Opinion
SUCV20183404BLS1
03-13-2019
CITY OF SOMERVILLE v. SOMERVILLE POLICE EMPLOYEES ASSOCIATION
MEMORANDUM OF DECISION AND ORDER ON DEFENDANT’S MOTION TO DISMISS OR STAY THE ACTION PENDING ARBITRATION OR PROCEEDINGS BEFORE THE DEPARTMENT OF LABOR RELATIONS
Mitchell H. Kaplan, Justice of the Superior Court
The plaintiff, City of Somerville (the City), has a Collective Bargaining Agreement (CBA) with the defendant, Somerville Police Employees Association (SPEA). The CBA addresses, among many other things, what constitutes overtime work and how overtime pay is to be calculated. Eighty-two Somerville police officers, including the president of SPEA, filed an action in the United States District Court for the District of Massachusetts, Docket No. 2017-CV-10979 (the Federal Action) in which they assert that the manner in which the City calculates and pays overtime wages to them violates the Fair Labor Standards Act, 29 U.S.C. § § 201 et seq. (FLSA), and, in consequence, the Massachusetts Wage Act, G.L.c. 149, § § 148 and 150 (the Wage Act) as well. In the Federal Action the City has denied that it has violated either the FLSA or the Wage Act. In its Second Amended Complaint (the Complaint) filed in this case, the City alleges that the president of SPEA and its legal counsel (not defense counsel in this action) solicited Somerville police officers to be the plaintiffs in the Federal Action at a union meeting, and SPEA is financing that litigation. The City also alleges that it calculates and pays overtime wages in accordance with the relevant provisions of the CBA. It asserts that: (i) by reason of its manner of underwriting the Federal Action, SPEA has breached the covenant of good faith and fair dealing implied under the CBA (Count I); and (ii) if the City is found liable to the plaintiffs in the Federal Action, then SPEA might have violated its duty of fair representation owed those plaintiffs in negotiating the CBA and, if so, SPEA is a joint tortfeasor with the City under G.L.c. 231B with respect to those plaintiffs and liable to the city for its pro rata share of the City’s liability to the plaintiffs for its violation of the FLSA and the Wage Act (Count II).
The case is now before the court on SPEA’s motion to dismiss the Complaint or alternatively to stay it while the City’s claims are arbitrated or the claims are submitted to the Massachusetts Department of Labor Relations (DLR) for resolution. For the reasons that follow, the motion to dismiss is ALLOWED.
ADDITIONAL PROCEDURAL BACKGROUND
In the Federal Action, the City filed a motion for leave to file a third-party complaint asserting essentially the same claims that it asserts this action. On April 16, 2018, the Federal Court (Saylor, J.) denied that motion from the bench. He reasoned that the claim for violation of the duty of fair representation "doesn’t seem to make sense ... under the circumstances" and declined to allow it to proceed. He then also declined to exercise supplemental jurisdiction over the claim asserting breach of the implied covenant. In response, the City filed the instant case.
DISCUSSION
Count I: Breach of the Covenant of Good Faith and Fair Dealing
"Every contract [including a collective bargaining agreement] in Massachusetts is subject, to some extent, to an implied covenant of good faith and fair dealing. See Anthony’s Pier Four, Inc. v. HBC Assocs., 411 Mass. 451, 473 (1991). This implied covenant may not be ‘invoked to create rights and duties not otherwise provided for in the existing contractual relationship, ’ Uno Restaurants, Inc. v. Boston Kenmore Realty Corp., 441 Mass. 376, 385 (2004), but rather concerns the manner of performance. It has been explained that the implied covenant exists so that the objectives of the contract may be realized. See Crellin Technologies, Inc. v. Equipmentlease Corp., 18 F.3d 1, 10 (1st Cir. 1994). The concept of good faith and fair dealing in any one context is shaped by the nature of the contractual relationship from which the implied covenant derives. The scope of the covenant is only as broad as the contract that governs the particular relationship." Ayash v. Dana-Farber Cancer Institute, 443 Mass. 367, 385 (2005).
In this case, the City takes up many pages of its Complaint alleging facts concerning the manner in which the CBA was negotiated. These allegations are not relevant to a claim for breach of the covenant implied in the contract. Here the concept of good faith and fair dealing addresses only "the manner of performance" of the CBA not whether any particular provision was or was not bargained about. As best the court understands this claim, the City contends that SPEA has acted to deprive it of one of the benefits of the CBA, that is, what goes into the computation of overtime pay, because the components and manner of that computation are specifically called out in the CBA. See Complaint, par. 41. SPEA has done this by helping to organize and finance the Federal Action, in which some police officers assert that the CBA, in this regard, does not meet the requirements of the FLSA. The argument that when a union assists members who believe that they have statutory rights to increased pay, beyond what may be set out in a CBA, it violates the covenant is certainly novel. However, the court need not consider whether it states a claim on which relief may be granted to decide the pending motion.
