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Nature of Suit Code: 720
Nature of Suit: Labor Management Relations Act
Cause of Action: 

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued October 11, 1996 Decided November 12, 1996

No. 96-7101

KENAMERICAN RESOURCES, INC., ET AL.,

APPELLANTS 

v.

INTERNATIONAL UNION, UNITED MINE WORKERS OF AMERICA,

APPELLEE

Appeal from the United States District Court

for the District of Columbia

(95cv2252)

John G. Roberts, Jr. argued the cause for appellants, with whom Daniel Francis Attridge, Donald

G. Kempf, Jr., John Stiles Irving, Jr., Gary W. Brown, and Jonathan Saul Franklin were on the

briefs.

John R. Mooney argued the cause for appellee, with whom Grant F. Crandall was on the brief.

Robert H. Stropp, Jr. entered an appearance.

Harold P. Coxson, Maurice Baskin, Rosemary M. Collyer, and Mark E. Baker were on the joint brief

for amici curiae National Association of Manufacturers, et al.

Jonathan Hiatt and Kathy L. Krieger were on the brief for amicus curiae American Federation of

Labor and Congress of Industrial Organizations.

Before: SILBERMAN, GINSBURG, and ROGERS, Circuit Judges.

Opinion for the Court filed by Circuit Judge SILBERMAN.

SILBERMAN, Circuit Judge: Appellants are the parent and subsidiary corporations of two

groups of coal companiesthe unionized Ohio Valley companies and the nonunion KenAmerican

companiesand Robert Murray, the individual who owns the stock of each group's parent

corporation, but, for the purpose of clarity, we use appellants to refer only to the KenAmerican

companies andMurrayindividually. The district court granted summary judgment to the International

Union, United Mine Workers of America (the Union), enforcing an arbitrator's award requiring a

KenAmerican company, pursuant to anagreement betweentheUnionand theOhio Valleycompanies,

to hire displaced workersfroman Ohio Valley company. Since the district court incorrectly deferred

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to the arbitrator on the issue of whether Murray and the KenAmerican companies had agreed to

arbitrate this dispute, and since Murray and the KenAmerican companies are not bound by the

agreement between the Union and the Ohio Valley companies, we reverse.

I.

Robert Murraywhollyowns, and serves asthe President andCEO of, Ohio ValleyResources,

Inc. and Coal Resources, Inc. Ohio Valley Resources is the parent company of the three other Ohio

Valley companies, including Ohio Valley Coal Company; employees of the Ohio Valley companies

are represented bythe Union. CoalResources is the parent company of the seven other KenAmerican

companies, including KenAmerican Resources, Inc. (KRI). KenAmerican employees are not

members of the Union.

In 1993, the Union and the Bituminous Coal Operators Association, Inc. (the Association),

a multi-employer bargaining group which does not include the Ohio Valley companies, after a long

strike, and with the aid of the noted mediator William J. Usery, reached an agreement (the

Association Agreement). One of the issues on which the negotiations focused was the proclivity of

some companies to operate both union and nonunion mines, the latter allegedly to avoid the

obligations of past collective bargaining agreements. Accordingly, the Association Agreement

included a Memorandum of Understanding Regarding Job Opportunities(MOU). Under the MOU,

each signatory was to sign as a limited agent of its nonsignatory parent and its nonsignatory

subsidiaries, thereby obliging those nonunion members of a family corporate structure to offer three

out of every five new classified job openings to qualified laid-off or active miners from the signatory

company's bargaining unit. This obligation applied to new coal mining operations opened after

execution of the Association Agreement. The MOU authorized the Chairman of the Association

Agreement's Labor Management Policy Committeewho, it turns out, is Mr. Useryto arbitrate

disputes alleging a breach of the MOU.

The Ohio Valley companies, through their President Murray, prior to the Union's strike

against the Association,signed a "me too" agreement with the Union obliging the companiesto adopt

the agreement that came out of the industry-wide negotiations. Subsequent to the execution of the

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Association Agreement, KRI was incorporated as a subsidiary of Coal Resources to construct and

operate a mine, Paradise No. 11, in Kentucky; it did not offer jobs to Union workers in Ohio Valley

companies, prompting the Union to contend that KRI failed to perform its obligations under the

MOU. The Union initiated arbitration proceedings against all of the Ohio Valley and KenAmerican

companies. The KenAmerican companies claimed they were not covered by the MOU and therefore

were not bound to arbitrate the dispute because although the Ohio Valley companies had agreed to

be bound to the Association Agreement, they did so in a fashion that limited their obligation so as not

to extend to the KenAmerican companies. The arbitrator ruled otherwise; he determined that

Murray, who signed the several agreements which we examine below as the President of the Ohio

Valley companies, was himself a "parent" within the meaning of the MOU and therefore all of his

companies were covered by the MOU. Accordingly, the arbitrator ordered Murray and the

KenAmerican companiesto ensure that three out of five new and existing classified jobs at KRI were

filled with workers from Ohio Valley Coal.

