CITY OF ANN ARBOR V AFSCME LOCAL 369
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STATE OF MICHIGAN
COURT OF APPEALS
CITY OF ANN ARBOR,
FOR PUBLICATION
May 28, 2009
9:05 a.m.
Plaintiff-Appellee
v
AMERICAN FEDERATION OF STATE,
COUNTY, AND MUNICIPAL EMPLOYEES
(AFSCME) AND ITS AFFILIATED LOCAL 369,
Defendant-Appellant.
No. 283814
Washtenaw Circuit Court
LC No. 07-000520-CL
Advance Sheets Version
Before: Bandstra, P.J., and Whitbeck and Shapiro, JJ.
BANDSTRA, P.J.
Defendant, American Federation of State, County, and Municipal Employees (AFSCME)
Local 369, appeals as of right the trial court’s order granting summary disposition to plaintiff,
city of Ann Arbor in this action arising from a dispute over the scope of an arbitration award.
We reverse and remand for the entry of an order granting summary disposition in favor of
defendant.
At issue here is the meaning of language in a so-called “me too” provision of a collective
bargaining agreement (CBA) entered into by the parties for the three-year period from July 1,
1998, to June 30, 2001.1 This “me too” provision provides that
[i]f another bargaining unit receives an increase higher than the settlement with
AFSCME, such increase will also be granted to AFSCME for this contract period
as a “me too” on wages. If gained by Police or Fire bargaining units, a “me too”
[sic] retroactivity on wages for retirees.
1
The purpose of this provision was to induce defendant to enter into a contract with plaintiff
before bargaining was complete with all other units, without being concerned about whether
plaintiff would then grant higher increases to those bargaining units with which it subsequently
reached agreement.
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The parties did not reach agreement on a successor contract as of the CBA’s June 30, 2001,
expiration date. By virtue of “ground rules” mutually agreed to by the parties on April 21, 2001,
the CBA was to remain in effect until a successor contract was ratified by both parties. Before
the parties reached agreement on a successor contract, defendant filed its grievance, alleging that
plaintiff violated the “me too” provision of the CBA by refusing to give defendant’s members
wage increases provided to members of another bargaining unit.
The parties executed a successor collective bargaining agreement, which was ratified by
plaintiff on October 7, 2002. Defendant ratified the agreement sometime between August 21,
2002, and October 7, 2002. Thus, pursuant to the “ground rules,” the CBA remained in effect
until October 7, 2002.
Defendant’s grievance remained unresolved through the process outlined in the CBA, and
on March 25, 2002, defendant demanded arbitration. Ultimately, the arbitrator determined that
defendant was entitled to the “me too” increase it sought, concluding that “the longevity/wage
structure increases received by the [other bargaining unit] shall be awarded to AFSCME for the
contract period from July 1, 1998, to June 3[0], 2001, and as extended by the parties.”
Following the issuance of the arbitrator’s opinion, plaintiff granted the “me too”
increases to defendant, limited to the period from July 1, 1998, to June 30, 2001. Plaintiff
asserted that the arbitration award did not include the period during which the CBA was
extended pursuant to the mutually agreed to “ground rules” pending completion of a successor
agreement, because that period was not part of the “contract period” within the meaning of the
CBA’s “me too” provision. Plaintiff argued that the phrase “and as extended by the parties” in
the arbitration award meant only that the awarded “me too” increases would continue if, but only
if, the parties agreed to extend the “me too” benefit by including it in the successor agreement.
Defendant disagreed, asserting that the arbitrator’s language “and as extended by the parties”
referred to and encompassed the parties’ mutual agreement, set forth in the “ground rules,” to
extend the CBA until such time as a successor agreement was ratified by both parties and that the
increases thus extended until October 7, 2002. Unable to resolve their disagreement, the parties
ultimately agreed to return to the arbitrator to seek clarification of the award.
Following a hearing on this issue and the submission of post-hearing briefs, on April 24,
2007, the arbitrator issued a second opinion and award clarifying that “‘[a]s extended by the
parties’ means until ratification by the parties on October 7, 2002. The ground rules mutually
adopted on April 24, 2001, stated that the agreement is to remain in effect until both parties ratify
the successor contract.” The arbitrator reasoned that, by mutual agreement of the parties, “[t]he
employees continued to be paid under the terms and conditions of the 1998-2001 contract until
the new contract was ratified. This means that the ‘me-too’ wage increases continued to be part
of the 1998-2001 agreement until it was officially superceded.”
