Jim Walter Resources, Inc. v. United Mine Workers of America, Internationial Union

[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
DECEMBER 6, 2011
No. 10-10486
JOHN LEY
________________________
CLERK
D.C. Docket No. 7:08-cv-02033-LSC
JIM WALTER RESOURCES, INC.,
Plaintiff-Appellant,
versus
UNITED MINE WORKERS OF AMERICA, INTERNATIONAL
UNION, UNITED MINE WORKERS OF AMERICA, LOCAL 2397,
UNITED MINE WORKERS OF AMERICA, LOCAL 2245,
UNITED MINE WORKERS OF AMERICA, LOCAL 2368,
UNITED MINE WORKERS OF AMERICA, LOCAL 2427,
Defendants-Appellees.
________________________
Appeal from the United States District Court
for the Northern District of Alabama
_________________________
(December 6, 2011)
Before EDMONDSON and MARTIN, Circuit Judges, and HODGES,* District
Judge.
*Honorable Wm. Terrell Hodges, U. S. District Judge for the Middle District of Florida,
sitting by designation
Hodges, District Judge
This appeal presents an issue concerning the interpretation and application
of a collective bargaining agreement between Jim Walter Resources, Inc. (“Jim
Walter”), and the United Mine Workers of America (the “Union”).
Jim Walter sued the Union in the district court for damages caused by a
work stoppage conducted by the Union in alleged violation of the collective
bargaining agreement.1 The district court entered summary judgment without
reaching the merits holding that the dispute was subject to arbitration under the
contract. Jim Walter appealed. We reverse and remand for further proceedings in
the district court.2
I
The facts as found by the district court for purposes of deciding the motion
for summary judgment are these.
Jim Walter owns and operates coal mining properties and supporting
facilities in Tuscaloosa County, Alabama. The United Mine Workers, and its four
local unions involved in this case, represent Jim Walter’s mining employees for
1
The action was brought under Section 301 of the Labor Management Relations
Act, 29 U.S.C. § 185. There is no issue concerning the jurisdiction of the district court to
entertain the case.
2
“This Court reviews de novo summary judgment rulings and draws all inferences
and reviews all evidence in the light most favorable to the non-moving party.” Moton v. Cowart
631 F.3d 1337, 1341 (11th Cir. 2011) (citing Capone v. Aetna Life Ins. Co., 592 F.3d 1189, 1194
(11th Cir. 2010)). See also WSB-TV v. Lee, 842 F.2d 1266, 1270 (11th Cir. 1988).
2
purposes of collective bargaining concerning the miner’s terms and conditions of
employment. The current labor agreement between the parties became effective
on January 1, 2007, and does not expire until December 31, 2011. One of the
provisions of that agreement states: “The International Union, United Mine
Workers of America, may designate memorial periods not exceeding a total of ten
(10) days during the term of this Agreement at any mine or operation provided it
shall give reasonable notice to the Employer.” In addition to the primary
collective bargaining agreement, the parties also entered into a separate
Memorandum of Understanding. One of its provisions deals with memorial
periods and states, among other things, that: “The memorial period will be
designated for legitimate reasons.”3
On October 14, 2008, Local 2379 and its members observed a memorial
period away from work at Jim Walter’s No. 7 Mine; and on October 28, 2008, all
four of the defendant Local Unions took a memorial period absence from work at
each of their respective Jim Walter mines. Jim Walter claims that these work
stoppages were not “legitimate” memorial periods as required by the memorandum
of understanding. The Union counters that the memorial periods were properly
designated in order to allow its members to attend local hearings being conducted
3
The record does not contain any additional contract documentation providing a
definition of the terms “memorial period” or “legitimate reasons,” but that involves the merits of
the underlying dispute which the district court did not reach. Neither do we.
3
by the Department of Labor, Mine Safety and Health Administration. Jim Walter
responds that the proffered justification is pretextual – that the real motivation for
the work stoppages was a work place dispute at Mine No. 7 concerning work
scheduling and other conflicts with the company’s Industrial Relations
Supervisor.4
II
The district court granted a motion for summary judgment filed by the
Union seeking, in effect, to compel arbitration of Jim Walter’s claim for damages.
