Local 791, United Food & Commercial Workers Union v. Shaw's Supermarkets, Inc.

United States Court of Appeals
For the First Circuit

No. 06-2405

LOCAL 791, UNITED FOOD & COMMERCIAL WORKERS UNION, AFL-CIO,

Plaintiff, Appellant,

v.

SHAW'S SUPERMARKETS, INC.,

Defendant, Appellee.

APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Reginald C. Lindsay, U.S. District Judge]

Before

Howard, Circuit Judge,

Campbell, Senior Circuit Judge,

and Saris*, District Judge.

Terrence E. Coles, with whom Pyle, Rome, Lichten, Ehrenberg
& Liss-Riordan, P.C. was on brief for appellant.
Robert P. Joy, with whom Robert P. Morris and Morgan, Brown
& Joy were on brief for appellee.

November 7, 2007

*
Of the District of Massachusetts, sitting by designation.
 CAMPBELL, Senior Circuit Judge. Plaintiff Local 791,

United Food and Commercial Workers Union ("Local 791" or the

"union") appeals from the entry of judgment on the pleadings in

favor of defendant Shaw's Supermarkets, Inc. ("Shaw's") in the

United States District Court for the District of Massachusetts.

The district court found that because of the parties' agreement to

resolve disputes internally, it did not have jurisdiction pursuant

to section 301 of the Labor Management Relations Act ("LMRA"), 29

U.S.C. § 185(a), to review the union's claim of breach of the

collective bargaining agreement ("CBA") between the parties.1 We

affirm the district court.

Facts

Shaw's and Local 791 are parties to a CBA covering

employees of supermarkets in southeastern Massachusetts and Rhode

Island for the period of August 1, 2004-August 2, 2008. The CBA is

made up of 25 articles, along with a series of side letters and

agreements. The 1985 Side Agreements contain a provision that

"[p]resent night stocking crew will not be forced to work evenings

and lose the stocking premium" provided them as night employees.

1
Section 301 provides, inter alia, that suits for violation of
contracts between an employer and a labor organization representing
employees in an industry affecting commerce may be brought in any
district court of the United States having jurisdiction of the
parties. 29 U.S.C. § 185(a).

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 The union brought the instant complaint in the district

court alleging a breach of this provision, stating,

On or about March 27, 2005, Shaw's forced approximately
75 bargaining unit employees doing night stocking work
in stores covered by the 2004-2008 CBA to do stocking
work in afternoon and evening hours that did not
qualify for the 75 cents per hour premium. This has
resulted in losses of earnings for full-time employees
of at least thirty dollars per week, and lesser amounts
for part time employees.

Shaw's action in forcing the night stocking employees
to do their work during afternoon and evening hours
outside the hours for which the premium is paid
violates [Article 4, Section 5, quoted supra] of the
1985 side agreements.

Following the filing of the union's complaint, Shaw's moved for

judgment on the pleadings pursuant to Fed. R. Civ. P. 12(c) and

12(b)(1). Shaw's argued that the dispute resolution procedures in

the CBA constituted the exclusive remedy for grievances arising

under the CBA, barring the union from seeking redress in the

federal courts under Section 301 of the LMRA. See note 1, supra.

Article 13 of the CBA contains grievance and arbitration

provisions preceded by the following declaration in Section 1:

The Company and Union concur on the usefulness and
mutual advantages of providing for the prompt and fair
resolution of disagreements that could arise on the
meaning and interpretation of this Agreement. The
following procedures are intended to be the sole means
for the resolution of grievances, which for the
purposes of this Agreement are defined as disputes
between the Management and the Union or covered
Employee(s) concerning the meaning or application of
this Agreement.

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Article 13 then goes on to set out in four steps the referenced

procedures said to be "intended to be the sole means for the

resolution of grievances." The initial three steps, followed when

needed by the fourth step of arbitration, are described as follows:

Step 1: An aggrieved Employee or the Union will bring
his or her complaint to his or her Store Manager within
seven (7) calendar days of the incident or action being
complained of, or having reasonable knowledge thereof.
The Store Manager will make a good faith effort to
resolve the matter within seven (7) calendar days of
being notified. If the Store Manager cannot resolve the
matter, it will be reduced to writing by the Union and
submitted to the Store Manager within five (5) calendar
days of the receipt of the Manager's verbal response.
The grievance must be signed by the grieving Employee(s)
or the Union Representative, and must contain a statement
describing the nature of the alleged contract violation
and a good faith effort to identify the provision of the
contract violation and dates, if known. The Manager will
have five (5) calendar days to answer the grievance in
writing. Employees may request their Steward to bring
the matter to their supervisor's attention on their
behalf. It is the intention of the parties to resolve as
many grievances as possible at this step.

