Opinion
14-P-241
12-23-2014
CITY OF BEVERLY v. AMERICAN FEDERATION OF STATE, COUNTY AND MUNICIPAL EMPLOYEES, COUNCIL 93, AFL-CIO (AFSCME).
NOTICE: Decisions issued by the Appeals Court pursuant to its rule 1:28 are primarily addressed to the parties and, therefore, may not fully address the facts of the case or the panel's decisional rationale. Moreover, rule 1:28 decisions are not circulated to the entire court and, therefore, represent only the views of the panel that decided the case. A summary decision pursuant to rule 1:28, issued after February 25, 2008, may be cited for its persuasive value but, because of the limitations noted above, not as binding precedent.
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
The city of Beverly (city) and the American Federation of State, County and Municipal Employees (AFSCME), Council 93 (union), cross-appeal from a judgment entered pursuant to Mass.R.Civ.P. 56, as amended, 436 Mass. 1402 (2002), in the Superior Court, which vacated two awards issued by an arbitrator in favor of employee Edward Comeau, Jr. The union argues, inter alia, that the arbitrator's finding that the union timely submitted the grievance concerning Comeau's termination to arbitration was entitled to deference in the Superior Court. In turn, the city primarily argues that, in light of Boston Hous. Authy. v. National Conference of Firemen & Oilers, Local 3, 458 Mass. 155, 162-165 (2010) (Firemen & Oilers), there was no collective bargaining agreement (CBA) in effect at the time when Comeau was terminated and, thus, the arbitrator lacked authority to issue the awards. We reverse the Superior Court's judgment, and order entry of a judgment confirming the arbitrator's awards.
The city filed two separate petitions to vacate the arbitrator's awards (one petition following each of the two awards), and the actions were consolidated in the Superior Court. The arbitrator, in the first award, found that the city improperly terminated Comeau; in the second award, the arbitrator awarded Comeau final damages.
1. Procedural arbitrability. The procedural question presented here concerns a time limit for requesting arbitration of a grievance, as required by the CBA and interpreted by the parties' subsequent agreement, and, thus, constitutes a classic question of procedural arbitrability reserved for the arbitrator to decide. See Massachusetts Hy. Dept. v. Perini Corp., 444 Mass. 366, 377-378 (Perini Corp.). See also Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 85 (2002) (procedural arbitrability includes issues concerning "time limits, notice, laches, estoppel, and other conditions precedent to an obligation to arbitrate"). Because the parties did not explicitly reserve, in the CBA or any supplementary agreement, questions of procedural arbitrability for the courts, the Superior Court was not authorized to review and reverse the arbitrator's timeliness finding. Perini Corp., supra at 376 n.11 ("Only those contracts with arbitration clauses that expressly preclude arbitrators from deciding gateway procedural disputes will support judicial intervention").
We note that the union presents this issue in terms of "deference" to the arbitrator's timeliness finding, but we think a correct reading of Perini Corp. dictates that an issue of procedural arbitrability is not appropriate for judicial review under any standard of review.
The city, perhaps to circumvent Perini Corp., argues that the timeliness issue presents a question of substantive arbitrability, not procedural, because the union was, by its estimation, extremely dilatory in requesting arbitration. It argues, concomitantly, that the union waived any right that it had to arbitrate the matter due to the extensive delays that it caused. However, Perini Corp. draws a bright line between procedural and substantive arbitrability, and does not contemplate the distinction the city tries to make here. We conclude that, whatever the propriety of the arbitrator's finding that the union timely submitted the grievance to arbitration, that finding was not open to judicial review. "'[O]nce it is determined . . . that the parties are obligated to submit the subject matter of a dispute to arbitration, "procedural" questions which grow out of the dispute,' such as the matter of the union's compliance with arbitration procedures, 'should be left to the arbitrator.'" Perini Corp., 444 Mass. at 378, quoting from John Wiley & Sons v. Livingston, 376 U.S. 543, 557 (1964).
Although the union failed to argue before the arbitrator and the Superior Court that the arbitrator's timeliness finding was a question of procedural arbitrability, we reject the city's contention that the argument is waived. While not on all fours, we find support in the case of Bedford v. AFSCME Council 93, Local 1703, 69 Mass. App. Ct. 110, 111-112 & n.5 (2007) ("To the extent the town argues the union had waived its right to appeal to a panel of this court the issue whether the stay of arbitration was properly granted, it need not be emphasized that we are authorized to correct an error of law appearing in an appellate record"). We thus consider the issue as quasi-jurisdictional.
