Opinion
No. 99 CV 5981
March 31, 2000
MEMORANDUM OPINION AND ORDER
Plaintiff Wheeling Lake Erie Railway Company ("WLE") filed a four count complaint seeking declaratory relief against defendant Brotherhood of Railroad Signalman ("BRS"), requesting this court to enforce an Arbitration Agreement with BRS and find that WLE has no duty to arbitrate before an arbitration board reconvened under § 7 of the Railway Labor Act ("the Harris Board"). Both parties agree that the material facts are not in dispute and have filed cross motions for summary judgment pursuant to Federal Rule of Civil Procedure 56. For the following reasons, plaintiff WLE's motion for summary judgment is DENIED and defendant BRS's motion for summary judgment is GRANTED.
STATEMENT OF FACTS
The following statement of facts comes from the parties' Local Rule 56.1(a) 56.1(b) statements of material facts and accompanying exhibits.
Plaintiff WLE is a railway carrier within the meaning of the Railway Labor Act ("RLA"), 45 U.S.C. § 151, First. Defendant BRS is a labor organization and representative under Section 1 of the RLA, the National Mediation Board ("NMB"), Sixth. BRS represents WLE's locomotive mechanics and signal and communication employees for the purpose of collective bargaining. WLE and BRS are parties to a collective bargaining agreement ("CBA"). WLE has other groups of employees who are represented for purposes of collective bargaining, including carmen employees. Carmen employees are represented by the Carmen Steering Committee ("CSC"), though BRS disputes that the CSC is a legitimate representative under the RLA.
Following the beginning of several labor disputes, WLE BRS agreed to submit their unresolved contract negotiation issues to binding interest arbitration under RLA Section 7, 45 U.S.C. § 157, and forgo utilizing self-help. On July 21, 1998, WLE and BRS entered into an Arbitration Agreement under RLA Section 7, 45 U.S.C. § 157, to decide, among other things, the wages of locomotive mechanic employees for the period of June 1996 to January 2001. The same day, the parties entered into a second Arbitration Agreement under RLA Section 7 to decide the wages of signal and communication and maintenance of way employees for the period of January 1997 to January 2001. The National Mediation Board ("NMB") convened a three person arbitration board ("the Harris Board") pursuant to RLA Section 5, Third (c), 45 U.S.C. § 155 Third (c), and Section 7, 45 U.S.C. § 157. The Harris Board consists of one member appointed by each party. In addition, a neutral arbitrator who was appointed by the National Mediation Board ("NMB"), Robert O. Harris acted as chairman of the Arbitration Board.
Both Agreements provided that the award of the Arbitration Board would be implemented within 30 days following the date of the award, "and shall continue in force until changed in accordance with the procedures of the Railway Labor Act as amended." Section 11 of the Agreements also both state that "[a]ny difference arising as to the meaning, or the application of the provisions of such award shall be referred within 60 days following implementation of the award for a ruling to the Board, or to a subcommittee of the Board agreed to by the parties hereto." Under the Agreements, any rulings made by the Harris Board after such a referral "shall have the same force and effect as such original award."
On February 8, 1999, the Harris Board issued a single award ("the award") deciding the questions submitted under both Arbitration Agreements. The parties disagree as to whether the award was "implemented" on February 8, or February 22, when the award was incorporated into the CBA between WLB and BRS. Among other things, the award included a "me too" provision which stated: "In the event that any unrepresented non-management employee group receives other wage or benefit improvements, all Locomotive Mechanics and Signal and Communications employees shall receive the same improvements."
In March 1999, WLE entered into collective bargaining negotiations with the carmen through CSC regarding changes in the collective bargaining agreement covering carmen. WLE and CSC reached an agreement on April 10, 1999, for wage increases for carmen employees. BRS learned of the CBA with the Carmen on April 22, 1999, and immediately demanded that under the "me too" provision of the award, the improvements given to the carmen should be given to the BRS-represented employees. WLE refused to grant the same increase to the BRS employees because, according to WLE, the carmen are represented under the RLA, and the "me too" provision thus does not apply to them because they are not an "unrepresented non-managerial employee group."