On May 16, 2007, 21 days after the arbitrator clarified his award, plaintiff filed a
complaint to vacate a portion of arbitrator’s award. It asserted that the arbitrator exceeded his
authority under the CBA by awarding defendant the “me too” increases for the period from June
30, 2001, until October 7, 2002.
Defendant moved for summary disposition pursuant to MCR 2.116(C)(7). Defendant
relied on a decision issued by the United States Court of Appeals for the Sixth Circuit, Badon v
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Gen Motors Corp, 679 F2d 93 (CA 6, 1982), a case filed under § 301 of the Labor Management
Relations Act, 29 USC 185, to argue that the Michigan limitations period for an action to vacate
a labor arbitration award is six months. Thus, defendant argued that plaintiff’s complaint should
be dismissed as untimely because it was filed more than six months after the arbitrator issued his
October 28, 2005, award granting defendant’s grievance.
Plaintiff initially acknowledged that a six-month limitations period generally applies to
such claims, but argued that the limitations period should be equitably tolled given the unusual
circumstances presented here, including the necessity of seeking clarification of the award from
the arbitrator, that much of the delay in returning to the arbitrator was caused by defendant, and
that plaintiff filed its complaint less than one month after the arbitrator issued his second opinion
clarifying the phrase “and as extended by the parties.” Later, in a reply to defendant’s motion,
plaintiff denied that Michigan imposes a six-month limitations period on claims to vacate an
arbitration award, asserting for the first time that such actions are subject to the six-year residual
statute of limitations set forth in MCL 600.5813.
The trial court agreed and denied defendant’s motion for summary disposition. The trial
court ruled that the residual six-year limitations period set forth in MCL 600.5813 applied to
plaintiff’s claim to vacate a portion of the arbitration award and that even if a six-month
limitations period applied, it would be equitably tolled considering the circumstances presented.
Plaintiff likewise moved for summary disposition, asserting that the arbitrator exceeded
his authority by extending the “me too” benefits until October 7, 2002, because he did so relying
on the “ground rules” (which extended the CBA pending ratification of a successor agreement)
and not by interpreting language contained in the CBA. Defendant opposed the motion,
asserting that the arbitrator was acting within his authority when he interpreted the “contract
period” as including the parties’ mutually agreed extension of the CBA until such time as the
successor agreement was ratified. At the conclusion of oral argument, the trial court granted
plaintiff’s motion. It concluded that the arbitrator exceeded his authority by relying on the
ground rules, and not solely on the CBA, to determine that the “contract period” for purposes of
the “me too” increases concluded on October 7, 2002.
Defendant first argues on appeal that the trial court erred in determining that actions to
vacate an arbitration award are governed by a six-year limitations period. We disagree.
This Court reviews a trial court’s decision on a motion for summary disposition de novo.
Dressel v Ameribank, 468 Mich 557, 561; 664 NW2d 151 (2003); Spiek v Dep’t of
Transportation, 456 Mich 331, 337; 572 NW2d 201 (1998); Rice v Auto Club Ins Ass’n, 252
Mich App 25, 30; 651 NW2d 188 (2002). The question regarding the applicable limitations
period presents a question of law that this Court also reviews de novo. Detroit v 19675 Hasse,
258 Mich App 438, 444; 671 NW2d 150 (2003); City of Novi v Woodson, 251 Mich App 614,
621; 651 NW2d 448 (2002).
The parties agree, correctly, that there is no statute or court rule setting forth a limitations
period specifically for actions seeking to vacate labor arbitration awards arising from collective
bargaining agreements. Although arbitration is addressed in both statutory provisions and court
rules, there is no limitations period plainly applicable to actions relating to labor arbitration
awards.
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The Legislature has declared, in § 1 of the labor mediation act, that it is “the public policy
of this state that the best interests of the people of the state are served by the prevention or
prompt settlement of labor disputes . . . .” MCL 423.1. In furtherance of this policy, the
Legislature has provided:
(1) Any labor dispute, other than a representation question, may lawfully
be submitted to voluntary arbitration in the manner provided in this section. . . .
(2)(a) When a labor dispute involves the meaning or interpretation of an
existing collective agreement between an employer and a labor organization and
the collective agreement provides for the use of a designated arbitrator to decide
disputes thereunder, or provides the method for selection of arbitrator or
arbitrators, the provisions of that agreement shall be binding upon the parties, and
shall be complied with unless the parties agree to submit the dispute to some other
arbitration procedure.
