Opinion
Case No. 6:00-CV-6-ORL-19DAB
March 8, 2001
ORDER
This cause came before the Court on the following matters:
(1) Defendant's Motion for Summary Judgment on Its Counterclaim (Doc. No. 21, filed November 28, 2000); Defendant's Memorandum in Support of Defendant's Motion for Summary Judgment on Its Counterclaim (Doc. No. 22, filed November 28, 2000); Defendant's Statement of Undisputed Facts (Doc. No. 23, filed November 28, 2000);
(2) Plaintiff's Motion for Summary Judgment (Doc. No. 25, filed December 1, 2000); and the Defendant's' Response to Plaintiff's Motion for Summary Judgment (Doc. No. 30, filed December 22, 2000)
BACKGROUND
This action arises out of an employment dispute between Plaintiff the United Parcel Service, Inc. ("UPS"), its employee Cheryl Drury, and the International Brotherhood of Teamsters, Local 385 (the "Union") which has represented Ms. Drury in her relations with UPS. The only issue raised by the parties is whether Arbitrator Charles A. Hall had authority to render his decision of October 4, 1999 that the underlying dispute between the parties is arbitrable. See (Doc. No. 34, at 1); see also (Doc. No. 27, at Exh. 22) (providing copy of Arbitrator Hall's decision); (Doc. No. 28) (stipulation of the parties that the exhibits, numbered 1-22 at docket number 27, "shall be deemed authentic and admissible and neither party shall object to the consideration of said exhibits by the Court")
UPS filed the instant action pursuant to Section 301 of the Labor-Management Relations Act, Title 29, United States Code, section 185, requesting that this Court vacate the decision of Arbitrator Hall.See (Doc. No. 1). The Union counterclaimed requesting that the Court enforce Arbitrator Hall's decision. See (Doc. No. 15). Both parties seek an award of expenses, including court costs and attorney's fees. See (Doc. Nos. 1 15)
Both parties have filed motions for summary judgment with regard to their respective claims. See (Doc. Nos. 21 25). The parties agree that the issue of Arbitrator Hall's authority "is purely a matter of law" and that "there are no disputed issues of material fact" to be resolved by the Court. See (Doc. No. 34, at 1-2)
The undisputed facts relevant to the arbitrator's authority in this case are as follows. The Union and UPS are parties to a Collective Bargaining Agreement, entitled National Master United Parcel Service Collective Bargaining Agreement and Southern Region Supplemental Collective Bargaining Agreement for the period August 1, 1997 through July 31, 2002 (the "CBA"). E.g. (Doc. No. 23, at ¶ 1). The CBA sets forth procedures for the resolution of grievances which arise between the parties. See (Doc. No. 27, Exh. 5, at Art. 8 and Art. 51)
On January 29, 1998, Ms. Drury filed a grievance protesting her termination for job abandonment and absenteeism. (Doc. No. 23). Pursuant to the CBA, Ms. Drury's grievance was heard and ruled upon by the Southern Region Area Parcel Grievance Committee (the "SRAPGC") on February 17, 1998. According to the record before this Court, the SRAPGC Panel issued a unanimous decision in favor of UPS with regard to Ms. Drury's job abandonment grievance, and the Union "withdrew" Ms. Drury's remaining grievances. See (Doc. No. 27, at Exh. 8).
The SRAPGC is "a bi-partite panel composed of equal numbers of disinterested union representatives and disinterested employer representatives." See (Doc. No. 23, at ¶ 3). UPS has provided the Court with several cases where the decisions of similarly-composed panels were upheld under Spielberg Manufacturing Company, 112 N.L.R.B. 1080 (1955), which sets forth the minimum conditions that must be satisfied before the NLRB will defer to an "arbitration" decision. See (Doc. No. 23, at Exh. 10, Tabs 6-8) (providing United Parcel Service, 274 N.L.R.B. 396 (1995), United Parcel Service, 270 N.L.R.B. 290, (1984), aff'd, 779 F.2d 12 (6th Cir. 1985), and United Parcel Service, 232 N.L.R.B. 1114 (1997)).
