Exide Technologies v. IBEW, Local No. 700 ( 2020 )

United States Court of Appeals
For the Eighth Circuit
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No. 19-2317
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Exide Technologies
lllllllllllllllllllllPlaintiff - Appellant
v.
International Brotherhood of Electrical Workers, Local No. 700
lllllllllllllllllllllDefendants - Appellee
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Appeal from United States District Court
for the Western District of Arkansas - Ft. Smith
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Submitted: January 16, 2020
Filed: July 10, 2020
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Before KELLY, MELLOY, and KOBES, Circuit Judges.
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KELLY, Circuit Judge.
This appeal stems from a Collective-Bargaining-Agreement (CBA) dispute
between Exide Technologies (Exide) and the International Brotherhood of Electrical
Workers, Local Union No. 700 (the Union). An arbitrator resolved the dispute in favor
of the Union, deciding that Exide had violated the CBA and the National Labor
Relations Act (NLRA) by unilaterally changing its procedures for implementing the
Family and Medical Leave Act (FMLA) without bargaining with the Union.
Exide filed a complaint in the district court seeking to vacate both the arbitra-
tor’s finding of a CBA violation and his finding of an NLRA violation. The Union
filed a counterclaim seeking to confirm the arbitrator’s award. After a hearing,
the district court1 confirmed the arbitrator’s CBA finding but concluded that it lacked
jurisdiction to review the arbitrator’s NLRA finding. We affirm.
I. Background
Exide is a battery recycler and manufacturer headquartered in Milton, Georgia.
It has ten facilities in seven states, including a plant in Fort Smith, Arkansas, where it
manufactures industrial-purpose batteries. The Union is the exclusive bargaining agent
for production and maintenance employees at the Fort Smith plant. Exide and the
Union are parties to a CBA, which includes an arbitration clause. One of the items
addressed in the CBA is FMLA leave administration.
On August 22, 2016, Exide notified employees that it would no longer process
FLMA leave requests through its onsite human-resources departments. Instead, the
requests would be processed through an offsite third-party administrator, Unum,
effective September 1, 2016. The Union filed a grievance on August 31, 2016,
arguing that Exide could not make this change without going through the collec-
tive-bargaining process because it was “a major change in terms and conditions of
employment.” Exide denied the grievance, asserting that it had the right to “change
insurance plan administrators and administration without negotiation.”
1
The Honorable P.K. Holmes, III, United States District Judge for the Western
District of Arkansas.
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The Union then filed two unfair-labor-practice charges with the National Labor
Relations Board (NLRB). The NLRB consolidated the cases and conditionally
dismissed the charges pursuant to its deferral policy “as set forth in Collyer Insulated
Wire, 192 N.L.R.B. 837 (1971), and United Technologies Corp., 268 N.L.R.B. 557
(1984).” Under that policy, the NLRB will conditionally dismiss a case “when a set
of facts may present not only an alleged violation of the [NLRA] but also an alleged
breach of the collective-bargaining agreement subject to arbitration.” Collyer, 192
N.L.R.B. at 841. However, the NLRB retains limited jurisdiction to decide, among
other things, whether an arbitrator has reached a result “repugnant to the [NLRA].”
Id. at 843.
After the NLRB deferred, the parties proceeded to arbitration. Their arguments
centered on two provisions of the CBA. Exide relied on Article II of the CBA,
“Management Rights,” which reserves Exide’s “inherent right . . . to conduct its
business in all particulars except as expressly modified by [the CBA] and any written
supplements to the [CBA].” Article II continues:
The Company shall remain vested with all management functions
including the full and exclusive control, direction and supervision of
operations and the working forces . . . . Management functions, which
shall be vested solely in the Company, shall include, but not be limited to,
the right . . . to contract out, subcontract work or exchange work . . .
[and] to determine . . . the processes, methods and procedures to be used
....
Exide asserted that this provision vested it with authority to unilaterally change
FMLA leave administrators without bargaining. And it argued that, to the extent the
CBA was ambiguous, its past practice of using third-party administrators for its
short- and long-term disability policies showed that using a third-party administrator
for its FMLA policy did not violate the CBA. In the alternative, Exide contended that,
even if changing FMLA leave administrators violated the CBA, it did not violate the
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NLRA because the change was “trivial.” See Parsons Elec., LLC v. NLRB, 812 F.3d
716, 720 (8th Cir. 2016) (explaining that “a unilateral change must be material,
substantial, and significant before it is found to violate the [NLRA]” (cleaned up)).
