Fraternal Order of Police Ohio Labor Council, Inc. v. Uhrichsville , 2018 Ohio 3344 ( 2018 )

[Cite as Fraternal Order of Police Ohio Labor Council, Inc. v. Uhrichsville, 2018-Ohio-3344.]
COURT OF APPEALS
TUSCARAWAS COUNTY, OHIO
FIFTH APPELLATE DISTRICT
JUDGES:
FRATERNAL ORDER OF POLICE : Hon. W. Scott Gwin, P.J.
OHIO LABOR COUNCIL, INC. : Hon. William B. Hoffman, J.
: Hon. Earle E. Wise, J.
Plaintiff-Appellee :
:
-vs- : Case No. 2018 AP 01 0002
:
CITY OF UHRICHSVILLE :
: OPINION
Defendant-Appellant
CHARACTER OF PROCEEDING: Civil appeal from the Tuscarawas County
Court of Common Pleas, Case No. 2016
CV 07 0501
JUDGMENT: Reversed and Dismissed
DATE OF JUDGMENT ENTRY: August 20, 2018
APPEARANCES:
For Plaintiff-Appellee For Defendant-Appellant
MICHAEL PIOTROWSKI ROBERT TSCHOLL
2721 Manchester Road 400 South Main Street
Akron, OH 44319 North Canton, OH 44720
[Cite as Fraternal Order of Police Ohio Labor Council, Inc. v. Uhrichsville, 2018-Ohio-3344.]
Gwin, P.J.
{¶1} Appellant appeals the December 21, 2017 judgment entry of the
Tuscarawas County Court of Common Pleas granting appellee’s motion to compel
arbitration.
Facts & Procedural History
{¶2} Appellant, the City of Uhrichsville (“City”) is a public employer subject to
collective bargaining under R.C. 4117. Appellee, the Fraternal Order of Police, Ohio
Labor Council, Inc. (“FOP”) is an organization which has been chosen as the exclusive
bargaining representative for the police patrolmen employed by the City.
{¶3} Article 21, Section 03 of the Collective Bargaining Agreement (“CBA”)
between the City and the FOP, effective from November 1, 2011 to October 31, 2014,
provided as follows:
Section 03. Effective November 1, 2011, the City shall pay six and
one half (6 1/2%) percent of the statutorily required employee contribution
into the pension system. Effective November 1, 2012, the City shall
contribute three (3%) of that cost. Effective January 1, 2013, the City shall
not pay any portion (zero percent) of the employees required contribution
into the pension system.
{¶4} On May 11, 2012, the City and the FOP entered into a Memorandum of
Understanding (“MOU”) to modify the terms of the CBA. The MOU provided the following
modification regarding the employee contribution into the pension system:
Article 21 Section 03 (Wages) shall be modified as follows. Effective
the first full pay period following the signing of this MOU (or the pay period
Tuscarawas County, Case No. 2018 AP 01 0002 3
commencing on May 13, 2012, whichever is earlier), the bargaining unit
members shall be responsible for the full amount of the statutorily required
employee contribution into the pension system.
{¶5} The City and the FOP commenced negotiations for a successor agreement
in 2014, but were unable to reach agreements on all terms. The parties then submitted
their contested issues to a fact-finder with the State Employment Relations Board
(“SERB”). The fact-finder issued his report on May 20, 2015 and both parties accepted
this report.
{¶6} The parties then were to draft the successor CBA, which would incorporate
any negotiated changes, plus those changes recommended by the fact-finder. The FOP
created multiple drafts of the successor CBA. The first draft did not provide for the City
to pay any of the employee portions to the Police and Fire Disability Pension Found. The
second draft provided the City would pay 10% of the employee portion to the pension
fund. The third draft provided the City would pay 5% of the employee portion to the
pension fund. The City rejected the drafts which required the City to pay any percentage
of the employee contribution to the pension fund.
{¶7} The FOP then filed an Unfair Labor Practice Charge (“ULP”) with SERB on
September 14, 2015. On January 28, 2016, SERB dismissed the charge for lack of
probable cause.