2. Governing CBA. It is axiomatic that, where there is no valid CBA requiring arbitration in effect at the time when the disputed events occur, the arbitrator is without jurisdiction to arbitrate the matter. See Firemen & Oilers, 458 Mass. at 165. Therefore, we must consider whether the 1999-2002 or 2002-2005 CBA applied to Comeau's termination, which occurred in 2003, such that the arbitrator had jurisdiction to arbitrate the matter in the first instance.
The parties do not dispute that the 1999-2002 CBA contained an "evergreen clause." Rather, they dispute whether the Firemen & Oilers holding that evergreen clauses that extend all of the terms of a CBA beyond a three-year period are prohibited by G. L. c. 150E, § 7(a), should be retroactively applied to the facts of this case. See id. at 163-164. Firemen & Oilers was issued in October, 2010, seven years after Comeau's termination, but before the arbitrator issued the two awards in Comeau's favor.
Specifically, the CBA stated that "[i]n the event that a new Agreement is not reached, it is understood between the parties that this Agreement will extend itself and remain in full force and effect."
Generally, decisional law is applied retroactively to past events, unless doing so would fail to protect the reasonable expectations of parties. Schrottman v. Barnicle, 386 Mass. 627, 631 (1982) (Schrottman). "In determining whether a new rule arising from decisional law should apply prospectively, we look at three factors: (1) whether a new principle has been established whose resolution was not clearly foreshadowed; (2) whether retroactive application will further the rule; and (3) whether inequitable results, or injustice or hardships, will be avoided by a holding of nonretroactivity." Keller v. O'Brien, 425 Mass. 774, 782 (1997), citing McIntyre v. Associates Financial Servs. Co. of Mass., 367 Mass. 708, 712 (1975).
Here, we are dubious that Fireman & Oilers applies retroactively to the facts of this case. We first recognize that the majority opinion of Firemen & Oilers indicated that its conclusion was fairly evident. See Firemen & Oilers, 458 Mass. at 162-163 ("The unambiguous language of G. L. c. 150E, § 7(a), reveals a clear legislative intent to limit the term of a CBA to not more than three years" [emphases supplied]). Certainly, this bears on whether the result was clearly foreshadowed.
Nevertheless, prior to the issuance of Firemen & Oilers, the Labor Relations Commission (commission), now the Department of Labor Relations, long upheld the use of evergreen clauses. See Firemen & Oilers, 458 Mass. at 166-169 (Botsford, J., dissenting) (noting that the division has "upheld the validity of evergreen clauses under § 7(a), and has done so consistently since 1977"). In fact, the division itself has concluded (in at least one case) that Firemen & Oilers is not retroactively applicable, given that, in its estimation, Firemen & Oilers was a case of first impression and it was reasonable for parties to rely on "undisturbed, longstanding precedent" of the commission holding that evergreen clauses were valid. In re City of New Bedford and AFSCME Council 93, AFL-CIO, 38 M.L.C. 239, 248 (2012). In light of the fact that public employers and unions have long relied on the division's interpretation of § 7(a), it follows that retroactive application of Firemen & Oilers would produce inequitable results. See Keller v. O'Brien, 425 Mass. at 782. Compare Schrottman, 386 Mass. at 635-636 (retroactive application of civil rule warranted where plaintiff failed to show reasonable reliance due to previous unsettled nature of law).
Moreover, we are unpersuaded by the city's argument that the 2011 amendment to § 7(a) indicates that Firemen & Oilers should be applied retroactively. The amendment specifically does not apply to cases pending before a court during the time between the issuance of Firemen & Oilers and the effective date of the amendment in November, 2011. This does not speak at all, explicitly or implicitly, to retroactivity of Firemen & Oilers, and, in fact, supports an inference that parties should not benefit from or be punished by unexpected changes in the law.