By a letter dated April 23, 1999, BRS proposed to the Harris Board that an executive session be scheduled to discuss the dispute over whether the "me too" provision had been triggered by the carmen wage increase. The letter stated "this document shall serve as a referral of a dispute to the [Harris] Board as provided by the Arbitration Agreements dated July 21st, 1998, and Section 7 of the Railway Labor Act." The letter phrased the dispute being referred to the Harris Board as: whether "the terms of the Award, as amended, and the Arbitration Agreements intend" that the wage improvements that had been granted to the carmen "are to apply to BRS represented employees." The letter was mailed and sent via facsimile to the three members of the Harris Board and the Chief of Staff of the NMB on April 23, 1999, which was within 60 days of February 22, 1999, the date that the award was actually incorporated into the CBA between WLE and BRS.
On May 7, 1999, WLE responded that, under § 11 of the Agreements, this referral of the dispute was improper. Arbitrator Harris did not schedule an executive session of the Harris Board, take up BRS's dispute, or otherwise respond to BRS's April 23 request. BRS then made a request for an executive session by letter dated May 13, 1999 to Harris. Harris did not schedule an executive session or take up BRS's dispute. Harris suggested that BRS ask the NMB to reconvene the Harris Board. BRS waited one month, and then, in a letter dated June 10, 1999, asked the NMB to reconvene the Harris Board pursuant to Section 7, Third (c) of the RLA. In a June 24, 1999 letter, the NMB asked WLE to respond to BRS's request. In a July, 1999, letter to the NMB, WLE explained that there was no basis for the BRS request because § 11 of the Agreements limited the time period during which disputes over the award could be referred back to the Board to 60 days. WLE further explained that the 60 day period had run before BRS made its April 23 request, and the Board had thus expired. Therefore, WLE maintained that interpretive disputes could only be resolved through the RLA "minor" dispute process. WLE also noted that because BRS's dispute involved the representative of the carmen, and not the interpretation of the award, it was not an arbitrable issue under the jurisdiction of a RLA Section 7 or Section 3 arbitrator. Per BRS's request, the NMB reconvened the Harris Board pursuant to Section 7, Third(c) of the RLA, which provides: "Upon notice from the Mediation Board that the parties, or either party, desire the reconvening of the board of arbitration . . . to pass on any controversy over the meaning or application of their award, the board, or its subcommittee, shall at once reconvene." 45 U.S.C. § 157 Third(c).
STANDARD OF REVIEW
Under Rule 56(c), summary judgment is proper "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). In ruling on a motion for summary judgment, the evidence of the nonmovant must be believed and all justifiable inferences must be drawn in the nonmovant's favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 2513 (1996). This court's function is not to weigh the evidence and determine the truth of the matter, but to determine whether there is a genuine issue for trial.
A party who bears the burden of proof on a particular issue, however, may not rest on its pleadings, but must affirmatively demonstrate, by specific factual allegations, that there is a genuine issue of material fact that requires trial. Celotex Corp. v. Catrett, 477 U.S. 317, 324 106 S.Ct. 2548, 2553 (1986). There is no issue for trial "unless there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party." Anderson, 477 U.S. at 249, 106 S.Ct. at 2511.
ANALYSIS
As is clear from the undisputed facts, both WLE and BRS agree that the substance of their underlying dispute — whether the "me too" provision of the Harris Award (now part of the parties' CBA) was triggered by the carmen's wage increase — ultimately should be decided through arbitration, not by this court. Nevertheless, WLE objects to BRS's act of requesting that the Harris Board be reconvened to determine the meaning of the "me-too" provision with regard to the carmen's wage increase. WLE argues that the parties explicitly limited the jurisdiction of the Harris Board to 60 days following the implementation of the award. Because the parties contractually limited the operation of Section 7, Third(c) of the RLA, WLE argues, BRS violated the terms of the award by referring the dispute to an allegedly defunct Harris Board. WLE further argues that because the Harris Board has ceased to exist, it is without jurisdiction even to determine whether the dispute was properly referred to it within 60 days following the implementation of the award, and thus WLE has no duty to arbitrate any issues in front of the reconvened Harris Board. WLE argues that the dispute must be resolved through the "minor dispute" arbitration procedures of Section 3 of the RLA before the National Railroad Adjustment Board ("NARB") or another adjustment board set up pursuant to Section 3, Second of the RLA, 45 U.S.C. § 153, Second.