{¶8} On July 28, 2016, the FOP filed a complaint against the City to compel
arbitration. The FOP sought an order compelling the City to “submit this dispute to binding
arbitration for resolution as required by the Collective Bargaining Agreement between the
Tuscarawas County, Case No. 2018 AP 01 0002 4
parties.” The complaint alleges the parties agreed to arbitrate the “pension pick-up
dispute.”
{¶9} The City filed an answer to the complaint on August 19, 2016. The City also
filed an opposition to the FOP’s motion to compel arbitration and filed a motion to dismiss
complaint on August 29, 2016. The City denied it had a contractual obligation to arbitrate
the grievance involving pension pick-up. Further, the City stated that the FOP’s sole
remedy regarding contract formation issues under R.C. 4117.11 is the filing of an unfair
labor practice, a process which had been completed. Attached to the City’s answer as
Exhibit 1 is the unfair labor practice charge filed by the FOP against the City on September
14, 2015. The unfair labor practice charge details the pension pick-up dispute. In the
charge, the FOP stated:
On or about August 17, 2015, the Employer informed the FOP that it
believed that the City was not required to pay any portion of the employees’
contribution to the pension system and has refused to sign the collective
bargaining agreement. The Employer’s failure to negotiate in good faith and
its refusal to execute the collective bargaining agreement is an unfair labor
practice in violation of R.C. 4117.11(A)(1) & (5).
{¶10} Attached as Exhibit 2 to the City’s answer is the January 28, 2016 dismissal
of the unfair labor practice charge. In the dismissal, SERB characterized the FOP’s
charge as, “Charging Party alleged Charged Party violated Ohio Revised Code Section
4117.11(A)(1) and (5) by failing to provide a 5% pension pick up that the employees in a
different union are receiving.” SERB found there was no probable cause to believe the
City violated R.C. 4117.11 and dismissed the charge with prejudice.
Tuscarawas County, Case No. 2018 AP 01 0002 5
{¶11} The trial court held an oral hearing on the complaint and motion to dismiss
on November 29, 2016. In a December 5, 2016 judgment entry, the trial court found that
SERB does not have exclusive jurisdiction over the issues raised in the complaint and set
the matter for a bench trial to determine whether arbitration should be compelled.
{¶12} The trial court conducted a bench trial on September 21, 2017. Charles
Choate, (“Choate”) senior staff representative for the FOP, testified. Choate stated he
did not make a written proposal in this set of negotiations for a successor Collective
Bargaining Agreement to change Article 21, Section 03 and require the employer to pick-
up part of the pension. Further, that it was not discussed during the negotiation before
fact-finding whether the City agreed to pick-up part of the pension. Brett Hillyer (“Hillyer”),
law director for the City, testified the FOP did not write a written proposal to modify or
change Article 21, section 03 regarding the pension pick-up. Further, that the FOP did
not include the pension pick-up issue as an unresolved issue before the fact-finder.
{¶13} The parties also submitted several exhibits at the bench trial. The first
exhibit is a copy of the SERB fact-finder’s findings and recommendations dated May 20,
2015, in the matter of fact-finding between the FOP and the City. In the “background”
portion of the findings, the fact-finder stated the parties negotiated a Memorandum of
Understanding in 2012 and “it contained language which required the officers to pay a
large portion of the employees’ contribution to the employee’s pension fund. This resulted
in a net decrease in pay for members of the bargaining unit.” In the “discussion and
recommendations” portion of the document, the fact-finder addressed issues under Article
18, Article 21, and Article 30. The specific issue addressed in Article 21 is that the FOP
proffered two proposals, one for a wage increase and one for an increase in the annual
Tuscarawas County, Case No. 2018 AP 01 0002 6
clothing allowance, and the City objected to both proposals. In his discussion as to why
he was recommending a modest pay increase, the fact-finder noted that, “due to the
language which requires them to make a larger contribution to their pension funds, their
net pay is less than it would have been in 2011.”
{¶14} Also submitted as an exhibit is the MOU between the FOP and the City.
