Court Opinion

ID: 183668
Source: CourtListenerOpinion
Date Created: 2011-01-26 19:55:04+00
Date Added: 2024-06-11T17:26:04.583289
License: Public Domain

UNPUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT

                             No. 09-2215

UNITED FOOD AND COMMERCIAL WORKERS, LOCAL 23,

                Plaintiff - Appellant,

           v.

MOUNTAINEER PARK, INCORPORATED,

                Defendant - Appellee.

Appeal from the United States District Court for the Northern
District of West Virginia, at Wheeling.     Frederick P. Stamp,
Jr., Senior District Judge. (5:08-cv-00177-FPS)

Argued:   October 28, 2010                 Decided:   January 26, 2011

Before MOTZ, AGEE, and WYNN, Circuit Judges.

Reversed and remanded by unpublished opinion. Judge Agee wrote
the opinion, in which Judge Motz and Judge Wynn joined.

ARGUED: Marianne Oliver, GILARDI, COOPER & LOMUPO, Pittsburgh,
Pennsylvania, for Appellant.      Peter Raymond Rich, SPILMAN,
THOMAS & BATTLE, PLLC, Pittsburgh, Pennsylvania, for Appellee.
ON BRIEF: William J. Gagliardino, GILARDI, COOPER & LOMUPO,
Pittsburgh, Pennsylvania; Timothy F. Cogan, CASSIDY, MYERS,
COGAN & VOEGELIN, LC, Wheeling, West Virginia, for Appellant.

Unpublished opinions are not binding precedent in this circuit.
AGEE, Circuit Judge:

      United Food and Commercial Workers, Local 23 (“the Union”)

appeals from the district court’s grant of summary judgment in

favor of Mountaineer Park, Inc. (“MPI”).                      The Union sought to

compel    MPI   to    arbitrate      two   disputes      under     the    arbitration

provision of the Collective Bargaining Agreement (“CBA”) 1 between

the Union and MPI.              In its order granting MPI’s motion for

summary judgment, the district court held that the disputes were

not   subject    to    arbitration.            Because   we    conclude     that   the

parties’ agreement requires arbitration, we reverse the judgment

of the district court and remand for further proceedings.

                                           I.

      The resolution of this case revolves around the scope and

interplay of two sections in the CBA: the arbitration provision

in Article 12, and the management rights clause in Article 4.

Under Article 12, the parties agreed to an expansive provision

to arbitrate “any dispute or disagreement with respect to the

interpretation       or   any   of   the    provisions        of   this   agreement.”

(J.A. 22, 48.)

      1
       Although there were two different CBAs in effect during
the relevant time frame, the pertinent provisions of each are
the same for purposes of this case.     Accordingly, we simply
refer to the CBA.

                                           2
      Article 4, titled “Management Rights” lists certain rights

retained by MPI, the pertinent provision for our purposes being

the following:

      ARTICLE 4 – Management Rights: Except as expressly
      modified or restricted by a specific provision of this
      Agreement, Employer reserves the right in accordance
      with its judgment in connection with it’s [sic] VLT
      employees:[2]

      . . .

      (j) Except as otherwise specifically provided herein,
      to exercise all rights it had prior to the signing of
      this Agreement.

(J.A. 14-15; 40-41.)

      The parties dispute how the foregoing provisions apply to

determine whether the two separate grievances brought by the

Union are arbitrable. 3      The first grievance (the “pay grievance”)

was   filed   by    the   Union   on   behalf   of   several   employees   who

changed   job      classifications     by   voluntarily   transferring     into

lower-grade positions.        According to the Union, these employees

were treated as “new hires” after their transfers and were paid

the “hiring rates” set forth in subsection 1 of Appendix A to

the CBA, but without any adjustment for prior increases earned

under subsection 2.

      2
       The employees whose grievances are at issue are all VLT
employees.
      3
        The parties and the district court referred                  to     the
disputes as “grievances” and we will use the same term.

                                        3
     In    the    second   grievance          (the      “vacation     grievance”),      the

Union challenged MPI’s decision to “blackout” December 26th as a

day when no employees were permitted to take vacation, and the

consequent denial of employees’ requests for vacation on that

date.