Despite the parties' representation that there are no issues of disputed facts in this case, the Court notes that the parties are not in agreement as to how all of Ms. Drury's grievances were resolved before the SRAPGC.
Following the SRAPGC's decision, the Union took two different actions. First, on February 20, 1998, the Union filed a charge (the "Charge") with the National Labor Relations Board (the "NLRB"), alleging that Ms. Drury's termination violated the National Labor Relations Act (the "NLRA"). See (Doc. No. 27, at Exh. 9). The Union amended its Charge on April 24, 1998. (Doc. No. 23, at Exh. 4). Second, on March 11, 1998, pursuant to the procedures set forth in the CBA, the Union appealed the decision of the SRAPGC Panel to the National Grievance Committee Panel (the "National Panel"). See id. at Exh. 3. The Union's second course of action, the appeal to the National Panel, has borne no fruit. The Union's first course of action ultimately resulted in the instant suit.
According to the record before this Court, the National Panel has yet to rule on the Union's appeal.
After the Union filed its Charge with the NLRB, UPS sent a letter to the NLRB advising of UPS's position concerning deferral of the Union's Charge (the "May 15 Letter"). See (Doc. No. 27, Exh. 12). The May 15 Letter summarized the proceedings before the SRAPGC and stated that the Union had appealed the SRAPGC's decision to the National Panel. Id. The May 15, 1998 Letter concluded:
Based upon this, the Company is willing to continue to process this grievance which covers the subject matter of the charge, pursuant to the grievance procedure contained in the [CBA], which calls for decision by a National Committee, the equivalent of arbitration, or in some cases, arbitration before a single arbiter (Article 8, Section 4), notwithstanding any contractual time limits or the subsequent expiration of the collective bargaining agreement.Id. (emphasis added).
In a letter dated May 29, 1998 (the "May 29 Letter"), the NLRB notified the parties that:
In accordance with the [NLRB's] policy in Collyer Insulated Wire, 192 N.L.R.B. 837, and pursuant to "Arbitration Deferral Policy under Collyer-Revised Guidelines" publicly issued by the General Counsel on May 10, 1973 [hereinafter the "Collyer-Revised Guidelines"], [the NLRB would] declin[e] to issue a complaint on the instant [C]harge based upon [a] determination that further proceedings on the [C]harge should be administratively deferred for arbitration.
(Doc. No. 27, at Exh. 13). The May 29 Letter then set forth the NLRB's reasons for deferring the Charge, including UPS's representations in its "letter dated May 15, 1998, . . . that it is now, and for a reasonable period of time will remain, willing to arbitrate the disputes which are the subjects of the captioned charge notwithstanding any contractual time limitations on the processing of grievances to arbitration or the subsequent expiration of the current [CBA]." Id. The May 29 Letter also set forth the NLRB's conclusion "that there is a reasonable probability that the unfair labor practice issues raised by the [C]harge could be considered and resolved under the contractual grievance/arbitration procedure in a manner consistent with [Spielberg]." Id.
The May 29 Letter also set forth additional action which might be taken by the NLRB. Specifically, the NLRB expressed its intention to: (1) monitor the parties' progress; (2) "dismiss the [C]harge in the event the [Union] does not promptly submit the dispute underlying the [C]harge to the contract arbitration procedures, or in the event the [Union] notifies me in writing that it does not intend to submit the dispute to arbitration;" and (3) revoke its "decision to defer and to resume processing of the [C]harge in the event [UPS], by conduct inconsistent with its expression of willingness to arbitrate, prevents or impedes the prompt resolution of the underlying dispute through the contract grievance-arbitration procedures." Id. Finally, the May 29 Letter states that "[i]f the dispute underlying the [C]harge is not resolved amicably under the grievance procedure, and resort to arbitration proves necessary, the [Union] may obtain a review of the arbitrator's final award . . . ." Id.
