Amalgamated Transit Union Local 268 v. Greater Cleveland Regional Transit Auth.

[Cite as Amalgamated Transit Union Local 268 v. Greater Cleveland Regional Transit Auth., 2020-Ohio-3120.]

COURT OF APPEALS OF OHIO

EIGHTH APPELLATE DISTRICT
COUNTY OF CUYAHOGA

AMALGAMATED TRANSIT UNION
LOCAL 268, :

Plaintiff-Appellant, :
No. 108883
v. :

GREATER CLEVELAND REGIONAL
TRANSIT AUTHORITY, :

Defendant-Appellee. :

JOURNAL ENTRY AND OPINION

JUDGMENT: AFFIRMED
RELEASED AND JOURNALIZED: May 28, 2020

Civil Appeal from the Cuyahoga County Court of Common Pleas
Case No. CV-19-912586

Appearances:

Brian J. Smith, for appellant.

Littler Mendelson P.C., Stephen J. Sferra, and Jeffrey
Seidle, for appellee.

LARRY A. JONES, SR., J.:

Plaintiff-appellant, Amalgamated Transit Union, Local 268 (“Local

268” or “the Union”), appeals from the trial court’s August 2019 judgment granting

the Civ.R. 12(B)(1) motion to dismiss for lack of subject matter filed by defendant-
appellee, the Greater Cleveland Regional Transit Authority (“GCRTA”). For the

reasons that follow, we affirm.

Procedural and Factual Background

In March 2019, the Union filed this action, requesting the common

pleas court to compel GCRTA to proceed to “interest arbitration” to resolve a labor

dispute over a successor agreement to the parties’ 2014 collective bargaining

agreement (“CBA”). The 2014 CBA expired in July 2017, and at the time Local 268

filed this action, the parties had not reached an agreement on a successor CBA.

The record shows that pursuant to section 13(c) of the Urban Mass

Transportation Act of 1964, transit entities entered into certain protective

agreements to protect the employees affected by the funds. The “section 13(c)

agreements” were a condition precedent to transit entities receiving federal funds.

In 1975, GCRTA’s predecessor, the Cleveland Transit System, and the Union entered

into such an agreement. Around the same time, Cleveland Transit System also

entered into such an agreement with national entities, that is, the American Public

Transit Association and the national Amalgamated Transit Union. Paragraph 9 of

the section 13(c) Agreement at issue here provides as follows:

In the event of any labor dispute not otherwise governed by law or labor
agreement involving the Public Body and the employees covered by
agreement which cannot be settled within thirty (30) days after such
dispute first arises, such dispute may be submitted at the written
request of either the Union or the Public Body to a board of arbitration
selected in accordance with the existing collective bargaining
agreement, if any, or if none, as hereinafter provided.
 In 1984, Ohio’s “Public Employees Collective Bargaining Act,” which

is codified in R.C. Chapter 4117, became effective. As a result of the enactment of

R.C. Chapter 4117, the State Employment Relations Board (“SERB”) was created.

The Act sets forth dispute settlement procedures. One of the provisions, set forth in

R.C. 4117.14(C), provides in relevant part, that:

[i]n the event the parties are unable to reach an agreement, they may
submit, at any time prior to 45 days before the expiration date of the
collective bargaining agreement, the issues in dispute to any mutually
agreed upon dispute settlement procedure which supersedes the
procedures contained in this section. The procedures may include any
other dispute settlement procedure mutually agreed to by the parties.

A mutually agreed upon dispute settlement procedure is commonly

referred to as a “MAD,” and as set forth above, usurps the procedures contained in

R.C. Chapter 4117 and the jurisdiction of SERB.

