United Food and Comm Workers v. Mountaineer Park, Incorporated, No. 09-2215 (4th Cir. 2011)

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UNPUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 09-2215 UNITED FOOD AND COMMERCIAL WORKERS, LOCAL 23, Plaintiff - Appellant, v. MOUNTAINEER PARK, INCORPORATED, Defendant - Appellee. Appeal from the United States District Court for the Northern District of West Virginia, at Wheeling. Frederick P. Stamp, Jr., Senior District Judge. (5:08-cv-00177-FPS) Argued: October 28, 2010 Decided: January 26, 2011 Before MOTZ, AGEE, and WYNN, Circuit Judges. Reversed and remanded by unpublished opinion. Judge Agee wrote the opinion, in which Judge Motz and Judge Wynn joined. ARGUED: Marianne Oliver, GILARDI, COOPER & LOMUPO, Pittsburgh, Pennsylvania, for Appellant. Peter Raymond Rich, SPILMAN, THOMAS & BATTLE, PLLC, Pittsburgh, Pennsylvania, for Appellee. ON BRIEF: William J. Gagliardino, GILARDI, COOPER & LOMUPO, Pittsburgh, Pennsylvania; Timothy F. Cogan, CASSIDY, MYERS, COGAN & VOEGELIN, LC, Wheeling, West Virginia, for Appellant. Unpublished opinions are not binding precedent in this circuit. AGEE, Circuit Judge: United Food and Commercial Workers, Local 23 ( the Union ) appeals from the district court s grant of summary judgment in favor of Mountaineer Park, Inc. ( MPI ). compel MPI to arbitrate two disputes The Union sought to under the arbitration provision of the Collective Bargaining Agreement ( CBA ) 1 between the Union and MPI. In its order granting MPI s motion for summary judgment, the district court held that the disputes were not subject to arbitration. Because we conclude that the parties agreement requires arbitration, we reverse the judgment of the district court and remand for further proceedings. I. The resolution of this case revolves around the scope and interplay of two sections in the CBA: the arbitration provision in Article 12, and the management rights clause in Article 4. Under Article 12, the parties agreed to an expansive provision to arbitrate any dispute or disagreement with respect to the interpretation or any of the provisions of this agreement. (J.A. 22, 48.) 1 Although there were two different CBAs in effect during the relevant time frame, the pertinent provisions of each are the same for purposes of this case. Accordingly, we simply refer to the CBA. 2 Article 4, titled Management Rights lists certain rights retained by MPI, the pertinent provision for our purposes being the following: ARTICLE 4 Management Rights: Except as expressly modified or restricted by a specific provision of this Agreement, Employer reserves the right in accordance with its judgment in connection with it s [sic] VLT employees:[2] . . . (j) Except as otherwise specifically provided herein, to exercise all rights it had prior to the signing of this Agreement. (J.A. 14-15; 40-41.) The parties dispute how the foregoing provisions apply to determine whether the two separate grievances brought by the Union are arbitrable. 3 was filed changed by job the The first grievance (the pay grievance ) Union on classifications lower-grade positions. behalf by of several voluntarily employees transferring who into According to the Union, these employees were treated as new hires after their transfers and were paid the hiring rates set forth in subsection 1 of Appendix A to the CBA, but without any adjustment for prior increases earned under subsection 2. 2 The employees whose grievances are at issue are all VLT employees. 3 The parties and the district court referred disputes as grievances and we will use the same term. 3 to the In the second grievance (the vacation grievance ), the Union challenged MPI s decision to blackout December 26th as a day when no employees were permitted to take vacation, and the consequent denial of employees requests for vacation on that date. The compel Union filed arbitration arbitrate. its of complaint these in grievances the district after MPI court to refused to After the parties filed cross-motions for summary judgment, the district court granting MPI s motion Union s. In doing so, the district court held that MPI was not for issued summary an opinion judgment and and order denying the required to arbitrate either grievance. The Union timely appealed. This Court has jurisdiction under 28 U.S.C. § 1291. II. A. We review a district court s award of summary judgment de novo. French v. Assurance Co. of Am., 448 F.3d 693, 700 (4th Cir. 2006). Summary judgment is appropriate when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. In AT&T Technologies, Id.; Fed. R. Civ. P. 56(c). Inc. v. Communications Workers of America, 475 U.S. 643 (1986), the Supreme Court described four 4 basic principles which courts should use to determine whether a disputed issue is subject to arbitration. The first principle . . . is that arbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit. . . . The second rule, which follows inexorably from the first, is that the question of arbitrability-whether a collective-bargaining agreement creates a duty for the parties to arbitrate the particular grievance--is undeniably an issue for judicial determination. . . . The third principle ¦ is that, in deciding whether the parties have agreed to submit a particular grievance to