***
(4) An award rendered in a proceeding hereunder shall be enforceable at
law or in equity as the agreement of the parties. [MCL 423.9d.]
However, the labor mediation act does not contain any limitations period for actions to enforce,
vacate, or modify arbitration awards. MCR 3.602 establishes limitations periods for filing a
complaint to vacate an arbitration award (21 days), a motion to vacate an award (91 days), or a
complaint to correct or modify an arbitration award (21 days). MCR 3.602(J) and (K).
However, that rule only governs statutory arbitration conducted under chapter 50 of the Revised
Judicature Act (RJA), MCL 600.5001 to 600.5035. MCR 3.602(A). The pertinent provisions of
the RJA specifically except collective bargaining agreements from that chapter. MCL
600.5001(3). Thus, the limitations periods set forth in MCR 3.602 do not apply to awards such
as that at issue here.
In the absence of a specifically applicable limitations period, defendant urges that a sixmonth period is mandated by the Sixth Circuit’s decision in Badon, supra. Alternatively,
plaintiff asserts that, in the absence of any specifically applicable limitations period, this action is
governed by the six-year residual limitations period set forth in MCL 600.5813.
At issue in Badon was the proper limitations period for a Michigan employee’s “hybrid”
action, brought under § 301 of the Labor Management Relations Act, 29 USC 141 et seq.
(hereafter LMRA), against his former employer for breach of contract and against his union for
unfair representation. The Sixth Circuit observed that the United States Supreme Court had
instructed federal courts to “apply the most analogous state statute to section 301 suits as a
matter of federal law” and that “the most appropriate [limitations] statute was that pertaining to
the vacation of arbitration awards.” Badon, supra at 95-96, citing Int’l Union, UAW v Hoosier
Cardinal Corp, 383 US 696, 704-705; 86 S Ct 1107; 16 L Ed 2d 192 (1966), and United Parcel
Service v Mitchell, 451 US 56, 62; 101 S Ct 1559; 67 L Ed 2d 732 (1981).
Having decided that it was to apply the Michigan limitations period for actions to vacate
arbitration awards, the Court next attempted to ascertain Michigan law on this issue. It began by
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noting that the limitations period relating to arbitration awards set forth in the Michigan Court
Rules applied only to statutory arbitration under the RJA, which explicitly excludes from its
operation “‘collective contracts between employers and employees or associations of employees
in respect to terms or conditions of employment.’” Badon, supra at 98, quoting MCL
600.5001(3). The Badon Court then explained:
By excluding labor disputes from statutory arbitration, Michigan has
relegated labor arbitration to the realm of the common law. Appellants have not
directed us to, nor have we found, any authority limiting the time in which labor
arbitration awards may be vacated in Michigan. [The plaintiff] has, however,
cited several cases which he claims employ Michigan’s residual six-year personal
action statute. [MCL 600.5813]. Unfortunately none of the cases cited is
apposite. . . .
In summary, we are left without guidance by the state of Michigan with
respect to the time period within which actions to vacate labor arbitration awards
must be brought. We must therefore decide this federal question on the strength
of our own reasoning. That process leads us to conclude that the most appropriate
statute of limitations under these circumstances is the six-month period found at
section 10(b) of the National Labor Relations Act, 29 U.S.C. § 106(b). Although
that period specifically governs unfair labor charges brought before the National
Labor Relations Board, the policy behind that time period applies with equal force
when similar charges are brought to a federal court under section 301 of the
[LMRA]. [Badon, supra at 99.]
The Badon Court commented that the six-month limitations period presented “‘the proper
balance between the national interests in [a] stable bargaining relationship and finality of private
settlements, and an employee’s interest in setting aside what he views as an unjust settlement
under the collective-bargaining system.’” Id., quoting Mitchell, supra at 70.
This Court applied Badon in Romero v Paragon Steel Div, Portec, Inc (On Remand), 129
Mich App 566, 572-573; 341 NW2d 546 (1983). In Romero, on remand from our Supreme
Court for reconsideration in light of Badon, this Court, quoting extensively from Badon and
adopting its reasoning, determined that a six-month limitations period applied to bar the
plaintiff’s claims against his employer for wrongful discharge brought under § 301 of the
LMRA. This Court also determined that a teacher’s claim against his union alleging breach of
the duty of fair representation was barred by a six-month limitations period, “[l]ikewise [finding]
the result reached . . . [in] Badon to be sound.” Ray v Org of School Administrators &
Supervisors, Local 28, 141 Mich App 708, 711; 367 NW2d 438 (1985). Similarly, this Court
applied Badon to again bar as untimely an action by an employee against her union and its agent,
alleging that the union failed to file a timely grievance for arbitration on her behalf following
termination of her employment. Ogletree v Local 79, Service Employees Int’l Union, 141 Mich
App 738, 739-740, 743; 368 NW2d 882 (1985).
