UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 09-2215
UNITED FOOD AND COMMERCIAL WORKERS, LOCAL 23,
Plaintiff - Appellant,
v.
MOUNTAINEER PARK, INCORPORATED,
Defendant - Appellee.
Appeal from the United States District Court for the Northern
District of West Virginia, at Wheeling. Frederick P. Stamp,
Jr., Senior District Judge. (5:08-cv-00177-FPS)
Argued: October 28, 2010 Decided: January 26, 2011
Before MOTZ, AGEE, and WYNN, Circuit Judges.
Reversed and remanded by unpublished opinion. Judge Agee wrote
the opinion, in which Judge Motz and Judge Wynn joined.
ARGUED: Marianne Oliver, GILARDI, COOPER & LOMUPO, Pittsburgh,
Pennsylvania, for Appellant. Peter Raymond Rich, SPILMAN,
THOMAS & BATTLE, PLLC, Pittsburgh, Pennsylvania, for Appellee.
ON BRIEF: William J. Gagliardino, GILARDI, COOPER & LOMUPO,
Pittsburgh, Pennsylvania; Timothy F. Cogan, CASSIDY, MYERS,
COGAN & VOEGELIN, LC, Wheeling, West Virginia, for Appellant.
Unpublished opinions are not binding precedent in this circuit.
AGEE, Circuit Judge:
United Food and Commercial Workers, Local 23 (“the Union”)
appeals from the district court’s grant of summary judgment in
favor of Mountaineer Park, Inc. (“MPI”). The Union sought to
compel MPI to arbitrate two disputes under the arbitration
provision of the Collective Bargaining Agreement (“CBA”) 1 between
the Union and MPI. In its order granting MPI’s motion for
summary judgment, the district court held that the disputes were
not subject to arbitration. Because we conclude that the
parties’ agreement requires arbitration, we reverse the judgment
of the district court and remand for further proceedings.
I.
The resolution of this case revolves around the scope and
interplay of two sections in the CBA: the arbitration provision
in Article 12, and the management rights clause in Article 4.
Under Article 12, the parties agreed to an expansive provision
to arbitrate “any dispute or disagreement with respect to the
interpretation or any of the provisions of this agreement.”
(J.A. 22, 48.)
1
Although there were two different CBAs in effect during
the relevant time frame, the pertinent provisions of each are
the same for purposes of this case. Accordingly, we simply
refer to the CBA.
2
Article 4, titled “Management Rights” lists certain rights
retained by MPI, the pertinent provision for our purposes being
the following:
ARTICLE 4 – Management Rights: Except as expressly
modified or restricted by a specific provision of this
Agreement, Employer reserves the right in accordance
with its judgment in connection with it’s [sic] VLT
employees:[2]
. . .
(j) Except as otherwise specifically provided herein,
to exercise all rights it had prior to the signing of
this Agreement.
(J.A. 14-15; 40-41.)
The parties dispute how the foregoing provisions apply to
determine whether the two separate grievances brought by the
Union are arbitrable. 3 The first grievance (the “pay grievance”)
was filed by the Union on behalf of several employees who
changed job classifications by voluntarily transferring into
lower-grade positions. According to the Union, these employees
were treated as “new hires” after their transfers and were paid
the “hiring rates” set forth in subsection 1 of Appendix A to
the CBA, but without any adjustment for prior increases earned
under subsection 2.
2
The employees whose grievances are at issue are all VLT
employees.
3
The parties and the district court referred to the
disputes as “grievances” and we will use the same term.
3
In the second grievance (the “vacation grievance”), the
Union challenged MPI’s decision to “blackout” December 26th as a
day when no employees were permitted to take vacation, and the
consequent denial of employees’ requests for vacation on that
date.
The Union filed its complaint in the district court to
compel arbitration of these grievances after MPI refused to
arbitrate. After the parties filed cross-motions for summary
judgment, the district court issued an opinion and order
granting MPI’s motion for summary judgment and denying the
Union’s. In doing so, the district court held that MPI was not
required to arbitrate either grievance.
The Union timely appealed. This Court has jurisdiction
under 28 U.S.C. § 1291.
II.
A.
We review a district court’s award of summary judgment de
novo. French v. Assurance Co. of Am., 448 F.3d 693, 700 (4th
Cir. 2006). “Summary judgment is appropriate when there is no
genuine issue of material fact and the moving party is entitled
to judgment as a matter of law.” Id.; Fed. R. Civ. P. 56(c).
In AT&T Technologies, Inc. v. Communications Workers of
America, 475 U.S. 643 (1986), the Supreme Court described four
4
basic principles which courts should use to determine whether a
disputed issue is subject to arbitration.
The first principle . . . is that 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. . . .
