was his failure to
exhaust which prevented an arbitrator from deciding whether that
remedy was administratively available.  Because the CBA itself did
not prevent the arbitrator from fashioning an adequate remedy,
Beard cannot assert futility as an excuse for failing to exhaust
his administrative remedies.  
          4.   Claims against McMullen and Venusti
          McMullen and Venusti argue that the superior court should
have dismissed the claims against them as individual defendants
because Beard did not exhaust his administrative remedies.  They
assert that the conduct Beard complains of was subject to the CBA
grievance process.  Beard's appellate briefs filed in this appeal
and in Beard I and Beard II did not argue that the intentional
infliction of emotional distress (IIED) claims were not subject to
the CBA grievance requirements.  Nor did Beard's briefs in the
three appeals assert that an unexcused failure to exhaust that
would bar his claims against the State would not also bar his IIED
and constructive discharge claims against Venusti and McMullen.
[Fn. 5]
          Beard's petition for rehearing, filed after we issued our
original opinion in Beard III, raises an argument he did not
previously raise in Beard I, Beard II, or Beard III: that his
claims against Venusti and McMullen are based at least in part on
42 U.S.C. sec. 1983, and to that extent are not subject to the
exhaustion doctrine.  He claims that his IIED claims were based on
sec. 1983.  In support, Beard cites Patsy v. Board of Regents, 457
U.S. 496 (1982), and Diedrich v. City of Ketchikan, 805 P.2d 362
(Alaska 1991).  
          Beard failed to assert a timely argument distinguishing
between sec. 1983 claims and non-sec. 1983 claims in opposing
Venusti's
and McMullen's fundamental defense, failure to exhaust, which has
been the subject of three appeals and three appellate opinions.  He
also failed to raise a timely distinction between claims against
the State and claims against Venusti and McMullen.  Beard has
consequently waived the argument that the exhaustion doctrine
cannot bar his claims against Venusti and McMullen.
          Although the dissent, in resolving the exhaustion issue,
would distinguish between Beard's IIED claims against Venusti and
McMullen and his constructive discharge claims, Dissent at 31-32,
Beard does not ask us to draw that distinction.
          The dissent also suggests that the union's refusal to
grieve a pattern of harassment excuses Beard's failure to exhaust
his remedies with respect to the IIED claims.  Dissent at 32. 
Several circumstances convince us otherwise.  The union did agree
to represent Beard on some grievances, and two grievances were
still being processed when Beard resigned in August.  After he
resigned, the union complied with Beard's request to grieve the
final evaluation issue.  Nonetheless, after mid-May 1986 Beard
never asked the union to grieve his work conditions, including the
resignation itself or the post-May conduct that allegedly
precipitated his resignation.  Because he did not timely ask the
union to pursue the work conditions that were central to his IIED
claims, he is not excused from failing to exhaust his remedies.
          We consequently hold that the unexcused failure to
exhaust that bars Beard's claims against the State also bars his
claims against McMullen and Venusti.  The well-recognized
principles favoring exhaustion apply equally to claims against
supervisors who engaged in the tortious conduct that formed the
basis for Beard's State IIED and constructive discharge claims. 
The judgment against Venusti and McMullen must therefore be set
aside. [Fn. 6]
     B.   Other Issues
          Our resolution of the exhaustion question moots the
remaining issues raised in the appeal and Beard's cross-appeal. 
Thus, vacating the judgment against the State, Venusti, and
McMullen moots any dispute about when prejudgment interest began to
accrue and whether an enhanced rate applied.  It also moots the
Civil Rule 60(b)(6) relief issue raised by McMullen and Venusti,
and Beard's argument that the State's agreement to indemnify
Venusti and McMullen is invalid because it violates public policy. 
IV.  CONCLUSION
          We conclude that the superior court abused its discretion
in finding that Beard's failure to exhaust his administrative
remedies was excused.  We therefore REVERSE the judgment and REMAND
with instructions to enter judgment for the State, Venusti and
McMullen.
RABINOWITZ, Justice, concurring.
          Although I agree that the superior court's judgment
should be reversed and judgment entered for appellants and cross-
appellees, I disagree with the court's reliance on Casey v. City of
Fairbanks, 670 P.2d 1133 (Alaska 1983), in Section III.A.2 of the
court's opinion.  My reasons are as follows.
          The court explains in Section III.A.2 that an employee's
failure to exhaust administrative remedies is excused by the
union's refusal to pursue a complaint when
          the union has sole power under the contract to
invoke the higher levels of the grievance procedure and if the
union has prevented the employee from exhausting his remedies by
its wrongful refusal to process the grievance.