Next, this Court mentioned Badon in Meadows v Detroit, 164 Mich App 418, 434-435;
418 NW2d 100 (1987). That case involved an action by a former police officer against his
employer alleging wrongful discharge (among other claims) and against his union for breach of
the duty of fair representation. In that context, this Court explained:
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When a duty of fair representation claim is asserted by itself or in
combination with a claim of wrongful discharge, this Court has held that a sixmonth period of limitations applies. Romero [supra at 572-573]; Ray [supra];
Ogletree [supra at 745]. The adoption of such a brief limitations period is based
on the following sound policy rationale:
“Where the parties have contracted to settle claims among themselves,
their final decisions should not be exposed to collateral attack for long periods but
should become final rather quickly. See UMW v Barnes & Tucker Co, 561 F2d
1093, 1096 (CA 3, 1977) (‘It is not arbitration per se that federal policy favors,
but rather final adjustment of differences by a means selected by the parties.’)[.]
Otherwise, the internal system will be just another step into a lengthy process of
litigation rather than an efficient and unitary method of disposing of the high
volume of grievances generated under any large scale employment contract.”
[Romero, supra, p 569, quoting Badon [supra]. See also DelCostello v Int’l
Brotherhood of Teamsters, 462 US 151; 103 S Ct 2281; 76 L Ed 2d 476 (1983).]
[Meadows, supra at 434-435.]
Of note to the instant appeal, neither Badon nor any of the aforementioned cases actually
involved actions to vacate, modify, or enforce arbitration awards. Rather, Badon and its
Michigan progeny applied a six-month limitations period to claims that a union had breached its
duty of fair representation, whether brought alone or in conjunction with claims against the
employer for wrongful termination or other improper employment action. Meadows, supra.
The limitations period applicable to an action to enforce an arbitration award was at issue
in Walkerville Ed Ass’n v Walkerville Rural Communities School, 165 Mich App 341, 345; 418
NW2d 459 (1987). This Court noted that Michigan law does not specify a limitations period for
enforcing a labor arbitration award arising from private-sector collective bargaining agreements,
or from public-sector agreements where the challenged employer action was not submitted to the
Michigan Employment Relations Commission (MERC). Faced with this, this Court affirmed a
trial court’s decision extending by analogy the six-month limitations period found in § 16(a) of
the public employment relations act (PERA), MCL 423.216(a), to the plaintiff’s claim seeking
enforcement of an arbitration award not meeting the conditions of that act. After noting that
neither MCR 3.602(I) nor MCL 423.216(a) applied to the case before it, this Court reasoned:
An arbitration proceeding, being based on an agreement, is contractual in
nature. The difficulty in this case arises because of MCL 423.9d . . . , which,
while allowing public labor disputes to be resolved by arbitration, does not
specify a limitation period for enforcing the arbitration award. Rather, the award
rendered “shall be enforceable at law or in equity as the agreement of the parties.”
MCL 423.9d(4) . . . . This requirement suggests that an arbitration award in the
public sector should be subject to the six-year limitation period for contracts
contained in the Revised Judicature Act, MCL 600.5807(8) . . . . This limitation
period, although perhaps applicable under strict rules of statutory construction,
appears to be an unduly lengthy period for enforcing an arbitration award. This is
particularly so when viewed with the statutory declaration that the best interests of
the people of this state are served by the prompt settlement of labor disputes.
MCL 423.1 . . . . Similar policy considerations, under federal labor law, along
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with a consideration of the competing interests affected by the limitation period,
have led federal courts to adopt the six-month limitation period contained in §
10(b) of the National Labor Relations Act, 29 USC 160(b), for arbitration
purposes.
We conclude that the trial court did not err in adopting the six-month
limitation period. A six-month period is part of PERA; it effectuates the state’s
express policy in favor of the prompt resolution of labor disputes in the public
sector. Adoption of the six-month limitation period also contributes to statute of
limitation uniformity. [Walkerville, supra at 345 (some citations omitted.]