     The    Union    filed      its    complaint        in   the    district    court    to

compel    arbitration      of    these    grievances          after    MPI    refused    to

arbitrate.        After the parties filed cross-motions for summary

judgment,    the     district         court       issued     an    opinion     and   order

granting    MPI’s    motion      for     summary        judgment      and    denying    the

Union’s.     In doing so, the district court held that MPI was not

required to arbitrate either grievance.

     The Union timely appealed.                      This Court has jurisdiction

under 28 U.S.C. § 1291.

                                          II.

                                              A.

     We review a district court’s award of summary judgment de

novo.     French v. Assurance Co. of Am., 448 F.3d 693, 700 (4th

Cir. 2006).       “Summary judgment is appropriate when there is no

genuine issue of material fact and the moving party is entitled

to judgment as a matter of law.”                   Id.; Fed. R. Civ. P. 56(c).

     In    AT&T    Technologies,        Inc.       v.    Communications       Workers    of

America, 475 U.S. 643 (1986), the Supreme Court described four

                                              4
basic principles which courts should use to determine whether a

disputed issue is subject to arbitration.

          The first principle . . . 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. . . .

          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. . . .

          The third principle … 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 [dispute at issue]
     is to be decided, not by the court asked to order
     arbitration, but as the parties have agreed, by the
     arbitrator.     The courts, therefore, have no business
     weighing the merits of the grievance, considering
     whether there is equity in a particular claim, or
     determining whether there is particular language in
     the written instrument which will support the claim.
     The   agreement   is   to   submit  all   grievances   to
     arbitration, not merely those which the court will
     deem meritorious.

          Finally, it has been established that where the
     contract contains an arbitration clause, there is a
     presumption of arbitrability in the sense that an
     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.
475 U.S. at 648-650 (internal quotations and citations omitted).

     Additionally, in cases where there is a broad arbitration

clause   and   an   “absence   of   any   express   provision   excluding   a

                                      5
particular      grievance        from      arbitration,       .    .   .    only    the    most

forceful       evidence    of     a     purpose     to   exclude           the   claim     from

arbitration can prevail.”                  United Steelworkers of Am. v. Warrior

& Gulf Navigation Co., 363 U.S. 574, 584-85 (1960) (“Warrior &

Gulf”).

                                               B.

      With regard to the pay grievance, the district court found

the   following     language          in    subsection    4       of   Appendix      A    to   be

significant: “It is specifically agreed that the hiring rates

and   annual      increases       set       forth   in    this         Appendix      ‘A’       are

minimums, and that the Employer may pay rates and increases in

excess    of    these     at    its     sole   discretion.”             (J.A.      31.)        The

district court considered the “at its sole discretion” language

of “particular importance.”                  (J.A. 87.)       The court also stated

it read subsection (j) of Article 4, which reserved to MPI “all

rights” it had prior to signing the CBA, except as otherwise

specifically provided in the CBA, to weigh against arbitration.

(J.A. 87.)

      Principally based on the “sole discretion” authority and

reservation of prior rights, the district court concluded the

CBA “taken as a whole, clearly and unambiguously shows that the

parties did not intend to take a grievance such as this to

arbitration. . . .             The language clearly shows that, as a result

of the parties’ bargaining, there is no right to retain past

                                               6
annual pay increases where an employee voluntarily steps into a

lower    position.”              (J.A.    88-89.)          Because         MPI    was     paying     the

employees who voluntarily downbid into lower classifications at

least the minimum hiring rates set forth in Appendix A, the

district court concluded the pay grievance was not arbitrable.

        We disagree.              The CBA’s arbitration provision, Article 12,

covers       “any       dispute          or     disagreement          with       respect      to     the

interpretation              or    any    of     the    provisions          of    this     agreement.”

(J.A. 22, 48.)                   Whether the “minimum hourly hiring rates” in

subsection 1 of Appendix A constitute the full wage basis of the

downbidding            employees,         so     they      have       no        entitlement        under

subsection 2, is clearly in dispute.                                  Unless a specific CBA

provision takes this grievance out of the scope of arbitration,

then    it    is       up    to    the        arbitrator       to    decide       which     pay    rate

applies.