For its part, the Union relied on Article XVII of the CBA, “Leaves of Ab-
sences,” paragraph 154 of which states: “FAMILY MEDICAL LEAVE ACT.
The Exide Technologies FMLA Policy is hereby incorporated, in its entirety as part of
this Agreement.” Attached to the CBA is a company-wide document titled
“Exide Technologies Human Resources Policies and Procedures.” That document
details Exide’s FMLA leave policies and procedures, and it states that FMLA leave
requests are to be submitted to “the Human Resources Manager or their designated
representative at the employee’s location.”
The Union argued that by requiring employees to submit FMLA leave requests
to an offsite third-party administrator rather than the human-resources department at
the employee’s location, Exide’s new policy violated the policies-and-procedures
document, which had been expressly incorporated into the CBA. Further, the Union
argued that this was a material, substantial, and significant change in the terms and
conditions of employment because it was more difficult for employees to submit leave
requests to the third-party administrator than to their onsite human-resources
departments, and the administrators would now be “nameless individuals, voices over
the phone” who had no knowledge of the employees’ rights under the CBA.
The arbitrator sided with the Union. He found that the parties had expressly
modified the CBA by incorporating Exide’s FMLA policies-and-procedures document,
and that Exide’s new FMLA leave procedures violated the terms of that document. He
further concluded that this was a material, substantial, and significant change in the
employees’ terms and conditions of employment, in violation of § 8 of the NLRA.
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The district court confirmed the arbitrator’s CBA ruling because it drew its
essence from the parties’ agreement. However, the court decided that it lacked
jurisdiction to review the arbitrator’s NLRA ruling, explaining that “[i]f a party is
dissatisfied with an arbitrator’s decision and remedy on the § 8 claim, that party does
not appeal to a United States District Court but moves the NLRB to reopen the
deferred unfair labor practice charges so that the NLRB can consider the arbitrator’s
findings and remedy.” Exide appeals. Our review is de novo. See Homestead Mining
Co. v. United Steelworkers, Local 7044, 153 F.3d 678, 680 (8th Cir. 1998).
II. The CBA Violation
The Labor Management Relations Act (LMRA) establishes a federal policy that
arbitration is “the desirable method for settlement of grievance disputes arising over
the application or interpretation of an existing collective-bargaining agreement.”
29 U.S.C. § 173(d). Section 301 of the LMRA gives federal courts jurisdiction over
“[s]uits for violation of contracts between an employer and a labor organization
representing employees in an industry affecting commerce.” Id. § 185(a). However,
because “[t]he federal policy of settling labor disputes by arbitration would be
undermined if courts had the final say on the merits of awards,” United Steelworkers
v. Enter. Wheel & Car Corp., 363 U.S. 593, 596 (1960), and the parties to an
agreement with an arbitration clause have bargained for the arbitrator’s judgment,
United Steelworkers v. Am. Mfg. Co., 363 U.S. 564, 568 (1960), “[t]he function of
the court is very limited when the parties have agreed to submit all questions of
contract interpretation to the arbitrator,” id. at 567–68.
Specifically, the Supreme Court has instructed that:
[T]he arbitrator’s award settling a dispute with respect to the interpreta-
tion or application of a labor agreement must draw its essence from the
contract and cannot simply reflect the arbitrator’s own notions of
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industrial justice. But as long as the arbitrator is even arguably constru-
ing or applying the contract and acting within the scope of his authority,
that a court is convinced he committed serious error does not suffice to
overturn his decision.
United Paperworkers Int’l Union v. Misco, Inc., 484 U.S. 29, 38 (1987).
Under this standard, we will vacate an arbitrator’s award where “relevant
language was not considered by the arbitrator” or it appears that “the arbitrator has not
interpreted the specific contract at issue.” George A. Hormel & Co. v. United Food &
Commercial Workers, Local 9, 879 F.2d 347, 351 (8th Cir. 1989). We will also vacate
an award where the arbitrator’s CBA interpretation “so directly contradicts the plain
meaning of the parties’ agreement that it effectively rewrites it.” Boise Cascade Corp.
v. Paper Allied-Indus., Chem. & Energy Workers (PACE), 309 F.3d 1075, 1081 (8th
Cir. 2002). And we have explained that, “where the plain language of the parties’
agreement is silent or ambiguous with respect to a disputed issue, an arbitrator is
obliged to consider other relevant sources of the parties’ intent,” such as their past
practices. Id. at 1082. Otherwise, the arbitrator cannot be said to have considered “the
entire agreement.” Id. (cleaned up).