Subsequently, however, our Supreme Court refused to apply this Court’s decision in
Walkerville, holding that PERA’s six-month limitations period could not be applied by analogy
and that actions to enforce arbitration awards are instead governed by the six-year limitations
period for breach of contract actions and, where specific performance or other equitable relief is
sought, are also subject to the equitable doctrine of laches. Rowry v Univ of Michigan, 441 Mich
1, 9-11; 490 NW2d 305 (1992). Stated differently, the Court explained that “a plaintiff
ordinarily has six years to seek enforcement of an arbitration award[,]” although “in certain cases
this time period may be substantially diminished if a plaintiff’s arbitration award grants equitable
relief and a delay in its enforcement is shown to prejudice the defendant in a way that evokes
laches to bar the plaintiff’s claim.” Id. at 11-12.
We find particularly noteworthy Justice Griffin’s ‘“reluctant”’ concurrence in Rowry,
“express[ing] . . . concern that application of a limitation period of six years, rather than six
months, will seriously undermine state and federal policies favoring the prompt resolution of
labor disputes” and urging the Legislature “to address this issue and to provide a more
appropriate period of limitation in keeping with its stated policy of encouraging expeditious
resolution of labor disputes.” Id. at 12, 17. More specifically, Justice Griffin (joined by Justice
Boyle) reasoned as follows:
In its analysis, the majority concludes that the six-year period generally
applicable to contract actions is the appropriate limitation period to apply to this
plaintiff’s action to “enforce” a labor arbitration award. However, this case
involves more than a simple breach of contract or a straightforward refusal to
comply with an arbitration award. Plaintiff’s cause of action arises out of a
collective bargaining agreement between his union and his employer. The
agreement establishes a grievance procedure designed to effect the prompt
resolution of disputes. Such a procedure is in keeping with a state policy that
discourages long delays in the resolution of labor disputes.
When it adopted the labor mediation act, our Legislature stated:
“It is hereby declared as the public policy of this state that the best
interests of the people of the state are served by the prevention or prompt
settlement of labor disputes . . . .” [MCL 423.1. . . .]
This act encourages use of arbitration in the settlement of disputes by providing
that an agreement to arbitrate “shall be binding upon the parties,” and stating that
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the arbitration award “shall be enforceable at law or in equity as the agreement of
the parties.”
Concern at the state level for rapid resolution of labor disputes is
consistent with established policy at the federal level. In DelCostello [supra], the
United States Supreme Court rejected the application of an extended state contract
limitation period in an action arising from a collective bargaining agreement that
provided for grievance resolution through arbitration. The Court explained:
“This system, with its heavy emphasis on grievance, arbitration, and the
“law of the shop,” could easily become unworkable if a decision which has given
“meaning and content” to the terms of an agreement, and even affected
subsequent modifications of the agreement, could suddenly be called into
question as much as [three] years later.’” [462 US 169, quoting (Mitchell, supra
at 64).]
Recognizing the importance of stable relationships in the workplace and the need
for finality in a collectively bargained grievance procedure, the Court elected to
apply the six-month limitation period of § 10(b) of the Labor-Management
Relations Act, 29 USC 160(b), “a federal statute of limitations actually designed
to accommodate a balance of interests very similar to that at stake here . . . .”
DelCostello, 462 US 169.
In Samples v Ryder Truck Lines, Inc, 755 F2d 881, 888 (CA 11, 1985), the
United States Court of Appeals for the Eleventh Circuit applied the DelCostello
rationale to an employee’s action to enforce a labor arbitration award. The court
found Georgia’s six-year contract limitation period inapplicable because “a
grievance arising during the term of a collective bargaining agreement bears little
likeness to a common law breach of contract claim.” Similarly, in Int’l Ass’n of
Machinists v Allied Products Corp, 786 F2d 1561, 1564 (CA 11, 1986), the
Eleventh Circuit applied the six-month limitation period to a union’s action to
compel arbitration, explaining that Alabama’s six-year limitation period for
contract actions “contravenes the federal policy of the prompt resolution of labor
disputes.”
As I see it, the same rationale counsels against application of a six-year
contract limitation period in the instant case. . . . Surely, if a policy of prompt
resolution of labor disputes is to have meaning, a relatively short limitation period
should govern resort to the courts after exhaustion of a grievance procedure.
Although the Legislature has taken pains to declare that it is the public
policy of this state to encourage prompt resolution of labor disputes,
unfortunately, it has failed to provide suitable statutes of limitations for the
implementation of that policy.
