In the
United States Court of Appeals
For the Seventh Circuit
No. 09-4001
K ARL S CHMIDT U NISIA, INCORPORATED ,
Plaintiff/Counter-Defendant/Appellant,
v.
INTERNATIONAL U NION, U NITED A UTOMOBILE,
A EROSPACE, AND A GRICULTURAL IMPLEMENT
W ORKERS OF A MERICA, UAW L OCAL 2357, ET AL.,
Defendants/Counter-Plaintiffs/Appellees.
Appeal from the United States District Court
for the Northern District of Indiana, Fort Wayne Division.
No. 1:07-CV-297—Joseph S. Van Bokkelen, Judge.
A RGUED O CTOBER 1, 2010—D ECIDED D ECEMBER 17, 2010
Before P OSNER, K ANNE, and SYKES, Circuit Judges.
K ANNE, Circuit Judge. International Union, United
Automobile, Aerospace and Agricultural Implement
Workers of America, UAW Local No. 2357 (“Union”),
filed grievances against Karl Schmidt Unisia, Inc. (“Com-
2 No. 09-4001
pany”), on its own behalf and on behalf of Sam Jenkins
and John Tony Smith. After initially participating in the
grievance process, the Company reversed course and
filed suit against the Union, Smith, and Jenkins in
federal district court, seeking a declaratory judgment
that the Union’s grievances are not arbitrable. The Union
filed a counterclaim to compel arbitration and subse-
quently filed a motion for summary judgment. The
district court found the grievances arbitrable under the
terms of the parties’ collective bargaining agreement
(CBA), and it therefore granted the Union’s motion
for summary judgment. We affirm.
I. B ACKGROUND
In 2005, the parties negotiated the CBA that was in place
at all relevant times of this dispute. Section 13.01 of the
CBA includes a “Thirty and Out” provision, which pro-
vides eligibility for supplemental retirement benefits to
an employee once he has reached the age and seniority
requirements in the provision. Section 13.01 also pro-
vides that the Pension Plan, which sets forth other
features of the Company’s retirement policy, “shall con-
tinue in effect” for the term of the CBA. After the CBA
had gone into effect, the Company unilaterally added
language to § 5.03 of the Pension Plan. Based on this
amendment to § 5.03, to be eligible to receive the sup-
plemental retirement benefit, an employee must have
reached the age and seniority requirements of the
Thirty and Out provision “as of his date of termination
of employment.” Section 6.02 of the CBA provides the
No. 09-4001 3
rules for loss of employee seniority. Section 4.01 of the
CBA outlines a four-step dispute-resolution procedure
for grievances; the fourth step is arbitration.
In April 2007, the Company notified the Union of im-
pending layoffs at its Fort Wayne facility. Earlier in 2007,
the Union had learned the Company planned to deny
supplemental retirement benefits to employees who
were on layoff when they met the requirements of § 13.01.
Fearing the Company would deny the benefits of the
Thirty and Out provision to otherwise eligible laid-off
employees, the Union initiated the grievance procedure
provided by the CBA. After completing the first three
steps, and with the dispute still unresolved, the Union
appealed the grievance to arbitration. At this stage, the
Union also filed grievances on behalf of Smith and
Jenkins, who had reached the age and seniority require-
ments of § 13.01, but to whom the Company was denying
the Thirty and Out benefit. Pursuant to the process out-
lined in the CBA, the Company and Union each rejected
one panel of arbitrators.
When the third panel was appointed, the Company
refused to arbitrate. Instead, it filed suit in federal
district court against the Union, Jenkins, and Smith,
seeking a judgment declaring the parties’ dispute not
arbitrable. The Company asserted that the issue was
governed by the terms of the Pension Plan and not by
the terms of the CBA. The Union filed a counterclaim
seeking an order to compel arbitration of the grievances
and then moved for summary judgment. The district
court granted the Union’s motion for summary judg-
ment and ordered arbitration. The Company now appeals.
4 No. 09-4001
II. A NALYSIS
When a district court has ordered arbitration, we
review that decision de novo. United Steel Workers Int’l
Union v. Trimas Corp., 531 F.3d 531, 535 (7th Cir. 2008).
The court cannot compel a party to arbitrate a dispute
unless that party has contractually agreed to do so.