The governing provisions of the collective bargaining agreement are these:
Article XXVII - MAINTAIN INTEGRITY OF
CONTRACT AND RESORT TO COURTS
The United Mine Workers of America and the
Employers agree and affirm that, except as provided
herein, they will maintain the integrity of this contract
and that all disputes and claims which are not settled by
agreement shall be settled by the machinery provided in
the “Settlement of Disputes” Article of this Agreement
unless national in character in which event the parties
shall settle such disputes by free collective bargaining as
heretofore practiced in the industry, it being the purpose
of this provision to provide for the settlement of all such
4
Jim Walter’s complaint in the district court prayed for (1) “a declaratory judgment
that defendants are subject to the Labor Agreement and that the dispute between the parties is
subject to the [contractual] arbitration procedure”; and (2) an award of damages “for these illegal
work stoppages.” It is an irony of the case that Jim Walter depends upon the arbitration
provisions of the contract from which to infer a no strike obligation on the part of the Union (i.e.,
that the employees at Mine No. 7 should have grieved and sought arbitration of their disputes)
while contending that the Company has no reciprocal contractual obligation to arbitrate its claim
for damages.
4
disputes and claims through the machinery in this
contract and by collective bargaining without recourse to
the courts.
The Employer, however, expressly authorizes the
Union to seek judicial relief, without exhausting the
grievance machinery, in cases involving successorship.
(Emphasis supplied).
* * * *
Article XXIII - - SETTLEMENT OF DISPUTES
Section (a) Mine Committee
[creates a committee of employees to
participate in step two of the Grievance
Procedure below]
Section (b) District Arbitrators
[creates a panel of arbitrators to participate
in step four of the Grievance Procedure
below]
Section (c) Grievance Procedure
Should Differences arise between the Mine
Workers and an Employer as to the meaning and
application of the provisions of this Agreement, or
should differences arise about matters not specifically
mentioned in this Agreement, or should any local trouble
of any kind arise at the mine, an earnest effort shall be
made to settle such differences at the earliest practicable
time.
Disputes arising under this Agreement shall be
resolved as follows:
(1) The Employee will make his complaint to
his immediate foreman who shall have the authority to
settle the matter. The foreman will notify the Employee
5
of his decision within 24 hours following the day when
the complaint is made. . . .
(2) If no agreement is reached between the
Employee and his foreman the complaint shall be
submitted to the BCOA-UMWA Standard Grievance
Form and shall be taken up within five working days of
the foreman’s decision by the Mine Committee and mine
management. . . . [I]f the complaint is not settled, the
grievance shall be referred to a representative of the
UMWA district, designated by the Union, and a
representative of the Employer.
(3) Within seven working days of the time the
grievance is referred to them, the district representative
and the representative of the Employer shall meet and
review the facts and pertinent contract provisions in an
effort to reach agreement. . . .
(4) In cases where the district representative
and the representative of the Employer fail to reach
agreement, the matter shall, within 10 calendar days after
referral to them, be referred to the appropriate district
arbitrator who shall decide the case without delay. . . .
III
The Union argues, as the district court determined, that Jim Walter’s claim
for damages is subject to arbitration because Article XXVII of the collective
bargaining agreement declares a dominant, mutual intention to resolve “all
disputes and claims . . . without recourse to the courts.” Nothing in Article XXVII
mentions arbitration.
Jim Walter concedes that contractual commitment – as it must – but asserts
that the phrase “all disputes and claims” is expressly limited to those disputes that
6
can “be settled by the machinery provided in the ‘Settlement of Disputes’ Article”
of the agreement, and that Article XXIII governing Settlement of Disputes is
exclusively employee oriented. The contract does not contemplate or provide for
any claim or grievance, or the arbitration of any claim or grievance, asserted by the
employer.