I agree with the reasoning set forth in Walkerville [supra] and I would
adopt it in this case if the Legislature had not provided a residual or “catch-all”
statute of limitations requiring:
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“All other personal actions shall be commenced within the period of 6
years after the claims accrue and not afterwards unless a different period is stated
in the statutes.” [MCL 600.5813. . . .]
It is at least arguable that MCL 600.5807(8) . . . [the period of limitations
for contract actions applied by the majority] does not apply in this case because
that subsection establishes a limitation period for “actions to recover damages or
sums due for breach of contract,” whereas this plaintiff primarily seeks
reinstatement to his position as a bus driver. However, because I conclude that
the residual statute is applicable in any event, I am compelled to agree that
plaintiff’s claim is governed by a six-year limitation period.
Rather than allow a wide disparity to develop in the treatment of similar
claims presented by public and private employees, I urge the Legislature to
address this issue and to provide a more appropriate period of limitation in
keeping with its stated policy of encouraging expeditious resolution of labor
disputes. [Rowry, supra at 12-17.]
In her concurrence, Justice Riley agreed with the majority that the six-year period of
limitations for contract actions was applicable to the plaintiff’s attempt to enforce his arbitration
award. She reasoned that
[a]s the majority has recognized, the only reference in the labor mediation act,
MCL 423.1 et seq. . . . , which applies to the enforcement of arbitration awards is
§ 9d(4), which provides:
“An award rendered in a proceeding hereunder shall be enforceable at law
or in equity as the agreement of the parties.” [MCL 423.9d(4) . . . .]
Two factors contribute to the conclusion that the six-year provision for breach of
contract must apply here. First, as the majority recognized, the Legislature did
not provide for an express time frame to enforce arbitration awards in the labor
mediation act itself. Therefore, we are left with the belief that the Legislature
intended for us to apply the existing six-year period of limitation for breach of
contract actions to govern this issue. Second, we have held that “[a]n arbitrator’s
jurisdiction and authority to resolve a particular dispute concerning the
appropriate interpretation of a collective bargaining agreement derives exclusively
from the contractual agreement of the parties . . . .” Given that an arbitrator is
bound by the terms of the collective bargaining agreement, there is nothing that
would have precluded the parties from establishing a time limitation shorter than
six years.
Because neither the labor mediation act nor the collective bargaining
agreement (nor the arbitration award itself) provides a statute of limitation to
enforce an arbitration award, the six-year period of limitation for breach of
contract must apply. [Rowry, supra at 18-19 (some citations omitted).]
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Justice Riley joined in Justice Griffin’s “call to the Legislature to address this issue and provide a
more appropriate period of limitation in keeping with its stated policy of encouraging
expeditious resolution of labor disputes.” Id. at 18 n 1.
Despite the urgings of Justices Griffin, Boyle, and Riley, however, the Legislature has
taken no action in the nearly 17 years since Rowry was decided to provide a specific statute of
limitations for the enforcement, or for actions seeking the vacation, of labor arbitration awards.
Thus, this Court is left to construe its own earlier decisions (applying a six-month limitations
period to actions against a union for unfair representation or actions brought under § 301 of the
LMRA) and our Supreme Court’s decision in Rowry (imposing a six-year limitations period on
actions to enforce an arbitration award) to determine the applicable limitations period for actions,
such as the instant action, that seek to vacate an arbitration award arising from a collective
bargaining agreement. In this context, we conclude, albeit reluctantly, that actions to vacate
arbitration awards are subject to a six-year limitations period.
We find that actions to vacate arbitration awards are more akin to actions to enforce
arbitration awards than to actions for unfair representation. In Rowry, our Supreme Court held
that the enforcement of an arbitration award is subject to the six-year limitations period for
breach of contract because “arbitration is a matter of contract. It is the agreement that dictates
the authority of the arbitrators and the disputes to be resolved through arbitration.” Rowry, supra
at 10. Certainly, the same logic is equally applicable in the context of an action to vacate an
arbitration award. Thus, we must reject defendant’s suggestion that we should limit Rowry’s
application to enforcement, not vacation, actions. We have no authority to impose such a
limitation when nothing in Rowry would even vaguely suggest it.