Op. at 11 (quoting Croston v. Burlington N. R. Co., 999 F.2d 381,
386 (9th Cir. 1993)).  The court further explains that "[m]ost
courts have equated a 'wrongful refusal' to process a grievance
with a breach of the union's duty of fair representation."  Op. at
11.
          In Vaca v. Sipes, 386 U.S. 171 (1967), the Supreme Court
of the United States reviewed a court's determination that an
employee's failure to exhaust his arbitration remedies was excused. 
The Missouri Supreme Court relied on the fact that the jury found
the employee's claim meritorious and thus held that the union must
have breached its duty of fair representation by not grieving the
claim.  Id. at 192-93.  The federal high court reversed.
          Vaca begins by emphasizing the employer's interest in
having employees adhere to agreed-upon grievance procedures;
arbitration saves the employer the expense of litigation.  Id. at
191-92.  The Supreme Court also noted the contradiction in allowing
a union's breach of duty to excuse an employee's failure to
exhaust, since the employer "may have done nothing to prevent
exhaustion of the exclusive contractual remedies to which he agreed
in the collective bargaining agreement."  Id. at 185.  Vaca
nevertheless concludes that to leave the employee remediless
whenever the union fails to grieve would lead to "great injustice." 
Id. at 185-86.
          The Supreme Court therefore settled on a standard that
allows the employee to institute judicial proceedings only when the
union's refusal to pursue his claim is wrongful.  Id. at 185.  In
other words, the refusal must amount to a breach of the union's
duty of fair representation.  Id. at 190.  The Court emphasized
that it did "not agree that the individual employee has an absolute
right to have his grievance taken to arbitration . . . ."  Id. at
191.
          By insisting on this elevated standard, the Supreme Court
sought not only to protect the employer's rights under the
agreement, but also to preserve the union's discretion in deciding
which complaints will be pursued.  "[F]rivolous grievances"are
weeded out early when "the union [has] discretion to supervise the
grievance machinery and to invoke arbitration . . . ."  Id.  In
other words, the union acts as a gatekeeper.  It must, "in good
faith and in a nonarbitrary manner, make decisions as to the merits
of particular grievances."  Id. at 194.  In detailing the policies
underlying preservation of union discretion, Vaca states:
               If the individual employee could compel
arbitration of his grievance regardless of its merit, the
settlement machinery provided by the contract would be
substantially undermined, thus destroying the employer's confidence
in the union's authority and returning the individual grievant to
the vagaries of independent and unsystematic negotiation. 
Moreover, under such a rule, a significantly greater number of
grievances would proceed to arbitration.  This would greatly
increase the cost of the grievance machinery and could so
overburden the arbitration process as to prevent it from
functioning successfully.  It can well be doubted whether the
parties to collective bargaining agreements would long continue to
provide for detailed grievance and arbitration procedures . . . if
their power to settle the majority of grievances short of the
costlier and more time-consuming steps was limited by a rule
permitting the grievant unilaterally to invoke arbitration.

