Lockport Memorial Hospital v. United Prof. Nurses Assoc

Full title: LOCKPORT MEMORIAL HOSPITAL, Plaintiff, v. UNITED PROFESSIONAL NURSES…

Court: United States District Court, W.D. New York

Date published: Jun 25, 2004

02-CV-0771A(Sr) (W.D.N.Y. Jun. 25, 2004)

Opinion

02-CV-0771A(Sr).

June 25, 2004

REPORT, RECOMMENDATION AND ORDER

KEN SCHROEDER, Magistrate Judge

This matter was referred to the undersigned by the Hon. Richard J. Arcara, in accordance with 28 U.S.C. § 636(b), for all pretrial matters and to hear and report upon dispositive motions. Dkt. #7. Currently before the Court is the United Professional Nurses Association's ("UPNA's"), motion to: (1) dismiss Lockport Memorial Hospital's ("Hospital's"), complaint for declaratory judgment; and (2) compel arbitration (Dkt. #13);¹ and the Hospital's motion for summary judgment staying arbitration and dismissing the UPNA's counterclaim to compel arbitration. Dkt. #17. For the following reasons, it is recommended that the UPNA's motion be granted and the Hospital's motion be denied.

1 UPNA also moved to amend its Answer to correct its admission that the CBA appended to the Hospital's Complaint is accurate. Dkt. #13. Defense counsel averred that he "was not aware at the time of the answer that there was a dispute as to the actual contents of Section 9.03 of the CBA." Dkt. #15, ¶ 4. The Hospital opposed the motion to amend because the UPNA had not attached a proposed amended answer to its motion. Dkt. #19, ¶ 4. At oral argument of the pending motions, this Court denied the UPNA's motion to amend the answer without prejudice to the UPNA's right to renew.

BACKGROUND ²

2 Unless otherwise noted, the facts presented, which are generally not in dispute, are taken from the Hospital's Statement of Undisputed Material Facts and the Affidavit of UPNA's Staff and Program Director. Dkt. ##16, 18.

In August of 2001, the parties tentatively agreed to a collective bargaining agreement ("CBA"), for the period April 1, 2001 through March 31, 2005. Appendix A of the CBA, entitled "Wages," provides that upon ratification of the CBA, "each full-time nurse will receive a lump sum payment of $900, each regular part-time nurse will receive $450, and each per diem nurse will receive $225." Dkt. #1, Exh. 1A, ¶ 1. The CBA was ratified by the UPNA membership on or about August 9, 2001. Lump sum payments were issued on August 16, 2001.

The UPNA submitted a grievance dated September 3, 2001, but allegedly not received by the Hospital until September 10, 2001, complaining that not all eligible employees received the lump-sum payments. Dkt. #1, Exh. 1AA. On September 18, 2001, the Hospital denied the grievance on the grounds that it was "not timely," and that "[a]ll eligible bargaining unit employees received payment in accordance with contract." Dkt. #1, Exh. 1AA.

By letter dated July 8, 2002, the UPNA advised the Hospital of its intent to submit the lump sum payment greivance to arbitration. Dkt. #1, Exh. 1AC. By Notice of Petition verified October 3, 2002, the Hospital petitioned the New York State Supreme Court, County of Niagara, for a Judgment, pursuant to section 7503(b) of New York's Civil Practice Law Rules, staying the arbitration of this grievance on the grounds that there is no agreement to arbitrate this grievance and, alternatively, that UPNA failed to comply with a condition precedent to arbitration and, as a result, no dispute remains to be arbitrated. Dkt. #1. The UPNA removed the action to this Court pursuant to section 301 of the Labor Management Relations Act of 1947. See 29 U.S.C. § 185(a); 28 U.S.C. § 1441(b).

DISCUSSION AND ANALYSIS

The UPNA argues that its motion to compel arbitration must be granted and the Hospital's motion to stay arbitration must be dismissed because the CBA contains an agreement to arbitrate grievances involving the interpretation or alleged violation of specific provisions of the Appendix to the CBA and any question regarding the timeliness of that grievance must be resolved by the arbitrator, not the Court. Dkt. #14.

The Hospital argues that its motion for summary judgment staying arbitration and dismissing the UPNA's counterclaim must be granted because the UPNA's failure to comply with the deadlines set forth in the CBA caused the dispute to be deemed settled and no longer arbitrable. Dkt. #19. The UPNA replies that the parties have a history of explicitly or impliedly waiving strict enforcement of the time limitations contained within the CBA. Dkt. #16, ¶¶ 17-19.

As the United States Supreme Court long ago ruled, a grievance-arbitration procedure in a collective bargaining agreement is enforceable pursuant to § 301 of the Labor Management Relations Act ( 29 U.S.C. § 185). Textile Workers Union v. Lincoln Mills, 353 U.S. 448 (1957). Moreover, there is no question that this Court has jurisdiction to decide the initial issue of arbitrability as raised by the parties herein.