The MOU states it modifies the terms of the Collective Bargaining Agreement effective
January 1, 2012 through December 31, 2014 and provides that “with the exception of
modifications made in this Agreement, all terms and conditions as set forth in the
Agreement shall remain in full force and effect until such time as modified through mutual
agreement.” In the MOU, the parties agreed to modify Article 21, Section 03 to state, “the
bargaining unit members shall be responsible for the full amount of the statutorily required
employee contribution into the pension system.”
{¶15} Finally, the CBA is submitted as an exhibit. Article 5 of the CBA details the
grievance procedure and provides a “grievance” is “any alleged violation, including
disciplinary matters, of this Agreement or any dispute with respect to its meaning or
application and shall be subject to the procedures set forth herein.” The grievance
procedure lists the following steps: Step 1 – Informal (grievant must attempt to resolve
informally with his/her immediate supervisor); Step 2 – Shift Supervisor (grievance
presented in writing to shift supervisor); Step 3 – Chief of Police (appeal to Chief of
Police); Step 4 – Mayor (appeal to Mayor); and Step 5 – Arbitration (if the grievance is
not satisfactorily settled at Step #4, the F.O.P may file a request for arbitration). Article 5
also provides that, “the decision of the arbitrator shall be final and binding on the parties.
Tuscarawas County, Case No. 2018 AP 01 0002 7
The arbitrator shall not have the power to add or subtract from or modify any of the terms
of the Agreement.”
{¶16} The City filed a post-hearing brief on October 27, 2017. The FOP filed a
post-hearing brief on November 3, 2017.
{¶17} The trial court issued a judgment entry on December 21, 2017. The trial
court found the FOP is entitled to arbitration regarding the application of the parties’
agreement under terms of Article 5, Section 01 of the CBA. Thus, the trial court granted
the FOP’s motion to compel arbitration.
{¶18} The City appeals the December 21, 2017 judgment entry of the Tuscarawas
County Court of Common Pleas and assigns the following as error:
{¶19} “I. THE TRIAL COURT COMMITTED ERROR BY NOT DISMISSING THE
COMPLAINT FOR LACK OF SUBJECT MATTER JURISDICTION.
{¶20} “II. THE TRIAL COURT ERRED BY NOT RECOGNIZING THE
DISTINCTION BETWEEN CONTRACT FORMATION AND CONTRACT
INTERPRETATION.
{¶21} “III. THE TRIAL COURT COMMITTED ERROR BY ORDERING
ARBITRATION ON A SUBJECT NOT CONTAINED IN THE CONTRACT BETWEEN
THE PARTIES.”
Standard of Review
{¶22} A trial court’s decision on a motion to compel arbitration is “subject to de
novo review on appeal with respect to issues of law, which will commonly predominate
because such cases generally turn on issues of contractual interpretation * * *.” Hudson
v. John Hancock Fin. Servs., 10th Dist. Franklin No. 06AP-1284, 2007-Ohio-6997;
Tuscarawas County, Case No. 2018 AP 01 0002 8
McFarren v. Emeritus at Canton, 5th Dist. Stark No. 2013CA00040, 2013-Ohio-3900.
Further, the “issue of whether a controversy is arbitrable under an arbitration provision of
a contract is a question of law for the court to decide upon examination.” Id.; Rona Ents.,
Inc. v. Vanscoy, 5th Dist. Perry Nos. 09CA6, 09CA8, 2010-Ohio-1836. In this case, the
trial court’s determination to grant the motion to compel arbitration is reviewable under a
de novo standard, as the conclusions involve legal determinations. Accordingly, we need
not defer to the trial court’s decision. McFarren v. Emeritus at Canton, 5th Dist. Stark No.
2013CA00040, 2013-Ohio-3900; Estate of Heath v. Grange Mut. Cas. Co., 5th Dist.
Delaware No. 02CAE05023, 2002-Ohio-5494.
{¶23} Ohio’s public policy favoring arbitration is codified at R.C. Chapter 2711.
Under R.C. 2711.01(A), a written arbitration clause “shall be valid, irrevocable, and
enforceable, except upon grounds that exist at law or in equity for the revocation of any
contract.” If a party moves to stay proceedings pending arbitration or compel arbitration
pursuant to an agreement in writing for arbitration, the court must first satisfy itself “that
the issue involved in the action is referable to arbitration” under the agreement. R.C.