Id. at 191-92 (footnote and citations omitted).
          The Supreme Court went on to conclude that the plaintiff
employee in that case could not establish a breach of the union's
duty of fair representation "merely by proof that the underlying
grievance was meritorious"; the employee "must also have proved
arbitrary or bad-faith conduct on the part of the Union in
processing his grievance."  Id. at 195, 193.
          Vaca's emphasis on the union as gatekeeper, with
discretion to determine which complaints will go forward, is
consistent with decisions both before and since.  The Supreme Court
had previously established that "individual employees wishing to
assert contract grievances must attempt use of the contract
grievance procedure agreed upon by the employer and union . . . . 
[T]here can be no doubt that the employee must afford the union the
opportunity to act on his behalf."  Republic Steel Corp. v. Maddox,
379 U.S. 650, 652-53 (1965).  It had also made clear that the union
does not breach its duty of fair representation so long as it acts
"honestly, in good faith and without hostility or arbitrary
discrimination."  Humphrey v. Moore, 375 U.S. 335, 350 (1964); see
also Ford Motor Co. v. Huffman, 345 U.S. 330, 338 (1953)
(emphasizing "hostile discrimination"based on "irrelevant and
individious"considerations; no exception if union exercised good
faith within "wide range of reasonableness").
          In subsequent decisions, the Supreme Court has reiterated
that exceptions to mandatory arbitration require "substantial
evidence of discrimination that is intentional, severe, and
unrelated to legitimate union objectives . . . ."  Amalgamated
Ass'n of St., Elec., Ry. and Motor Coach Employees v. Lockridge,
403 U.S. 274, 301 (1971).  The Court hinted that a showing of
negligence would not be sufficient.  "[T]he burden of demonstrating
breach of duty by the Union . . . involves more than demonstrating
mere errors in judgment. . . .  The grievance processes cannot be
expected to be error-free."  Hines v. Anchor Motor Freight, Inc.,
424 U.S. 554, 570-71 (1976).  At the core of these cases lies the
principle that unions must be allowed to make independent deter-

minations as to the merits of individual claims.  "[U]nion
discretion is essential to the proper functioning of the
collective-bargaining system."  International Bhd. Elec. Workers v.
Foust, 442 U.S. 42, 51 (1979).
          In United Steelworkers of America v. Rawson, 495 U.S. 362
(1990), the Supreme Court announced that while the duty of fair
representation is of major importance,
          a breach occurs "only when a union's conduct
toward a member . . . is arbitrary, discriminatory, or in bad
faith."  The courts have in general assumed that mere negligence
. . . would not state a claim for breach of the duty of fair
representation, and we endorse that view today.

Id. at 372-73 (emphasis added) (citation omitted) (quoting Vaca v.
Sipes, 386 U.S. 171, 190 (1967)).
          Air Line Pilots Ass'n, Int'l v. O'Neill, 499 U.S. 65
(1991), affirms and elaborates:
          We hold that the rule announced in Vaca v.
Sipes -- that a union breaches its duty of fair representation if
its actions are either "arbitrary, discriminatory, or in bad faith"
-- applies to all union activity . . . .  We further hold that
union's actions are arbitrary only if, in light of the factual and
legal landscape at the time of the union's actions, the union's
behavior is so far outside a "wide range of reasonableness"as to
be irrational.