Here, the parties authorized the arbitrator to decide whether Exide violated the
CBA by unilaterally changing FMLA leave administrators. See PSC Custom, LP v.
United Steel, Paper & Forestry, Rubber, Mfg., Energy, Allied Indus. & Serv. Workers
Int’l Union, Local No. 11-770, 763 F.3d 1005, 1010 (8th Cir. 2014) (“When two
parties submit an issue to arbitration, it confers authority upon the arbitrator to decide
that issue.” (cleaned up)). However, the parties stipulated that the arbitrator’s decision
“shall be based solely upon an interpretation of the provisions of [the CBA]. The
arbitrator shall not have the right to amend, take away, modify, add to, or change any
of the provisions of [the CBA].” Exide argues that three aspects of the arbitrator’s
decision exceeded his authority under this provision.
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First, Exide argues that the arbitrator failed to consider relevant language
because he did not discuss the CBA’s management-rights provision. We disagree. At
the beginning of his opinion, the arbitrator set forth Exide’s argument that it had
authority to change FMLA leave administrators under the management-rights
provision, as well as the Union’s response to that argument. In his findings and
conclusions, the arbitrator distinguished FMLA leave administration from other
management functions on the basis that “[a]dministrative processing and evaluating
employees’ requests for statutory leave under the FMLA is not core entrepreneurial
activity as it does not change the scope, direction or nature of the enterprise.” And
later in the opinion, the arbitrator stated: “As for Article II, Management Rights, it does
not specifically reference or identify leave administration as reserved solely to
management.” The arbitrator thus considered the CBA’s management-rights section.
We have “no business” second-guessing his interpretation of it. See Am. Mfg. Co.,
363 U.S. at 568.
Next, Exide argues that the arbitrator effectively rewrote the CBA by deciding
paragraph 154 of the CBA incorporated Exide’s entire “Human Resources Policies and
Procedures” document. Exide notes that paragraph 154 states: “The Exide Technolo-
gies FMLA Policy is hereby incorporated, in its entirety as part of [the CBA].” Exide
contends that only pages one through five of the policies-and-procedures document,
which describe Exide’s FMLA policy, were incorporated into the CBA. In its view,
pages five and six, which describe Exide’s FMLA procedures, were not incorporated.
Whatever the merits of this argument, the arbitrator interpreted the CBA’s language
and decided that the incorporated “FMLA Policy” was the entire
policies-and-procedures document attached to the CBA. “Because the arbitrator had
the authority to adopt one reasonable interpretation of the CBA over the other, his
interpretation must not be disturbed.” PSC Custom, 763 F.3d at 1010.
Finally, Exide argues that the arbitrator failed to consider its past practice of
using third-party administrators for its short- and long-term disability leave policies.
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However, the arbitrator did consider this practice. He decided that, because Exide’s
FMLA leave procedures had been incorporated into the CBA but its short- and
long-term disability leave procedures had not, “the conditions in the instant grievance
are different from the conditions for the practice asserted by [Exide].”
After careful review, we conclude that the arbitrator “interpreted the specific
contract at issue,” Hormel, 879 F.2d at 351, and did not “effectively rewrite[] it,” Boise
Cascade, 309 F.3d 1075 at 1081. Because the arbitrator was “arguably construing or
applying the contract and acting within the scope of his authority,” there is no basis for
vacating the arbitrator’s finding that Exide violated the CBA. See Misco, 484 U.S. at
38.
III. The NLRA Violation
Next, Exide asks us to vacate the arbitrator’s decision that unilaterally changing
FMLA leave administrators was a material, substantial, and significant change in the
employees’ terms and conditions of employment in violation of § 8 of the NLRA. Like
the district court, we must first assess whether we have jurisdiction over this issue.
Section 8 of the NLRA makes it an unfair labor practice for an employer to
“interfere with, restrain, or coerce employees in the exercise of the rights guaranteed
[by the FMLA],” or to “refuse to bargain collectively with the representatives of [its]
employees.” 29 U.S.C. § 158(a)(1), (a)(5). An employer violates these provisions
when it unilaterally makes a material, substantial, and significant change to the
employees’ terms and conditions of employment. See Parsons, 812 F.3d at 719–20.