       Significantly, there is no express provision in Article 4

or elsewhere in the CBA that removes the pay grievance from the

otherwise legitimate reach of the arbitration clause.                                      While MPI

points repeatedly to the management rights clause as exempting

certain       disputes            from        arbitration,           that        clause     and      the

arbitration         clause         do    not     refer     to       each    other.         While     the

wording of subsection 4 of Appendix A may be relevant to the

merits    of    the         pay    grievance          (e.g.,    in    answering         whether      the

subsection         1    pay       rates        are    inclusive        or       exclusive     of     the

                                                      7
subsection 2 increases), nothing in subsection 4 speaks to the

arbitrability of a dispute about the terms in Appendix A.                           No

provision in the CBA excises pay disputes from the agreement to

arbitrate.

      Nonetheless, MPI contends we should affirm the denial of

arbitrability     because    it    presented         “forceful    evidence    of    a

purpose   to    exclude    the    claim       from   arbitration.”      See    AT&T

Techs., 475 U.S. at 650 (quotations and citation omitted).                         MPI

contends it has shown such “forceful evidence” through: (1) the

managements rights clause; (2) the discretion given to MPI in

Appendix A to pay any rates over the minimum rates set forth

therein; (3) the absence of any specific clause requiring MPI to

pay more than the hiring minimums to employees who downbid; and

(4) MPI’s practice, both before and during the term of the CBA,

of   paying    persons    going   into    a     different   job    classification

(such as by demotion, bumping, transfer, downbidding, or other

reason) at the hiring rate for that classification.

      MPI contends that, taken together, this evidence shows that

the parties agreed MPI has sole discretion over the issue of pay

to its employees except as otherwise modified by the agreement.

Consequently,     MPI    concludes   the       recited   items    constitute       the

“forceful evidence” necessary to show the parties did not intend

this dispute to be arbitrable.

                                          8
       Again, we disagree.               Warrior & Gulf, which was the genesis

of the “most forceful evidence” language, is instructive here.

In    that   case,        the    union     sought     to    compel       the   employer     to

arbitrate      a    grievance          challenging    the    employer’s         decision    to

contract     out    work        that    had   previously      been       performed   by    its

employees. 363 U.S. at 575.           The agreement between the parties

had a grievance and arbitration provision which governed any

“differences aris[ing]” between the company and the union “as to

the meaning and application of the provisions of this Agreement”

as    well   as     “any        local    trouble      of    any    kind.”      Id.   at    576

(quotations omitted).              It further stated, however, that “matters

which are strictly a function of management shall not be subject

to arbitration under this section.” Id. (quotations omitted).

       In light of the no-strike clause present in the agreement,

the   Supreme       Court       determined     that    the    language         “‘strictly    a

function of management’ must be interpreted as referring only to

that over which the contract gives management complete control

and unfettered discretion.” Id. at 584.                           The Court noted that,

had    there       been     a     specific     exclusion          from     arbitration      of

“contracting out” or any collateral agreement making clear that

contracting out was not a matter for arbitration, the grievance

would not be arbitrable.                  Id. at 584.         But in the absence of

such a provision and in the absence of any showing that the

parties designed the phrase “strictly a function of management”

                                               9
to encompass any and all forms of contracting out, the Court

determined that the dispute was arbitrable.                                 The “exclusion”

from arbitration of strictly management functions simply was not

sufficiently “forceful evidence” of an intent to exclude the

claim from arbitration.              Id. at 585.

        Although    the       arbitration         clause      in    Warrior      &    Gulf    was

arguably broader            than     the    one    at      issue    here,    the     management

rights clause in that case expressly stated that matters that

were    strictly        a     function      of     management        were      exempted      from

arbitration.        In the case at bar, by contrast, the management

rights clause makes no reference to arbitration, much less any

restrictions       on       arbitration.           Indeed,        neither    the     management

rights    clause        nor    the       arbitration        provision       (nor     any    other

provision of the CBA) expressly excludes any management decision

from the arbitration provision.

        Moreover, Article 4 is itself limited by other terms in the

Agreement.         Put      differently,          while     the    CBA   has    a    management

rights clause, that clause is subject to the other terms in the

agreement,    including            the     requirement       to    arbitrate        grievances.