Id. at 67 (citations omitted) (quoting Vaca v. Sipes, 386 U.S. 171,
190 (1967); Ford Motor Co. v. Huffman, 345 U.S. 330, 338 (1953)). 
O'Neill went on to direct courts not to substitute their own
judgment for that of the unions.  "Any substantive examination of
a union's performance . . . must be highly deferential . . . ." 
Id. at 78.
          The standard which emerges from this fairly consistent
line of cases is that a union's decision not to pursue an employee
grievance is reviewed only for an abuse of discretion.  A union's
refusal to grieve constitutes a breach of duty only when it stems
from an improper motive or lacks a rational basis.  As the
gatekeeper to arbitration, the union must be allowed to
independently decide which claims are meritorious and should go
forward.  Judicial review is deferential.
          Burle Beard cannot meet this standard.  There is no
evidence that union representative Senkow's decision not to grieve
Beard's claims as a pattern was the product of an improper motive. 
Nor can Beard show the decision was irrational.  At the exhaustion
hearing, Senkow himself testified that he had not discerned a
pattern in the complaints Beard had brought to him.
          Senkow also refused to grieve several of Beard's
individual claims.  Among these were complaints that a supervisor
had asked Beard to justify his use of sick leave in May 1986, that
he was forced to keep detailed time sheets, and that the
supervisors avoided assigning work to Beard.  The union's several
refusals neither individually nor in combination constitute an
abuse of discretion.  The record contains absolutely no evidence
that Senkow's decisions were the result of an improper motive, nor
does Beard so allege.  The only possible basis for finding that the
union acted wrongfully is that the decisions were irrational.
          Senkow's decisions had a rational basis.  Senkow affied
that he did not pursue the several individual claims because he
felt they were "not provable"and the actions fell within
"management prerogative."  And both Senkow and Beard's witness
testified that Senkow did not pursue the pattern complaint because
he did not perceive a pattern of harassment against Beard. 
          As to the individual claims, Senkow's explanation for his
refusal is in and of itself rational.  The actions which Beard
complained of -- requiring detailed time sheets, justifying sick
leave, and apportioning work load -- are all decisions which
management is generally entitled to make.  Senkow could have
rationally concluded that Beard's complaints would not have
supported a successful grievance and should not be pursued.  His
determination that these actions were not provable as harassment
because they fell within management discretion, while not neces-

sarily correct, is not irrational.  Furthermore, as discussed
below, Senkow had reason to doubt Beard's interpretation of events.
          As to Beard's pattern complaint, both parties' evidence
indicates that Senkow simply did not perceive a pattern of
harassment where Beard did.  Senkow's skepticism of Beard's charge
of a unified management conspiracy had a rational basis.  Senkow's
interactions with Beard and the events leading up to Beard's
resignation could have led Senkow to conclude that Beard was unduly
sensitive and there was no "pattern"against him.  None of the
evidence available to Senkow conclusively established the existence
of an organized campaign.
          The evidence which was available to Senkow could either
have led him to conclude that Beard was the victim of management
orchestrations or that he was a troublemaker.  In support of the
latter, Beard had charged that Milt Lentz, the Director of the
Department of Transportation, had lied about a conversation with
Beard during a visit to the office in May 1986.  Cameron v. Beard,
864 P.2d 538, 543 n.4 (Alaska 1993) (Beard II).  However, it is
entirely understandable that Senkow could decline to believe that
the alleged conspiracy against Beard went to the highest levels of
the Department of Transportation.  Furthermore, the implausibility
of the charge could also have led Senkow to discount Beard's other
allegations, and to conclude that Beard was overly suspicious of
his superiors.  Senkow's decisions were not "wrongful."  Beard
cannot demonstrate that "in light of the factual and legal
landscape at the time of the union's actions, the union's behavior
is so far outside a 'wide range of reasonableness' as to be
irrational."  O'Neill, 499 U.S. at 67 (citation omitted) (quoting
Ford Motor Co. v. Huffman, 345 U.S. 330, 338 (1953)).  Nor does the
fact that a jury ultimately found Beard's claims meritorious
justify his failure to exhaust.  This is precisely the argument
that was rejected by the Supreme Court in Vaca.
          In my view, Vaca articulates a reasonable standard for
determining when an employee's failure to exhaust administrative
remedies is excused.  The Vaca test essentially determines when the
employer will be denied the protections of mandatory arbitration
because of something the union did.  It is reasonable to accord the
union discretion over which complaints should be pursued.  As a
gatekeeper, the union preserves the integrity of the arbitration
process by screening out frivolous complaints.  If courts did not
defer to union decisions, and a union refusal always allowed the
grievant to go to court, employers would have little incentive to
enter into arbitration agreements in the first place.  In this
regard, I find the Supreme Court's reasoning compelling.  See Vaca,
386 U.S. at 191-92.
          Furthermore, the standard for exceptions to exhaustion
articulated in Casey v. City of Fairbanks, 670 P.2d 1133 (Alaska
1983), is arguably incorrect.  Despite this court's acknowledgment
of federal preemption, Casey adopted the test articulated in
Eidelson v. Archer, 645 P.2d 171 (1982), which asks only whether
the employee made a good faith effort to seek arbitration.  Casey,
670 P.2d at 1136.  Eidelson is inapposite.  That case did not
involve a collective bargaining agreement and the plaintiff was not
dependent on a union for access to administrative remedies.  In
fact, the plaintiff there was not even a member of a labor union. 
Eidelson involved a doctor's challenge to a private hospital's
termination of his staff privileges.  See Eidelson, 645 P.2d at
172-75.  This situation is entirely outside the scope of the Labor
Management Relations Act.  Eidelson is simply an application of the
general rule that "an aggrieved member of a private association
must exhaust the remedies provided by the organization before
seeking judicial action against the association."  Id. at 179.  The
policy driving the decision was that internal remedies allow an
organization to apply its expertise and correct its own errors. 
Id. at 176.  The Eidelson standard has nothing to do with Vaca:  no
labor union was involved, the doctor had direct access to
administrative remedies, and it was unnecessary to determine if a
union's refusal to grieve was wrongful.  Casey's reliance on that
case is misplaced.  Since I am of the view that Casey is in
conflict with binding federal law, I would disapprove it. [Fn. 1]