AT&T Techs., Inc. v. Commc’ns Workers of Am., 475 U.S. 643,
648-49 (1986). We keep in mind, however, the federal
policy favoring arbitrability. See United Steelworkers of
Am. v. Warrior & Gulf Nav. Co., 363 U.S. 574, 578 n.4 (1960)
(explaining that a broad arbitration clause promotes
industrial stability, because the clause represents the
union’s consideration for its agreement not to strike
while the CBA is in effect). If the parties’ contract
includes a broad arbitration clause, there is a presump-
tion in favor of arbitrability. Trimas, 531 F.3d at 536.
Finally, we must take care not to address the merits of
the underlying claim. AT&T Techs., 475 U.S. at 650.
The language of the CBA’s arbitration clause forms
the basis of our analysis. Trimas, 531 F.3d at 536. Section
4.02(a) of the CBA provides, in relevant part, “The Union
may grieve any violation of this agreement . . . . Each
grievance arising under this agreement shall be resolved
in accordance with the procedure described in this
article of the agreement. The procedure shall provide
the sole and exclusive remedy for any grievance.” A
grievance, as defined in § 4.01 of the CBA, is “a claim by
the Union, an employee, or group of employees . . . that
the Company has violated an express provision of this
agreement by some conduct, act or omission occurring
No. 09-4001 5
during the term of the agreement.” The Union claims
the Company violated the Thirty and Out provision of
§ 13.01. On its face, this claim is a grievance under
the CBA.
Because the CBA contains a generally applicable arbitra-
tion clause, the Union’s claim is presumed arbitrable.
See AT&T Techs., 475 U.S. at 650. To overcome the
presumption of arbitrability, a party must show either
an “express provision excluding [the] grievance from
arbitration” or “the most forceful evidence of a purpose
to exclude the claim from arbitration.” Warrior & Gulf,
363 U.S. at 584-85.
A. Express Exclusion from Arbitration
The Company argues the CBA’s arbitration clause
and the CBA’s definition of “grievance” expressly ex-
clude the Union’s claim from arbitration. We disagree.
According to the Company, because the CBA does not
specifically address whether an employee may be laid
off when he reaches the § 13.01 requirements, the Union
has not alleged that the Company violated an express
provision of the CBA. And because a grievance
must claim a violation of an express term of the CBA,
the Union’s claim is not a grievance. The arbitration
clause applies to grievances, the argument goes, so
we should apply the interpretive rule of inclusio unius
est exclusio alterious (the inclusion of one is the exclusion
of another) to show the arbitration clause expressly
excludes the Union’s claim.
6 No. 09-4001
But to articulate this argument is to recognize its ab-
surdity: mere failure to address a type of dispute is not
necessarily an express exclusion of that type. A rule of
construction that implies exclusion is irrelevant to the
question of express exclusion. Moreover, if we were to
accept this argument, the arbiter’s interpretive domain
would be a null set—limited to disputes for which a
plain reading of the CBA clearly determines the out-
come. Finally, to accept this argument would be to con-
clude that §§ 13.01 and 6.02 of the CBA do not require
the Company to provide the supplemental Thirty and
Out benefit to employees who are laid off when they
meet the relevant age and seniority requirements. This
conclusion would be a ruling on the merits of the
Union’s claim, and we “have no business” making such
a ruling. AT&T Techs., 475 U.S. at 649-50.
The Company’s express exclusion argument also fails
for a more fundamental reason: the argument distorts
the Union’s claims. The Union alleges the Company
violated express terms of the CBA, namely §§ 13.01
(Thirty and Out) and 6.02 (Seniority), by denying the
Thirty and Out benefit to employees who had met the
§ 13.01 requirements while on layoff and who had
not lost seniority under § 6.02.1 The Company tries to
characterize the grievance as a dispute about the meaning
1
In its briefs to the district court and this court, the Union
notes that it also seeks to arbitrate whether the Company’s
unilateral amendment of the Pension Plan itself violates the
CBA. Because the Union’s other claims are arbitrable, we
need not consider this argument.
No. 09-4001 7
of “termination” in the Pension Plan. It claims there is
no dispute about any express term in the CBA because
the Company agrees with the Union that laid-off em-
ployees satisfy all conditions of § 13.01’s Thirty and
Out provision and retain seniority under § 6.02. But the
Union does not claim that the Company has misinter-
preted the CBA; rather, it claims that the Company
has violated the terms of the CBA and that the CBA
provides for arbitration of precisely such claims.
B. Most Forceful Evidence of Parties’ Intent not to Arbitrate
The Company presents several arguments purporting
to show most forceful evidence that the parties intended
to exclude the Union’s grievance from arbitration. None
of these arguments, either alone or in combination,
rebuts the presumption of arbitrability.
