Court Opinion

ID: 9499793
Source: CourtListenerOpinion
Date Created: 2023-08-05 17:57:52.131028+00
Date Added: 2024-06-11T17:59:43.918220
License: Public Domain

SYKES, Circuit Judge,
dissenting.
I respectfully dissent. The presence of an arbitration clause in a contract creates a presumption in favor of arbitration, but this means only that doubts about whether a particular dispute is covered are resolved in favor of coverage; “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.” United Steelworkers of Am. v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582, 80 S.Ct. 1347, 4 L.Ed.2d 1409 (1960); AT & T Techs., Inc. v. Commc’ns Workers of Am., 475 U.S. 643, 648-50, 106 S.Ct. 1415, 89 L.Ed.2d 648 (1986); Int’l Ass’n of Machinists & Aerospace Workers, Progressive Lodge No. 1000 v. Gen. Elec. Co., 865 F.2d 902, 904 (7th Cir.1989). The presumption of arbitrability is overcome when “it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute.” Warrior & Gulf Navigation Co., 363 U.S. at 582-83, 80 S.Ct. 1347; AT & T Techs., 475 U.S. at 650, 106 S.Ct. 1415.
The arbitration clause in the parties’ collective bargaining agreement (“CBA”) provides: “The right to invoke arbitration shall extend only to matters which involve: (A) The interpretation or application of any of the terms or provisions of this Agreement, unless excluded by specific provisions of this Agreement. (B) The discipline of an employee with six (6) or more months of Net Credited Service.” (Emphasis added.) The use of the term “only” — obviously a term of limitation— suggests a somewhat less expansive interpretation than that urged by the Union and adopted by my colleagues. The dispute at issue here is about performance guidelines, and it is arbitrable only if it involves the interpretation or application of a term or provision in the CBA, or the discipline of an employee.
The CBA contains no terms or provisions whatsoever relating to performance guidelines or standards, and this dispute concerns the performance guidelines policy itself, not the discipline of a employee pursuant to it. Nonetheless, the majority concludes that the dispute is arbitrable because it “could” involve the interpretation of the so-called “recognition” clause of the CBA. Majority op. at 689. That provision, § 1.01 of the CBA, states as follows: “The Company recognizes the Union [Local 21] as the exclusive bargaining agent for those employees of the Company in the State of Illinois ... and Lake and Porter County [sic], Indiana.”
*692On its face, the recognition clause merely specifies who — that is, which union'— shall be recognized as the employees’ bargaining agent; it does not address any substantive topics pertaining to employment terms and conditions as a general matter, much less performance guidelines in particular. Nor does it articulate any duties beyond recognition or describe the scope of bargaining. Scope of bargaining issues, and the rights and obligations arising from bargaining impasses or violations, are governed by the National Labor Relations Act, 29 U.S.C. § 158 et seq., and a well-developed body of judicial and NLRB decisional law interpreting the statutory duty to bargain collectively and in good faith. See generally NLRB v. Katz, 369 U.S. 736, 82 S.Ct. 1107, 8 L.Ed.2d 230 (1962); NLRB v. Ins. Agents’ Int’l Union, 361 U.S. 477, 498, 80 S.Ct. 419, 4 L.Ed.2d 454 (1960); NLRB v. Wooster Div. of Borg-Warner Corp., 356 U.S. 342, 78 S.Ct. 718, 2 L.Ed.2d 823 (1958); Inland Tugs v. NLRB, 918 F.2d 1299, 1307-08 (7th Cir.1990); Kankakee-Iroquois Co. Employers’ Ass’n v. NLRB, 825 F.2d 1091, 1094 (7th Cir.1987); Int’l Union, United Auto., Aerospace & Agrie. Implement Workers of Am. v. NLRB, 765 F.2d 175, 179-80 (D.C.Cir.1985). There is nothing in this generic recognition clause that could be interpreted to expand the parties’ statutory bargaining duties or the derivative rights and obligations flowing from bargaining impasses or illegal bargaining behavior.
In any event, the Union does not assert that the Company failed or refused to bargain in good faith over the performance guidelines. Indeed, the record reflects that the Company gave notice of the new policy and offered to meet with Union representatives to bargain over it. The Union has historically taken the position that it will not formally “bargain” over policies of this sort but agreed to meet for informal discussions with the Company. Accordingly, meetings were held and changes made to the guidelines as a result of the Union’s input and objections to specific aspects of the policy.
So it is not surprising that the Union does not argue that the Company failed or refused to bargain in good faith, beyond suggesting that what occurred was “not bargaining in any real sense,” whatever that means. The Union has not alleged, for example, that bargaining had not reached impasse before the Company imposed the performance guidelines. See Inland Tugs, 918 F.2d at 1307 (“In the event of impasse, the employer is permitted to make unilateral changes in conditions of employment, but only as to matters that have been previously offered to the union.”); Int’l Union, United Auto., Aerospace & Agric. Implement Workers of Am., 765 F.2d at 179 (“Where a mandatory subject [of bargaining] is not contained in the contract, an employer must bargain in good faith to impasse with union representatives; if no agreement is reached, the employer may unilaterally implement its bargaining proposal with respect to the matter not contained in the agreement.”). The Union’s grievance challenges the performance guidelines themselves, not the bargaining conduct of the Company.
