In American Federation of State, County, and Municipal Employees, AFL-CIO v. Board of Education, 457 Mich. 74, 577 N.W.2d 79 (1998), labor unions sued various employers alleging that they had breached a collective bargaining agreement ("CBA").
The CBA included a multistep mandatory grievance procedure culminating in arbitration that was non-binding (although there was some initial dispute between the parties as to whether it was binding or non-binding). The trial court granted summary judgment in favor of the employers on the ground that the action for breach of the CBA was time-barred. The intermediate appellate court reversed, holding that the statute of limitations was equitably tolled until the conclusion of the grievance process.
A fractured Michigan Supreme Court agreed with the intermediate appellate court and held that equitable tolling applied.
The majority, remarking that the case was unique in the country in that it is highly unusual for a CBA to include a mandatory grievance procedure with non-binding arbitration as the final step, opined that if the labor unions' action for breach of the CBA were ruled time-barred, the employees would have been "punish[ed]" "for exhausting th[e grievance] procedures before filing suit." 457 Mich. at 89.