National Nurses United v. Washington Hospital Center Corporation ( 2013 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
NATIONAL NURSES UNITED, )
)
Plaintiff, )
)
v. ) Civil Case No. 12-2032 (RJL)
)
WASHINGTON HOSPITAL CENTER )
CORPORATION, )
)
Defendant. )
MEMO~UM OPINION
(July'i-, 2013) (Dkts. ##7, 10)
Plaintiff, National Nurses United, AFL-CIO (plaintiff or "NNU") filed the instant
action on December 18, 2012, seeking enforcement of an arbitration award pursuant to
Section 301 of the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 185. See
Compl. [Dkt. #1]. On January 16, 2013, defendant Washington Hospital Center
Corporation (defendant or "WHC") filed its answer and a counterclaim to vacate the
arbitration award. See Def.'s Answer and Counterclaim [Dkt. #5]. On February 6,
2013, plaintiff moved to dismiss WHC's counterclaim and for summary judgment. See
Pl.'s Mot. to Dismiss and Mot. Summ. J. [Dkt. #7]. Defendant filed a Motion for
Summary Judgment on its Counterclaim on March 8, 2013. See Def.'s Mot. Summ. J.
[Dkt. #10]. Upon consideration of the parties' pleadings, applicable law, and the
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complete administrative record in this case, the Court DENIES defendant's Cross Motion
for Summary Judgment and GRANTS plaintiffs Motion for Summary Judgment.
BACKGROUND
NNU and WHC are signatories to a Collective Bargaining Agreement ("CBA")
effective for the period of May 8, 2011 through November 15, 2014. See Ex. 1 to
Compl. ("CBA") [Dkt. #1-1]. The CBA outlines a grievance procedure culminating in
final and binding arbitration. See id. §§ 17-18; Pl.'s Statement of Material Facts As To
Which There Is No Genuine Issue In Dispute (Pl.'s SOF) [Dkt. #7] ~ 3. The CBA
defines grievance as "any disagreement between the parties concerning any matter
relating to wages, rates of pay, hours of employment or other conditions of employment,
or any application or interpretations ofthe provisions ofthis Agreement." Pl.'s SOF ~ 7.
The CBA also addresses WHC's ability to amend the health insurance plans
provided to the nurses in the bargaining unit. See CBA § 26.7. Article 26.7 of the CBA
states that WHC may make modifications to the plans with proper notice so long as the
modifications "will not result in materially diminishing it as a whole (not merely
individual aspects)." !d. There are limited exceptions, such as when a modification is
"required by law." !d. Article 26.7 also provides that NNU may contest WHC's
proposed modifications as a violation of the material diminishment standard. !d. If the
parties cannot resolve the issue through discussion or contract negotiation on that issue,
the next step is arbitration under Article 18 of the CBA. !d. In such a proceeding, "the
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issue before the arbitrator shall be defined to be, and shall be limited to, whether or not
the Employer has, by the modifications it voluntarily implemented, materially diminished
the Health Plan as a whole." !d.
In the fall of2011, WHC notified NNU of forthcoming modifications to the 2012
health insurance plan. Pl.'s SOF ~ 5. The modifications affected deductibles and
coinsurance maximums associated with non-MedStar providers, impacting approximately
forty percent of nurses in the bargaining unit. !d. `` 11-12. NNU filed a grievance
objecting to the changes under the material diminishment standard set forth in Article
26.7 of the CBA. !d.~ 8. The parties were unable to resolve the dispute through
discussion and proceeded to arbitration pursuant to Articles 18 and 26.7 of the CBA. See
id. ~ 9. Arbitration hearings took place on February 13, 2012 and June 4, 2012. !d.
~ 10.
On August 28, 2012, the arbitrator issued the first of two awards ("Initial Award"),
finding that "by its modifications to the 2012 Health Insurance Plan, WHC materially
diminished the Health Plan as a whole, in violation of26.7 of the CBA." See Ex. 2 to
Compl. ("Initial Award") [Dkt. #1-2] at 20. The Initial Award instructed WHC to
"revert the increased deductibles and coinsurance maximums to their levels under the
2011 Plan" and the parties to "establish a process for reimbursement of claims for
payments ... which exceeded the deductibles and coinsurance maximums under the 2011
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Plan." !d. at 23. The arbitrator retained jurisdiction to oversee the parties'
implementation of the agreed-upon remedy. !d.
After the arbitrator issued the Initial Award, WHC and NNU entered negotiations
to reach a settlement or agreement on a reimbursement process. WHC's Statement of
Material Facts As to Which There Is No Genuine Issue in Dispute ("Def.'s SOP") [Dkt.
#10] ~ 4. WHC interpreted the arbitrator's instruction in the Initial Award to "revert the
increased deductibles and coinsurance maximums to their level under the 2011 Plan" as
an instruction to apply the 2011 Plan as a whole. Id. NNU, by contrast, viewed the
arbitrator's instruction in the Initial Award as limited to the deductibles and coinsurance
maximums. !d. Unable to reach a settlement or agreement on a reimbursement process,
the parties returned to the arbitrator for a resolution. Id. ~ 5. On November 21, 2012,
the arbitrator issued a Supplemental Award which clarified the Initial Award. Ex. 1 to
Def.'s Answer and Counterclaim ("Supplemental Award") [Dkt. #5-1]. The
Supplemental Award states that the Initial Award "did not, as WHC states, 'return the
Plan to the 2011 status quo"' and "only addressed the changes made to the increased
deductibles and coinsurance maximums for the 2012 Plan." Id. at 2.
