Opinion ID: 3002131
Heading Depth: 2
Heading Rank: 2

Heading: Exelon’s Consent to Arbitrate Disputes

Text: Over Retiree Medical Benefits Exelon contends that it did not agree to arbitrate a grievance brought by the Union on behalf of retirees. The district court concluded otherwise. The court reasoned that because the CBA includes provisions that apply specifically to retirees, when the CBA says that disputes over its interpre- tation or application are subject to arbitration, that necessarily includes disputes over retiree rights that the CBA confers. In short, by entering into a CBA that included terms according rights to retirees as well as a broad obligation to engage in arbitration over disputes about the CBA, [Exelon] consented to arbitration of grievances brought on behalf of retirees. The court also relied on the presumption of arbitrability, requiring an express provision or forceful evidence to exclude the retiree grievance from arbitration. We have said: “[W]here the contract contains an arbitration clause, there is a presumption of arbitrability in the sense that [a]n order to arbitrate the particular No. 07-4065 9 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.” Int’l Bhd. of Elec. Workers, Local 21 v. Ill. Bell Tel. Co., 491 F.3d 685, 687-88 (7th Cir. 2007) (quoting AT&T Techs., Inc. v. Commc’ns Workers of Am., 475 U.S. 643, 650 (1986) (internal quotations omitted)). Exelon argues that Rossetto v. Pabst Brewing Co., 128 F.3d 538 (7th Cir. 1997), compels a different conclusion than that reached by the district court. The CBA in Rossetto provided for health benefits for retired employees and their dependents, id. at 538, and the CBA’s arbitration provision provided for appeal to arbitration of “all grievances . . . between the Company and its employees” that “that cannot be satisfactorily settled” by the grievance process. Id. at 539 (emphasis added). Pabst unilaterally eliminated retiree health benefits and the union filed a grievance on behalf of the affected retirees, alleging a breach of the CBA. The union also filed a civil action on behalf of all the retirees, seeking reinstatement of the terminated benefits. The union eventually appealed the grievance to arbitration, and Pabst refused to arbitrate. The district court certified a class consisting of all the retirees, their spouses, and dependents, who were represented by the union. The plaintiffs sought to compel arbitration of the union’s grievance, their motion was granted, and Pabst appealed. Id. We held that the union lacked standing to represent the retirees in arbitration 10 No. 07-4065 unless the retirees consented to the union’s representation and Pabst consented to bargain with the union as the agent of the affected retirees. Id. at 541. Exelon is correct that the mere fact that a CBA creates the retirees’ rights to medical benefits may be insufficient to establish that the company agreed to arbitrate disputes over retiree medical benefits. We know as much from Rossetto. After all, the CBA there provided for retiree health benefits, but this was insufficient by itself to support the conclusion that Pabst agreed to arbitrate retiree claims. But there is a critical distinction between the CBA in Rossetto and the one in this case: The CBA in Rossetto expressly defined an arbitrable grievance as one between Pabst and an “employee.” And retirees are not employees. Id. at 540. The CBA here, however, does not define an arbitrable grievance as one between the company and an employee. Nor does the CBA in this case expressly restrict arbitration to grievances by employees. The arbitration agreement is broader than that. The grievance procedure applies to “any dispute or difference . . . between the Company and the Union or its members as to the interpretation or application of any of the provisions of this Agreement . . . .” Exelon has agreed that a dispute exists between it and the Union regarding the interpretation and application of the retiree medical benefit provisions of the MOAs, which are part of the CBA. Exelon contends that the CBA contains specific language plainly limiting the grievance procedure to disputes brought by the Union on behalf of current employees. For example, Exelon points to the following: “It is the intent No. 07-4065 11 of the Company, Local Union 15, and the employees that timely filed grievances shall be settled promptly” (emphasis added); the deadline for filing a grievance runs from the date that the “employee became aware or reasonably should have become aware of the incident which is the basis for the grievance” (emphasis added); and “[t]he dispute or difference shall be presented and first discussed by the employee concerned and the immediate Supervisor.” (Emphasis