Appellantssued the Union in district court, challenging the arbitration award on groundsthat

they had never agreed to arbitrate and that, in any event, the MOU is illegal under § 8(e) of the

National Labor Relations Act (a "hot cargo" agreement). See 29 U.S.C. § 158(e) (1994). On cross

motions for summary judgment, the district court granted summary judgment to the Union.

II.

Appellants put two main arguments to us; first, that they never agreed at all to the

MOUonly the Ohio Valley companies were bound by itand therefore they did not agree to

arbitrate disputes as to its interpretation. They assert that the district judge erroneously deferred to

the arbitrator on the issue of arbitrability. Second, the Association Agreement, as interpreted by the

arbitrator, may not be enforced because it violates § 8(e) of the National Labor Relations Act. They

contend that the Agreement is not one designed to preserve bargaining unit work but rather to reach

out and affect the labor relations of a neutral employer, and that the KenAmerican companies are

"neutrals," as § 8(e) has been interpreted, with regard to the Union's dispute with the Ohio Valley

companies. The Union, of course, counters both arguments, but it includes an alternative claim

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1 Appellants do not explicitly contend that any interpretation of the agreements that would lead

to damages against Ohio Valley and Murray would still be a violation of § 8(e), but it would

appear that their same arguments would apply. 

against the Ohio Valley companies and Murray. The Union argues that if we determine that

appellants never agreed to arbitrate, the Ohio Valley companies and Murray are liable in damages and

therefore, presumably, the case should be sent back to the arbitrator to affix such damages.1

We take up first, as we must, the question of arbitrability. It is now settled that a federal court

must decide de novo whether the parties agreed to arbitrate a particular dispute, unless the parties

unmistakably indicate that arbitrabilityissues are to be decided by an arbitrator. AT&T Technologies,

Inc. v. Communications Workers of America, 475 U.S. 643, 649 (1986). This is particularly true

where one party deniesthat it has ever agreed to the collective bargaining agreement. In such a case,

" "the analysis is a simple one; if the parties disagree as to whether they ever entered into any

arbitration agreement at all, the court must resolve that dispute.' " National R.R. Passenger Corp.

v. Boston & Maine Corp., 850 F.2d 756, 761 (D.C. Cir. 1988) (quoting Brotherhood of Teamsters

and Auto Truck Drivers Local No. 70 v. Interstate Distributor Co., 832 F.2d 507, 510 (9th Cir.

1987)); see A.T. Massey Coal Co., Inc. v. International Union, United Mine Workers of America,

799 F.2d 142, 146 (4th Cir. 1986), cert. denied, 481 U.S. 1033 (1987). In so doing, we may not

afford any deference at all to the arbitrator's view on that issue. Although the Union points to the

ample body of law that calls for wide deference to an arbitrator's interpretation of a collective

bargaining agreement on the merits, it does not really contest appellants' main argumentthat we

must decide the arbitrability question without regard to the arbitrator's viewsnor did the district

judge; indeed, he explicitly recognized his duty. But he determined that "the Ohio Valley companies

"clearly and unmistakably' agreed to submit to binding arbitration any dispute growing out of the

1993 [Association Agreement] and the ... MOU." Then having decided, in his view, the issue of

arbitrability, he went on to afford "great deference" to the arbitrator's interpretation of the MOU,

including the arbitrator's definition of the word "parent," which, again in his view, extended the

MOU's obligations to appellants.

We think the district court'sreasoning isflawed. That the Ohio Valley companies were bound

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2 A federal court interpreting a collective bargaining agreement applies federal common law of

contracts, Textile Workers v. Lincoln Mills, 353 U.S. 448, 451 (1957), but there is no dispute

between the parties as to the principles of contract law that govern. 

by the MOU and therefore agreed to arbitrate disputes asto its meaning decidedly does not mean that

the KenAmerican companies and Murray were similarly bound. And the question whether the latter

were or were not bound is the arbitrability issue in this case. See AT&T Technologies, 475 U.S. at

648. If appellants never agreed to the MOU, they can hardly be thought to have agreed to arbitrate

disputes as to its meaning. The district court thus did, as appellants argue, erroneously defer to the

arbitrator on the core aspect of the arbitrability issue.

* * * *

Whether appellants agreed to be bound by the MOU, under ordinary contract law, turns on

a careful examination ofthe agreements Murraysigned on behalf ofthe Ohio Valleycompanies; there

are no material disputes offact, and therefore no reason to remand the arbitrability issue to the district

court.2 The Union argues that these agreements, fairly read, indicate that the Ohio Valley companies

as agents bound Murray (and therebyKRI) asthe principal. But if, as we conclude, those agreements

never purported to cover the KenAmerican companies or Murray personally, then it cannot be said

that appellants were obliged to arbitrate this dispute.