On December 18, 2012, NNU filed the instant action to enforce the Initial Award.
On January 16, 2013, less than ninety days after the arbitrator issued the Supplemental
Award, WHC filed a counterclaim to vacate the Initial and Supplemental Awards.
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STANDARD OF REVIEW
An arbitrator's interpretation and application of a collective bargaining agreement
is generally entitled to great deference. Madison Hotel v. Hotel & Rest. Emps., Local25,
AFL-CIO, 144 F.3d 855, 857 (D.C. Cir. 1998) (en bane). An arbitrator may not,
however, "ignore the contract and dispense his own brand of industrial justice." !d. at
859 (citations and quotation marks omitted). The Court must vacate an arbitration award
which does not "draw its essence" from the terms of the collective bargaining agreement.
Howard Univ. v. Metro. Campus Police Officer's Union, 512 F.3d 716, 720 (D.C. Cir.
2008) (citing United Steelworkers ofAm. v. Enterprise Wheel & Car Corp., 363 U.S. 593,
597 (1960)). This is the case where an arbitrator's words reveal that he has gone beyond
interpreting and applying the parties' agreement. See Hay Adams Hotel L.L. C. v. Hotel
& Rest. Emps., Local25, Unite Here Int'l Union, Civ. Action No. 06-968, 2007 WL
1378490, at *5 (D.D.C. May 9, 2007). The Court may not, however, "review the
arbitrator's decision on the merits despite allegations that the decision rests on factual
errors or misinterprets the parties' agreement." Major League Baseball Players Ass 'n v.
Garvey, 532 U.S. 504, 509 (2001) (per curiam); see also United Paperworkers Int'l
Union v. Misco, Inc., 484 U.S. 29, 38 (1987) ("[A]s long as the arbitrator is even arguably
construing 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.").
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ANALYSIS
Because WHC filed its counterclaim on January 16, 2013, less than ninety days
after the arbitrator issued the Supplemental Award on November 21, 2012, NNU's
Motion to Dismiss WHC's counterclaim as untimely must be denied. The arbitrator's
Initial Award was not final and binding because it left the development of a remedy up to
the parties and the arbitrator retained jurisdiction for the purpose of resolving any
disputes in connection with that process. See Am. Postal Workers' Union, AFL-CIO v.
US. Postal Serv., 646 F. Supp. 2d 1, 3 (D.D.C. 2009) ("An arbitration award that
postpones the determination of a remedy is not final and binding."). Therefore, the
Initial A ward did not trigger the ninety day deadline for filing a counterclaim pursuant to
D.C. Code Section 16-4423. The arbitrator's Supplemental Award, however, was final
and binding because it was "intended by the arbitrator to be his complete determination of
every issue submitted to him." Am. Postal Workers Union v. US. Postal Serv., 422 F.
Supp. 2d 240, 246 (D.D.C. 2006) (quotations and citations omitted). The ninety day
filing deadline, therefore, did not start running until the Supplemental Award was issued
on November 21, 2012.
The arbitrator was within his authority and drawing from the essence of the CBA
in making findings and concluding that "by its modifications to the 20 12 Health Insurance
Plan, WHC materially diminished the Health Plan as a whole, in violation of Section 26.7
of the CBA." Initial Award at 20. Defendant's arguments that the arbitrator's analysis
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was too narrow (i.e., not focused on the plan "as a whole") are not persuasive. See
Def.'s Mot. Summ. J. at 8. The arbitrator considered a variety of factors including:
changes in plan design for 2012, actuarial change in the value of the plan, cost savings to
WHC, cost increases and other adverse effects to covered nurses, and the number of
nurses adversely affected. See Initial Award at 4-6, 19-21. Specifically, the arbitrator
found that forty percent of covered nurses would face a deductible nearly three times
higher in 2012 as compared to 2011. See id. at 21.
The Supplemental Award cannot, as defendant contends, be read to say that the
arbitrator did not consider the plan as a whole in crafting the Initial Award. When the
arbitrator wrote in the Supplemental Award that the Initial Award "only addressed the
changes made to the increased deductibles and coinsurance maximums for the 2012
plan," he was referring to the remedy and not the analysis of the Initial A ward. See
Supplemental Award at 3. In the Supplemental Award, the arbitrator simply clarified
that the Initial Award called for returning the deductibles and coinsurance maximums to
their 20 11 Plan levels rather than returning all aspects of the proposed 20 12 Plan to the
2011 status quo.
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CONCLUSION
For all of the foregoing reasons, the Court GRANTS plaintiffs Motion for
Summary Judgment and DENIES defendant's Motion for Summary Judgment. An order
consistent with this decision accompanies this Memorandum Opinion.
United States District Judge
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