COMPTON, Chief Justice, dissenting.
I. IIED
          I accept, arguendo, the court's characterization of
Beard I and I assume as well that the court is correct in requiring
Beard to exhaust his contractual remedies as to individual
defendants.  The court nevertheless errs, as a matter of fact, in
holding that Beard should not be excused from exhausting his
contractual remedies as to his claim for IIED.  It may be arguable
that Beard failed to exhaust his contractual remedies as to the
constructive discharge claim. [Fn. 1]  Beard's resignation was the
last essential element of that claim.  Beard did not specifically
request that Senkow grieve a claim "for constructive discharge"
after Beard resigned -- after the cause of action arose. 
          However, Beard's resignation was not an essential element
of his claim for IIED.  A claim for IIED requires only "(1) that
the defendant's conduct was extreme and outrageous, (2) that the
conduct was intentional or reckless, (3) that this conduct caused
the plaintiff emotional distress, and (4) that the distress was
severe."  Cameron v. Beard, 864 P.2d 538, 548 (Alaska 1993).
          Beard did request that Senkow grieve the "pattern of
harassment"against him.  It is this pattern of harassment which
supports both the IIED claim and the constructive discharge claim. 
Although it is arguable that the constructive discharge claim did
not arise until after Beard resigned, no such argument can be made
as to the IIED claim.  Senkow explicitly refused to recognize the
pattern of harassment alleged by Beard, which supports his claim
for IIED.  Under even the court's stringent interpretation of Casey
v. City of Fairbanks, 670 P.2d 1133 (Alaska 1983), Beard has
complied with the requirements for excusing his failure to exhaust
his contractual remedies as to his IIED claim. [Fn. 2]
          The court fails to adequately explain why it requires
Beard to have asked the union to grieve conduct that occurred
"after mid-May 1986."  Op. at 18.  The pattern of harassment
alleged by Beard prior to that time is sufficient to support his
claim for IIED.  Senkow's explicit refusal to grieve this pattern
of harassment is sufficient to satisfy the court's interpretation
of Casey.  The court's assertion that Beard "did not timely ask the
union to pursue the work conditions that were central to his IIED
claims,"Op. at 18-19, is inaccurate.  The judgments against
McMullen and Venusti should be affirmed.
II. Constructive Discharge
          The rule laid down by the court is a harsh one:  
          Where an ongoing pattern of harassment in the
workplace culminates in an employee's resignation, the employee
must attempt to grieve this involuntary termination even if the
union has previously been unresponsive to the employee's complaints
of harassment. 
 