UPS had previously indicated to the NLRB, in a letter dated May 15, 1998, that it would submit to arbitration. See (Doc. No. 27, at 12).
Shortly after the NLRB sent the May 29 Letter to the parties, the Union wrote a letter to UPS, (the "June 17 Letter"), seeking to initiate arbitration before a single arbitrator from the Federal Mediation Conciliation Service (the "FMCS"). (Doc. No. 27, at Exh. 16). The June 17 Letter stated the Union's understanding that the NLRB had "deferred the issuance of a complaint pending arbitration because of [UPS's] willingness to submit all the issues for arbitration." Id. Based upon this understanding, the May 29 Letter included the following request:
Pursuant to Article 51, Section 3 of the [CBA], please contact me at your earliest convenience in order that we initiate the selection of an arbitrator through the [FMCS] and decide on the use of attorneys. As you know, the contract provides that the decision to use attorneys is to be made by the [Union]See (Doc. No. 17, at Exh. 16).
UPS responded to the Union by letter dated June 26, 1998 (the "June 26 Letter"). In the June 26 Letter, UPS stated the following:
This matter is not properly appealable under Article 51. UPS did not agree to proceed with the grievance outside of the normal grievance process. As I understand it, we are awaiting a decision by the National Panel.
UPS agreed with the NLRB that this matter could proceed in accordance with the grievance procedure. [The Union] has appealed the decision of the [SRAPGC] to the National Panel pursuant to Article 8.
It would be improper to take the matter of out [sic] the hands of the National Panel. Joint Committees at any level are the equivalent of arbitration under the [NLRA].
(Doc. No. 27, at Exh. 17) (providing UPS's May 15 Letter to the NLRB as an attachment).
In a brief letter dated September 10, 1998, the Union responded to UPS's June 26 Letter as follows:
We disagree with any claim by [UPS] that the deferral to arbitration in the referenced case is restricted in any way. To the contrary, the [NLRB] has specifically listed the conduct of [UPS] that is subject to arbitration pursuant to the decision to defer. This decision to defer, and in particular, the subject matter of the deferral, was not appealed by the Employer, said appeal which was due on or before June 12, 1998.
Accordingly, to avoid any confusion on this issue, we are enclosing a grievance encompassing the precise issues deferred to arbitration by the [NLRB].
We have requested a panel of arbitrators from the FMCS. When we receive the panel, we will contact you to strike the panel.
(Doc. No. 27, at Exh. 18).
This correspondence between the parties continued, when on September 24, 1998, UPS sent a letter to the Union again contesting the arbitrability issue:
Our agreement with the NLRB was to process the existing grievance of Cheryl Drury through the grievance procedure. We did not agree that you could make up some new grievance.
* * *
[The May 15 Letter] to the NLRB did not encompass going outside the [CBA] to process the grievance. And, there is no procedure in the [CBA] which envisions going to the [FMCS] other than if the local panel deadlocks which, of course, did not occur.
* * *
It is the position of UPS that you appealed this matter to the National Panel and, until there is a decision or a deadlock, it is premature to go to arbitration and, further, that the arbitration step after going to the National Panel should be pursuant to the American Arbitration Association.
(Doc. No. 27, at Exh. 19).
After this lengthy exchange of correspondence, both parties appeared at a hearing before Arbitrator Hall on July 14, 1999 (the "July Hearing").See (Doc. No. 23, at ¶ 9). The single issue addressed at the July Hearing was that of arbitrability. Id. On October 4, 1999, Arbitrator Hall issued a decision ruling in favor of the Union on the arbitrability issue. See (Doc. No. 27, at Exh. 22).
Despite repeatedly expressing its arbitrability objections to the Union and to Arbitrator Hall, UPS did not voice its objections to the NLRB or to this Court until after Arbitrator Hall made his determination. See id. at ¶ 11; (Doc. No. 31, Exh. C). Indeed, based upon the record before the Court, the NLRB was not notified of the arbitrability issue by either party until January of 2000 when UPS sent the NLRB a letter stating the following:
Since [the May of 1998], the Union has attempted to bypass the contractual procedure and go directly to an independent arbitrator. We recently filed the attached Complaint to put a stop to this procedure, because it is not proper in accordance with the labor contract.Id.