2711.02(B). Thus, the trial court must “determine ultimately whether an arbitration
provision is enforceable” and be satisfied that the relief sought is appropriate before
issuing an order to stay or compel arbitration. Maestle v. Best Buy Co., 100 Ohio St.3d
330, 800 N.E.2d 7 (2003).
I., II., III.
{¶24} In its assignments of error, the City contends the trial court erred in granting
the FOP’s complaint/motion to compel arbitration. The City contends SERB has exclusive
jurisdiction over this issue as it is an unfair labor practice allegation. The FOP argues
Tuscarawas County, Case No. 2018 AP 01 0002 9
they do not allege an unfair labor practice, but are alleging a dispute as to the meaning
of the CBA, and that interpretation of the terms to the CBA are claims to be decided by
an arbitrator, not SERB. We agree with the City.
{¶25} In Revised Code Chapter 4117, Public Employees’ Collective Bargaining,
the legislature “established a comprehensive framework for the resolution of public-sector
labor disputes by creating a series of new rights and setting forth specific procedures and
remedies for the vindication of those rights.” State ex rel. City of Cleveland v. Sutula, 127
Ohio St.3d 131, 2010-Ohio-5039, 937 N.E.2d 88. The Ohio Supreme Court has held that
SERB “has exclusive jurisdiction to decide matters committed to it pursuant to R.C.
Chapter 4117. If a party asserts rights that are independent of R.C. Chapter 4117, the
party’s complaint may properly be heard in common pleas court. However, 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.” Franklin Co.
Law Enforcement Assn. v. Fraternal Order of Police, Capital City Lodge No. 9, 59 Ohio
St.3d 167, 572 N.E.2d 87 (1991). While SERB’s jurisdiction is not so broad as to place
all claims that touch on R.C. Chapter 4117 within its jurisdiction, “exclusive jurisdiction to
resolve unfair labor practice charges is vested in SERB in two general areas: (1) where
one of the parties filed charges with SERB alleging an unfair labor practice under R.C.
4117.11 and (2) where a complaint brought before the common pleas court alleges
conduct that constitutes an unfair labor practice specifically enumerated in R.C. 4117.11.”
State ex rel. City of Cleveland v. Sutula, 127 Ohio St.3d 131, 2010-Ohio-5039, 937 N.E.2d
88.
Tuscarawas County, Case No. 2018 AP 01 0002 10
{¶26} In cases decided by the Ohio Supreme Court, they have held that SERB
had exclusive jurisdiction: over claims for injunctive relief regarding a settlement
agreement between the public entity and the union and the trial court lacks jurisdiction
when the union claimed the city failed to abide by an agreement reached through
collective bargaining negotiations; over a claim that the CBA between an FOP and the
commissioners was invalid because the sheriff had not approved it; and over a claim as
to whether the City had a duty to perform in accordance with their last pre-strike offer.
State ex rel. Ohio Civil Service Employees Assn. v. State of Ohio, 146 Ohio St.3d 315,
2016-Ohio-478, 56 N.E.3d 913; Franklin Co. Law Enforcement Assn. v. Fraternal Order
of Police, Capital City Lodge No. 9, 59 Ohio St.3d 167, 572 N.E.2d 87 (1991); State ex
rel. City of Cleveland v. Sutula, 127 Ohio St.3d 131, 2010-Ohio-5039, 937 N.E.2d 88.
Further, the Supreme Court held that simply couching allegations of an application to
vacate arbitration award in common pleas court in language comparable to that found in
the arbitration provision of R.C. 2711 was insufficient to vest jurisdiction in the common
pleas court. State ex rel. Ohio Dept. of Mental Health v. Nadel, 98 Ohio St.3d 405, 2003-
Ohio-1632, 786 N.E.2d 49 (2003).
{¶27} However, the Supreme Court has also held that parties can settle
differences in interpreting provisions of their CBA agreement through the process of
binding arbitration. City of East Cleveland v. East Cleveland Firefighters Local 500,
I.A.F.F., 70 Ohio St.3d 125, 637 N.E.2d 878 (1994).
{¶28} The Supreme Court has consistently held that the dispositive test “remains
whether the claims arise from or depend on collective-bargaining rights created by R.C.