Op. at 14 (emphasis added).  In the instant case, we have an
employee who consistently requested that his union representative
aid him in grieving a pattern of harassment. His union
representative consistently denied that such a pattern existed or
was grievable.  Nonetheless, this court requires Beard to know that
such a pattern becomes grievable when he is actually forced to
resign.  Had Beard but known to invoke the magic words
"constructive discharge"following his resignation, he would not be
faced with this appeal.  
          This formalistic reasoning leads to an unjust result.  It
requires employees to possess both specific legal knowledge and
unreasonable tenacity.  Beard made a good faith effort to resolve
his overall working conditions through the available grievance
procedures.  His union failed to come to his aid.  We should
require no more than this before permitting employees to turn to
the courts for the assistance that their unions refuse to provide.
III. Law of the Case     
          That said, I adhere to the view I expressed in Cameron v.
Beard, 864 P.2d 538 (Alaska 1993) (Beard II).  In Beard II I
dissented from the court's decision to remand for an evidentiary
hearing on the issue of whether Beard was excused from exhausting
his contractual remedies.  Id. at 551-53 (Compton, J., dissenting). 
My position was that this issue was raised and resolved in Beard I.
Id. at 551.  I remain convinced that in Beard I this court
"unqualifiedly and unconditionally held that Beard was excused from
exhausting his contractual remedies."  Id. at 552.  See Wolff v.
Arctic Bowl, Inc., 560 P.2d 758, 763 (Alaska 1977) ("The doctrine
of the law of the case prohibits the reconsideration of issues
which have been adjudicated in a previous appeal in the same
case.").
          I dissent.




                            FOOTNOTES


Footnote 1:

     Article 10 of the CBA provided for the processing of
grievances or "any controversy or dispute arising between . . . an
Employee . . . and the Employer."  The CBA outlined a five-step
process concluding with arbitration.  The CBA specified that
"GRIEVANCES AT STEP THREE AND BEYOND MUST BE PROCESSED THROUGH APEA
BUSINESS REPRESENTATIVES." 


Footnote 2:

     The State does not argue that a test other than that announced
and applied in Casey should apply here or that we should reconsider
Casey.  It is consequently not necessary in this case to reach the
issues discussed in the concurring opinion.


Footnote 3:

     Senkow affied:

          Mixed in with my discussions with Mr. Beard
were his complaints that one or more of his supervisors were trying
to harass him by using work assignments, apportioning the workload
and otherwise structuring his work environment so as to make it as
uncomfortable as possible.  I explained to him that this is not a
grievable matter as it is not provable by the correspondence and
personnel file documents and is, on its face, one of those areas
that is left to management prerogative.


Footnote 4:

     Beard claimed that his work conditions amounted to supervisor
harassment.  In Beard I we held that evidence of the Union's
failure to grieve what Beard claimed was a pattern of harassment
excused his failure to grieve his constructive termination claim,
requiring that the summary judgment entered for defendants be set
aside.  796 P.2d at 1349.  In Beard II we remanded for
determination of whether Beard's failure to grieve was excused. 
864 P.2d at 545.  We assumed in both opinions that evidence of
Union refusal to grieve claims of harassing work conditions was
relevant to whether Beard was excused from asking the Union to
grieve a claim that those conditions forced him to resign.  Only
upon remand following Beard II was the disputed futility issue
tried with full opportunity to offer evidence on whether a pre-
resignation refusal to grieve particular complaints of harassing
conduct excused Beard from failing to ask the Union after he
resigned to file a grievance that would have claimed that harassing
conduct forced him to quit.


Footnote 5:

     McMullen, Venusti, and the State moved to dismiss Beard's IIED
and constructive discharge claims for failure to exhaust
administrative remedies.  Beard opposed on the ground his failure
was excused by the Union's refusal to represent him.  He did not
argue in the superior court that even if the CBA grievance
procedure and authority of the arbitrator covered his State claims,
they did not encompass his claims against his supervisors.  The
superior court dismissed his claims on failure-to-exhaust grounds.
We reversed in Beard I because it appeared there was a genuine fact
dispute about whether the Union had refused to represent Beard on
a claim that there was a pattern of harassment leading to
constructive discharge.  Beard argued in the Beard I appeal that
none of his claims was arbitrable, but did not argue that even if
his claims against the State were arbitrable, his claims against
Venusti and McMullen were not.  He did not argue in that appeal
that even if summary judgment for the State were affirmed, it
should be reversed as to the supervisors.