UPS also provided the Court with a copy of a letter sent to the NLRB on April 18, 2000 (the "April 18 Letter") See (Doc. No. 31, at Exh. C). The April 18 Letter informed the NLRB that: (1) the Union was represented by new counsel; (2) UPS had filed the instant lawsuit; and (3) UPS "is not willing to proceed with the presentation of" the underlying dispute in an arbitration before Arbitrator Hall. Id. UPS stated that deferral under Collyer was no longer appropriate, and that the NLRB should "proceed with its investigation and processing of [the Charge]." Id.
ANALYSIS
The preliminary issue to be addressed in this case is the matter of substantive arbitrability: whether the parties agreed that the subject matter of the dispute before Arbitrator Hall, that is arbitrability, was to be decided in arbitration. E.g. First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 942 (1995). If the parties have agreed that an arbitrator is to determine the issue of arbitrability, then the Court must use a deferential standard of review. Id. (stating that "[i]f the parties agreed to submit [the issue of arbitrability] to an arbitrator, "then the court's standard for reviewing the arbitrator's decision" should be deferential). If the parties did not agree to arbitrate the matter of arbitrability, then they cannot be bound by an arbitrator's decision regarding arbitrability.Normally, courts resolve issues of substantive arbitrability by looking to the terms of the CBA. See ATT Tech., Inc. v. Communications Workers, 475 U.S. 643, 649 (1986). Here, UPS contends that the silence in the CBA with regard to whether arbitrability issues will be submitted to an arbitrator indicates that the parties did not so agree. (Doc. No. 25, at 10). For its part, the Union has not pointed to any language in the CBA that suggests that the parties agreed to arbitrate the issue of arbitrability. Indeed, the Union has conceded that this matter is not arbitrable based upon the terms of the CBA, but in spite of them, "because the NLRB issued its deferral Order which constituted the submission agreement and UPS thereafter submitted the issue of substantive arbitrability to Arbitrator Hall for his determination." Id. (stating that "absent UPS's course of dealings with the NLRB, the NLRB's deferral Order, and UPS's participation in the arbitration hearing before Arbitrator Hall", the underlying grievance would not be arbitrable).
UPS's argument in this regard is premised on Florida law. (Doc. No. 25, at 10). The Court notes that UPS's contention that state law controls this Court's interpretation of the CBA is incorrect. The cases cited in support of this argument were decided under the federal Arbitration Act, Title 9, United States Code, section 1, not the FLSA.See id. (citing First Options, 514 U.S. at 945; Prudential Sec., Inc. v. Emerson, 905 F. Supp. 1038, 1044 (M.D.Fla. 1995); Prudential Sec., v. Kucinski, 947 F. Supp. 462, 465 (M.D.Fla. 1996). The law is that where the FLSA is at issue, courts are to apply federal common law. See John Wiley Sons, 376 U.S. at 548 (explaining that "[f]ederal law, fashioned `from the policy our national labor laws,' controls arbitration issues in labor disputes") State law may be utilized only to the extent it is useful in developing the federal common law in a particular case.Id.
The Union stated that "if the instant matter were properly before this Court de novo, . . . the merits of the disciplines forming the subject of the NLRB's deferral Order would be neither substantively nor procedurally arbitrable." (Doc. No. 30, at 3)
In light of the Union's concession that the CBA does not include an agreement to arbitrate the issue of arbitrability, the Court must determine whether the parties entered into an independent agreement to arbitrate the issue of arbitrability. The Union argues that the NLRB's May 29 Letter is essentially a "submission agreement" which granted the arbitrator authority to hear the case. See (Doc. No. 27, at 1). The language of the May 29 Letter belies this argument. The May 29 Letter merely directs the parties to resolve their dispute pursuant to their existing grievance/arbitration procedures. It did not include an agreement to arbitrate an issue, such as arbitrability, which they had not previously agreed to arbitrate in the CBA. Furthermore, it is clear that the NLRB will issue a Collyer deferral even if a party contends that a particular issue is not arbitrable. See Collyer-Revised Guidelines. Thus, the Court finds that the May 29 Letter did not constitute an independent agreement by UPS to submit an otherwise non-arbitrable issue to arbitration.