The Congress . . . has by § 301 of the LMRA, assigned the courts the duty of determining whether the reluctant party has breached his promise to arbitrate. For arbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit. Yet, to be consistent with congressional policy in favor of settlement of disputes by the parties through the machinery of arbitration, the judicial inquiry under § 301 must be strictly confined to the question whether the reluctant party did agree to arbitrate the grievance or did agree to give the arbitrator power to make the award he made. An 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.

United Steelworkers v. Warrior Gulf Navigation Company, 363 U.S. 574, 582-83 (1960) (emphasis added). Thus,

The function of the court is very limited when the parties have agreed to submit all questions of contract interpretation to the arbitrator. It is confined to ascertaining whether the party seeking arbitration is making a claim which on its face is governed by the contract. Whether the moving party is right or wrong is a question of contract interpretation for the arbitrator. In these circumstances the moving party should not be deprived of the arbitrator's judgment, when it was his judgment and all that it connotes that was bargained for.

United Steelworkers v. American Mfg. Co., 363 U.S. 564, 567-68 (1960). This principle was strongly reiterated by the United States Supreme Court in ATT Technologies, Inc. v. Communications Workers of America, wherein it stated:

It is the court's duty to interpret the agreement and to determine whether the parties intended to arbitrate grievances concerning [issues such as is presented herein.] If the court determines that the agreement so provides, then it is for the arbitrator to determine the relative merits of the parties' substantive interpretations of the agreement. It [is] for the court, not the arbitrator, to decide in the first instance whether the dispute was to be resolved through arbitration.

475 U.S. 643, 651 (1986). Since "arbitration is simply a matter of contract between the parties," courts "should apply ordinary state-law principles that govern formation of contracts" when deciding whether the parties agreed to arbitrate a certain matter. First Options of Chicago v. Kaplan, 514 U.S. 938, 943-44 (1995).

The CBA at issue in this case provides that "[g]reivances are limited to matters of interpretation or alleged violation of specific provisions of this Agreement." Dkt. #1, Exh. A, ¶ 13.01.

"Agreement" means this Agreement and each appendix, schedule amendment or supplement thereto.

Dkt. #1, Exh. A, ¶ 15.01(A). There are three appendices attached to the CBA, including Appendix A (Wages), which provides for the lump-sum payments at issue in this dispute. Dkt. #1, Exh. A. This Appendix is clearly part of the Agreement, and is, therefore, subject to the arbitration provision contained within the CBA's Grievance Procedure.³

3 The Grievance Procedure set forth in the CBA provides that a "grievance must be filed within five (5) of grievant's workdays after the alleged violation has occurred." Dkt. #1, Exh. 1A, ¶ 13.01. The procedure further provides that the Director of Human Resources must respond to the grievance "within 5 work days after" either the receipt of the grievance or the meeting, if held, between the Director of Human Resources and the UPNA representative. Dkt. #1, Exh. 1A, ¶ 13.02.

If the grievance remains unresolved after the answer received from the Director of Human Resources, the [UPNA] will notify the Director of Human Resources in writing of an intent to arbitrate. Such written notice must be given within ten (10) workdays following receipt of the Step 2 Answer.

Dkt. #1, Exh. 1A, ¶ 13.02. "Disposition of a grievance in accordance with [these] provisions . . . will be final and binding upon the Hospital, the Association, and the employee(s) involved." Dkt. #1, Exh. 1A, ¶ 13.02. In addition, the grievance procedures provide as follows:

13.03 Limitations. Grievances which are not processed to the next step within the time limitations proceeded [sic] in Steps 1 or 2 will be deemed settled on the basis of the answer given in Step 1 or 2. . . .

At any Step, if either party cannot present the grievance to the next Step in accordance with the established time limitations, these limitations may be reasonably extended by written agreement.

Dkt. #1, Exh. 1A, ¶ 13.03.

"Once 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 and bear on its final disposition should be left to the arbitrator." John Wiley Sons, Inc. v. Livingston, 376 U.S. 543, 557 (1964). The rationale for this rule is that "[q]uestions concerning the procedural prerequisites to arbitration do not arise in a vacuum; they develop in the context of an actual dispute about the rights of the parties to the contract or those covered by it." Id. at 556.

"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." Id. at 557. Thus, "an allegation of waiver, delay, or a like defense to arbitrability," absent express contractual language to the contrary, should be decided by the arbitrator. Moses H. Cone Hosp. v. Mercury Construction, 460 U.S. 1, 25 (1983). The Supreme Court of the United States has recently determined that the arbitrator, not the court, should interpret and apply an arbitration provision stating that no dispute shall be eligible for submission for arbitration where six years have elapsed from the occurrence or event giving rise to the dispute because "such a dispute seems an `aspec[t] of the [controversy] which called the grievance procedures into play.'" Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 85 (2000), quoting John Wiley, 376 U.S. at 559.