As mentioned, the parties’ most recent CBA expired in July 2017, and

at the time Local 268 filed this action, they had not reached an agreement as to the

terms of their new CBA. On April 21, 2017, GCRTA sent a “notice to negotiate” to

SERB, and served it on the Union. The notice stated that the parties had not adopted

a MAD because R.C. Chapter 4117.14, which governs the “procedure for termination

or modification of agreement or negotiation of successor agreement,” supplanted

paragraph 9 of the section 13(c) Agreement under state law governing labor disputes

and as contemplated under the section 13(c) Agreement.
 On April 25, 2017, Local 268 filed a “notice to negotiate” with SERB,

and served a copy on GCRTA. The union’s notice claimed that the parties had

adopted a MAD, which superseded the statutory procedures set forth in R.C. 4117.14.

SERB sent the parties a letter in June 2017, appointing a mediator

under R.C. 4117.14 to assist the parties in bargaining. According to the letter, either

party “may request a fact-finding panel any time after a mediator is appointed, and

requires [SERB] to appoint a panel within 15 days after receiving such a request.”

In February 2019, Local 268 sent GCRTA a letter stating it was

submitting the labor dispute to interest arbitration. GCRTA filed a response in

March 2019, in which it maintained its position that R.C. 4117.14 controlled the

parties’ dispute. In its response, GCRTA stated that it would “not agree to submit

the labor dispute over the terms of a successor contract to interest arbitration or any

type of arbitration under the terms of the 13(c) Agreement.”

The Union responded on March 4, 2019, requesting that the parties

submit the issue of whether there was a right to interest arbitration to the arbitration

procedures set forth in the section 13(c) Agreement. On March 15, 2019, the Union

filed this action in the common pleas court under R.C. 2711.03 and 2711.16 to compel

arbitration under the section 13(c) Agreement’s arbitration provision. The Union

also sought a declaration that the section 13(c) Agreement is a MAD agreement that

trumps the procedures of R.C. 4117.14.
 In May 2019, GCRTA filed a Civ.R. 12(B)(1) motion to dismiss for lack

of subject-matter jurisdiction. The trial court granted the motion in July 2019, and

this appeal ensues. The Union’s assignment of error reads as follows:

I. The Cuyahoga County Court of Common Pleas erred in its
Judgment Entry dated July 17, 2019 dismissing the
Application/Petition to Compel Enforcement of an Arbitration
Agreement filed by Plaintiff/Appellant Amalgamated Transit
Union Local 268 * * *. The Trial Court erred as a matter of law
in concluding that the action should be dismissed for lack of
subject matter jurisdiction.

Law and Analysis
Standard of Review

We review a trial court’s decision on a Civ.R. 12(B)(1) motion to

dismiss under a de novo standard of review. Bank of Am. v. Macho, 8th Dist.

Cuyahoga No. 96124, 2011-Ohio-5495, ¶ 7, citing Crestmont Cleveland Partnership

v. Ohio Dept. of Health, 139 Ohio App.3d 928, 936, 746 N.E.2d 222 (10th

Dist.2000). In order to dismiss a complaint under Civ.R. 12(B)(1), the court must

determine whether a plaintiff has alleged any cause of action that the court has

authority to decide. Crestmont at id. When determining its subject-matter

jurisdiction pursuant to a Civ.R. 12(B)(1) motion to dismiss, the trial court is not

confined to the allegations of the complaint and may consider material pertinent to

such inquiry. Southgate Dev. Corp. v. Columbia Gas Transm. Corp., 48 Ohio St.2d

211, 358 N.E.2d 526 (1976), paragraph one of the syllabus.
Trial Court’s Judgment

In its judgment entry granting RTA’s motion to dismiss, the trial court

found that the Union’s claims “arise from or depend on the collective bargaining

rights created by R.C. Chapter 4117 and fall within the exclusive jurisdiction of

[SERB].” In support of its decision, the trial court relied on two cases: (1) State ex

rel. Cleveland v. Sutula, 127 Ohio St.3d 131, 2o1o-Ohio-5o39, 937 N.E.2d 88, and

(2) State ex rel. Ohio Civ. Serv. Emps. Assn. v. State, 146 Ohio St.3d 315, 2o16-ohio-

478, 56 N.E.3d 913.