The majority concludes that the dispute is arbitrable because the recognition clause “could” be interpreted “to prohibit the Company from making significant changes in the terms and conditions of employment without the consent of the Union.” Majority op. at 688-89. Such an interpretation is impossible; it would require the arbitrator to completely rewrite the recognition clause, engrafting a duty that is not there. Indeed, such an interpretation would contradict well-settled principles in the case law pertaining to the statutory duty to bargain collectively and establishing the *693rights and obligations that arise from good-faith bargaining impasses and illegal bargaining demands. While a mandatory-subject of bargaining contained in a preexisting collective bargaining agreement may not be altered without consent, an employer is permitted to unilaterally implement new employment conditions not contained in the agreement after bargaining in good faith to impasse. See Inland Tugs, 918 F.2d at 1307-08; Int’l Union, United Auto., Aerospace & Agric. Implement Workers of Am., 765 F.2d at 179. Also, an unfair labor practice on the part of a union suspends the duty to bargain and permits the employer to unilaterally implement new conditions of employment. Inland Tugs, 918 F.2d at 1308.
Because the performance guidelines are not contained in the current CBA, the Company has a good-faith bargaining duty under the NLRA but no duty to obtain consent from the Union before implementing the policy. The “no strike” provision in the CBA does not leave the Union without recourse; its remedies are in the collective bargaining process and the NLRA. The recognition clause simply is not susceptible of an interpretation that would vest the Union with the sort of veto power suggested by the majority.
The out-of-circuit case law cited by my colleagues is either distinguishable or badly reasoned. In Oil, Chemical & Atomic Workers International Union v. Phillips 66 Co., 976 F.2d 277, 278-79 (5th Cir.1992), the court held that a labor/management dispute about an employee drug testing policy was arbitrable because it arguably violated the collective bargaining agreement’s recognition, just cause, and health- and-safety clauses. The court’s decision did not specifically or solely rely on the agreement’s recognition clause, as the majority opinion does here.
E.M. Diagnostic Systems, Inc. v. Local 169, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, 812 F.2d 91, 96 (3d Cir.1987), involved a dispute about the employer’s right to subcontract work outside the bargaining unit. The collective bargaining agreement provided for arbitration of disputes “arising out of a claimed violation of this agreement” but also contained a management rights clause explicitly reserving to the employer the right to subcontract work without interference from the union. A divided Third Circuit held the dispute was arbitrable. It was enough, the majority said, if the subject matter of the grievance fell within the “zone of interests” protected by the collective bargaining agreement. Id. An unfettered right to subcontract, the majority concluded, “would include the right to subcontract all work of the bargaining unit and would be inconsistent with the agreement’s recognition of the Union as the bargaining agent for the Company’s employees.” Id. The dissenting judge objected that the “majority [has] redrawn the parties’ Agreement,” nullifying the management reservation of rights clause by way of an unbounded interpretation of the recognition clause. Id. at 97-98 (Garth, J., dissenting). The majority in E.M. Diagnostics cited no authority for its “zone of interests” approach to arbitrability questions.
Finally, Local 1912, International Ass’n of Machinists v. United States Potash Co., 270 F.2d 496, 499 (10th Cir.1959), also addressed the arbitrability of a dispute about subcontracting, although in this case the parties’ agreement was silent on the subject. The Tenth Circuit held that because subcontracting could have the effect of “injuring the union as an effective bargaining unit,” the dispute implicated the recognition clause of the contract and was therefore arbitrable. This holding was *694based on the court’s rather expansive view of its interpretive task: “It would stifle the underlying purposes of the whole agreement to construe it according to its dry words. It is for us to put meat on the skeleton rather than tear the flesh from the bones.” Id. at 498. This is hyperbole, not reasoning. I find none of these cases persuasive.
The Union argues in the alternative that § 4.01 of the CBA, the “mutual responsibility and respect” clause, is implicated in this dispute. In that clause, the parties “recognize” that “all dealings between them be, and continue to be, characterized by mutual responsibility and respect” and that the terms of the CBA shall be applied “fairly in accord with its intent and meaning and consistent with the Union’s status as exclusive bargaining representative.” Because the CBA is silent about performance guidelines or standards, the Company cannot be guilty of “unfairly” applying a term of the CBA by adopting the guidelines. The Union has made no effort to identify how the performance guidelines policy itself might reflect a lack of “mutual responsibility and respect.”
Accordingly, the arbitration clause— which covers only those disputes that involve an interpretation of a term or provision of the CBA or the discipline of an employee — is not reasonably susceptible of an interpretation that covers this dispute. The parties’ dispute over the performance guidelines is not arbitrable.
In closing, I have serious concerns about the essentially limitless reach of today’s decision. If this dispute is arbitrable as an arguable violation of the recognition clause, then almost any dispute is; any Company action that can be characterized as contrary to the Union’s interests “could” violate the recognition clause if its scope is as boundless as the majority believes. Recognition clauses of this sort are routine in collective bargaining agreements, as are arbitration clauses that limit arbitration to disputes involving an interpretation or application of the terms of the parties’ agreement. Henceforward, recognition clauses will be invoked as malleable enough to compel arbitration of disputes that do not squarely implicate any other term or provision of the contract. In my judgment, this violates the fundamentally contractual nature of arbitration and the axiom that “a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit.” Warrior & Gulf Navigation Co., 363 U.S. at 582, 80 S.Ct. 1347; AT & T Techs., 475 U.S. at 648-50, 106 S.Ct. 1415.