(J.A.    14-15;     40-41)         (language          in    managements        rights      clause

stating that “Except as expressly modified or restricted by a

specific     provision          of       this    Agreement,”         management       has     the

expressed rights).

                                                 10
       Additionally,              the     mere     fact   that    Appendix      A   gives    the

employer “sole discretion” to pay higher wages than the contract

rate       is     not    dispositive          on    the   question       of    arbitrability.

Indeed, the very issue raised in the pay grievance is a dispute

over       what    is       the   contract       rate,    not     what   the    employer     may

discretionarily choose to pay beyond that rate.                                Cf. East Coast

Hockey League v. Prof’l Hockey Players Ass’n, 322 F.3d 311 (4th

Cir. 2003) (concluding that a dispute was arbitrable despite

language          in    a    separate        agreement     between       the    parties     that

management could take certain actions “in its sole discretion”);

id.    at       316     (this      Court       finding     “no     inconsistency      in     the

president being given the ‘sole discretion’ to make a decision

and        that        exercise         of    discretion         being    reviewable”        via

arbitration). 4

       For all of these reasons, we conclude that the record does

not    disclose          the      “most      forceful     evidence”      showing    that    the

       4
       MPI relies heavily on three Seventh Circuit decisions:
Local Union 1393 International Brotherhood of Electrical Workers
v. Utilities District of Western Indiana Rural Electric
Membership   Cooperative,  167 F.3d 1181   (7th  Cir.  1999),
International Brotherhood of Teamsters v. Logistics Support
Group, 999 F.2d 227 (7th Cir. 1993), and Local Union No. 483,
International Brotherhood of Boilermakers v. Shell Oil Co., 369
F.2d 526, 529 (7th Cir. 1966).    These out of circuit cases are
not binding on this Court.     In any event, we have considered
each of them, but all are substantially distinguishable based on
the facts and language of the contract provisions, none of which
are similar to those in the case at bar.

                                                   11
parties      did    not     intend     to    arbitrate        the     pay       grievance.

Accordingly, the presumption in favor of arbitrability applies

and the district court erred in determining the pay grievance

was not arbitrable.

                                            C.

      Our     analysis      leads      to    a     similar      conclusion        on       the

arbitrability       of    the   vacation         grievance.         According         to   the

Union,      the    analysis     turns       on    “the     interplay        between        the

employees’ rights to take vacation at any time during the year

and the employer’s right to approve/disapprove selected vacation

dates.” (Appellant’s Br. at 11-12.)                      The asserted “right” of

employees     to    take     vacation       at     any   time      during       the    year,

according to the Union, is based on language in the CBA that

“[v]acations may be taken between January 1 and December 31 each

year.” (J.A. 24.)          The Union contends that this provision means

the   employer     is     prohibited    from      making     any    date    a    “blackout

date” on which no employees are permitted to take vacation.                                The

Union therefore argues that the vacation grievance is nothing

more than a dispute as to the meaning of the terms of the CBA

and thus must fall to an arbitrator to decide.

      MPI responds that there is unchallenged ‘forceful evidence’

of a purpose to exclude the vacation selection grievances from

arbitration.        In particular, MPI contends Section 14.6 of the

CBA is such forceful evidence because it expressly allows MPI to

                                            12
“approve/disapprove selected vacation dates.” (Appellee’s Br. 22

(quoting J.A. 25, 51).)                  Additionally, MPI argues the CBA has no

specific contractual restriction on MPI’s right to disapprove

vacation      on    the      day    after     Christmas,     and     the      Union    cannot

explain why it negotiated a specific restriction on management’s

staffing rights with respect to Christmas Day in Section 13.2 of

the CBA.

