Opinion
Case No. 1:02-CV-928
September 10, 2003
Fillipe S. Iorio, FOR PLAINTIFF(S)
Richard D. McNulty, FOR DEFENDANT(S)
OPINION
Plaintiff, International Brotherhood of Teamsters, General Teamsters Local 406 (the "Union"), filed a complaint against Defendant, FiveCAP, Inc. ("FiveCAP"), seeking enforcement of an arbitration award rendered on June 25, 2002. FiveCAP has filed a counter-complaint seeking to vacate the arbitration award. Now before the Court are the parties' cross motions for summary judgment.
I. Background and Procedural History
A. The Collective Bargaining Agreement
FiveCAP and the Union are parties to a collective bargaining agreement covering the period from December 1, 1999, to November 30, 2001 (the "CBA"). The CBA provides that FiveCAP employees are entitled to certain paid holidays, "provided the[y] report for work the scheduled working day before and the day after the specified holiday." (CBA Art. XIII, § 3.) The CBA contains a grievance procedure for disputes under the CBA, which provides for binding arbitration as the final step in the process. The grievance procedure provides:
An employee of the agency who believes that he/she has a justifiable grievance or complaint:
Step 1: Shall present his/her grievance in writing to his/her immediate supervisor in an effort to secure satisfactory solution to the problem. If resolution is not agreed upon at Step 1, the employee shall proceed to Step 2.
Step 2: The Employee shall re-file his/her grievance in writing with the Executive Director of the agency within five (5) working days from the Company's rejection under Step 1. The employee shall also provide a copy of the grievance to the Union Business Agent. This written grievance shall be dated and signed by the Executive Director (or his/her designee other than the immediate supervisor) and shall be answered in writing within five (5) working days after receipt in an effort to satisfactorily resolve the grievance with the employee. The Employer will mail a copy of its response to the Union Business Agent.
(CBA Art. § VI, 1.) The grievance procedure states that "[i]f the Union fails to present a grievance in time or to advance it to the next step in a timely manner, it shall be considered to be withdrawn." (Id.) However, "[i]f the time procedure is not followed by FiveCAP, the grievance shall automatically advance to the next Step, but excluding Arbitration." (Id.)
The grievance procedure also sets forth the procedure for arbitration and defines the scope of the arbitrator's authority as follows:
The arbitrator's powers shall be limited to the application and interpretation of this Agreement as written. The arbitrator shall be governed at all times wholly by the terms of this Agreement. The arbitrator shall have no power or authority to alter or modify this Agreement in any respect, directly or indirectly, or any authority to hear and determine any dispute involving the exercise of any of FiveCAP's inherent rights not specifically limited by the express terms of this Agreement. Further, the arbitrator shall not be empowered to consider any question or matter outside this Agreement or to change or set a wage rate. If the issue of arbitrability is raised, the arbitrator shall only decide the merits of the grievance if arbitrability is affirmatively decided.
(Id. Art. VI, § 3.)
B. The Grievances and Arbitration
On or about January 13, 2000, Chief Union Steward Melissa Kukla filed grievances on behalf of all bargaining unit members complaining about FiveCAP's failure to pay certain employees holiday pay during the 1999-2000 Christmas/New Year's holiday period. FiveCAP denied the grievances on January 25, 2000, on the ground that the CBA "intentionally does not provide for a group grievance." (1/25/02 Grievance Denial, Def.'s Br. Supp. Ex. 3.) Thereafter, on September 25, 2001, the parties submitted the grievance to arbitration before Arbitrator Stanley T. Dobry. The issues presented to the Arbitrator included: (1) whether the CBA permits filing of "group" grievances or whether each aggrieved employee must sign and file an individual grievance; and (2) whether FiveCAP breached the CBA by failing to pay the employees for the Christmas/New Year's holiday for 1999-2000.
The Arbitrator issued his decision and award on June 25, 2002. In his decision, the Arbitrator concluded that the Union could properly file a grievance on behalf of all affected employees, without the requirement of individual grievances being filed. (6/25/02 Decision at 23-24, Pl.'s Br. Supp. Ex. 2.) The Arbitrator also concluded that a remedy could be awarded for all affected employees. (Id. at 24.) With regard to the issue of breach, the Arbitrator found in favor of the Union based upon his conclusion that FiveCAP waived all arguments not raised during the grievance process. (Id. at 25-26.) Finally, the Arbitrator rejected the Union's attempt to expand the scope of its requested relief to include the 2000-2001 holiday season on the grounds that the Union first made its request at the arbitration. (Id. at 25.)
The pages of the Arbitrator's written decision are unnumbered. Therefore, the Court has supplied page numbers in order to properly reference the specific portions of the decision relevant to the instant motions.