Considering the Supreme Court’s analysis in Rowry and the lack of legislative action
thereafter, defendant can offer no compelling substantive legal basis to support the application of
a six-month limitations period here. Thus, here, as in Rowry, despite the Legislature’s
“declared . . . public policy of this state” favoring “prompt settlement of labor disputes,” MCL
423.1, this Court is compelled to conclude that plaintiff’s action to vacate a portion of the
arbitration award is subject to the six-year limitations period for contract actions (considering
that such awards are “enforceable at law or in equity as the agreement of the parties” under MCL
423.9d(4), as suggested by Rowry) or, to the six-year residual “catch-all” limitations period set
forth in MCL 600.5813 (as suggested by Justice Griffin in his concurrence in Rowry) for “[a]ll
other personal actions” to which specific limitations periods are not applicable.2
Defendant next argues that the trial court erred by granting plaintiff’s motion for
summary disposition, because the arbitrator’s award constituted an arguable construction of the
terms of the CBA and was within his authority. We agree.
2
Having concluded that plaintiff’s claim is governed by a six-year limitations period, we need
not address plaintiff’s argument that any six-month limitations period was equitably tolled under
the unique circumstances of this case.
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This Court reviews de novo a trial court’s decision to enforce, vacate, or modify an
arbitration award. Bayati v Bayati, 264 Mich App 595, 597-598; 691 NW2d 812 (2004); Saveski
v Tiseo Architects, Inc, 261 Mich App 553, 554; 682 NW2d 542 (2004); Tokar v Albery, 258
Mich App 350, 352; 671 NW2d 139 (2003). Judicial review of an arbitrator’s decision is
narrowly circumscribed. Police Officers Ass’n of Michigan v Manistee Co, 250 Mich App 339,
343; 645 NW2d 713 (2002). A court may not review an arbitrator’s factual findings or decision
on the merits. Id. Likewise, a reviewing court cannot engage in contract interpretation, which is
an issue for the arbitrator to determine. Konal v Forlini, 235 Mich App 69, 74; 596 NW2d 630
(1999). Nor may a court substitute its judgment for that of the arbitrator. Gordon Sel-Way, Inc v
Spence Bros, Inc, 438 Mich 488, 497; 475 NW2d 704 (1991). “[H]ence [courts] are reluctant to
vacate or modify an award when the arbitration agreement does not expressly limit the
arbitrators’ power in some way.” Id. The inquiry for the reviewing court is merely whether the
award was beyond the contractual authority of the arbitrator. Police Officers Ass’n of Michigan,
supra at 343. If, in granting the award, the arbitrator did not disregard the terms of his or her
employment and the scope of his or her authority as expressly circumscribed in the contract,
“‘judicial review effectively ceases.’” Id., quoting Lincoln Park v Lincoln Park Police Officers
Ass’n, 176 Mich App 1, 4; 438 NW2d 875 (1989). Thus, “‘as long as the arbitrator is even
arguably construing or applying the contract and acting within the scope of his authority,’” a
court may not overturn the decision even if convinced that the arbitrator committed a serious
error. Michigan Ass’n of Police v City of Pontiac, 177 Mich App 752, 760; 442 NW2d 773
(1989), quoting United Paperworkers Int’l Union, AFL-CIO v Misco, Inc, 484 US 29, 38; 108 S
Ct 364; 98 L Ed 2d 286 (1987).
As discussed earlier, the issue for arbitration was whether certain provisions of plaintiff’s
bargaining agreement with another bargaining unit triggered the “me too” clause in the CBA,
which, as previously noted, provides:
If another bargaining unit receives an increase higher than the settlement
with AFSCME, such increase will also be granted to AFSCME for this contract
period as a “me too” on wages. If gained by Police or Fire bargaining units, a
“me too” [sic] retroactivity on wages for retirees.
At issue here is the arbitrator’s interpretation of the phrase “for this contract period” as used in
this provision. “[T]his contract period” is not defined in the CBA. However, two provisions
address the termination and duration of the agreement:
55. TERMINATION AND MODIFICATION
This Contract shall continue in full force and effect until 11:59 p.m. on June 30,
2001. If either party desires to modify or change this contract, it shall follow the
procedure for negotiations as set forth in the paragraph entitled “Duration of
Contract”.
56. DURATION OF CONTRACT
This Contract shall become effective as of its date of execution, and shall remain
in full force and effect until 11:59 p.m., June 30, 2001, and from year to year
thereafter unless either party hereto serves written notice upon the other at least
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ninety (90) calendar days prior to the expiration date of any subsequent automatic
renewal period of its intention to amend, modify or termination [sic] this contract.