The Union's final arguments include waiver and estoppel. Essentially, the Union contends that Arbitrator Hall's decision should not be disturbed because UPS waived its right to contest the issue of arbitrability and it should be estopped from challenging Arbitrator Hall's decision. This Court does not find that UPS waived its right to contest arbitrability of the instant claim simply because it appeared at the July Hearing before Arbitrator Hall and provided him with a brief concerning the arbitrability issue. See Pennsylvania Power Co. v. Local Union #272, 886 F.2d 46, 50 (3d Cir. 1989). Similarly, UPS's failure to file an action in this Court prior to the July Hearing, does not constitute a waiver of its right to dispute arbitrability. Id. UPS sufficiently preserved its rights by voicing its objections to the Union, before Arbitrator Hall, and now before this Court. See id.
In its presentation to Arbitrator Hall, the Union did not raise its estoppel or waiver arguments, and Arbitrator Hall's decision was not premised upon these theories. SEE (Doc. No. 27, at Exh. 22). In this regard, the instant case is distinguishable from Shopmen's Local 539 v. Mosher Steel Co., 796 F.2d 1361 (11th Cir. 1986) (ruling that it was error for the trial court to "set aside the arbitrator's factual finding of waiver")
In Pennsylvania Power Co., the court used a deferential standard in reviewing the Arbitrator's arbitrability determination. See Pennsylvania Power Co., 886 F.2d at 48 (stating that "[i]n considering the propriety of the arbitrator's decision on arbitrability . . . our review is subject to the same highly deferential standard . . . . [so that] a decision on arbitrability will be affirmed as long as it `draws its essence' from the collective bargaining agreement. [rather than from his own] notions of industrial justice")
With regard to the Union's estoppel argument, the Court is not persuaded that UPS's actions were taken in bad faith and solely to delay a final resolution in Ms. Drury's case. The Court notes that, despite the clear language of the May 29 Letter, the Union did not appeal the NLRB's deferral decision, and it never notified the NLRB of UPS's alleged bad faith. Indeed, in the May 29 Letter, the NLRB expressly stated that: (1) the Union, not UPS, might appeal the deferral decision; and (2) the NLRB would "resume processing the [C]harge in the event [UPS], by conduct inconsistent with its expression of willingness to arbitrate, prevents or impedes the prompt resolution of the underlying dispute through the grievance arbitration procedures." See (Doc. No. 27, at 13). Based upon the Record, it appears that the Union shares responsibility with UPS for the delay and uncertainty that have pervaded this case.
The Court notes that in addition to notifying the NLRB of UPS's alleged bad faith, the Union had the option of bringing an action against UPS to compel it to arbitrate. The issues presently before the Court are often raised in such a procedural posture. E.g. United Steelworkers of Am. v. Simcala, Inc., 971 F. Supp. 522 (M.D.Ala. 1997); United Steelworkers of Am. v. McGraw-Edison Power Systems Div., 1971 WL 870 (N.D.Ala. Dec. 13, 1971)
In light of the parties' shared responsibility for the circuitous path that has led Ms. Drury's Charge into federal court and delayed its final resolution, the Court finds that neither party is entitled to recover its attorney's fees.
CONCLUSION
Based upon the foregoing, the Court rules that:(1) Defendant's Motion for Summary Judgment on Its Counterclaim (Doc. No. 21) is DENIED.
(2) Plaintiff's Motion for Summary Judgment (Doc. No. 25) is GRANTED.
(3) The Arbitrator's decision dated October 4, 1999 is hereby VACATED.
(4) The Clerk shall enter judgment in favor of United States Parcel Service, Inc. and shall CLOSE this case.