The Union filed the instant action to enforce the arbitration award when FiveCAP failed to comply with the award. FiveCAP responded by requesting that the Court vacate the award.
II. Standard of Review for Arbitration Awards
The standard for review of arbitration awards is "one of the narrowest standards of judicial review in all of American jurisprudence."Tenn. Valley Auth. v. Tenn Valley Trades Labor Council, 184 F.3d 510, 514-15 (6th Cir. 1999) (quoting Lattimer-Stevens Co. v. United Steelworkers of Am., Dis. 27, 913 F.2d 1166, 1169 (6th Cir. 1990)) (internal quotation marks omitted). In reviewing an award, a court's scope of review is limited to determining whether "the arbitrator is even arguably construing or applying the contract and acting within the scope of his authority." United Paperworkers Int'l Union v. Misco, Inc., 484 U.S. 29, 38, 108 S.Ct. 364, 371 (1987). So long as the arbitrator's award "draws its essence from the collective bargaining agreement" and is not merely the arbitrator's "own brand of industrial justice," the award must be upheld. Id. at 36, 108 S.Ct. at 370 (internal quotations omitted).
[T]he question of interpretation of the collective bargaining agreement is a question for the arbitrator. It is the arbitrator's construction which was bargained for; and so far as the arbitrator's decision concerns [a] construction of the contract, the courts have no business overruling him because their interpretation of the contract is different from his.United Steelworkers of Am. v. Enter. Wheel Car Co., 363 U.S. 593, 599, 80 S.Ct. 1358, 1362 (1960). Thus, while an arbitrator is accorded wide latitude in construing a collective bargaining agreement, the arbitrator's interpretation and award must be grounded in the language of the contract. Misco, 484 U.S. at 38, 108 S.Ct. at 371. The Sixth Circuit has held that an arbitrator's award fails to draw its essence from the collective bargaining agreement when:
"(1) it conflicts with express terms of the agreement; (2) it imposes additional requirements not expressly provided for in the agreement; (3) it is not rationally supported by or derived from the agreement; or (4) it is based on general considerations of fairness and equity instead of the exact terms of the agreement."Int'l Union, United Auto., Aerospace, Agric. Implement Workers of Am. v. Dana Corp., 278 F.3d 548, 554 (6th Cir. 2002) (quoting MidMichigan Reg'l Med. Ctr.— Clare v. Prof'l Employees Div. of Local 79, 183 F.3d 497, 502 (6th Cir. 1999)).
III. Discussion
The instant motions raise the following issues: (1) whether FiveCAP's counter-complaint to vacate the arbitration award was timely filed; and (2) whether the Arbitrator's conclusion that FiveCAP was precluded from raising grounds it failed to raise during the grievance process is either contrary to the express provisions of the CBA or imposes additional duties or requirements on FiveCAP not required by the CBA.
A. Statute of Limitations
The Union argues that FiveCAP's counter-complaint to vacate the arbitration award must be dismissed because it was filed after the three-month statute of limitations for filing motions to vacate set forth in Section 12 of the Federal Arbitration Act ("FAA"), 9 U.S.C. § 12. In support of its argument, the Union cites Occidental Chemical Corp. v. International Chemical Workers Union, 853 F.2d 1310 (6th Cir. 1988), in which the Sixth Circuit held that where there is no analogous state statute to supply the limitations period for motions to vacate arbitration awards in labor disputes under the Labor Management Relations Act of 1947, courts may borrow the three-month limitations period from Section 12 of the FAA. Id. at 1315-16. The Union contends that pursuant to the holding in Occidental Chemical Corp., FiveCAP's counter-complaint to vacate the award is untimely because the award was rendered on June 25, 2002, but FiveCAP did not file its counter-complaint until December 20, 2002, almost six months later.
The CBA contains a provision which explicitly addresses the time limit for filing actions to confirm or vacate an arbitration award:
Any legal action by the Union to compel arbitration of a grievance or to set aside or confirm an arbitration award must be filed in a court of competent jurisdiction no later than six months following the date of FiveCAP's refusal to engage in arbitration of the grievance or not later than six months following the date that the arbitration award was issued, whichever is applicable. Any legal action brought by FiveCAP to enjoin arbitration or to set aside or confirm an arbitration award must be filed in a court of competent jurisdiction no later than six months following the date of the Union's written notice to FiveCAP that it intends to seek arbitration of a grievance or no later than six months following the date that the arbitration award was issued, whichever is applicable.