Other provisions in the contract discuss arbitration, but all of these other
provisions contemplate disputes originating from employee complaints; all of
these other provisions refer to the employee oriented grievance procedures in
Article XXIII(c). Article XXIII(b) (when selecting arbitrators, arbitration will
proceed through procedures outlined in Article XXIII(c)); Article XXII(s)(3)
(disputes about employer’s application of employee bonus plans, if arbitrated,
must go through procedures in Article XXIII(c)); Article XXIV(d) (if the union
believes there was no just cause for discharge, it can bypass the grievance
procedure in Article XXIII(c) and arbitrate immediately).
The issue presented is not a novel one. It has received attention from the
Supreme Court and several of the Circuits including, as will be seen, this Circuit
as well.
IV
7
Analysis of the relevant Supreme Court decisions must begin with the
Steelworkers Trilogy, decided in 1960. United Steelworkers of America v.
American Mfg. Co., 363 U.S. 564, 80 S. Ct. 1343 (1960); United Steelworkers of
America v. Warrior & Gulf Nav. Co., 363 U.S. 574, 80 S. Ct. 1347 (1960); United
Steelworkers of America v. Enterprise Wheel & Car Corp., 363 U.S. 593, 80 S. Ct.
1358 (1960). The Trilogy established several basic axioms governing the
application of provisions for arbitration contained in collective bargaining
agreements. These principles were later synthesized and reiterated by the Court in
AT&T Tech., Inc. v. Communications Workers of America, 475 U.S. 643, 648-
650, 106 S. Ct. 1415, 1418-1419 (1986):
The first principle gleaned from the Trilogy is that
“arbitration is a matter of contract and a party cannot be
required to submit to arbitration any dispute which he
has not agreed so to submit.” Warrior & Gulf, supra,
363 U.S., at 582, 80 S. Ct., at 1353; American Mfg. Co.,
supra, 363 U.S., at 570-571, 80 S. Ct., at 1364-1365. . . .
* * * *
The second rule, which follows inexorably from
the first, is that the question of arbitrability–whether a
collective-bargaining agreement creates a duty for the
parties to arbitrate the particular grievance–is undeniably
an issue for judicial determination. Unless the parties
clearly and unmistakably provide otherwise, the question
of whether the parties agreed to arbitrate is to be decided
by the court, not the arbitrator. Warrior & Gulf, supra,
363 U.S., at 582-583, 80 S. Ct., at 1352-1353.
* * * *
8
The third principle derived from our prior cases is
that, in deciding whether the parties have agreed to
submit a particular grievance to arbitration, a court is not
to rule on the potential merits of the underlying claims.
Whether “arguable” or not, indeed even if it appears to
the court to be frivolous, the union’s claim that the
employer has violated the collective-bargaining
agreement is to be decided, not by the court asked to
order arbitration, but as the parties have agreed, by the
arbitrator.
* * * *
Finally, it has been established that where the
contract contains an arbitration clause, there is a
presumption of arbitrability in the sense that “[a]n order
to arbitrate the particular grievance should not be denied
unless it may be said with positive assurance that the
arbitration clause is not susceptible of an interpretation
that covers the asserted dispute. Doubts should be
resolved in favor of coverage.” Warrior & Gulf, 363
U.S., at 582-583, 80 S. Ct., at 1352-1353.
In 1962, two years after the Trilogy, the Supreme Court decided two
additional cases on the same day. Atkinson v. Sinclair Ref. Co., 370 U.S. 238, 82
S. Ct. 1318 (1962), and Drake Bakeries, Inc. v. Local 50, American Bakery &
Confectionery Workers Int’l, 370 U.S. 254, 82 S. Ct. 1346 (1962). In both cases an
employer had sued the union representing its employees asserting a claim for
damages, as in this case, for an alleged violation of the no strike clause in their
respective collective bargaining agreements. The contracts in both cases
contained provisions for arbitration of unresolved disputes. In Drake Bakeries the
9
Court held that the employer’s claim for damages was arbitrable, while in
Atkinson the Court held that it was not. Both opinions (by Justice White) focused
upon the different terms of the two contracts. Specifically, the contract in
Atkinson contained a multiple step grievance procedure, very much like the one in
this case, that was keyed exclusively to the processing of employee grievances.