Issue Presented for Review

In this appeal, we decide: (1) whether Local 268’s claims arise from

the collective bargaining rights created under R.C. Chapter 4117 and fall within the

exclusive jurisdiction of SERB, as contended by RTA; (2) or whether common pleas

courts have jurisdiction because the exceptions set forth under R.C. 4117.10 and

306.12 take section 13(c) agreements out of the exclusive jurisdiction of SERB under

R.C. Chapter 4117, as the Union contends.

Case Law

State ex rel. Cleveland v. Sutula, 127 Ohio St.3d 131, 2o1o-Ohio-5o39, 937 N.E.2d
88.

In Sutula, a union certified by SERB as the exclusive representative

of a bargaining unit consisting of a group of employees from the city of Cleveland

filed a complaint for injunctive and declaratory relief regarding the city of

Cleveland’s duty to perform in accordance with its prestrike settlement offer,
following two years of failed negotiations pursuant to R.C. 4117.14. Cleveland, in

response, filed a complaint for a writ of prohibition in this court. State ex rel.

Cleveland v. Sutula, 8th Dist. Cuyahoga No. 94264, 2010-Ohio-914. This court

dismissed the prohibition action, and the city appealed to the Ohio Supreme Court.

The Ohio Supreme Court considered whether the trial court patently

and unambiguously lacked jurisdiction over the union’s action for injunctive and

declaratory relief. Sutula, 127 Ohio St.3d 131, 2o1o-Ohio-5o39, 937 N.E.2d 88,

at ¶ 13-14. The court, relying on its previous position in Franklin Cty. Law

Enforcement Assn. v. Fraternal Order of Police, Capital City Lodge No. 9, 59 Ohio

St.3d 167, 572 N.E.2d 87 (1991), reiterated that SERB “‘has exclusive jurisdiction to

decide matters committed to it pursuant to R.C. Chapter 4117’” and that the

dispositive test for determining whether SERB has exclusive, original jurisdiction “is

whether the claims ‘arise from or depend on the collective bargaining rights created

by R.C. Chapter 4117.’” Sutula at ¶ 16, 20, quoting Franklin Cty. Law Enforcement

Assn. at paragraphs one and two of the syllabus.

The Sutula court concluded that the trial court lacked jurisdiction

because the union claimed that the city failed to abide by an agreement reached

through collective-bargaining negotiations under R.C. Chapter 4117. Id. at ¶ 17, ¶ 25.

State ex rel. Ohio Civ. Serv. Emps. Assn. v. State, 146 Ohio St.3d 315, 2o16-Ohio-
478, 56 N.E.3d 913
 In Ohio Civ. Serv. Emps. Assn., the Ohio Supreme Court considered

whether individuals employed at a correctional facility in Ohio that was subject to

the prison-privatization provisions in H.B. 153 were “public employees” under R.C.

4117.01(C) because of the collective-bargaining rights created by R.C. Chapter 4117.

The court found that the collective-bargaining rights under R.C. Chapter 4117

applied:

The determination whether employees working at [the facility] are
public employees, as defined in R.C. 4117.01(C), and are therefore
entitled to the benefits and protections afforded to bargaining-unit
members under the [collective bargaining agreement], depends
“entirely on the provisions of R.C. Chapter 4117, over which SERB has
exclusive original jurisdiction.”

Id. at ¶ 62, quoting Ohio Historical Soc. v. State Emps. Relations Bd., 66 Ohio St.3d

466, 469, 613 N.E.2d 591 (1993). The Ohio Civ. Serv. Emps. Assn. court cautioned,

however, that its opinion was not meant to “suggest that SERB has exclusive,

original jurisdiction over every claim touching upon R.C. Chapter 4117.” Id. at ¶ 63.