Courts have “no original jurisdiction” to decide unfair-labor-practice claims arising
under § 8 of the NLRA. See Brown v. Sterling Aluminum Prods. Corp., 365 F.2d 651,
656 (8th Cir. 1966). Instead, Congress has empowered the NLRB to resolve unfair-
labor-practice claims in the first instance. See 29 U.S.C. § 160(a).
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The Supreme Court has decided that this delegation of authority ordinarily
preempts federal courts from deciding cases that involve unfair-labor-practice disputes.
See San Diego Bldg. Trades Council v. Garmon, 359 U.S. 236, 245 (1959) (“When
an activity is arguably subject to § 7 or § 8 of the Act, the States as well as the federal
courts must defer to the exclusive competence of the National Labor Relations
Board.”). However, it has also recognized discrete exceptions to Garmon’s preemption
rule, grounded in “the nature of the particular interests being asserted” and the effect
that preemption would have on “the administration of national labor policies.” See
Vaca v. Sipes, 386 U.S. 171, 180 (1967). As relevant here, the Court has held that §
301 of LMRA “permits suits for breach of a collective bargaining agreement regardless
of whether the particular breach is also an unfair labor practice within the jurisdiction
of the Board.” Id. at 180–81 (citing Smith v. Evening News Ass’n, 371 U.S. 195, 197
(1962)).
Courts applying this doctrine have sometimes stated that “where a party’s
conduct gives rise to both a charge of an unfair labor practice and a claimed breach of
a collective bargaining agreement, the NLRB and the district court share ‘concurrent
jurisdiction.’” Local Union No. 884, United Rubber, Cork, Linoleum, & Plastic
Workers v. Bridgestone/Firestone, Inc., 61 F.3d 1347, 1356 (8th Cir. 1995) (quoting
William E. Arnold Co. v. Carpenters Dist. Council, 417 U.S. 12, 18 (1974)). The
parties read these references to “concurrent jurisdiction” as indicating that, although
federal courts do not usually have jurisdiction to decide unfair-labor-practice claims
in the first instance, a different rule applies when a case involves both a CBA claim
and an unfair-labor-practice claim. In this context, they contend, § 301 of the LMRA
provides federal courts with original jurisdiction to decide both the CBA issue and the
unfair-labor-practice claim.
We disagree. The cases cited by the parties indicate that, when a court possesses
jurisdiction to decide a CBA issue under § 301 of the LMRA, it is not preempted from
exercising its jurisdiction by the fact that the employer’s conduct may also violate the
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NLRA. See Smith, 371 U.S. at 197. These cases do not expand the court’s original
jurisdiction.
Section 301 of the LMRA does not provide us with original jurisdiction to
decide whether Exide violated the NLRA. See Brown, 365 F.2d at 656 (“The National
Labor Relations Board has sole and exclusive original jurisdiction to determine
whether the Company’s actions violated their duties under the [NLRA], and the Courts
have no original jurisdiction to make such a determination.”). Instead, it authorizes us
to resolve “[s]uits for violation of contracts between an employer and a labor
organization.” 29 U.S.C. § 185(a) (emphasis added). We have addressed the
violation-of-contract issue in the preceding section. As Exide acknowledges, the
separate issue of whether this CBA violation also contravened the NLRA “is not an
issue of contract interpretation, but instead one of applying the law as interpreted by
the NLRB and federal courts.” That issue is assigned to the NLRB in the first
instance. See 29 U.S.C. § 160(a); see also Amalgamated Ass’n of St., Elec. Ry. &
Motor Coach Emps. v. Lockridge, 403 U.S. 274, 301 (1971) (noting that our
jurisdiction in this context is generally limited to “disputes that are governed by the
terms of the collective-bargaining agreement itself”).
This does not mean that Exide is unable to seek review of the arbitrator’s NLRA
decision. As the district court explained, Exide may seek to reopen the § 8 charge filed
with the NLRB, which has retained jurisdiction to determine whether the arbitrator
“reached a result . . . repugnant to the [NLRA].” See Collyer, 192 N.L.R.B. at 843.
If the parties remain unsatisfied after the NLRB issues a decision, they may then
petition for review in federal court. See 29 U.S.C. § 160(f).
IV. Conclusion
The district court’s judgment is affirmed.
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