The second rule, which follows inexorably from
the first, is that the question of arbitrability--
whether a collective-bargaining agreement creates a
duty for the parties to arbitrate the particular
grievance--is undeniably an issue for judicial
determination. . . .
The third principle … is that, in deciding
whether the parties have agreed to submit a particular
grievance to arbitration, a court is not to rule on
the potential merits of the underlying claims.
Whether “arguable” or not, indeed even if it appears
to the court to be frivolous, the [dispute at issue]
is to be decided, not by the court asked to order
arbitration, but as the parties have agreed, by the
arbitrator. The courts, therefore, have no business
weighing the merits of the grievance, considering
whether there is equity in a particular claim, or
determining whether there is particular language in
the written instrument which will support the claim.
The agreement is to submit all grievances to
arbitration, not merely those which the court will
deem meritorious.
Finally, it has been established that where the
contract contains an arbitration clause, there is a
presumption of arbitrability in the sense that 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.
475 U.S. at 648-650 (internal quotations and citations omitted).
Additionally, in cases where there is a broad arbitration
clause and an “absence of any express provision excluding a
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particular grievance from arbitration, . . . only the most
forceful evidence of a purpose to exclude the claim from
arbitration can prevail.” United Steelworkers of Am. v. Warrior
& Gulf Navigation Co., 363 U.S. 574, 584-85 (1960) (“Warrior &
Gulf”).
B.
With regard to the pay grievance, the district court found
the following language in subsection 4 of Appendix A to be
significant: “It is specifically agreed that the hiring rates
and annual increases set forth in this Appendix ‘A’ are
minimums, and that the Employer may pay rates and increases in
excess of these at its sole discretion.” (J.A. 31.) The
district court considered the “at its sole discretion” language
of “particular importance.” (J.A. 87.) The court also stated
it read subsection (j) of Article 4, which reserved to MPI “all
rights” it had prior to signing the CBA, except as otherwise
specifically provided in the CBA, to weigh against arbitration.
(J.A. 87.)
Principally based on the “sole discretion” authority and
reservation of prior rights, the district court concluded the
CBA “taken as a whole, clearly and unambiguously shows that the
parties did not intend to take a grievance such as this to
arbitration. . . . The language clearly shows that, as a result
of the parties’ bargaining, there is no right to retain past
6
annual pay increases where an employee voluntarily steps into a
lower position.” (J.A. 88-89.) Because MPI was paying the
employees who voluntarily downbid into lower classifications at
least the minimum hiring rates set forth in Appendix A, the
district court concluded the pay grievance was not arbitrable.
We disagree. The CBA’s arbitration provision, Article 12,
covers “any dispute or disagreement with respect to the
interpretation or any of the provisions of this agreement.”
(J.A. 22, 48.) Whether the “minimum hourly hiring rates” in
subsection 1 of Appendix A constitute the full wage basis of the
downbidding employees, so they have no entitlement under
subsection 2, is clearly in dispute. Unless a specific CBA
provision takes this grievance out of the scope of arbitration,
then it is up to the arbitrator to decide which pay rate
applies.
Significantly, there is no express provision in Article 4
or elsewhere in the CBA that removes the pay grievance from the
otherwise legitimate reach of the arbitration clause. While MPI
points repeatedly to the management rights clause as exempting
certain disputes from arbitration, that clause and the
arbitration clause do not refer to each other. While the
wording of subsection 4 of Appendix A may be relevant to the
merits of the pay grievance (e.g., in answering whether the
subsection 1 pay rates are inclusive or exclusive of the
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subsection 2 increases), nothing in subsection 4 speaks to the
arbitrability of a dispute about the terms in Appendix A. No
provision in the CBA excises pay disputes from the agreement to
arbitrate.
Nonetheless, MPI contends we should affirm the denial of
arbitrability because it presented “forceful evidence of a
purpose to exclude the claim from arbitration.” See AT&T
Techs., 475 U.S. at 650 (quotations and citation omitted). MPI
contends it has shown such “forceful evidence” through: (1) the
managements rights clause; (2) the discretion given to MPI in
Appendix A to pay any rates over the minimum rates set forth
therein; (3) the absence of any specific clause requiring MPI to
pay more than the hiring minimums to employees who downbid; and
(4) MPI’s practice, both before and during the term of the CBA,
of paying persons going into a different job classification
(such as by demotion, bumping, transfer, downbidding, or other
reason) at the hiring rate for that classification.
MPI contends that, taken together, this evidence shows that
the parties agreed MPI has sole discretion over the issue of pay
to its employees except as otherwise modified by the agreement.
Consequently, MPI concludes the recited items constitute the
“forceful evidence” necessary to show the parties did not intend
this dispute to be arbitrable.
8
Again, we disagree. Warrior & Gulf, which was the genesis
of the “most forceful evidence” language, is instructive here.