The court explained that its decision did not “undertake to define the circumstances

in which a common pleas court might have jurisdiction over claims touching upon

R.C. Chapter 4117.” Id. The court reiterated its position from Franklin Cty. Law

Enforcement Assn. at paragraph two of the syllabus: “if a party asserts claims that

arise from or depend on the collective bargaining rights created by R.C. Chapter

4117, the remedies provided in that chapter are exclusive.”
Amalgamated Transit Union v. Toledo Area Regional Transit Auth., 6th Dist.
Lucas No. L-12-1260, 2013-Ohio-4412.1

The Union cites Amalgamated Transit Union in support of its

position that the common pleas court has jurisdiction in this case. In Amalgamated

Transit Union, the union filed an application to compel enforcement of arbitration.

In response to the union’s petition, Toledo Area Regional Transit Authority

(“TARTA”) filed a motion to dismiss for lack of subject-matter jurisdiction. The trial

court summarily granted TARTA’s motion and dismissed the action in its entirety

for lack of subject-matter jurisdiction. The union appealed the dismissal.

The facts of Amalgamated Transit Union are like the facts of this

case. In 1975, TARTA and the union became parties to an agreement executed by

the American Public Transit Association, the Amalgamated Transit Union, AFL-

CIO, and the Transport Workers Union of America, AFL-CIO. Also in 1975, TARTA

and the union executed a section 13(c) agreement, under which TARTA was required

to make arrangements to preserve certain employee and collective bargaining rights

as a condition precedent to receiving its federal funding. Paragraph 9 of the section

13(c) agreement provided in relevant part as follows:

In the event of any labor dispute involving the Authority and the
employees covered by this Agreement which cannot be settled within
thirty (30) days after such dispute first arises, such dispute may be
submitted at the written request of either the Union or the Authority to
a board of arbitration selected in accordance with the existing collective
bargaining agreement, if any, or if none, as hereinafter provided. * * *

1Appealnot accepted, Amalgamated Transit Union, AFL-CIO, Local 697 v. Toledo Area
Regional Transit Auth., 138 Ohio St.3d 1417, 2014-Ohio-566, 3 N.E.3d 1218.
Id. at ¶ 5.

Thereafter, the Union and TARTA entered into a CBA. The CBA

established the terms and conditions of employment for all of TARTA’s paratransit

service drivers. The CBA was effective October 1, 2009, through November 30,

2010, and was extended twice while the parties attempted to negotiate a new labor

agreement. The parties were not able to come to an agreement on the terms,

however, and the CBA expired on May 31, 2011.

In June 2011, the union sent a letter notifying TARTA that it was

submitting the dispute over the terms and conditions of a new labor agreement to

binding arbitration pursuant to paragraph 9 of the section 13(c) agreement. TARTA

did not appoint a member to the board of arbitration or comply with any of the

requirements of the agreement relative to the union’s demand for interest

arbitration; TARTA later confirmed to the union that it was refusing to participate

in interest arbitration as demanded by the union.

Thereafter, the union filed a complaint in the common pleas court

requesting an order directing the parties to promptly proceed to binding interest

arbitration in accordance with paragraph 9 of the section 13(c) agreement. TARTA

filed a motion to dismiss for lack of subject-matter jurisdiction, contending that the

union’s claim fell within the exclusive jurisdiction of SERB. TARTA maintained that

the parties’ section 13(c) agreement was inapplicable to their negotiations for a

successor CBA and that the dispute should instead be resolved pursuant to the
procedures set forth under R.C. Chapter 4117 and under the exclusive jurisdiction of

SERB.

The trial court found that SERB had exclusive jurisdiction, dismissed

the union’s complaint, and the union appealed. The Sixth Appellate District

reversed, finding that the common pleas court had jurisdiction. See id. at ¶ 25. The

Sixth District recognized that the section 13(c) agreement was not intended to

replace state labor law, but it also found SERB’s jurisdiction to enforce the Public

Employees Collective Bargaining Act did not authorize TARTA to disregard the

promises it made in the section 13(c) agreement as a condition of receiving federal

funds. Id.