Chapter 4117.” Id; Franklin Co. Law Enforcement Assn. v. Fraternal Order of Police,
Tuscarawas County, Case No. 2018 AP 01 0002 11
Capital City Lodge No. 9, 59 Ohio St.3d 167, 572 N.E.2d 87 (1991); State ex rel. Ohio
Civil Service Employees Assn. v. State of Ohio, 146 Ohio St.3d 315, 2016-Ohio-478, 56
N.E.3d 913.
{¶29} In their complaint, the FOP states the dispute to be arbitrated is the “pension
pick-up issue.” The FOP characterizes this dispute as a dispute involving contract
interpretation. We disagree. After a contract has been negotiated, disputes arising that
involve interpretation of specific provisions of the CBA are subject to arbitration.
However, this case does not involve interpretation of a specific provision of a CBA that
has been negotiated.
{¶30} In this case, the issue regarding Article 21, Section 03 involves the contract
formation and negotiation process. The parties commenced negotiations for a successor
agreement to the CBA that was effective until 2014, but were unable to reach an
agreement on all terms. OAC 4117-9-05 requires a party who is seeking to change a
CBA to provide a “statement defining all unresolved issues and summarizing the position
of the party with regard to each unresolved issue.” Pursuant to OAC 4117-9-05, the
parties submitted their contested issues to a fact-finder with SERB. Neither party
proposed a change in Article 21, Section 03. The fact-finder recognized in his report and
recommendations that the MOU required the members of the FOP to pay a large portion
of the pension fund contribution and based his recommendation of a modest pay
increase, in part, because of the pension contribution language in the MOU. The fact-
finder issued his report on May 20, 2015 and both parties accepted this report.
{¶31} The parties then were to draft the successor CBA, which would incorporate
any negotiated changes, plus those changes recommended by the fact-finder. The FOP
Tuscarawas County, Case No. 2018 AP 01 0002 12
created multiple drafts of the successor CBA. The first draft did not provide for the City
to pay any of the employee portions of the Police and Fire Disability Pension Found. The
second draft provided the City would pay 10% of the employee portion to the pension
fund. The third draft provided the City would pay 5% of the employee portion to the
pension fund. The City rejected the drafts which required the City to pay any percentage
of the employee contribution to the pension fund.
{¶32} We find the FOP’s claims stemmed directly from rights and remedies
created by R.C. Chapter 4117. The FOP claims the City failed to execute the CBA with
the pension pick-up language included by the FOP after negotiations which were
conducted in accordance with R.C. Chapter 4117. The negotiation process as
contemplated by R.C. 4117.14 concerns contract formation issues, not contract
interpretation issues. Because the FOP’s claims are dependent on the framework
established in R.C. Chapter 4117, the FOP was limited to the remedies and procedures
provided in that chapter and SERB has exclusive jurisdiction over the FOP’s claims.
{¶33} Additionally, we find the FOP’s complaint to compel arbitration is a collateral
attack on the SERB decision. The unfair labor practice charge details the pension pick-
up dispute and the FOP stated in the charge that the City’s refusal to sign the collective
bargaining agreement was a failure to negotiate in good faith and is an unfair labor
practice in violation of R.C. 4117.11(A)(1) & (5). Further, in the dismissal of the unfair
labor practice charge, SERB characterized FOP’s charge as an allegation that the City
violated R.C. 4117.11(A)(1) and (5) “by failing to provide a 5% pension pickup that the
employees in a different union are receiving.” SERB found there was no probable cause
to believe the City violated R.C. 4117.11 and dismissed the charge with prejudice. The
Tuscarawas County, Case No. 2018 AP 01 0002 13
FOP now attempts to arbitrate the same claim as they made in the ULP case, whether
the City was required to execute the CBA with the pension pick-up language. We find
such an arbitration is an improper collateral attack on SERB’s determination there was
no probable cause to believe the City violated R.C. 4117.11 by failing to provide the 5%
pension pick-up.