BRS argues that the dispute was referred to the Harris Board within 60 days of the implementation of the award, and thus this dispute is properly before that Board. BRS further argues that it did not breach the provisions of the CBA by referring the "me too" dispute to the Harris Board or by requesting that the Board be reconvened. Finally, BRS argues that the threshold question of which arbitral body should consider the dispute must also be decided by an arbitrator. According to BRS, whether BRS properly referred the dispute to the Harris Board within 60 days of the implementation of the award is a procedural question to be determined by an arbitrator, not a court.
The parties' larger dispute concerns whether the "me too" provision was triggered by increased compensation to the carmen, and which is the correct board to decide that dispute. The issue for this court to decide, however, is whether this court or an arbitral board — either the Harris Board or the NMB — should decide whether the "me too" dispute is properly before the Harris Board. WLE argues that the question of whether the Harris Board was properly reconvened is jurisdictional (and thus substantive), and should be decided by this court. BRS, on the other hand, argues that the issue of which arbitral body should decide the "me too" dispute is a question of procedural arbitrablility, and should be decided by an arbitral body. While WLE does not characterize it as such, the proper resolution of this dispute turns on whether the question of whether the Harris Board may hear any part of this dispute — if only to determine whether the underlying "me too" dispute is properly before it — is a question of substantive or of procedural arbitrablility.
In distinguishing substantive from procedural arbitrablility, the courts have held that "substantive arbitrablility" refers to whether a dispute involves a subject matter that the parties have contractually agreed to submit to arbitration, while "procedural arbitrablility" refers to whether particular grievance procedures apply to a dispute, whether the procedures have been followed or excused, and whether the unexcused failure to follow such procedures avoids a party's duty to arbitrate.Beer, Soft Drink, Water, etc. Local Union No. 744 v. Metropolitan Distrib., Inc., 763 F.2d 300, 302-03 (7th Cir. 1985). Substantive questions of arbitrablility are "undeniably an issue for judicial determination," while questions of procedural arbitabily are to be answered by the arbitrator. Chicago Typographical Union No. 16 v. Chicago Sun-Times, Inc., 860 F.2d 1420, 1423-24 (7th Cir. 1988). In its leading procedural arbitrablility case, the Supreme Court explained why procedural arbitrablility issues are best left to the arbitrator: "Doubt whether grievance procedures or some part of them apply to a particular dispute, whether such procedures have been followed or excused, or whether the unexcused failure to follow them avoids the duty to arbitrate cannot ordinarily be answered without consideration of the merits of the dispute which is presented for arbitration." John Wiley Sons v. Livingston, 376 U.S. 543, 557, 84 S.Ct. 909, 918 (1965). Therefore, procedural issues are to be resolved by the arbitrator, once (but only after) the court determines that the underlying dispute is one the parties have agreed to submit to the arbitrator.
Under Seventh Circuit precedent, time limits for the submission of disputes to an arbitrator are procedural matters for the arbitrator to decide. In International Brotherhood of Electrical Workers v. Illinois Power Co., 357 F.2d 916 (7th Cir. 1966), the court held that it was for an arbitrator to decide whether a union, in waiting nine months to file a grievance, had waived its right to arbitration under the collective bargaining agreement. Id. at 918-19. The collective bargaining agreement in Illinois Power specifically provided that a grievance would be considered waived if not filed within five working days-after the facts upon which the dispute was based first occurred or first became known.Id. at 918. The court concluded that the arbitrator, not the court, should determine the effect of the union's failure to comply with the five-day time limitation and its failure to explain such noncompliance.Id. at 918-19.