Article VII of the CBA is entitled: "Grievance and Arbitration Procedure." Section 1 of Art. VII provides that "a ‘grievance’ shall be defined as a complaint between the [City] and [SPEA] and/or any employee(s) involving an alleged violation of a specific provision of this Agreement." Section 2, Step 4 of Art. VII addresses arbitration. It explains how an arbitrator is to be selected. It then states: "Notwithstanding anything to the contrary, no dispute or controversy shall be subject for arbitration unless it involved an alleged violation of a specific provision of this Agreement ... The arbitrator shall arrive at his decision solely upon the facts, evidence and contentions as presented by the parties during the arbitration proceedings." The question presented by this motion is whether the City’s claim for breach of the covenant of good faith and fair dealing implied in the CBA constitutes an alleged violation of a specific provision of the CBA and therefore must be arbitrated.
While the Art. VII of the CBA is written as if all grievances will be initiated by an employee against the City and provides for steps to escalate the matter to the Chief of Police and then to the Mayor or his/her designee before reaching the arbitration stage of complaint resolution, no party has argued that the City can file a "grievance" in court and only an employee is required to submit grievances to arbitration. Rather, the case turns on whether this dispute lies within the meaning of ‘grievance’ as it is defined in the CBA.
The first question to be resolved is whether the court or the arbitrator should determine whether this dispute concerning breach of the covenant is subject to arbitration. It is axiomatic that the parties can only be required to arbitrate a dispute if they have contractually committed to do so. See Massachusetts Highway Dep’t v. Perini Corp., 444 Mass. 366, 374 (2005). The parties argue as to whether the particular arbitration provision in the CBA is "broad" or contains "words of limitation." See Local Union No. 1710, International Association of Fire Fighters, AFL-CIO v. City Of Chicopee, 430 Mass. 417, 424 (1999) (Local Union) (where the SJC discusses the difference). The court finds that it is somewhat of hybrid. On the one hand it does not require arbitration "of all disputes arising out of, or relating to, this Contract." Id. at 423. On the other, it does require arbitration of a complaint "involving an alleged violation of [any] specific provision of [the CBA]," without any words constraining which provision or limiting arbitration to certain subject matters. Compare Id. at 424. The court finds the language of the CBA sufficiently limited and unusual to suggest the need for the court to decide if this dispute is subject to arbitration. See Id. at 421 ("whether an agreement creates a duty to arbitrate is undeniably an issue for judicial determination unless the parties clearly and unmistakably provide otherwise" (internal citations and quotations omitted)). Furthermore, the question whether a claim which references a specific CBA provision, but is based on a violation of the implied covenant, is covered by this arbitration provision seems particularly appropriate for judicial consideration.
As noted above, the covenant which is implied in every contract does not "create rights and duties not otherwise provided for in the existing contractual relationship," Uno Restaurants, Inc. v. Boston Kenmore Realty Corp., 441 Mass. at 385. The right or duty implicated in this case is the method for computing overtime pay. The City’s contention is that by, in effect, sponsoring the Federal Action, SPEA is acting in a manner that prevents the City from realizing the benefits of that section of the CBA that addresses overtime wages. The court finds that this is a claim that in practical effect constitutes a dispute involving the City’s rights under a specific contract provision and whether they have been wrongfully impaired by SPEA’s conduct. As such, the dispute between the City and SPEA asserted in Count I "involve[s] an alleged violation of a specific provision of the [CBA]," namely, the overtime provision, and must be submitted to arbitration.
When the question is whether a dispute falls within the arbitration provisions of a collective bargaining agreement, "where the contract contains an arbitration clause, there is a presumption of arbitrability in the sense that ‘[a]n order to arbitrate the particular grievance should not be denied unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute. Doubts should be resolved in favor of coverage." Id., citing AT & T Techs., Inc. v. Communications Workers, 475 U.S. 643, 649 (1986).
Count II: Contribution from a Joint Tortfeasor
G.L.c. 231B, § 1(a) provides that "where two or more persons become jointly liable in tort for the same injury to person or property, there shall be a right of contribution among them even though judgment has not been recovered against all or any of them." G.L.c. 231B, 3(a) permits a joint tortfeasor to enforce its right to contribution against the other joint tortfeasor in a separate action. In Count II, the City alleges that if it is liable to the plaintiffs in the Federal Action for violation of FLSA and the Wage Act, SPEA is a joint tortfeasor with the City as to that amount, because "the prospect" arises for those plaintiffs to assert that "SPEA acted arbitrarily, in bad faith, recklessly and/or without regard for the rights of the employees that it represented by negotiating and agreeing to provisions in the CBA that the [Federal Action plaintiffs] contend to be contrary to their statutory rights." Complaint par. 80, emphasis added. In other words, if the FSLA and Wage Act claims are tort claims and the alleged breach of the duty of fair representation gives rise to the same injury that the plaintiffs in the Federal Action allege, a claim for contribution from SPEA as a joint tortfeasor might lie.