       The district court concluded the vacation grievances were

not arbitrable, but appeared to do so by analyzing the merits of

the     claim      instead     of        whether    the    dispute      was    subject      to

arbitration.          As noted in AT&T Technologies, “a court is not to

rule on the potential merits of the underlying claims.” 475 U.S.

at 649.       MPI contends, though, that the district court properly

addressed the merits of the vacation grievance claim, because

consideration of the substantive merits is sometimes required in

order    to     rule    on    arbitrability.              While   it    is    occasionally

necessary for a court to interpret a provision of an agreement

in order to determine arbitrability,                       see Litton Fin. Printing

Div. v. NLRB, 501 U.S. 190, 209 (1991) (“we cannot avoid [our

duty    to    determine       arbitrability]         because       it   requires       us   to

interpret a provision of a bargaining agreement”), our caselaw

consistently        follows        the    Supreme    Court’s      admonition      to    avoid

reaching the merits of the issue when that is not required to

determine       the    question          of   arbitrability.       See,       e.g.,    United

                                               13
Steel, Paper, & Forestry, Rubber, Mfg., Energy, Allied-Indus. &

Serv. Workers Int’l Union v. Cont’l Tire N. Am., Inc., 568 F.3d
158, 165-66 (4th Cir. 2009) (while “courts are permitted some

latitude to interpret provisions of a bargaining agreement that

impact the underlying merits of the dispute” when necessary to

determine arbitrability, “[i]f possible . . . the underlying

merits should be avoided”); United Food & Commercial Workers

Union v. Shoppers Food Warehouse Corp., 35 F.3d 958, 961 (4th

Cir. 1994).

     Whether       the    vacation   grievance    fails     on   its     merits   is

immaterial    to    the    determination    of    whether    the   grievance      is

arbitrable.     See AT&T Techs., 475 U.S. at 649-50.                   As with the

pay grievance, the conflicting interpretations of Article 14 of

the CBA are a “disagreement with respect to the interpretation .

. . of the provisions of the agreement.”                  (J.A. 22, 48.)          No

provision of the CBA takes this dispute out of the presumption

of arbitration.          Neither do any of MPI’s suggestions rise to the

level of the “most forceful evidence” to exclude the vacation

grievance from arbitration.

     MPI    argues,       however,   that   the    district      court    properly

addressed     the    merits     of   the    claims    because      the     Union’s

grievances here are “more than ‘frivolous’, they are ‘so totally

devoid of merit as to amount to a ‘perversion’ of the grievance

procedure.’” (Appellee’s Br. 10 (quoting Tobacco Workers Int’l

                                       14
Union       v.     Lorillard   Corp.,    448 F.2d 949,    954   n.10    (4th    Cir.

1971)).)          Notably, the quoted language is not a holding of this

Court.

        Instead, the language in Lorillard appears in a footnote in

which a panel of this Court reiterates the principle that a

federal court cannot refuse to compel arbitration because it

finds a claim to be frivolous.                 The footnote then goes on to say

that “[t]he closest any court has come to stating that the court

may refuse to compel arbitration if the grievance is without

merit is the recognition of the possibility that a grievant’s

claim        be    so    totally   devoid      of   merit     as    to    amount    to   a

‘perversion of the grievance procedure.’” Lorillard, 448 F.2d at

954 n.10. (citations omitted) (quoting one Second Circuit and

one Fifth Circuit decision).                  This Court continued: “Even if we

were to accept the notion that the District Court may examine

the merits to such an extent, this case falls far short of such

a test.” Id. 5

        We        cannot   conclude     the    Union’s      claim    is     “more    than

frivolous.”             The vacation grievance turns on interpretation of

the CBA and the rights of MPI with regard to denying vacation

        5
       MPI points to no other Supreme Court or Fourth Circuit
authority   holding   that  a   court   may   decline to order
arbitrability of an otherwise arbitrable grievance because the
grievance is determined to be “more than frivolous.”

                                              15
days or blacking out vacation days altogether.                In short, the

presumption of arbitrability applies, and no forceful evidence

has been shown that the parties did not intend to arbitrate such

a   dispute.   Thus,   the   vacation    grievance     is    subject   to   the

parties’ agreement to arbitrate, and the district court erred in

refusing to order arbitration of that dispute.

                                   III.

      The arbitration clause in the CBA reflected the parties’

clear intent to arbitrate a broad array of disputes concerning

the   interpretation    of   the   CBA    and   MPI    has    not   presented

“forceful evidence” that the parties intended to exclude the

issues in dispute from the contractual covenant to arbitrate.

Accordingly, the judgment of the district court is reversed, and

the case is hereby remanded to the district court for further

proceedings consistent with this opinion.

                                                      REVERSED AND REMANDED

                                    16