WLE attempts to avoid the import of this law by arguing that the provision at issue in its Arbitration Agreements with BRS is jurisdictional, not procedural. WLE argues that the Harris Board ceased to exist without acting upon BRS's referral of the application of the "me too" provision to it within 60 days. Thus, WLE argues, the Harris Board has no jurisdiction to determine whether this dispute is properly before it. WLE's argument is not without merit. The cases which have classified issues of the timeliness of a referral as procedural did so in the context of interpreting clauses in collective bargaining agreements which limited the time in which certain disputes could be brought before an arbitral body. This case is distinguishable in that the parties appear to have intended to limit the life of the Harris Board itself, not simply the time in which that Board could entertain disputes concerning the interpretation of the award. The statute, likewise, appears to allow for parties to contractually set time limits on the jurisdiction of § 7 Boards, whereas no similar statutory provisions were at issue in the cases cited by BRS finding that the timeliness of a referral is a strictly procedural question.
Nevertheless, this court is convinced that the dispute over whether the Harris Board may properly consider this dispute is more like the "procedural" issues identified by the courts than it is like the substantive ones. Here, neither party disputes that the interpretation of the "me-too" provision is a proper subject for arbitration. Neither party argues that a court, not an arbitrator, should determine whether the parties have a duty to arbitrate at all. Rather, by arguing that the "me too" dispute should be resolved though "minor dispute" arbitration, WLE is in effect asking this court to determine which arbitral body should entertain the dispute — the Harris Board or the NARB. While the timeliness of BRS's referral to the Harris Board is not a pure "statute of limitations" type defense, it is nonetheless similar to the time limitations for referrals which both the Seventh Circuit and the Supreme Court have found to be procedural. WLE cites Order of R.R. Telegraphers v. New York Cent. R. Co. 181 F.2d 113 (2nd Cir. 1950), in support of the proposition that the parties were flee to limit the jurisdiction of the § 7 Harris Board and that those jurisdictional limit should be enforced. However, Telegraphers stands for no more than the proposition that parties may contractually limit the conditions under which an arbitration award shall remain in effect. Id. at 116. BRS does not disagree, but the time limit of the award itself is not at issue in this litigation. Rather, BRS argues, and this court agrees, that an arbitral board, not this court, should determine whether the conditions under which the arbitral award may be modified or clarified have been met.
This court is further persuaded that an arbitral body is the proper body to determine whether the Harris Board has jurisdiction to hear this dispute because the parties expressly contemplated that issues over the meaning and application of the award would be decided by an arbitrator. Even more specifically, the parties contemplated that the Harris Board would hear such disputes, at least for sixty days following the implementation of the award. Here, it is undisputed that the award contained a clause that disputes would be referred to the Harris Board. Where a contract contains an arbitration clause, there is a presumption of arbitrablility, and "an order to arbitrate should not be denied unless it may be said with positive assurance that the arbitration clause in not susceptible to an interpretation that covers the asserted dispute. Doubts should be resolved in favor of coverage." ATT Technologies, Inc. v. Communications Workers of America, 475 U.S. 643, 648-49, 106 S.Ct. 1415, 1418-19 (1986). Here, this court cannot say with "positive assurance" that the Harris Board ceased to exist or was improperly reconvened. As such, it would be improper for this court to take the question of which arbitral board should hear this dispute away from the NMB.
Moreover, the Seventh Circuit has indicated that the decision of which arbitral body is the "correct" one to hear a particular dispute is procedural one. The court questioned whether the proper body was a committee of the union and employer representatives or an arbitral board: "Who knows? The easiest way to elicit an answer is to remand the case to the arbitral board, as we are empowered to do." Brotherhood R.R. Carmen Div. v. Atchison, Topeka, Santa Fe R.R. Co., 956 F.2d 156, 160-61 (7th Cir. 1992).
As such, this court is not the proper entity to determine whether the parties must arbitrate their disputes to the Harris Board. Based upon the precedent outlined above, the union's alleged failure to submit the dispute to the Harris Board within the time limitations specified in the award is an issue of procedural arbitrablility which should be reserved for the arbitrator. Because it is clear that the parties are obligated to submit the subject matter of their dispute concerning the "me too provision" to the arbitrator, under Wiley any procedural issues dealing with the timeliness of BRS's filing of the grievances should be presented to the arbitrator. See Beer, Soft Drink, Water, etc., Local Union No. 744 v. Metropolitan Distrib., Inc., 763 F.2d 300, 302-03 (7th Cir. 1985).