Step 2: If no resolution at Step 1, the matter may be
submitted to the Regional management representative or
his designee within seven (7) calendar days of receipt of
the Store Manager's answer. A Step 2 hearing will be
held within ten (10) calendar days from the management
representative's receipt of the written grievance. A
written response will be given to the Union
representative within ten (10) calendar days of the Step
2 hearing.

Step 3: If not settled at Step 2, the matter may be
further appealed in writing by the Union to the Company's
Labor Relations representative, within ten (10) calendar
days from the receipt of the Management's Step 2
response. A Step 3 hearing will be held within twenty-
one (21) calendar days of the appeal and may be attended
by appropriate representatives for the Union and Company.
A written response will be given to the Union within
fourteen (14) calendar days of the Step 3 hearing, or

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 within thirty (30) calendar days of the appeal if no
hearing can be scheduled. If no answer is given within
these time limits, the Union may proceed to the next
step.2

When the above three steps have been exhausted, "the matter may be

appealed to arbitration . . . ," and the arbitration provisions are

thereafter detailed separately under a heading of "Arbitration

Procedures."

At the root of the present controversy is a paragraph

introducing the relevant 1985 Side Agreements. The paragraph

states, "[t]he following 1985 and 1991 understandings are hereby

continued but shall not be subject to arbitration" (emphasis

supplied). Both parties have agreed that this part of the CBA bars

arbitration of the instant alleged violation of the 1985 Side

Agreements, but they disagree about where that leaves them. Shaw's

argues that the elimination of arbitration under the 1985 Side

Agreements simply means that plaintiffs are limited to, and still

must use, the initial three steps of the grievance procedure and

2
Section 2 of Article 13 provides that:

The time limits specified in these grievance procedures
are meant to be carefully observed by all parties. Any
grievance not handled or appealed within specified time
limits at any step will be considered settled on the
basis of the Management's last response. Failure of the
Management to respond within a specified time limit will
allow the matter to advance to the next step. Time
limits may be extended only by the mutual written consent
of the Company and Union. Unless specifically stated in
writing to the contrary, no grievance settlement will be
considered to set any precedent or establish any binding
practice.

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abide by the results reached, with neither an arbitration remedy

nor judicial action under Section 301 available. Local 791

contends that the elimination of an arbitration remedy with respect

to alleged violations of the 1985 Side Agreements entitles them to

go to the courts under Section 301 and obtain there a judicial

determination of those grievances. Alternatively, the union argues

that the provision against arbitration of the 1985 and 1991

understandings is ambiguous and the question of its meaning should

be submitted to a fact-finder.

The district court granted judgment on the pleadings to

Shaw's on the grounds that the applicable language in the CBA is

unambiguous and requires the plaintiff to forego arbitration but to

use the first three steps of the grievance procedure to contest the

alleged violation. Accordingly, the court ruled, the court is

without jurisdiction under Section 301 over the dispute.

Discussion

We "review the district court's grant of the Fed. R. Civ.

P. 12(c) motion de novo." International Paper Co. v. Town of Jay,

928 F.2d 480, 482 (1st Cir. 1991). "[T]he trial court must accept

all of the nonmovant's well-pleaded factual averments as true, and

draw all reasonable inferences in his favor. The motion should not

be granted unless it appears beyond doubt that the plaintiff can

prove no set of facts in support of his claim that would entitle

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him to relief." Pasdon v. City of Peabody, 417 F.3d 225, 226 (1st

Cir. 2005) (citation omitted).

Judicial review under Section 301, see note 1, supra, is

available to resolve disputes under collective bargaining

agreements only "[i]n the absence of an agreement for arbitration

or some other form of final resolution of dispute." Local 369,

Utility Workers Union of America, AFL-CIO v. Boston Edison Co., 588

F. Supp. 800, 804 (D. Mass. 1985), aff'd 752 F.2d 1 (1st Cir.

1984). The Supreme Court has stated,

[c]ollective bargaining agreements . . . generally
contain provisions for the settlement of disputes through
mutual discussion and arbitration . . . . Furthermore,
Congress has specified . . . that "[f]inal adjustment by
a method agreed upon by the parties is declared to be the
desirable method for settlement of grievance disputes."