(CBA Art. VI, § 3.) Under this provision, FiveCAP's counter-complaint would be timely because it was filed within six months of the date the award was issued. The Union acknowledges the six-month limitation period in the CBA, but argues that "[t]he parties cannot agree via a contract to extend a period of statute of limitations recognized by law." (Pl.'s Br. Supp. Mot. at 6.) However, the Union fails to cite any authority for this proposition. Courts recognize a significant distinction between time limits that are jurisdictional as opposed to those that merely operate as a statute of limitations: if a time limit is a statute of limitations, it can be waived, is subject to estoppel and equitable tolling, and can be extended by agreement of the parties, whereas a time limit that is jurisdictional cannot be waived or extended by the parties or the court. See Zipes v. Trans World Airlines, Inc., 455 U.S. 385, 393, 102 S.Ct. 1127, 1132 (1982) (holding that "filing a timely charge of discrimination with the EEOC is not a jurisdictional prerequisite to suit in federal court, but a requirement that, like a statute of limitations, is subject to waiver, estoppel, and equitable tolling." (footnote omitted)); Pugh v. Brook (In re Pugh), 158 F.3d 530, 536 (11th Cir. 1998) (noting that the weight of recent authority is that Sections 546(a) and 549(d) of the Bankruptcy Code are true statutes of limitations that can be waived); Kuehner v. Heckler, 778 F.2d 152, 153 n. 1 (3d Cir. 1985) (stating that "if the time limit [in 42 U.S.C. § 405(g)] is a statute of limitations, it can be waived by the Secretary or in certain cases by the court; if it is jurisdictional, however, it can be waived by neither the parties nor the court"); Brandt v. Gelardi (In re Shape, Inc.), 138 B.R. 334, 337 (Bankr. D. Me. 1992) (holding that 11 U.S.C. § 546(a) is a true statute of limitations that can be extended by agreement of the parties). Thus, if the time limit in Section 12 of the FAA is not jurisdictional, FiveCAP's counter-complaint would be timely under the six-month period set forth in the CBA.
Although neither party has cited any case addressing whether the three-month time limit in Section 12 of the FAA is jurisdictional or merely a statute of limitations, the courts that have addressed the question have concluded that the time limit is a limitations period. InFoster v. Turley, 808 F.2d 38 (10th Cir. 1986), the court stated: "We have found no case holding that the filing requirement is jurisdictional in nature, and some courts have described the time limit in section 12 as a statute of limitations. . . . We view this bar as one in the nature of a statute of limitations, which is subject to waiver." Id. at 41 (internal citations omitted); accord Kanuth v. Prescott, Ball Turben, Inc., CIV. A. No. 88-1416, 1990 WL 91579, at *2 (D.D.C. June 19, 1990) ("The cases make it clear that § 12 of the act states a period of limitations on motions to vacate, modify, or correct an arbitration award."). Moreover, as theFoster court observed, courts have often referred to the three-month period for motions to vacate as a period of limitations.See Florasynth, Inc. v. Pickholz, 750 F.2d 171, 175 (2d Cir. 1984); Hobet Mining, Inc. v. Int'l Union, United Mine Workers of Am., 877 F. Supp. 1011, 1017 (S.D.W.Va. 1994). In the absence of any persuasive authority or argument to the contrary, the Court concludes that the three-month period in Section 12 of the FAA is a period of limitations that may be extended by agreement of the parties. Accordingly, the Court rejects the Union's contention that FiveCAP's counter-complaint is untimely.
B. Review of Arbitrator's Decision
In his written decision, the Arbitrator noted that with the exception of the jurisdictional issue raised by FiveCAP regarding the propriety of a group grievance, "the parties agreed that the matter was timely filed and [was] properly before the arbitrator for final and binding disposition." (6/25/02 Decision at 3.) With regard to the issue of whether FiveCAP breached the CBA, the Arbitrator stated:
It is undisputed that the employer never [addressed the issue of holiday pay] when the grievance was processed. Its only contention was that group grievances were not proper. The employer uttered nary a word about the contract or the bargaining history when the grievance was processed.
For the identical reasons that the Union cannot expand the scope of its grievance, the Employer cannot either. `What is sauce for the goose is sauce for the gander.'
It cannot be heard on that issue now.
(Id. at 26.) This conclusion was based upon the important principal that arguments in a labor dispute should be made early in the grievance process in order to achieve fair and efficient resolutions of labor disputes. The Arbitrator stated:
"This machinery generally consists of a series of steps which must be followed prior to arbitration. Failure to submit a claim through the early stages of the grievance process denies the parties the opportunity to negotiate a resolution of their complaint. Accordingly, when the agreement is silent on this issue, arbitrators will generally refuse to consider a claim or issue which has not been alleged or discussed in the lower steps of the grievance procedure." Marvin F. Hill, Jr. and Anthony V. Sinicropi, Evidence in Arbitration (2d Ed.), (BNA, 1987), pp. 305-308.