In that case, the union sought to compel the employer to
arbitrate a grievance challenging the employer’s decision to
contract out work that had previously been performed by its
employees. 363 U.S. at 575. The agreement between the parties
had a grievance and arbitration provision which governed any
“differences aris[ing]” between the company and the union “as to
the meaning and application of the provisions of this Agreement”
as well as “any local trouble of any kind.” Id. at 576
(quotations omitted). It further stated, however, that “matters
which are strictly a function of management shall not be subject
to arbitration under this section.” Id. (quotations omitted).
In light of the no-strike clause present in the agreement,
the Supreme Court determined that the language “‘strictly a
function of management’ must be interpreted as referring only to
that over which the contract gives management complete control
and unfettered discretion.” Id. at 584. The Court noted that,
had there been a specific exclusion from arbitration of
“contracting out” or any collateral agreement making clear that
contracting out was not a matter for arbitration, the grievance
would not be arbitrable. Id. at 584. But in the absence of
such a provision and in the absence of any showing that the
parties designed the phrase “strictly a function of management”
9
to encompass any and all forms of contracting out, the Court
determined that the dispute was arbitrable. The “exclusion”
from arbitration of strictly management functions simply was not
sufficiently “forceful evidence” of an intent to exclude the
claim from arbitration. Id. at 585.
Although the arbitration clause in Warrior & Gulf was
arguably broader than the one at issue here, the management
rights clause in that case expressly stated that matters that
were strictly a function of management were exempted from
arbitration. In the case at bar, by contrast, the management
rights clause makes no reference to arbitration, much less any
restrictions on arbitration. Indeed, neither the management
rights clause nor the arbitration provision (nor any other
provision of the CBA) expressly excludes any management decision
from the arbitration provision.
Moreover, Article 4 is itself limited by other terms in the
Agreement. Put differently, while the CBA has a management
rights clause, that clause is subject to the other terms in the
agreement, including the requirement to arbitrate grievances.
(J.A. 14-15; 40-41) (language in managements rights clause
stating that “Except as expressly modified or restricted by a
specific provision of this Agreement,” management has the
expressed rights).
10
Additionally, the mere fact that Appendix A gives the
employer “sole discretion” to pay higher wages than the contract
rate is not dispositive on the question of arbitrability.
Indeed, the very issue raised in the pay grievance is a dispute
over what is the contract rate, not what the employer may
discretionarily choose to pay beyond that rate. Cf. East Coast
Hockey League v. Prof’l Hockey Players Ass’n, 322 F.3d 311 (4th
Cir. 2003) (concluding that a dispute was arbitrable despite
language in a separate agreement between the parties that
management could take certain actions “in its sole discretion”);
id. at 316 (this Court finding “no inconsistency in the
president being given the ‘sole discretion’ to make a decision
and that exercise of discretion being reviewable” via
arbitration). 4
For all of these reasons, we conclude that the record does
not disclose the “most forceful evidence” showing that the
4
MPI relies heavily on three Seventh Circuit decisions:
Local Union 1393 International Brotherhood of Electrical Workers
v. Utilities District of Western Indiana Rural Electric
Membership Cooperative, 167 F.3d 1181 (7th Cir. 1999),
International Brotherhood of Teamsters v. Logistics Support
Group, 999 F.2d 227 (7th Cir. 1993), and Local Union No. 483,
International Brotherhood of Boilermakers v. Shell Oil Co., 369
F.2d 526, 529 (7th Cir. 1966). These out of circuit cases are
not binding on this Court. In any event, we have considered
each of them, but all are substantially distinguishable based on
the facts and language of the contract provisions, none of which
are similar to those in the case at bar.
11
parties did not intend to arbitrate the pay grievance.
Accordingly, the presumption in favor of arbitrability applies
and the district court erred in determining the pay grievance
was not arbitrable.
C.
Our analysis leads to a similar conclusion on the
arbitrability of the vacation grievance. According to the
Union, the analysis turns on “the interplay between the
employees’ rights to take vacation at any time during the year
and the employer’s right to approve/disapprove selected vacation
dates.” (Appellant’s Br. at 11-12.) The asserted “right” of
employees to take vacation at any time during the year,
according to the Union, is based on language in the CBA that
“[v]acations may be taken between January 1 and December 31 each
year.” (J.A. 24.) The Union contends that this provision means
the employer is prohibited from making any date a “blackout
date” on which no employees are permitted to take vacation. The
Union therefore argues that the vacation grievance is nothing
more than a dispute as to the meaning of the terms of the CBA
and thus must fall to an arbitrator to decide.