1. Issues Underlying the Dispute
The Company argues that the best determinant of
whether the parties intended to arbitrate the dispute is
whether the answer to the underlying issue resides
within the terms of the CBA or some other document.
The Company claims the underlying issue here is the
meaning of “termination” as used in § 5.03 of the
Pension Plan, so the parties did not intend to arbitrate
this dispute.
We need not decide whether the Company’s proposed
“underlying issue” test may provide most forceful evi-
8 No. 09-4001
dence against arbitrability 2 because issues underlying
the present dispute require interpretation of the CBA.
The Company argues that because it agrees the laid-off
employees meet all CBA requirements for the Thirty
and Out benefit, the only disputed issue is whether the
“termination” language in the Pension Plan makes the
laid-off employees nonetheless ineligible for the Thirty
and Out benefit.
But the meaning of “termination” is only one of several
issues underlying the dispute. One issue the Company
does not recognize is whether § 13.01 of the CBA reflects
the parties’ intent to allow all employees, regardless of
layoff status, to receive the Thirty and Out benefit. If
the best reading of § 13.01 reveals that the parties in-
tended to allow laid-off employees to receive the Thirty
and Out benefit, then any contrary Company action
based on an interpretation of “termination” in the
Pension Plan would violate § 13.01, even if it does not
violate the Pension Plan. Another underlying issue is
whether § 13.01 contemplates that the Pension Plan’s
Thirty and Out eligibility requirements will remain con-
stant. If the best reading of § 13.01 reflects the parties’
intent to maintain the eligibility requirements of the
Pension Plan as of the effective date of the CBA, then any
Company denial of the Thirty and Out benefit based
2
We note that nothing in the arbitration clause or the defini-
tion of “grievance” limits arbitrable disputes to those in
which resolution of the underlying issue requires interpreting
the CBA.
No. 09-4001 9
on a subsequent unilateral amendment to the Pension
Plan may violate the CBA. Since these issues underlying
the dispute require interpretation of the CBA, the Com-
pany’s “underlying issues” argument does not show
most forceful evidence of an intent to exclude the
dispute from arbitration.
2. Negotiation of the Disputed Language
Again focusing on the scope of the underlying dispute,
the Company claims the parties never negotiated the
relevant provisions. According to the Company, the
disputed provisions are those in § 5.03 of the Pension
Plan that require an employee to reach age and seniority
requirements before “his date of termination of employ-
ment” in order to receive the Thirty and Out benefit. The
Company argues that this lack of negotiation is most
forceful evidence of the parties’ intent not to arbitrate
the dispute. We have addressed above the Company’s
argument that the only issue disputed in the grievance
is the definition of “termination” in the Pension
Plan. Yet for the sake of thoroughness, we discuss the
further reasons that the Company’s argument re-
garding negotiated language does not show most
forceful evidence of an intent to exclude the Union’s
grievance from arbitration.
This court has held that non-negotiation of the
disputed language sometimes constitutes most forceful
evidence of an intent not to arbitrate. See Printing Special-
ties and Paper Products Union Local 680 v. Nabisco Brands,
Inc., 833 F.2d 102, 105 (7th Cir. 1987); Int’l Assn. of Machin-
10 No. 09-4001
ists and Aerospace Workers, Dist. No. 10 v. Waukesha
Engine Div., Dresser Indus., Inc., 17 F.3d 196, 199 (7th
Cir. 1994) (refusing to order arbitration because no dis-
puted term appeared in the parties’ CBA, but not spec-
ifying that the absence of a disputed term constituted
most forceful evidence of an intent not to arbitrate). In
Nabisco, the court found forceful evidence the parties
did not intend to arbitrate a dispute over pension
benefits because the parties’ CBA did not incorporate
the pension plan, the pension plan contained a separate
plan for administering grievances, and the parties
did not negotiate any terms of the pension plan into the
CBA. Nabisco, 833 F.2d at 105.
While the Company correctly asserts the absence of
any disputed provision from a negotiated agreement
may constitute most forceful evidence of the parties’
intent to exclude the dispute from arbitration, the Com-
pany incorrectly claims the CBA here includes no
disputed provision. In Nabisco, the CBA’s only reference
to the pension plan was a provision that the company
“would keep the Pension Plan in full force and effect.”
Nabisco, 833 F.2d at 105 (describing this provision as a
“passing reference to” and “mere mention[ ] of” the
pension plan). The agreement in Waukesha made a
similarly limited reference to the plan that contained
the disputed terms. See Waukesha, 17 F.3d at 198 (noting
the only relevant language in the CBA to be: “The Com-
pany will continue to provide the present employee
insurance coverage . . . as specified in the Summary
Plan Booklet”).