In consequence, the first issue the court must decide is whether the FSLA and Wage Act claim asserted in the Federal Action is a tort claim. In Rosati v. Boston Pipe Covering, Inc., 434 Mass. 349 (2001), the plaintiffs worked for the defendant employer on a public construction project at Logan Airport. They brought an action against the defendant under G.L.c. 149, § 27 claiming that they had not been paid the prevailing wage for work performed on a public construction project and asserting their statutory right to lost wages, treble damages and attorneys fees. The question on appeal to the Supreme Judicial Court (SJC) was whether the defendant had a right to demand a jury trial of the plaintiffs’ claim. This required the SJC to consider the nature of a claim brought under c. 149 for failure to pay the wages required by statute. It concluded as follows:
[T]the claim is essentially an action in law sounding in contract. "[T]he ordinary action of contract is a controversy concerning property, in which trial by jury was had as of right at the time of the adoption of the Constitution." Farnham v. Lenox Motor Car Co., 229 Mass. 478, 480 (1918). The statute, G.L.c. 149, § § 26 and 27, provides that the wage rate for this particular employment contract was that set by the Commissioner of Labor and Industries, but the fact that the contract price is governed and set by statute does not make the claim any less analogous to a contract claim ... A claim pursuant to G.L.c. 149, § 27, is not a new statutory cause of action, but is fundamentally a contract claim for wages owed under an employment contract.Id. at 351-52.
There is no apparent reason that a claim that police officers have a statutory right to higher overtime wages than what was paid them by the City is different, in essence, from a claim that workers have a right to higher wages than they were paid for work done on a public works project. They both are "fundamentally a contract claim for wages owed under an employment contract." Since the Federal Action is essentially a contract claim, not a tort claim, G.L.c. 231B does not apply to it.
The City cites Melia v. Zenhire, Inc., 462 Mass. 164, 177 (2012) for the proposition that the SJC has held that "a Wage Act claim may sound in tort." In that case, the issue before the SJC was whether New York courts would likely use a tort or contract choice of law analysis in deciding whether to apply Massachusetts law to a Wage Act claim. The court concluded that New York would apply "tort choice-of-law principles to statutory claims arising from employment situations." This is because "the conduct giving rise to the cause of action— nonpayment of wages— ... took place in Massachusetts," and Massachusetts law should govern that relationship. Id. at 178. The court does not find that this analysis affects the question of whether a claim for additional payment for work performed under a contract of employment is a tort that requires the application of joint tortfeasor rules. In other words, nothing in Melia suggests that someone other than the employer (or an officer of the employer) could be liable jointly and severally to the employee for payment of overtime wages for work done for the City.
Moreover, even if the Federal Action was a tort claim, primary jurisdiction over matters involving claims of breach of the duty of fair representation lies with the DLR. Many years ago the SJC explained why claims of this nature should be committed to the DLR (then called the Labor Relations Commission) for resolution.
Although the relationship between a union and individual employees it represents is not at the very core of the commission’s expertise and mission, broader issues are often raised by disputes over the duty of fair representation. For example, the union may choose to settle an individual employee’s grievance as part of an over-all negotiating strategy. While the union must represent individuals fairly, it also acts primarily for the collective good of all employees. See Vaca v. Sipes, supra at 190-91; Trinque v. Mount Wachusett Community College Faculty Ass’n, 14 Mass.App.Ct. 191, 197-99 (1982); Cox, Rights Under a Labor Agreement, 69 Harv. L.Rev. 601, 625-27 (1956). Such an issue of a union’s over-all negotiating strategy is well-suited to the commission’s expertise and mission. Therefore, we agree that cases raising the duty of fair representation should normally be decided in the first instance by the commission. Cf. East Chop Tennis Club v. Massachusetts Comm’n Against Discrimination, 364 Mass. 444 (1973).Leahy v. Local 1526, American Federation of State, County, and Municipal Employees, 399 Mass. 341, 349 (1987) (Leahy).