arbitration, a court is not to rule on the potential merits of the underlying claims. Whether arguable or not, indeed even if it appears to the court to be frivolous, the [dispute at issue] is to be decided, not by the court asked to order arbitration, but as the parties have agreed, by the arbitrator. The courts, therefore, have no business weighing the merits of the grievance, considering whether there is equity in a particular claim, or determining whether there is particular language in the written instrument which will support the claim. The agreement is to submit all grievances to arbitration, not merely those which the court will deem meritorious. Finally, it has been established that where the contract contains an arbitration clause, there is a presumption of arbitrability in the sense that an order to arbitrate the particular grievance should not be denied unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute. Doubts should be resolved in favor of coverage. 475 U.S. at 648-650 (internal quotations and citations omitted). Additionally, in cases where there is a broad arbitration clause and an absence of any 5 express provision excluding a particular forceful grievance evidence from of a arbitration, purpose arbitration can prevail. to . . . exclude only the the most claim from United Steelworkers of Am. v. Warrior & Gulf Navigation Co., 363 U.S. 574, 584-85 (1960) ( Warrior & Gulf ). B. With regard to the pay grievance, the district court found the following language in subsection 4 of Appendix A to be significant: It is specifically agreed that the hiring rates and annual increases set forth in this Appendix A are minimums, and that the Employer may pay rates and increases in excess of these at its sole discretion. (J.A. 31.) The district court considered the at its sole discretion language of particular importance. (J.A. 87.) The court also stated it read subsection (j) of Article 4, which reserved to MPI all rights it had prior to signing the CBA, except as otherwise specifically provided in the CBA, to weigh against arbitration. (J.A. 87.) Principally based on the sole discretion authority and reservation of prior rights, the district court concluded the CBA taken as a whole, clearly and unambiguously shows that the parties did not intend to take a grievance such as this to arbitration. . . . The language clearly shows that, as a result of the parties bargaining, there is no right to retain past 6 annual pay increases where an employee voluntarily steps into a lower position. (J.A. 88-89.) Because MPI was paying the employees who voluntarily downbid into lower classifications at least the minimum hiring rates set forth in Appendix A, the district court concluded the pay grievance was not arbitrable. We disagree. covers any The CBA s arbitration provision, Article 12, dispute interpretation or (J.A. 22, 48.) or disagreement of the any with provisions respect of this to the agreement. Whether the minimum hourly hiring rates in subsection 1 of Appendix A constitute the full wage basis of the downbidding employees, so they have subsection 2, is clearly in dispute. no entitlement under Unless a specific CBA provision takes this grievance out of the scope of arbitration, then it is up to the arbitrator to decide which pay rate applies. Significantly, there is no express provision in Article 4 or elsewhere in the CBA that removes the pay grievance from the otherwise legitimate reach of the arbitration clause. While MPI points repeatedly to the management rights clause as exempting certain disputes arbitration clause from do arbitration, not refer to that each clause other. and the While the wording of subsection 4 of Appendix A may be relevant to the merits of subsection the 1 pay pay grievance rates are (e.g., in inclusive 7 answering or whether exclusive of the the subsection 2 increases), nothing in subsection 4 speaks to the arbitrability of a dispute about the terms in Appendix A. No provision in the CBA excises pay disputes from the agreement to arbitrate. Nonetheless, MPI contends we should affirm the denial of arbitrability because it presented forceful evidence of a See AT&T Techs., 475 U.S. at 650 (quotations and citation omitted). MPI purpose to exclude the claim from arbitration. contends it has shown such forceful evidence through: (1) the managements rights clause; (2) the discretion given to MPI in Appendix A to pay any rates over the minimum rates set forth therein; (3) the absence of any specific clause requiring MPI to pay more than the hiring minimums to employees who downbid; and (4) MPI s practice, both before and during the term of the CBA, of paying persons going into a different job classification (such as by demotion, bumping, transfer, downbidding, or other reason) at the hiring rate for that classification. MPI contends that, taken together, this evidence shows that the parties agreed MPI has sole discretion over the issue of pay to its employees except as otherwise modified by the agreement. Consequently, MPI concludes the recited items constitute the forceful evidence necessary to show the parties did not intend this dispute to be arbitrable. 