          Nor did Beard argue the issue in Beard II.  Neither
previous appeal raised a question whether a failure to exhaust
might bar Beard's claims against the State but not his claims
against individual supervisors.  Both prior opinions tacitly
assumed that the exhaustion issue applied equally to the IIED and
constructive discharge claims against all defendants.  The only
dispute about the effect of the CBA was whether the arbitrator
could fashion an adequate remedy, not whether the CBA was
inapplicable to particular claims against the individual defendants
even if it applied to claims against the State.

          Beard argues in the present appeal that futility was
proven because Senkow refused to grieve the supervisors' acts.  He
thus implicitly argues that the CBA grievance procedures
encompassed the supervisors' wrongful acts.

          As noted in the text, Beard argues for the first time in
his petition for rehearing filed after we issued our original
opinion in Beard III that the exhaustion doctrine cannot bar his
claims against Venusti and McMullen asserted under 42 U.S.C. sec.
1983.


Footnote 6:

     Because we conclude that the claims resulting in compensatory
damages awards against McMullen and Venusti were barred by the
exhaustion doctrine, the compensatory damages awards against those
defendants must be vacated.  It follows that the substantial
punitive damages awards against those defendants must also be set
aside.



                     FOOTNOTES (Concurrence)


Footnote 1:

     This court has held that the federal common law of collective bargaining, including the
rules for exceptions to mandatory arbitration, are binding in state cases.  See International
Bhd. of Teamsters, Local 959 v. King, 572 P.2d 1168, 1172 (Alaska 1977) ("Even though
this case is in state court, the law to be applied to this issue is federal labor-management
common law.").


                       FOOTNOTES (Dissent)


Footnote 1:

     But see, infra, Parts II and III.


Footnote 2:

     "Casey requires, at a minimum, that the employee establish that the union explicitly
refused to grieve a complaint before the employee is excused from pursuing administrative
remedies."  Op. at 9.
           In the Supreme Court of the State of Alaska



State of Alaska, et al.,        )
                                )        Supreme Court No. S-06378
                                   Petitioner,  )
                   v.           )                 Order
                                )          Petition for Rehearing
Burle B. Beard,                 )                     
                                )                     
                                   Respondent.  ) Date of Order: 5/29/98
                                )
Trial Court Case # 4FA-87-00369CI



     Before:        Matthews, Chief Justice, Compton, Eastaugh, Justices, and Rabinowitz,
Senior Justice.*  [Fabe and Bryner, Justices, not participating.]


     On consideration of the Petition for Rehearing filed on December 2, 1997, and the response
filed on January 29, 1998,

     It is Ordered:

     1.   The Petition for Rehearing is Denied because Beard is deemed to have waived the
argument, raised for the first time in his petition, that the exhaustion doctrine cannot bar a claim under
42 U.S.C. sec. 1983.  

     2.   Opinion No. 4913, issued on November 28, 1997, is WITHDRAWN and Opinion
No. 4996 is issued in its place on today.  Part III.A.4 contains changes.  The opinion is otherwise
unchanged
     
     Entered by the direction of the court.

                                   Clerk of the Appellate Courts


                                                                                                         
                                   Cheryl Jones, Deputy Clerk


     COMPTON, Justice, dissents.  He would grant the petition.  
                                                         
     * Sitting by assignment under article IV, section 11, of the Alaska Constitution and Alaska 
  Administrative Rule 23(a).

Alaska Supreme Court Order
State of Alaska v Burle S. Beard
Page 2


cc:  Supreme Court Justices
     Judge Hodges
     Trial Court Appeals Clerk


Distribution:  
 
     Thomas R. Wickwire 
     Attorney at Law 
     2775 Hanson Road, Suite 1 
     Fairbanks AK 99709 
 
     Randy M. Olsen 
     Attorney General's Office 
     100 Cushman Street, Suite 400 
     Fairbanks AK 99701