{¶34} Further, the Ohio Supreme Court has also held that, “an action in
mandamus is the appropriate remedy to obtain judicial review of orders by the State
Employment Relations Board dismissing unfair labor practice charges for lack of probable
cause.” State ex rel. Service Employees Internat’l Union, District 925 v. State
Employment Relations Board, 81 Ohio St.3d 173, 1998-Ohio-463, 689 N.E.2d 962; State
ex rel. Ohio Dept. of Mental Health v. Nadel, 98 Ohio St.3d 405, 2003-Ohio-1632, 786
N.E.2d 49 (2003) (holding when the appellant failed to file a writ of mandamus to
challenge SERB’s dismissal of his unfair labor practice charge, the common pleas court
does not have jurisdiction over appellant’s motion to vacate arbitration award). In this
case, if the FOP sought judicial review of SERB’s dismissal of their claim that the City
refused to execute the collective bargaining agreement and refused to negotiate in good
faith when it informed the FOP the City was not required to pay any portion of the
employees’ contribution to the pension system, the proper avenue to do so was an action
in mandamus after the January 28, 2016 dismissal of the unfair labor practice charge.
{¶35} The FOP also argues that the presumption in favor of arbitration compels
arbitration in this case. The Supreme Court of Ohio has recognized Ohio’s public policy
favoring arbitration. Taylor Bldg. Corp. of America v. Benfield, 117 Ohio St.3d 352, 884
N.E.2d 12 (2008). However, arbitration is a matter of contract and, despite the strong
Tuscarawas County, Case No. 2018 AP 01 0002 14
policy in its favor, a party cannot be compelled to arbitrate any dispute that he has not
agreed to submit. Grady v. Winchester Place Nursing & Rehab. Center, 5th Dist. Fairfield
No. 08 CA 59, 2009-Ohio-3660; Neofores v. Branddirect Marketing, Inc., 5th Dist.
Richland No. 02-CA-0012, 2002-Ohio-4841; Council of Smaller Enterprises v. Gates,
McDonald & Co., 80 Ohio St.3d 661, 687 N.E.2d 1352 (1998).
{¶36} As discussed above, while the parties agreed to arbitration as part of the
grievance procedure when a dispute involves interpretation of the specific provisions of
the CBA, the parties did not agree to arbitrate their disputes during contract negotiations
and contract formation. Article 5 of the CBA defines “grievance” as “any alleged violation,
including disciplinary matters, of this Agreement or any dispute with respect to its meaning
or application.” Article 5 presupposes that the terms and conditions of the CBA have
been established and compels arbitration on an alleged violation of the CBA, on what the
provisions mean, and on whether the provisions apply in a certain circumstance. In this
case, the terms and conditions of the CBA have not been established, as evidenced by
the multiple drafts drafted by Choate after the fact-finder’s recommendations.
{¶37} The FOP also contends the City is attempting to make the trial court rule on
the potential merits of their underlying claims, in violation of the trial court’s duty pursuant
to Chapter 2711 on arbitration. We disagree. While a court may not rule on the potential
merits of an underlying claim when deciding whether the parties have agreed to submit a
particular claim to arbitration pursuant to Council of Smaller Enterprises v. Gates,
McDonald & Co., 80 Ohio St.3d 661, 687 N.E.2d 1352 (1998), “an analysis of whether a
dispute falls within the scope of an arbitration agreement should logically follow the initial
determination whether the parties ever entered into an agreement in the first place.”
Tuscarawas County, Case No. 2018 AP 01 0002 15
Trinity Health System v. MDX Corp., 180 Ohio App.3d 815, 2009-Ohio-417, 907 N.E.2d
746 (7th Dist.); Mason v. Mason, 5th Dist. Stark No. 2016CA00208, 2017-Ohio-5787. In
this case, the decision as to whether to grant or deny the motion to compel and the
decision as to whether dismiss or not dismiss the complaint comes directly from the
analysis of whether the dispute falls within the scope of the arbitration agreement in Article
5.
{¶38} Based on the foregoing, appellant’s assignments of error are sustained.
{¶39} The judgment entry of the Tuscarawas Court of Common Pleas is reversed,
and the FOP’s complaint to compel arbitration is dismissed.
By Gwin, P.J.,
Hoffman, J., and
Wise, Earle, J., concur