added). None of these provisions, however, or any other provision in the CBA we might add, expressly excludes from arbitration a grievance brought by the Union on behalf of retirees. The parties could have written the CBA to exclude retiree grievances from the arbitration agreement if they had intended to, but they did not. Exelon also points to the CBA’s representation and recognition clause, which it claims demonstrates the parties’ intent that the grievance provisions apply only to current employees and not retirees. That clause recognizes the Union as the “exclusive bargaining representative for all employees in” the bargaining unit. However, it does not follow from the fact that Exelon recognizes the Union as the exclusive bargaining representative for bargaining unit employees that Exelon could never recognize the Union as the representative of retirees in arbitration. The clause does not clearly limit Exelon’s agreement to arbitrate to disputes involving only current employees. Any doubt about whether Exelon agreed to arbitrate disputes brought on behalf of retirees is resolved by application of the presumption of arbitrability. “[A]rbitra12 No. 07-4065 tion is favored and should be ordered ‘unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute.’ ” Niro v. Fearn Int’l, Inc., 827 F.2d 173, 175 (7th Cir. 1987) (quoting United Steelworkers of Am. v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582-83 (1960)). “Doubts should be resolved in favor of coverage.” Warrior & Gulf Navigation Co., 363 U.S. at 583. The presumption of arbitrability is particularly applicable where the arbitration provision is broad. United Steelworkers v. Cooper Tire & Rubber Co., 474 F.3d 271, 279 (6th Cir. 2007). Where the arbitration provision is broad, as it is here, only an “ ‘express provision excluding a particular grievance from arbitration . . . [or] the most forceful evidence of a purpose to exclude the claim from arbitration’ ” can keep the claim from arbitration. AT&T Techs., 475 U.S. at 650 (quoting Warrior & Gulf, 363 U.S. at 584-85). Several of our sister circuits have applied the presumption of arbitrability to disputes involving retirees. United Steelworkers of Am. v. Retirement Income Plan for Hourly-Rated Employees of Asarco, Inc., 512 F.3d 555, 560-61 (9th Cir. 2008) (applying presumption of arbitrability where union sought arbitration and filed a complaint to compel arbitration); Cleveland Elec. Illuminating Co. v. Util. Workers Union, 440 F.3d 809, 816 (6th Cir. 2005) (“[T]he presumption of arbitrability applies to disputes over retirees’ benefits if the parties have contracted for such benefits in their [CBA]. . . .”); United Steelworkers of Am., AFL-CIO v. Canron, Inc., 580 F.2d 77, 82 (3d Cir. 1978) (applying presumption). But see Anderson v. Alpha Portland Indus., Inc., 752 F.2d 1293, 1295-98 (8th Cir. 1985). No. 07-4065 13 We will apply the presumption of arbitrability here as well. First of all, as noted, the arbitration provision is quite broad. The grievance and arbitration procedure covers “any dispute . . . as to the interpretation or application of any of the provisions of this Agreement” and the retiree medical benefits are created by provisions of the MOAs, which have supplemented and become part of the CBA. And it was the Union rather than the retirees that filed the grievance asserting a violation of the CBA and MOAs with respect to retiree medical benefits. Furthermore as Exelon concedes, the dispute is between the Union and Exelon. And the Union may resort to its economic weapons—it also represents the bargaining unit’s interests in maintaining retiree medical benefits. These considerations counsel in favor of applying the presumption of arbitrability. See Asarco, 512 F.3d at 560-61; Cleveland Elec. Illuminating Co., 440 F.3d at 816. Moreover, the CBA contains no express provision excluding retiree grievances from the grievance and arbitration procedure. The language cited by Exelon, supra, is neither clear nor “forceful evidence” of a purpose to exclude a dispute over retiree medical benefits from the grievance and arbitration procedure. An interpretation of the arbitration language so as to include disputes between Exelon and the Union over retiree medical benefits is a reasonable one given the breadth of the grievance and arbitration procedure. And where both the Union’s and Exelon’s competing interpretations are reasonable, it cannot be said with “positive assurance” that the grievance and arbitration procedure is not suscep14 No. 07-4065 tible to an interpretation that covers the dispute over retiree medical benefits. Therefore, we find no error in the district court’s conclusion that Exelon consented to arbitrate disputes over retiree medical benefits.