MPI responds that there is unchallenged ‘forceful evidence’
of a purpose to exclude the vacation selection grievances from
arbitration. In particular, MPI contends Section 14.6 of the
CBA is such forceful evidence because it expressly allows MPI to
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“approve/disapprove selected vacation dates.” (Appellee’s Br. 22
(quoting J.A. 25, 51).) Additionally, MPI argues the CBA has no
specific contractual restriction on MPI’s right to disapprove
vacation on the day after Christmas, and the Union cannot
explain why it negotiated a specific restriction on management’s
staffing rights with respect to Christmas Day in Section 13.2 of
the CBA.
The district court concluded the vacation grievances were
not arbitrable, but appeared to do so by analyzing the merits of
the claim instead of whether the dispute was subject to
arbitration. As noted in AT&T Technologies, “a court is not to
rule on the potential merits of the underlying claims.” 475 U.S.
at 649. MPI contends, though, that the district court properly
addressed the merits of the vacation grievance claim, because
consideration of the substantive merits is sometimes required in
order to rule on arbitrability. While it is occasionally
necessary for a court to interpret a provision of an agreement
in order to determine arbitrability, see Litton Fin. Printing
Div. v. NLRB, 501 U.S. 190, 209 (1991) (“we cannot avoid [our
duty to determine arbitrability] because it requires us to
interpret a provision of a bargaining agreement”), our caselaw
consistently follows the Supreme Court’s admonition to avoid
reaching the merits of the issue when that is not required to
determine the question of arbitrability. See, e.g., United
13
Steel, Paper, & Forestry, Rubber, Mfg., Energy, Allied-Indus. &
Serv. Workers Int’l Union v. Cont’l Tire N. Am., Inc., 568 F.3d
158, 165-66 (4th Cir. 2009) (while “courts are permitted some
latitude to interpret provisions of a bargaining agreement that
impact the underlying merits of the dispute” when necessary to
determine arbitrability, “[i]f possible . . . the underlying
merits should be avoided”); United Food & Commercial Workers
Union v. Shoppers Food Warehouse Corp., 35 F.3d 958, 961 (4th
Cir. 1994).
Whether the vacation grievance fails on its merits is
immaterial to the determination of whether the grievance is
arbitrable. See AT&T Techs., 475 U.S. at 649-50. As with the
pay grievance, the conflicting interpretations of Article 14 of
the CBA are a “disagreement with respect to the interpretation .
. . of the provisions of the agreement.” (J.A. 22, 48.) No
provision of the CBA takes this dispute out of the presumption
of arbitration. Neither do any of MPI’s suggestions rise to the
level of the “most forceful evidence” to exclude the vacation
grievance from arbitration.
MPI argues, however, that the district court properly
addressed the merits of the claims because the Union’s
grievances here are “more than ‘frivolous’, they are ‘so totally
devoid of merit as to amount to a ‘perversion’ of the grievance
procedure.’” (Appellee’s Br. 10 (quoting Tobacco Workers Int’l
14
Union v. Lorillard Corp., 448 F.2d 949, 954 n.10 (4th Cir.
1971)).) Notably, the quoted language is not a holding of this
Court.
Instead, the language in Lorillard appears in a footnote in
which a panel of this Court reiterates the principle that a
federal court cannot refuse to compel arbitration because it
finds a claim to be frivolous. The footnote then goes on to say
that “[t]he closest any court has come to stating that the court
may refuse to compel arbitration if the grievance is without
merit is the recognition of the possibility that a grievant’s
claim be so totally devoid of merit as to amount to a
‘perversion of the grievance procedure.’” Lorillard, 448 F.2d at
954 n.10. (citations omitted) (quoting one Second Circuit and
one Fifth Circuit decision). This Court continued: “Even if we
were to accept the notion that the District Court may examine
the merits to such an extent, this case falls far short of such
a test.” Id. 5
We cannot conclude the Union’s claim is “more than
frivolous.” The vacation grievance turns on interpretation of
the CBA and the rights of MPI with regard to denying vacation
5
MPI points to no other Supreme Court or Fourth Circuit
authority holding that a court may decline to order
arbitrability of an otherwise arbitrable grievance because the
grievance is determined to be “more than frivolous.”
15
days or blacking out vacation days altogether. In short, the
presumption of arbitrability applies, and no forceful evidence
has been shown that the parties did not intend to arbitrate such
a dispute. Thus, the vacation grievance is subject to the
parties’ agreement to arbitrate, and the district court erred in
refusing to order arbitration of that dispute.
III.
The arbitration clause in the CBA reflected the parties’
clear intent to arbitrate a broad array of disputes concerning
the interpretation of the CBA and MPI has not presented
“forceful evidence” that the parties intended to exclude the
issues in dispute from the contractual covenant to arbitrate.
Accordingly, the judgment of the district court is reversed, and
the case is hereby remanded to the district court for further
proceedings consistent with this opinion.
REVERSED AND REMANDED
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