Jackson Transit Auth. v. Local Div. 1285, Amalgamated Transit Union, AFL-CIO-
CLC, 457 U.S. 15, 102 S.Ct. 2202, 72 L.Ed.2d 639 (1982)

In Jackson Transit Auth., the United States Supreme Court

addressed section 13(c) agreements. Although the issue in the case was whether

Congress intended to create federal causes of action for breaches of section 13(c)

agreements and collective bargaining contracts, the case is nonetheless instructive.

The Supreme Court discussed the reason for the existence of section

13(c) agreements: that is, to protect the conditions of private transit workers whose

companies were being taken over by the public sector. As mentioned, the

agreements were the condition precedent to the transit entities receiving federal

funds. The goal was to prevent any worsening conditions for transit workers whose

transit entities were transitioning from the private sector to the public sector.
 Jackson Transit Auth. makes clear that section 13(c) agreements

were not intended to usurp state labor law, stating the following:

Section 13(c) would not supersede state law, it would leave intact the
exclusion of local government employers from the National Labor
Relations Act, and state courts would retain jurisdiction to determine
the application of state policy to local government transit labor
relations. Congress intended that § 13(c) would be an important tool
to protect the collective-bargaining rights of transit workers, by
ensuring that state law preserved their rights before federal aid could
be used to convert private companies into public entities.

Id. at 27-28.

Analysis

After de novo review, and careful consideration of the case law, we

find that the trial court did not err in dismissing Local 268’s complaint. We

recognize the Sixth Appellate District’s decision in Amalgamated Transit Union,

6th Dist. Lucas No. L-12-1260, 2013-Ohio-4412, but decline to follow it.

We turn to the language of the section 13(c) Agreement in this case

that provides arbitration is appropriate “[i]n the event of any labor dispute not

otherwise governed by law or labor agreement * * *.” (Emphasis added.) Here,

there is governing statutory state law, R.C. Chapter 4117. We are not persuaded by

the Union’s contention that the section 13(c) Agreement constitutes a MAD subject

to arbitration. Specifically, at the time the section 13(c) Agreement was entered into

in 1975, the Union and RTA could not have known that they were agreeing to a MAD

under R.C. 4117.14(C) because R.C. Chapter 4117 had not yet been created.
 We are also not persuaded by the Union’s contention that the section

13(c) Agreement controls because RTA has repeatedly received federal funds. As

mentioned, the purpose of section 13(c) agreements is to ensure fairness and equity.

They are reviewed by the Department of Labor for renewal certifications; in this

case, the parties received renewal certifications on June 8 and July 11, 2018. These

renewals would presumably not have occurred if there were violations of the

Agreement.

Local 268 contends that R.C. 4117.10 and 306.12 provide exceptions

to the general exclusive jurisdiction in these cases of SERB. R.C. 4117.10 governs

agreements between a public employer and an exclusive representative entered into

under chapter R.C. 4117, and provides in relevant part that,

[e]xcept for sections 306.08, 306.12, 306.35, and 4981.22 of the
Revised Code and arrangements entered into thereunder, and section
4981.21 of the Revised Code as necessary to comply with section 13(c)
of the “Urban Mass Transportation Act of 1964,” * * * and
arrangements entered into thereunder, this chapter prevails over any
and all other conflicting laws, resolutions, provisions, present or future,
except as otherwise specified in this chapter or as otherwise specified
by the general assembly.

R.C. 4117.10(A)(4).

R.C. 306.12 governs “employee rights after acquisition of existing

system,” and provides, in part, that,

Any board of county commissioners operating a transit system or any
county transit board shall, if it acquires any existing transit system,
assume all the employer’s obligations under any existing labor contract
between the employees and management of the system. The board
shall, if it acquires, constructs, controls, or operates any such facilities,
 negotiate arrangements to protect the interests of employees affected
by such acquisition, construction, control, or operation.

The statute provides a nonexclusive list of such arrangements, and

provides that “[s]uch arrangements may include provisions for the submission of

labor disputes to final and binding arbitration.” Id.