See 370 U.S. at 249, 82 S.Ct. at 1325-27, Appendix. There was no mention of the
submission of grievances by the company. Arbitration of the employer’s claim
was not required. By contrast, in Drake Bakeries, the contractual grievance
procedure expressly contemplated both union and employer initiated grievances
culminating in arbitration.5 The employer’s claim was held to be arbitrable.
5
See Drake Bakeries, 370 U.S. at 257, n. 2, 82 S. Ct. at 1348 n. 2:
Article V-Grievance Procedure (a) The parties agree that they will
promptly attempt to adjust all complaints, disputes or grievances
arising between them involving questions of interpretation or
application of any clause or matter covered by this contract or any
act or conduct or relation between the parties hereto, directly or
indirectly. In the adjustment of such matters the Union shall be
represented in the first instance by the duly designated committee
and the Shop Chairman and the Employer shall be represented by
the Shop Management. It is agreed that in the handling of
grievances there shall be no interference with the conduct of the
business. (b) If the Committee and the Shop Management are
unable to effect an adjustment, then the issue involved shall be
submitted in writing by the party claiming to be aggrieved to the
other party. The matter shall then be taken up for adjustment
between the Union and the Plant Manager or other representative
designated by management for the purpose. If no mutually
satisfactory adjustment is reached by this means, or in any event
within seven (7) days after the submission of the issue in writing as
provided above, then either party shall have the right to refer the
matter to arbitration as herein provided.
10
The former Fifth Circuit twice considered the very issue presented here.
Firestone Tire & Rubber Co. v. International Union of United Rubber, Cork,
Linoleum & Plastic Workers of America, 476 F.2d 603 (5th Cir. 1973), and
Friedrich v. Local Union No. 780, IUE-AFL-CIO-CLC, 515 F.2d 225 (5th Cir.
1975).6 In both cases the Court held, citing Atkinson among other authorities,7
that the employer was not bound to arbitrate a claim for damages flowing from an
alleged breach of a no strike clause where “the contractual grievance machinery is
wholly employee oriented.” Firestone Tire & Rubber Co., 476 F.2d at 605;
Friedrich, 515 F.2d at 227, 230.
In addition to the former Fifth Circuit decisions in Friedrich and Firestone
Tire and Rubber Company, the courts of appeals in the First, Third, Seventh and
Ninth Circuits have reached the same result when interpreting collective
bargaining agreements containing employee oriented grievance and arbitration
clauses. See G. T. Schjeldahl Co. (1st Cir.) and Boeing Company (3rd Cir.), supra
n.7; Latas Libby’s Inc. v. United Steelworkers of America, 609 F.2d 25 (1st Cir.
1979); Lehigh Portland Cement Co. v. Cement, Lime, Gypsum, & Allied Workers
6
The Eleventh Circuit has adopted as binding precedent all of the decisions of the
former Fifth Circuit handed down prior to September 30, 1981. Bonner v. City of Prichard, 661
F.2d 1206, 1209 (11th Cir. 1981) (en banc).
7
Both opinions cited with approval the First Circuit decision in G. T. Schjeldahl
Co. v. Local Lodge 1680, Int’l Ass’n of Machinists, 393 F.2d 502 (1st Cir. 1968), and the Third
Circuit decision in Boeing Company v. International Union, United Automobile, Aerospace &
Agricultural Implement Workers of America, 370 F.2d 969 (3rd Cir. 1967).
11
Div., 849 F.2d 820 (3rd Cir. 1988); Faultless Div. v. Local Lodge No. 2040 of
District 153 Int’l Ass’n of Machinists & Aerospace Workers, 513 F.2d 987 (7th
Cir. 1975); Standard Concrete Prods., Inc. v. General Truck Drivers, Office, Food
& Warehouse Union, 353 F.3d 668 (9th Cir. 2003).