The key document isthe "me too" agreement signed in early 1993, which hastwo parts: one

called an interim agreement, and the other, somewhat confusingly, also called a memorandum of

understanding (which we shall refer to as the "memo"). The memo was quite specific as to what

Murray, in behalf of the Ohio Valley companies, was agreeing to put under the eventual Association

Agreement. It stated that the product of the Association's negotiations with the Union would cover

"the current and future coal lands and operations of the [Ohio Valley companies]," which were

identified in fine detail phrased in metes and bounds (including maps). The "me too" agreement thus

covered the holdings of the Ohio Valley companies onlyincluding, rather pointedly, past holdings

of Coal Resources that had been actually transferred to the Ohio Valley companies. Nowhere does

the memo even suggest that the agreements apply to other companies; indeed, its very precise

delineation of what it does cover necessarily implies that it does not reach anything else. We do not

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see how it can be thought, then, that Murray personally or the KenAmerican companies agreed in the

"me too" agreement to be bound by it and therefore the Association Agreement.

The Union contends that even if the "me too" agreement limited the prospective coverage of

the Association Agreement, as appellants argue, it was only because neither party anticipated that the

multi-employer bargaining would result in the broad-reaching MOU, which, as interpreted by Mr.

Usery, could reach an individual as a parent. Implicitly, then, the Union is arguing that Ohio Valley's

subsequent adoption of the Association Agreement modified and broadened the coverage terms set

forth in the "me too" agreement. But we find no support for this claim which is, in effect, an

argument that the parties agreed to a novation.

As required by the "me too" agreement, the Union forwarded form adoption pages relating

to the Association Agreement to Murray. These pages indicated that the signatories were agreeing

to "each and every term" of the Association Agreement, "including Memoranda of Understanding,

attached hereto." But Murray signed in his capacity as President and CEO of each of the Ohio Valley

companies, and modified the pages before he signed to provide that the adoption agreement also

incorporated "the 1993 Memorandum of Understanding" (the memo portion of the "me too"

agreement). He even noted in the letter returning the modified pages to the Union that the "me too"

agreement "is a part of the [Association Agreement] for our companies and, indeed ... supersedes ...

the [Association Agreement] in a few instances." The Union agreed to the modified signature pages.

The Union subsequently sent the all-important MOU itself to the Ohio Valley companies to be

executed. Murray, again in his capacity as President and CEO of each Ohio Valley company, signed

the MOU but modified it to provide that Ohio Valley Resources was signing as the limited agent of

no company; that the subsidiary Ohio Valley companies were signing as the limited agent of Ohio

Valley Resources alone; and that the Ohio Valley companies were not binding any nonsignatory

companies to the MOU. (The Union never signed that document.)

It appears then that Murray was quite careful to avoid agreeing to expand the anticipatory

coverage he had agreed to in the "me too" agreement. By contrast, the Union concurred in and

signed his modification of the adoption agreement, which explicitly referred back to the "me too"

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3 Our opinion, of course, has no bearing on the arbitrator's interpretation of the word "parent"

in the MOU as it relates to other signatories of that agreement. It is worth noting that the

interests of members of the Association may well be quite different than the Ohio Valley

companies. The former might be sympathetic to the arbitrator's decision applying the MOU to

Murray personally. 

agreement. We therefore think that it is rather plain that neither Murray personally nor KRI were

ever covered by the MOU. This case differs importantly from Bituminous Coal Operators' Ass'n,

Inc. v. Connors, 867 F.2d 625 (D.C. Cir. 1989), relied upon by the Union. In Connors, we held that

the intent of a party that had agreed via a "me too" agreement to be bound by a national agreement

was irrelevant in construing a term in the national agreement. Id. at 634-35. Here, however, the

intent of the partiesas evidenced by the "me too" agreementis not being used to construe a term

in the MOU, but to determine which parties actually agreed to be bound by the MOU. Appellants

did not sign an open-ended "me too" agreement as in Connors, but instead specifically limited the

coverage of the Association Agreement.3

* * * *

It will be recalled that the Union presented an alternative claim for damages against the Ohio

Valley companies in the event we were to determine that KRI and Murray were not bound by the

MOU. Although the theory of the claim is not precisely set forth, as we understand the Union's

agreement, it is based on the notion that Ohio Valley accepted an obligationto "deliver" the

KenAmerican companies and Murray personallywhich it did not perform. One could conceive of

a case where such a theory of liability would be available and therefore a remand would be

appropriateif, for instance, an agent purported to bind a principal without having authoritybut

that is not open here. The Union's sole claim, indeed, the only claim that is possible, is that Murray,

as President of Ohio Valley companies, bound the KenAmerican companies and himselfto the MOU.

Once we conclude, as we do, that Murray did not purport to bind appellants, indeed he carefully

avoided binding them, there is no possibility of a claim for damages; that claim is precluded by our

holding on the arbitrability issue. It is therefore unnecessary for us to remand the case, and, of

course, it is also unnecessary to consider whether the arbitrator'sinterpretation of the MOU violates

§ 8(e) of the NLRA.

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Accordingly, we reverse the district court's grant ofsummaryjudgment to theUnion and grant

summary judgment to appellants.

So ordered.

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