Hines v. Anchor Motor Freight, Inc., 424 U.S. 554, 562 (1976)

(citing 29 U.S.C. § 173(d))). The foregoing congressional policy

"can be effectuated only if the means chosen by the parties for

settlement of their differences under a collective bargaining

agreement is given full play." Steelworkers v. American Mfg. Co.,

363 U.S. 564, 566 (1960).

Here, the CBA sets forth a detailed three-step grievance

process followed, if that proves unsatisfactory to the employee or

union, by an arbitration remedy. The CBA makes plain that these

"procedures are intended to be the sole means for the resolution of

grievances." The paragraph immediately before the 1985 Side

Agreements states that "the following 1985 and 1991 understandings

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are hereby continued but shall not be subject to arbitration"

(emphasis supplied). The district court concluded that, "[t]he

simplest interpretation of these words is that disputes over the

provisions of the Side Agreements may be grieved [i.e., through

steps 1-3], but may not proceed to the fourth and final step of

arbitration."

The district court further believed that the character of

the 1985 Side Agreements supported this interpretation. The side

agreements are less formalized than the main text of the CBA which

they accompany. They include nine provisions regarding the

defendant's obligation to be "sensitive" to needs of its employees

which, as the district court said, "are particularly ill-suited to

arbitration." The district court added "there is no explanation

for why disputes under the Side Agreements would be entitled to

judicial review, when disputes under the remainder of the CBA may

not be appealed to a court" (emphasis in original).

Local 791 makes two arguments in response: first, that

the plain language of the CBA requires judicial review, and second,

alternatively, that the language of the CBA is at best ambiguous

and thus a fact-finder must look to extrinsic evidence to determine

the parties' intent in drafting the agreement. We address each

argument in turn.

i. Plain Language

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 In the district court's view, the "plain language" of the

CBA indicated the parties' intention that the grievance which was

the subject of the union's lawsuit should be resolved exclusively

through the CBA's grievance procedures as set out in Steps 1-3, and

not in the courtroom. While the CBA excluded from Step 4

arbitration grievances under the 1985 Side Agreements, it nowhere

purported to exempt such grievances from utilizing the dispute

resolution processes described in Steps 1-3. These three steps

embody sophisticated mechanisms separate from arbitration,

presenting a grievance in proceedings conducted before three

successive levels of company management. They spell out oral and

written procedures for identifying the particular complaint and the

part of the CBA violated; call for hearings at Steps 2 and 3;

provide strict time limits; and involve the presence of union

representatives. The sentence ending Step 1 states: "It is the

intention of the parties to resolve as many grievances as possible

at this step."

Prior to outlining the above, the CBA states that the

Company and Union "concur on the usefulness and mutual advantages

of providing for the prompt and fair resolution of

disagreements . . . on the meaning and interpretation" of the CBA,

and goes on to say that the procedures following "are intended to

be the sole means for the resolution of grievances . . ." (emphasis

supplied).

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 We agree with the district court that the CBA does no

more than remove the Step 4 arbitration option for the grievances

in question. The parties' intent, as garnered from the CBA, is to

utilize those internal processes, rather than court procedures, as

the exclusive means for resolving grievances.

In saying this, we recognize that, most often, the case

law enforcing dispute-resolution methods agreed to by the parties

to a CBA as an alternative to lawsuits under Section 301 of the

LMRA involves collective bargaining agreements with arbitration

clauses that are operable in the particular instance. But the

validity of such alternative procedures does not necessarily

require arbitration in every circumstance to be the method

available for resolving the particular grievance. The parties may

agree to "desirable method[s] for settlement of grievance

disputes." Hines, 424 U.S. at 562.3 Here the parties have

contracted to resolve their disagreements over interpretation of

3
There are circumstances where, within the context of agreeing to
resolve disputes internally through arbitration, a CBA may, by
providing that a certain action will be non-arbitrable, provide
effectively that the particular claim will be non-judicable in any
forum, including the courts. See David E. Feller, A General Theory
of the Collective Bargaining Agreement, 61 Cal. L. Rev. 663, 793
(1973) (CBA may provide for a probation period, during which an
employee is not entitled to file a grievance protesting his
discharge). Courts have found that where an underlying grievance
is barred according to the parties' collective bargaining
agreement, relief under Section 301 is unavailable. Truex v.
Garrett Freightlines, Inc., 784 F.2d 1347, 1353 (9th Cir. 1985).
See also Young v. Anthony's Fish Grottos, Inc., 830 F.2d 993, 998
n.2 (9th Cir. 1987); Hollis v. Kaiser Foundation Hospitals, 727
F.2d 823, 825 (9th Cir. 1984).

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the CBA by utilizing solely the "following procedures," which

include the comprehensive machinery of Steps 1-3. While Step 4

ordinarily offers the option of arbitration should Steps 1-3 fail

to satisfy the employee or the union, the parties' mutually-agreed

exclusion of that final step in the case of certain grievances like

the present one is valid and does not suggest an intention to scrap

the internal grievance machinery altogether and go back to lawsuits

as a method of resolving non-arbitrable industrial disputes.