Other decisions in the Second, Third and Fourth Circuits are, arguably, to
the contrary. ITT World Communications, Inc. v. Communications Workers of
America, 422 F.2d 77 (2d Cir. 1970); Eberle Tanning Co. v. Section 63L, FLM
Joint Board, Allegheny Div., United Food & Commercial Workers, 682 F.2d 430
(3rd Cir. 1982); Domino Sugar Corp. v. Sugar Workers Local Union 392, 10 F.3d
1064 (4th Cir. 1993); H K. Porter Co., Inc. v. Local 37, United Steelworkers of
America, 400 F.2d 691 (4th Cir. 1968). In those cases, the courts tended to apply a
presumption of arbitrability where, as in this case, there was a generally expressed
contractual commitment to arbitrate disputes, and the opinions placed no weight
upon the limiting effect of employee oriented grievance mechanisms. Rather,
those cases say, if the parties had intended to exclude employer initiated claims
from arbitration, they could and should have said so.
Thus, in finding Jim Walter’s claim to be arbitrable in this instance, the
district court relied upon the reasoning of the Second Circuit decision in ITT
World Communications, a case involving very similar contractual provisions.8
8
The district court cited, but did not undertake to distinguish, the former Fifth
12
There the Second Circuit emphasized the principle derived from Warrior & Gulf
that an order to arbitrate a labor contract dispute “should not be denied unless it
may be said with positive assurance that the arbitration clause is not susceptible of
an interpretation that covers the asserted dispute. Doubts should be resolved in
favor of coverage.” 422 F.2d at 81 (quoting Warrior & Gulf, 363 U.S. at 582-583,
80 S. Ct. at 1353). The Second Circuit then said:
We certainly cannot say ‘with positive assurance’
that Article VI ‘is not susceptible of an interpretation that
covers’ employer, as well as employee, claims of
contract violation. In addition to what we have already
noted, we point out that the parties elsewhere in the
contract showed that they knew how to clearly exclude a
subject from arbitration when they so desired. Had the
parties wanted to do the same with claims of violation of
the ‘no-strike’ clause, they could easily have been
equally specific. The importance of clear exclusionary
language to negate a presumption of arbitrability of a
dispute about a no-strike clause was emphasized by the
Supreme Court in Drake Bakeries supra, 370 U.S. at
258-259, 82 S. Ct at 1349 (1962). . . .
422 F.2d at 81-82.
The Second Circuit approach, however, following the same rationale of the
compatible decisions in the Third and Fourth Circuits previously cited, has
recently been the subject of critical comment by the Supreme Court in Granite
Circuit decision in Friedrich.
13
Rock Company v. International Brotherhood of Teamsters, U.S. , 130
S. Ct. 2847, 2859, n. 8 (2010):9
Although Warrior & Gulf contains language that might
in isolation be misconstrued as establishing a
presumption that labor disputes are arbitrable whenever
they are not expressly excluded from an arbitration
clause, 363 U.S., at 578-582, 80 S. Ct. 1347, the opinion
elsewhere emphasizes that even in LMRA cases,
“courts” must construe arbitration clauses because “a
party cannot be required to submit to arbitration any
dispute which he has not agreed so to submit.” Id., at
582, 80 S. Ct. 1347 (applying this rule and finding the
dispute at issue arbitrable only after determining that the
parties’ arbitration clause could be construed under
standard principles of contract interpretation to cover it).
We are not persuaded, therefore, to follow ITT World Communications, Inc.
We are guided by our Circuit’s precedents of Firestone Tire and Rubber Company,
and Friedrich, supra. The particular language in Article XXVII – encouraging
settlement of disputes through the machinery of the contract rather than through
“recourse to the courts” – is an aspiration to abide by the parts of the contract that
provide for grievance procedures, which “neither explicitly nor implicitly provide
for” arbitration and are “wholly employee oriented.” Cf. Firestone Tire & Rubber
Co., 476 F.2d at 605; Friedrich, 515 F.2d at 227. In this case, the employee
oriented grievance machinery in the parties’ contract qualifies and limits the
9
In fairness to the district court, it should be noted that Granite Rock was issued
after the district court had decided this case.
14
universe of claims and grievances subject to arbitration, and the language negates
the intention that the employer’s claim for damages must be submitted to
arbitration.
The district court’s grant of summary judgment is REVERSED and the case
is REMANDED for further proceedings consistent with this opinion.
15