This result is in keeping with the policies behind labor law. There is a strong presumption in favor of arbitration of labor disputes. In the commercial case, arbitration is the substitute for litigation. Arbitration of labor disputes, by contrast, is the substitute for industrial strife, and "arbitration of labor disputes under collective bargaining agreements is part and parcel of the collective bargaining process itself." United Steelworkers of America v. Warrior Gulf Navigation Co., 363 U.S. 574, 578, 80 S.Ct. 1347, 1351 (1960). When a court is called on to determine whether aspects of a dispute arising out of a collective bargaining agreement are to be determined by an arbitrator or by the court, judicial restraint is an institutional imperative. Independent Assoc. of Continental Pilots v. Continental Airlines, 155 F.3d 685, 696 (3rd Cir. 1998). Excessive judicial intrusion can undermine arbitral expertise and authority. Id. Further, lengthy court proceedings can seriously undermine the capacity for prompt adjudication, which is the hallmark of arbitration. Id. at 697. As the Court cautioned in John Wiley: "the opportunities for deliberate delay and the possibility of well-intentioned but no less serious delay created by separation of the `procedural' and `substantive' elements of a dispute are clear . . . [S]uch delay may entirely eliminate the prospect of a speedy arbitrated settlement of the dispute, to the disadvantage of the parties (who, in addition, will have to bear increased costs) and contrary to the aims of national labor policy." 376 U.S. at 558, 84 S.Ct. at 918. Such potential for delay is evident already in this litigation, almost a year has passed since BRS attempted to refer the "me too" dispute to arbitration. It is in the interest of both parties to have this dispute resolved as expeditiously as possible.
WLE argues that labor policy favors a judicial determination of the Harris Board's power to entertain this dispute. WLE argues that forcing the parties to resolve this issue with the Harris Board would possibly deter other unions and employers from voluntarily entering into § 7 agreements to engage in interest arbitration. WLE's concern is misplaced; WLE will arbitrate the underlying dispute, regardless of what this court decides. See Bell Atlantic -Pennsylvania, Inc. v. Communication Workers of America, 164 F.3d 197, 203 (3rd Cir. 1999). Allowing the Harris Board or any other arbitrator to determine which board will be used does not force WLE to arbitrate any disputes that it believed it was withholding from arbitration — unlike the situation when the basic determination of whether or not an underlying dispute is arbitrable is sent to an arbitrator. Id. At most, allowing the Harris Board to decide the question of its own jurisdiction will force WLE to arbitrate in front of a particular board (in which it foresaw the possibility of arbitration) beyond the time in which WLE believes to be obligated under the arbitration agreements.
In short, this court concludes that WLE's complaint is "functionally indistinguishable" from (and controlled by) those cases in which the parties agree that an underlying dispute is arbitrable, but disagree about the effect of laches, waiver, exhaustion of prearbitration steps, limitations periods, or other "procedural" issues. See Bell Atlantic, 164 F.3d at 203. The parties may direct their arguments that the "me too" dispute is or is not properly before the Harris Board to that Board. Statutory law, the parties' arbitration agreements, and judicial restraint all convince this court that no issues in the current dispute are proper for judicial determination.
Having concluded that whether this dispute was properly referred to the Harris Board is an issue of procedure for the arbitrator to decide, and that the issue of whether the "me too" provision of the award was triggered by the wage increase given to the carmen is undeniably a dispute regarding the meaning and application of the award, this court declines to consider any part of the merits of the dispute between these parties. The parties must arbitrate all of their differences, and the arbitration boards must decide for themselves where this dispute belongs.
CONCLUSION
For the above stated reasons, defendant BRS's motion for summary judgment is GRANTED. plaintiff WLE's motion for summary judgment is DENIED. This court dismisses plaintiff's amended complaint. This case is dismissed in its entirety. All other pending motions are moot.
ENTER.