Rather the most obvious interpretation of removal of the

arbitration option in these special and limited circumstances is

that the parties, after bargaining, merely agreed to truncate the

full panoply of dispute resolution procedures contained in the

agreement for these types of matters. Had the parties wished to

eliminate recourse to the grievance process altogether, they would

have had to expressly eliminate, for the instant cases, not merely

arbitration but the Steps 1-3 procedures themselves. This they did

not do. Moreover, had the parties believed that by omitting

arbitration here they were creating an exception to their

declaration in Article 13, Section 1, that the "following

procedures are intended to be the sole means for the resolution of

grievances," one would have expected that exception to have been

expressly noted in the CBA since it would be at variance with the

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parties' statement of their intent to rely solely upon the

specified internal procedures to resolve disputes.4

To support its argument that it is entitled to resolve

its grievances under the 1985 Side Agreements by lawsuit, Local 791

relies upon language in Boston Edison, 588 F. Supp. 800 (D. Mass.),

aff'd, 752 F.2d 1, supra. While that district court opinion is not

germane on its facts nor binding on this court, we find no

inconsistency between the court's general statements of the law and

our position here. The district court said there that it had

jurisdiction to hear the case "unless the parties had made an

effective agreement for an alternative method of resolving this

kind of dispute without resort to the courts." 588 F. Supp. at

804. Here, the parties can be said to have "made an effective

agreement for an alternative method" to handle disagreements

arising under the 1985 Side Agreements by leaving intact the first

three steps of the grievance procedure and eliminating the

arbitration option at the fourth stage. Nothing in the paragraph

which eliminates arbitration of the 1985 Side Agreements purports

also to remove the process spelled out in Article 13 of the CBA

whereby a grievance goes first to the store manager, then to the

4
It is noteworthy that the language excluding arbitration in the
case of the 1985 and 1991 Side Agreements is contained in the
identical CBA that describes "the following procedures" as intended
to be the sole means for the resolution of agreements.

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regional management representative, and finally to the Shaw's Labor

Relations representative.

The union stresses other language in Boston Edison to the

effect that the courts have jurisdiction to resolve disputes "[i]n

the absence of an agreement for arbitration or some other form of

final resolution of a dispute." 588 F. Supp. at 804. We again see

nothing inconsistent with our analysis here: the sophisticated 3-

step grievance procedure is indeed "some other form of final

resolution." We agree with the district court that the plain

meaning of the CBA was to require resolution of this dispute under

the remaining grievance process rather than by the present lawsuit.

We are not persuaded by the union's contention that the plain

meaning is to the contrary.

ii. Ambiguity

The union argues that the district court erred in finding

the relevant language at issue unambiguous and should have instead

concluded that the terms of the CBA require a fact-finder to look

to extrinsic evidence, including bargaining history, to determine

the parties' intent in excluding disputes over the 1985 Side

Agreements from arbitration. Compare American Postal Workers

Union, AFL-CIO v. U.S. Postal Service, 940 F.2d 704, 707-08 (D.C.

Cir. 1991) ("In the absence of ambiguity in the collective

bargaining agreement, however, we have no cause to examine

extrinsic evidence of the parties' intent"). As previously

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discussed, however, we concur with the district court that under

the plain language of the CBA, the 1985 Side Agreements--while non-

arbitrable--remain subject to the first three steps of the

grievance procedure, no contrary expression of intent being

indicated.

Because we find the CBA unambiguous, we do not reach the

union's discussion of the extrinsic evidence available. We have,

however, reviewed the affidavit of Mary McClay, and the cited

references concerning previous litigation of another provision of

the CBA, and find that neither is persuasive as to an intention to

leave to judicial resolution disputes such as the present one.

Like the district court, we can find no reason why the parties to

the CBA would provide exclusively that all disputes between

management and the union or covered employees concerning the

meaning or application of the CBA would go through the multi-stage

procedures in Article 13 but would wish, having agreed to exclude

the final step of arbitration for a small subset of these disputes,

to allow the latter to invoke the more expensive, formal and time-

consuming procedures of a federal court. The more reasonable

interpretation is that found in the CBA's plain language, namely

that provisions continued in the 1985 Side Agreements were to be

left to the grievance procedures alone, without availability of the

arbitration process in those instances.

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 Conclusion

We affirm the district court's conclusion that the CBA's

process for resolution of grievances arising under the 1985 Side

Agreements precludes judicial determination.

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