The parties did not reach agreement on a successor contract as of the CBA’s June 30,
2001, expiration date. It is not clear whether either party, or which of them, complied with
paragraph 56 of the CBA by serving written notice on the other party of an intent to amend,
modify, or terminate the CBA. What is clear is that, on April 24, 2001, the parties executed a
written document, titled “Ground Rules for Negotiations,” which specifically provided that the
CBA was to “remain in effect” until a successor contract was ratified by both parties. The
arbitrator, having been presented with the “ground rules” during the hearings, determined that
the “me too” provision’s phrase “for this contract period” included the period during which the
parties agreed that the CBA would “remain in effect.” The arbitrator reasoned that, by virtue of
the mutually agreed “ground rules,” “[t]he employees continued to be paid under the terms and
conditions of the 1998-2001 contract until the new contract was ratified.” Accordingly, the
arbitrator further reasoned that the “me-too” wage increase provision also continued to be part of
the 1998-2001 agreement until it was officially superceded by ratification of the successor
agreement.
The trial court ruled, as argued by plaintiff, that because the arbitrator relied on the
“ground rules” to determine the duration of the phrase “for this contract period,” and because
those benefits were not extended in the successor contract, the arbitrator acted outside his
authority by awarding “me too” benefits for the period from July 1, 2001, to October 7, 2002.
Considering the limited scope of judicial review and that the arbitrator certainly was “‘arguably
construing or applying’” the contractual language “for this contract period” having considered
the evidence presented, Michigan Ass’n of Police, supra at 760, quoting Misco, Inc, supra at 38,
we conclude that the trial court erred by granting plaintiff’s motion for summary disposition to
vacate this portion of the arbitrator’s award.3
The CBA provides that “[a]n arbitrator shall have no power to add to, subtract from or
modify any of the terms of this contract . . . .” Contrary to plaintiff’s assertion, considering the
parties’ written agreement that the contract would remain in effect during negotiations, the
arbitrator cannot be said to have added to, subtracted from, or modified the CBA in issuing his
award. Rather, being required to determine the duration of “this contract period,” the arbitrator
merely gave effect to the parties’ own mutual agreement that the CBA would remain the
operative agreement between the parties during the negotiation period. The CBA clearly
contemplated that the parties might extend its operation by mutual agreement. Thus, giving
effect to such an extension, even if achieved other than as contemplated in the CBA, does not
contradict or offend the CBA in any way.
Certainly, there is no dispute that both parties operated under the CBA until October 7,
2002. As noted by the arbitrator, plaintiff’s employees/defendant’s members were paid under,
3
In reaching this conclusion, we observe that any consideration of whether “me too” benefits
were included in the successor agreement is wholly irrelevant to the determination of the
duration of “this contract period.”
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and remained subject to all the provisions of, the CBA until that date. The arbitrator reasoned
that if the contract’s termination date was extended and the contract remained in effect after June
30, 2001, then the “me-too” provision would also continue to be in effect during that contract
period. On this basis, finding that the parties did in fact extend the termination date of the CBA,
the arbitrator concluded that defendant’s members were entitled to “me too” benefits for the
entire operative contract period, from July 1, 1998, to October 7, 2002. We find no basis to
conclude that the arbitrator acted beyond the material terms of the contract from which his
authority was derived, Saveski, supra at 554, or that he was doing anything other than “‘arguably
construing or applying the contract,’” Michigan Ass’n of Police, supra at 760, quoting Misco,
Inc, supra at 38, in reaching this conclusion. Further, under the circumstances presented here,
the determination of the duration of “this contract period” was a factual finding to be made by
the arbitrator, and the arbitrator’s factual findings are not subject to judicial review.4 Police
Officers Ass’n of Michigan, supra at 343.
There being no basis for the trial court to modify the arbitrator’s award, it was defendant,
and not plaintiff, who was entitled to summary disposition. We reverse and remand for the entry
of an order granting summary disposition in favor of defendant. We do not retain jurisdiction.
Defendant, being the prevailing party, may tax costs pursuant to MCR 7.219.
/s/ Richard A. Bandstra
/s/ William C. Whitbeck
/s/ Douglas B. Shapiro
4
In this context, we note that plaintiff apparently did not object to the arbitrator’s receipt of the
“ground rules” at the hearings and that plaintiff participated in returning to the arbitrator to seek
clarification of the award, knowing that defendant asserted that the award encompassed the
mutually agreed extension of the CBA during the negotiation period.
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