This principle was recently discussed by the Appeals Court in Malden Police Patrolman’s Association v. Malden, 92 MassApp.Ct. 53 (2017) (Malden Police). There the Appeals Court explained the doctrine of primary jurisdiction:
"The doctrine of primary jurisdiction, like exhaustion [of administrative remedies], ‘is concerned with promoting proper relationships between the courts and administrative agencies charged with particular regulatory duties.’" Murphy, 377 Mass. at 221, quoting from Nader, 426 U.S. at 303. It arises in cases "where a plaintiff, ‘in the absence of pending administrative proceedings, invokes the original jurisdiction of a court to decide the merits of a controversy’ that includes an issue within the special competence of an agency." Fernandes v. Attleboro Hous. Authy., 470 Mass. 117, 121 (2014) (Fernandes), quoting from Murphy, supra at 220. See Everett v. 357 Corp., 453 Mass. 585, 609 (2009) (Everett). The primary jurisdiction doctrine allows a judge to delay or deny judicial review in favor of administrative proceedings "when an action raises a question of the validity of an agency practice, ... or when the issue in litigation involves ‘technical questions of fact uniquely within the expertise and experience of an agency’" (citations omitted). Murphy, supra at 221, quoting from Nader, supra at 304. See Leahy v. Local 1526, Am. Fedn. of State, County, & Mun. Employees, 399 Mass. 341, 349-50 (1987) (Leahy).
"Where an agency has statutorily been granted exclusive authority over a particular issue, the doctrine of primary jurisdiction requires that a court refer the issue to the agency for adjudication in the first instance" (emphasis in original). Fernandes, supra, quoting from Blauvelt v. AFSCME Council 93, Local 1703, 74 Mass.App.Ct. 794, 801 (2009) (Blauvelt). See Everett, supra; Puorro v. Commonwealth, 59 Mass.App.Ct. 61, 64 (2003) (Puorro). "Where, however, no statute has conferred exclusive authority to the agency, primary jurisdiction is ‘a doctrine exercised in the discretion of the court.’" Blauvelt, supra at 801-02, quoting from Columbia Chiropractic Group, Inc. v. Trust Ins. Co., 430 Mass. 60, 62 (1999). See Everett, 453 Mass. at 610 n.32. The primary jurisdiction doctrine has no applicability where the issues presented to the court concern only questions of law that do not call for agency expertise. See Murphy, 377 Mass. at 221-22; Casey v. Massachusetts Elec. Co., 392 Mass. 876, 879-80 (1984).
"Labor relations is an area in which the concerns of primary jurisdiction are commonly implicated." Leahy, 399 Mass. at 346. General Laws c. 150E, the public employees collective bargaining statute, gives the department broad authority to resolve labor disputes. See id. at 347.Id. at 58-59.
Clearly, the question of whether SPEA breached the duty of fair representation when it allegedly failed to insist on higher overtime pay consistent with the requirements of FSLA during the negotiation of the CBA is exactly the type of labor dispute that falls within the particular expertise of the DLR and should be submitted to it for resolution. See Leahy ("Such an issue of a union’s over-all negotiating strategy is well-suited to the commission’s expertise and mission").
Indeed, as explained in Malden Police, the only time this type of labor dispute might be appropriate for resolution in the first instance in the Superior Court is "where the issues presented to the court concern only questions of law that do not call for agency expertise." That principle clearly has no application to the fair representation claim alluded to in the Complaint in this case.
"Breach of the duty of fair representation occurs if a union’s actions toward an employee are arbitrary, discriminatory, or in bad faith ... Unions are permitted a wide range of reasonableness in representing the often conflicting interests of employees ... Therefore, although ordinary negligence may not amount to a denial of fair representation, lack of a rational basis for a union decision and egregious unfairness or reckless omissions or disregard for an individual employee’s rights may have that effect." Graham v. Quincy Food Service Employees Ass’n, 407 Mass. 601, 608 (1990) (internal citations and quotations omitted). Here, all that the City alleges in its Complaint is that SPEA’s negotiating strategy, in failing to demand greater overtime pay consistent with the claims that the plaintiff police officers have asserted in the Federal Action, "raises the prospect for the [Federal Action plaintiffs] to assert that SPEA acted arbitrarily, in bad faith, recklessly and/or without regard for the rights of the employees that it represented." What facts these police officers would actually allege beyond the conclusory language the City uses in the Complaint is unknown. Indeed, as it is the City that alleges that SPEA breached the duty of fair representation, while at the same time maintaining that the overtime provisions of the CBA actually comply with FSLA, the facts that would support the City’s contention that SPEA’s negotiating strategy constituted an act of bad faith to some or all of its members are particularly obscure. Clearly, the very substantial development of the facts that might support the City’s claim of breach of the duty of fair representation that it asserts SPEA members could prove falls directly within DLR’s area of expertise.
ORDER
For the foregoing reasons, SPEA’s motion to dismiss is ALLOWED. Final judgment shall enter dismissing the Complaint.