General Laws c. 150E, § 7(a), both prior to and after the amendment, provides that "[a]ny collective bargaining agreement reached between the employer and the exclusive representative shall not exceed a term of three years." G. L. c. 150E, § 7(a), as appearing in St. 1977, c. 278, § 4. In 2011, St. 2011, c. 198, § 1, inserted the following additional language into § 7(a), after the word "years": "provided, however, that the employer and the exclusive representative through negotiation may agree to include a provision in a [CBA] stating that the agreement's terms shall remain in full force and effect beyond the 3 years until a successor agreement is voluntarily negotiated by the parties." This language explicitly does not apply to "specific matters that were pending or adjudicated in a court" between October 22, 2010 (when Firemen & Oilers was issued) and November 22, 2011 (the effective date of the amendment), such as the instant case. See St. 2011, c. 198, § 3.
In any event, although we tend to agree with the arbitrator that Firemen & Oilers does not apply retroactively, and, therefore, would not invalidate the evergreen clause included in the 1999-2002 CBA, we need not decide the issue. The 2002-2005 CBA, by its plain terms, applied to Comeau's termination -- namely, the CBA was explicitly intended to operate retroactively to July 1, 2002, even though it was executed in June, 2005, and the instant dispute concerning Comeau's termination arose during the life of that CBA. The parties' explicit intention to render the CBA retroactive belies the city's argument that it would be unfair or unjust to apply the CBA to Comeau's termination. If we were to conclude that the CBA does not have retroactive effect, we would undermine the parties' clearly stated intentions; in accordance with basic rules of contract interpretation, we refuse to do so here. See Freelander v. G. & K. Realty Corp., 357 Mass. 512, 516 (1970) (contracts that are free from ambiguity must be interpreted according to their plain terms).
The city's argument that the 2002-2005 CBA does not control because arbitration was not requested until 2010 is meritless. See Old Rochester Regional Teacher's Club v. Old Rochester Regional Sch. Dist. Comm., 398 Mass. 695, 699 (1986) (holding that employer had duty to arbitrate under expired CBA because dispute at issue arose under that CBA while it was still in effect), overruled on different grounds by Perini Corp., 444 Mass. at 373 n.10.
3. Conclusion. Therefore, we conclude that the Superior Court erred as a matter of law when it reviewed and reversed the arbitrator's timeliness finding, as it had no authority to do so in light of Perini Corp., supra. We also conclude that the 2002-2005 CBA, containing a valid arbitrability clause, was "in effect" at the time when Comeau was terminated and, therefore, the arbitrator had jurisdiction to arbitrate the grievance at issue.
We note that the parties presented, in addition to the two aforementioned issues, some other claims in support of their cross-motions for summary judgment. Specifically, the city argued that the doctrine of laches barred the arbitrator from issuing the awards or, at a minimum, should have mitigated the damages awarded to Comeau. The union counterclaimed and moved for summary judgment on the ground that the arbitrator's failure to reinstate Comeau to his original position with the city (electrician, rather than wire inspector, the job for which the city rehired him in 2012) and award future compensation based on the disparity in salary between the electrician job and the wire inspector job violated public policy. In turn, the city argued that the union had not timely counterclaimed on this ground and the arbitrator was without authority to issue damages past 2005 because the CBA expired in that year.
These issues were not addressed on the merits by the Superior Court, but they were either not properly before the judge in the first instance, or are meritless. Any argument involving laches presents a question of procedural arbitrability that was reserved for the arbitrator. See Howsam v. Dean Witter Reynolds, Inc., 537 U.S. at 85. Additionally, the parties' arguments concerning the amount of the make-whole award, although framed in terms of public policy and the arbitrator's authority, do not fit into one of the narrowly drawn grounds on which a judge may vacate an arbitrator's award. See G. L. c. 150C, § 11(a); Lynn v. Thompson, 435 Mass. 54, 61 (2001) (courts are "strictly bound by an arbitrator's findings and legal conclusions, even if they appear erroneous, inconsistent, or unsupported by the record at the arbitration hearing").
Consequently, the Superior Court judgment, dated November 25, 2013, which granted the city's summary judgment motion, vacated the arbitrator's awards, and dismissed as moot the union's counterclaims, is reversed. A new judgment shall enter confirming the arbitrator's May 6, 2011, and July 17, 2012, awards.
So ordered.
By the Court (Cypher, Fecteau & Massing, JJ.),
The panelists are listed in order of seniority.
Clerk Entered: December 23, 2014.