(Id. at 20.) The Arbitrator also noted that:
The parties have a sweeping multi-step grievance machinery. . . .
Further, the grievance machinery itself explicitly and implicitly contemplates that both parties will lay out their arguments and evidence at the earliest steps, so that cases will be settled or dropped, rather than arbitrated. Permitting the employer to amend its defenses for the first time at arbitration undermines state and national labor policy, and the terms of the contract itself.
(Id. at 22-23.)
FiveCAP asserts that the Arbitrator's award fails to draw its essence from the CBA because it is contrary to the terms of the CBA and imposes a requirement on FiveCAP not required by the CBA, namely, a duty to answer and explain the merits of a grievance. FiveCAP argues that the award is contrary to the CBA because the CBA contains a non-forfeiture provision. The language FiveCAP cites, found in the paragraph regarding time limitations in the grievance procedure, states: "If the time procedure is not followed by FiveCAP, the grievance shall automatically advance to the next Step, but excluding Arbitration." (CBA, Art. VI, § 1.) FiveCAP asserts that pursuant to this provision, its failure to raise substantive issues or defenses during the grievance process, as opposed to defenses regarding arbitrability, does not preclude FiveCAP from raising new or additional arguments or defenses for the first time at arbitration. In other words, FiveCAP asserts that this provision preserves all of its arguments and/or defenses, other than those relating to arbitrability, for arbitration, regardless of whether FiveCAP asserted them in response to the grievance.
The Court rejects this argument, because the language FiveCAP cites as a non-forfeiture provision is found in the paragraph discussing time limits, including the failure to comply with those limits. That is, the language FiveCAP cites as a non-forfeiture provision deals with the situation where FiveCAP fails to answer the grievance at all within the specified time; it does not pertain to the situation where FiveCAP answers a grievance but fails to articulate any substantive reason for the denial. Moreover, such an interpretation is at odds with the language in the paragraphs describing Steps 1 and 2 of the grievance procedure, which indicates that the purpose of the grievance procedure is to "secure satisfactory solution to the problem" and "to satisfactorily resolve the grievance with the employee." (Id.) Accepting FiveCAP's interpretation would be contrary to the purpose of the grievance machinery, which, as the Arbitrator observed, is to resolve labor disputes in an efficient manner, short of arbitration, because while FiveCAP might have a valid reason for denying the grievance, it could force the Union to arbitrate every single grievance by simply giving a pat denial and springing its position on the Union at arbitration.
FiveCAP next contends that the Arbitrator's decision imposes additional requirements on FiveCAP not required by the CBA, because the CBA only requires FiveCAP to "answer" the grievance, not to "answer and explain" its reasons for the denial of the merits. The Court also rejects this argument because the CBA does not state in clear and unambiguous terms whether or not FiveCAP is required to address substantive issues in its answer. Thus, the Arbitrator acted within his authority by construing ambiguous terms and applying his judgment and experience in interpreting the CBA. See Enter. Wheel Car Co., 363 U.S. at 599, 80 S.Ct. at 1362 (stating that a court may not overrule an arbitrator's interpretation of the contract simply because the court disagrees with that interpretation). As noted above, the Arbitrator's interpretation is based upon a reasonable construction of the CBA and is consistent with the purposes of the grievance process.
FiveCAP further contends that the following provision required the Arbitrator to consider the merits: "If the issue of arbitrability is raised, the arbitrator shall only decide the merits of the grievance if arbitrability is affirmatively decided." (Id. § 3.) Nothing in this language, however, suggests that the Arbitrator was required to consider arguments FiveCAP failed to raise during the grievance process. The clear import of this language is that the Arbitrator may reach the merits of the grievance only after the Arbitrator has addressed the issue of arbitrability, if raised, and concludes that the issue is arbitrable. Thus, this provision does not undermine the Arbitrator's decision.
FiveCAP's final argument, that the Arbitrator should have considered the merits because the parties agreed that the issue was properly before the Arbitrator, is also rejected. As the arbitrator noted, the only reason FiveCAP ever cited for denying the grievance was that the CBA did not allow for group grievances. Thus, the arbitrator was not precluded from applying the well-established rule preventing FiveCAP from raising an issue for the first time at arbitration.
In sum, FiveCAP has failed to demonstrate that the award does not derive its essence from the CBA. None of the provisions cited by FiveCAP provide a reasonable basis for concluding that the arbitrator exceeded the scope of his authority. Given the narrow standard of review applicable in this case, the Union is correct that the arbitration award should be affirmed.
IV. Conclusion
For the foregoing reasons, the Court will grant the Union's motion for summary judgment and deny FiveCAP's motion for summary judgment.
An Order consistent with this Opinion will be entered.