We are not persuaded by Local 268’s contention that these statutory

provisions take this case out of the control of R.C. Chapter 4117. R.C. 4117.10(A)(4)

provides that it applies “as necessary to comply with section 13(c) of the ‘Urban

Mass Transportation Act of 1964 * * *.’” (Emphasis added.) The statute further

provides that R.C. Chapter 4117 “prevails over any and all other conflicting laws,

resolutions, provisions, present or future * * *.” Id. Further, R.C. 306.12 provides

that the arrangements discussed under that statute “may include provisions for the

submission of labor disputes to final and binding arbitration.” (Emphasis added.)

Thus, R.C. 4117.10 and 306.12 do not provide that compliance with

the arbitration provisions under section 13(c) agreements is mandatory. And when

we read the statutes in conjunction with the section 13(c) Agreement at issue here,

which provides that it applies if the labor dispute is “not otherwise governed by law,”

we agree with GCRTA that R.C. Chapter 4117 is the governing law. We believe the

dissent in Toledo Area Regional Transit Auth., 6th Dist. Lucas No. L-12-1260, 2013-

Ohio-4412, properly framed the issue, stating the following:

Section 13(c) agreements were designed “merely to maintain the status
quo by preserving existing rights of public employees upon acquisition
of a transit system and not to create any new rights or enhance prior
rights under pre-acquisition labor agreements.” Finocchi v. Greater
 Cleveland Regional Transit Auth., 85 Ohio App.3d 572, 580, 620
N.E.2d 872 (8th Dist.1993). * * * In other words, they did not create
collective bargaining rights that did not already exist. United Transp.
Union, AFL-CIO v. Brock, 815 F.2d 1562, 1565, 259 U.S. App. D.C. 361
(D.C.Cir.1987). But the Ohio legislature has since enacted Chapter 4117
(effective Apr. 1, 1984), which requires public employers to collectively
bargain with its employees, and created [SERB]. SERB has exclusive
jurisdiction over claims arising from or depending on the collective
bargaining rights created by Chapter 4117. R.C. 4117.02; State ex rel.
Williams v. Belpre City School Dist. Bd. of Educ., 41 Ohio App.3d 1, 6,
534 N.E.2d 96 (4th Dist.1987); State ex rel. Cleveland v. Sutula, 127
Ohio St.3d 131, 2010-Ohio-5039, 937 N.E.2d 88, ¶ 20. Thus, after
TARTA and the unions entered into the 13(c) protective agreement,
Ohio adopted a statutory scheme providing protections that went
above and beyond what the federal government sought to guarantee in
enacting section 13(c). Moreover, Ohio essentially codified 13(c)
assurances in Chapter 306 of the Revised Code, which further protects
transit system employees should the legislature eliminate public
employees collective bargaining rights * * *.

Id. at ¶ 31-32 (Jensen, J., dissenting).

So while 13(c) protective agreements may have played an important

role in assuring private transit company employees that they would not lose

bargained-for rights upon being publicly acquired, the Ohio legislature now offers

those employees two additional layers of protection. See Local Div. 589,

Amalgamated Transit Union, AFL-CIO, CLC v. Commonwealth of Massachusetts,

666 F.2d 618, 634 (1st Cir.1981)(recognizing that state law may modify section 13(c)

assurances without bringing about an unfair or inequitable result.)

Based on the reasons discussed in this opinion, we agree with the

dissent in Toledo Area Regional Transit Auth., and thus find that the trial court
properly dismissed this case for lack of subject-matter jurisdiction. Local 268’s sole

assignment of error is overruled.

Judgment affirmed.

It is ordered that appellee recover from appellant costs herein taxed.

The court finds there were reasonable grounds for this appeal.

It is ordered that a special mandate be sent to said court to carry this judgment

into execution.

A certified copy of this entry shall constitute the mandate pursuant to Rule 27

of the Rules of Appellate Procedure.

_____________________________
LARRY A. JONES, SR., JUDGE

ANITA LASTER MAYS, P.J., and
EILEEN A. GALLAGHER, J., CONCUR