8 Again, we disagree. Warrior & Gulf, which was the genesis of the most forceful evidence language, is instructive here. In that case, arbitrate a contract out employees. the union grievance work sought challenging that had 363 U.S. at 575. to compel previously employer to employer s the the decision to been performed by its The agreement between the parties had a grievance and arbitration provision which governed any differences aris[ing] between the company and the union as to the meaning and application of the provisions of this Agreement as well as any local (quotations omitted). trouble of any kind. Id. at 576 It further stated, however, that matters which are strictly a function of management shall not be subject to arbitration under this section. Id. (quotations omitted). In light of the no-strike clause present in the agreement, the Supreme Court determined that the language strictly a function of management must be interpreted as referring only to that over which the contract gives management complete control and unfettered discretion. Id. at 584. The Court noted that, had from there been a specific exclusion arbitration of contracting out or any collateral agreement making clear that contracting out was not a matter for arbitration, the grievance would not be arbitrable. Id. at 584. But in the absence of such a provision and in the absence of any showing that the parties designed the phrase strictly a function of management 9 to encompass any and all forms of contracting out, the Court determined that the dispute was arbitrable. The exclusion from arbitration of strictly management functions simply was not sufficiently forceful evidence of an intent to exclude the claim from arbitration. Although the arguably broader Id. at 585. arbitration than the clause one at in issue Warrior here, & the Gulf was management rights clause in that case expressly stated that matters that were strictly arbitration. a function of management were exempted from In the case at bar, by contrast, the management rights clause makes no reference to arbitration, much less any restrictions rights on clause arbitration. nor the Indeed, arbitration neither provision the management (nor any other provision of the CBA) expressly excludes any management decision from the arbitration provision. Moreover, Article 4 is itself limited by other terms in the Agreement. Put differently, while the CBA has a management rights clause, that clause is subject to the other terms in the agreement, (J.A. including 14-15; 40-41) the requirement (language in to arbitrate managements grievances. rights clause stating that Except as expressly modified or restricted by a specific provision of this Agreement, expressed rights). 10 management has the Additionally, the mere fact that Appendix A gives the employer sole discretion to pay higher wages than the contract rate is not dispositive on the question of arbitrability. Indeed, the very issue raised in the pay grievance is a dispute over what is the contract rate, not what the discretionarily choose to pay beyond that rate. employer may Cf. East Coast Hockey League v. Prof l Hockey Players Ass n, 322 F.3d 311 (4th Cir. 2003) (concluding that a dispute was arbitrable despite language in a separate agreement between the parties that management could take certain actions in its sole discretion ); id. at 316 (this Court finding no inconsistency in the president being given the sole discretion to make a decision and that exercise of discretion being reviewable via arbitration). 4 For all of these reasons, we conclude that the record does not disclose the most forceful 4 evidence showing that the MPI relies heavily on three Seventh Circuit decisions: Local Union 1393 International Brotherhood of Electrical Workers v. Utilities District of Western Indiana Rural Electric Membership Cooperative, 167 F.3d 1181 (7th Cir. 1999), International Brotherhood of Teamsters v. Logistics Support Group, 999 F.2d 227 (7th Cir. 1993), and Local Union No. 483, International Brotherhood of Boilermakers v. Shell Oil Co., 369 F.2d 526, 529 (7th Cir. 1966). These out of circuit cases are not binding on this Court. In any event, we have considered each of them, but all are substantially distinguishable based on the facts and language of the contract provisions, none of which are similar to those in the case at bar. 11 parties did not intend to arbitrate the pay grievance. Accordingly, the presumption in favor of arbitrability applies and the district court erred in determining the pay grievance was not arbitrable. C. Our analysis arbitrability Union, the of leads the analysis to a vacation turns similar conclusion grievance. on the on the to the between the According interplay employees rights to take vacation at any time during the year and the employer s right to approve/disapprove selected vacation dates. (Appellant s Br. at 11-12.) The asserted right of employees time to take vacation at any during the year, according to the Union, is based on language in the CBA that [v]acations may be taken between January 1 and December 31 each year. (J.A. 24.) the employer is The Union contends that this provision means prohibited from making any date a blackout date on which no employees are permitted to take vacation. The Union therefore argues that the vacation grievance is nothing more than a dispute as to the meaning of the terms of the CBA and thus must fall to an arbitrator to