The determination as to whether the grievance was deemed settled when the UPNA failed to commence its grievance within five work days of the lump sum payment or to demand arbitration within ten work days following the Hospital's written response the grievance; whether the parties' past practices waived these time limits; or whether the deadlines should be excused by any informal attempts to resolve these and other disputes requires interpretation of specific provisions of the CBA. The parties specifically contracted to permit an arbitrator to resolve "matters of interpretation or alleged violation of specific provisions." Dkt. #1, Exh. A, ¶ 13.01. Accordingly, the determination as to whether the procedures for advancing a grievance to arbitration have been complied with is for the arbitrator, not the court.

The cases cited by the Hospital are not to the contrary. In Rochdale Village Inc. v. Public Service Employees Union, for example, the Court of Appeals remanded the case to the district court to determine whether the CBA was terminated pursuant to a separate agreement between the parties. 605 F.2d 1290 (2d Cir. 1979). If not, the Court of Appeals held that it was for the arbitrator to decide whether the CBA terminated pursuant to the duration clause within the CBA or whether the Union repudiated any extension of the CBA, and if so, whether the terms of the CBA permitted unilateral termination of the CBA by repudiation. Id. In New York News, Inc. v. Newspaper Guild of New York, the Court of Appeals determined that the parties did not agree to arbitrate disputes regarding termination of the contract. 927 F.2d 82 (2d Cir. 1991). Similarly, in State of New York v. Oneida Indian Nation of New York, the Court of Appeals for the Second Circuit enforced the following express limitation of an agreement to arbitrate all disputes concerning compliance with and interpretation of any provisions of the Compact:

Except for disputes concerning the games and activities permitted under this Compact, all disputes concerning compliance with and interpretation of any provisions of the Compact shall be resolved by binding arbitration in accordance with the procedures set forth below. A claim by the State that the Nation is conducting a Class III gaming activity not authorized by this Compact is not subject to mandatory arbitration.

90 F.3d 58, 61 (2d Cir. 1996). Finally, in Cendant Corp. v. Forbes, the Court of Appeals affirmed the district court's determination that because the dispute arose pursuant to "an independently-negotiated, separately-executed contract that nowhere refers to the Employment Agreement and that deals with a subject not directly covered by the Employment Agreement . . . it [was] not subject to the arbitration clause of the Employment Agreement." 70 F. Supp.2d 339, 342 (S.D.N.Y. 1999), aff'd, 205 F.3d 1322 (2d Cir. 2000). In the instant case, in contrast, the CBA clearly provides for arbitration of disputes with respect to the lump sum payments contained in Appendix A. Since the parties contracted to arbitrate such disputes, the merits of the dispute, including the merits of any defenses applicable to the dispute, are within the province of the arbitrator.

CONCLUSION

Based on the foregoing, it is hereby recommended that the UPNA's motion to dismiss the Hospital's complaint and compel arbitration (Dkt. #13), be GRANTED, and the Hospital's motion for summary judgment staying arbitration and dismissing UPNA's counterclaim to compel arbitration (Dkt. #17), be DENIED.

Pursuant to 28 U.S.C. § 636(b)(1), it is hereby

ORDERED, that this Report, Recommendation and Order be filed with the Clerk of the Court.

ANY OBJECTIONS to this Report, Recommendation and Order must be filed with the Clerk of this Court within ten (10) days after receipt of a copy of this Report, Recommendation and Order in accordance with the above statute, Fed.R.Civ.P. 72(b) and Local Rule 72.3(a)(3).

The district judge will ordinarily refuse to consider de novo arguments, case law and/or evidentiary material which could have been, but were not presented to the magistrate judge in the first instance. See, e.g., Patterson-Leitch Co. v. Massachusetts Mun. Wholesale Electric Co., 840 F.2d 985 (1st Cir. 1988).

Failure to file objections within the specified time or to request an extension of such time waives the right to appeal the District Court's Order. Thomas v. Arn, 474 U.S. 140, 106 S. Ct. 466, 88 L.Ed.2d 435 (1985); Wesolek v. Canadair Ltd., 838 F.2d 55 (2d Cir. 1988).

The parties are reminded that, pursuant to Rule 72.3(a)(3) of the Local Rules for the Western District of New York, "written objections shall specifically identify the portions of the proposed findings and recommendations to which objection is made and the basis for such objection and shall be supported by legal authority." Failure to comply with the provisions of Rule 72.3(a)(3), or with the similar provisions of Rule 72.3(a)(2) (concerning objections to a Magistrate Judge's Report, Recommendation and Order), may result in the District Judge's refusal to consider the objection.

The Clerk is hereby directed to send a copy of this Report, Recommendation and Order to the attorneys for the parties.