No. 09-4001 11
In contrast, the CBA here provides a specific right to
Union members, namely the right to receive the Thirty
and Out benefit upon reaching the requirements of § 13.01.
So the Union’s allegation that the Company has denied
employees their right to the Thirty and Out benefit de-
pends on the terms of § 13.01 of the CBA. See United
Steelworkers of Am. v. Rohm & Haas Co., 522 F.3d 324, 332-
35 (3d Cir. 2008) (refusing to order arbitration of a griev-
ance about disability benefits where the CBA contained
“no specific language addressing the employees’ rights
to disability benefits,” and “[t]he employees’ right to
receive disability benefits instead derive[d] from the
Plan”). Unlike the parties in Waukesha and Nabisco, the
parties here negotiated the provision of the Thirty and
Out benefit into the CBA, thereby showing an intent
to arbitrate grievances alleging the Company’s denial of
the benefit, not an intent to exclude such grievances
from arbitration.
3. Pension Plan’s Dispute Resolution Procedure and Re-
tirement Committee
Citing a single Sixth Circuit decision, the Company
argues that the Pension Plan’s dispute resolution proce-
dure demonstrates most forceful evidence the parties
intended to exclude the Union’s grievance from arbitra-
tion. This argument suffers from two serious flaws.
First, in the case the Company cites, United Steelworkers
of Am. v. Commonwealth Aluminum Corp., 162 F.3d 447
(6th Cir. 1998), the court did not find most forceful evi-
dence of an intent to exclude the relevant grievance
12 No. 09-4001
from arbitration. Rather, it held the CBA expressly ex-
cluded the grievance from arbitration by specifically
incorporating the company’s entire medical plan,
including the plan’s dispute resolution procedure. Sec-
ond, and more importantly, this court has held that a
mere passing reference to an ERISA plan in a CBA
does not incorporate the plan into the CBA. Local 232,
Allied Indus. Workers v. Briggs & Stratton Corp., 837 F.2d
782, 786-87 (7th Cir. 1988); Nabisco, 833 F.2d at 105. The
Commonwealth Aluminum court only held that the
medical plan’s dispute resolution procedure expressly
excluded arbitration because the court found the
relevant CBA had incorporated the entire medical plan.
Here, the only arguable incorporation of the Pension
Plan’s dispute resolution procedure is a passing refer-
ence to the Pension Plan—“[the Pension Plan] shall con-
tinue in effect” for the term of the CBA. We do not find
this language incorporates the Pension Plan’s dispute
resolution procedure, so Commonwealth Aluminum is
neither dispositive nor particularly instructive.
The Company also argues the existence of a retire-
ment committee vested with the authority to administer
the Pension Plan constitutes most forceful evidence the
parties did not intend to arbitrate the Union’s grievance.
The only support the Company can muster for this ar-
gument is this court’s decision in Nabisco. But the Nabisco
court only mentions the existence of a “Pension Com-
mittee” in its discussion of the case’s factual background.
See Nabisco, 833 F.2d at 103. The court does, in its analy-
sis, describe the pension plan as “all inclusive” because
it provided its own grievance procedure (presumably
No. 09-4001 13
administered by the pension committee). But this fea-
ture of the pension plan was not critical to the court’s
analysis. Rather, the court emphasized the absence of
any terms of the pension plan in the CBA. See id. at 105
(explaining that “[no] Pension Plan terms were included
in the collective bargaining agreement as a result of
negotiation,” and that the court might have reached “a
different result if Nabisco and the Union had explicitly
bargained over the terms of the Pension Plan and made
their agreement a part of the collective bargaining agree-
ment”). The Pension Plan’s dispute resolution pro-
cedure and the existence of the retirement committee
may provide some evidence of an intent not to arbitrate,
but certainly not the “most forceful evidence” required
to rebut the presumption of arbitrability created by the
arbitration clause. Warrior & Gulf, 363 U.S. at 584-85.
III. C ONCLUSION
The CBA’s arbitration clause creates a presumption
that the Union’s grievance is arbitrable. Because the
CBA does not expressly exclude the grievance from
arbitration and the Company has not shown most
forceful evidence of the parties’ intent to exclude the
grievance from arbitration, the Company has not
rebutted the presumption of arbitrability. Therefore, we
A FFIRM the district court’s grant of summary judgment
in favor of the Union, Jenkins, and Smith.
12-17-10