decide. MPI responds that there is unchallenged forceful evidence of a purpose to exclude the vacation selection grievances from arbitration. In particular, MPI contends Section 14.6 of the CBA is such forceful evidence because it expressly allows MPI to 12 approve/disapprove selected vacation dates. (Appellee s Br. 22 (quoting J.A. 25, 51).) Additionally, MPI argues the CBA has no specific contractual restriction on MPI s right to disapprove vacation on the day after Christmas, and the Union cannot explain why it negotiated a specific restriction on management s staffing rights with respect to Christmas Day in Section 13.2 of the CBA. The district court concluded the vacation grievances were not arbitrable, but appeared to do so by analyzing the merits of the claim instead of whether the dispute was subject to As noted in AT&T Technologies, a court is not to arbitration. rule on the potential merits of the underlying claims. 475 U.S. at 649. MPI contends, though, that the district court properly addressed the merits of the vacation grievance claim, because consideration of the substantive merits is sometimes required in order to rule on arbitrability. While it is occasionally necessary for a court to interpret a provision of an agreement in order to determine arbitrability, see Litton Fin. Printing Div. v. NLRB, 501 U.S. 190, 209 (1991) ( we cannot avoid [our duty to determine arbitrability] because it requires us to interpret a provision of a bargaining agreement ), our caselaw consistently follows the Supreme Court s admonition to avoid reaching the merits of the issue when that is not required to determine the question of arbitrability. 13 See, e.g., United Steel, Paper, & Forestry, Rubber, Mfg., Energy, Allied-Indus. & Serv. Workers Int l Union v. Cont l Tire N. Am., Inc., 568 F.3d 158, 165-66 (4th Cir. 2009) (while courts are permitted some latitude to interpret provisions of a bargaining agreement that impact the underlying merits of the dispute when necessary to determine arbitrability, [i]f possible . . . the underlying merits should be avoided ); United Food & Commercial Workers Union v. Shoppers Food Warehouse Corp., 35 F.3d 958, 961 (4th Cir. 1994). Whether immaterial the to arbitrable. vacation the grievance determination of fails on whether its the See AT&T Techs., 475 U.S. at 649-50. merits is grievance is As with the pay grievance, the conflicting interpretations of Article 14 of the CBA are a disagreement with respect to the interpretation . . . of the provisions of the agreement. (J.A. 22, 48.) No provision of the CBA takes this dispute out of the presumption of arbitration. Neither do any of MPI s suggestions rise to the level of the most forceful evidence to exclude the vacation grievance from arbitration. MPI addressed argues, the however, merits of that the district the claims court because the properly Union s grievances here are more than frivolous , they are so totally devoid of merit as to amount to a perversion of the grievance procedure. (Appellee s Br. 10 (quoting Tobacco Workers Int l 14 Union v. 1971)).) Lorillard Corp., 448 F.2d 949, 954 n.10 (4th Cir. Notably, the quoted language is not a holding of this Court. Instead, the language in Lorillard appears in a footnote in which a panel of this Court reiterates the principle that a federal court cannot refuse to compel arbitration because it finds a claim to be frivolous. The footnote then goes on to say that [t]he closest any court has come to stating that the court may refuse to compel arbitration if the grievance is without merit is the recognition of the possibility that a grievant s claim be so totally devoid of merit as to amount to a perversion of the grievance procedure. Lorillard, 448 F.2d at 954 n.10. (citations omitted) (quoting one Second Circuit and one Fifth Circuit decision). This Court continued: Even if we were to accept the notion that the District Court may examine the merits to such an extent, this case falls far short of such a test. Id. 5 We cannot frivolous. conclude the Union s claim is more than The vacation grievance turns on interpretation of the CBA and the rights of MPI with regard to denying vacation 5 MPI points to no other Supreme Court or Fourth Circuit authority holding that a court may decline to order arbitrability of an otherwise arbitrable grievance because the grievance is determined to be more than frivolous. 15 days or blacking out vacation days altogether. In short, the presumption of arbitrability applies, and no forceful evidence has been shown that the parties did not intend to arbitrate such a dispute. Thus, the vacation grievance is subject to the parties agreement to arbitrate, and the district court erred in refusing to order arbitration of that dispute. III. The arbitration clause in the CBA reflected the parties clear intent to arbitrate a broad array of disputes concerning the interpretation of the CBA and MPI has not presented forceful evidence that the parties intended to exclude the issues in dispute from the contractual covenant to arbitrate. Accordingly, the judgment of the district court is reversed, and the case is hereby remanded to the district court for further proceedings consistent with this opinion. REVERSED AND REMANDED 16

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