Court Opinion

ID: 3023112
Source: CourtListenerOpinion
Date Created: 2015-10-13 22:28:21.118972+00
Date Added: 2024-06-11T11:47:36.232846
License: Public Domain

United States Court of Appeals
                             FOR THE EIGHTH CIRCUIT
                                  ________________

                                     No. 98-3230
                                  ________________

Teamsters Local Union No. 688,             *
affiliated with International              *
Brotherhood of Teamsters, AFL-             *
CIO,                                       *      Appeal from the United States
                                           *      District Court for the Eastern
             Appellant,                    *      District of Missouri.
                                           *
      v.                                   *
                                           *
Industrial Wire Products, Inc.,            *
                                           *
             Appellee.                     *

                                  ________________

                                  Submitted: March 11, 1999
                                      Filed: July 7, 1999
                                  ________________

Before RICHARD S. ARNOLD, FLOYD R. GIBSON, and HANSEN, Circuit Judges.
                         ________________

HANSEN, Circuit Judge.

       Teamsters Local Union No. 688 (the union) brought this declaratory judgment
action seeking to compel Industrial Wire Products, Inc. (the company) to arbitrate a
grievance concerning the proper wage rates under a collective bargaining agreement.
Both parties moved for summary judgment. The district court determined that the wage
rate dispute is not subject to the arbitration clause of the agreement and accordingly,
granted summary judgment to the company. The union appeals, and we reverse.
                                            I.

      The union is the collective bargaining representative for the production and
maintenance workers employed by the company at its plant in Sullivan, Missouri. The
present dispute involves the company's refusal, following negotiations in 1996, to
continue paying a five cent per hour pay increase that the parties had negotiated in their
1994 collective bargaining agreement. A bit of background information is necessary
to explain the present dispute.

       In 1994, the union and the company negotiated a collective bargaining agreement
that included a five cent per hour wage increase for all employees. The agreement also
provided for a new incentive compensation program, through which employees could
earn a bonus based upon plant productivity. An asterisked paragraph in the footnotes
to the wage schedule explained, however, that the five cent hourly wage increase would
be set off against any bonus earned through the new incentive program. In other words,
employees would receive bonus compensation only to the extent any bonus earned
exceeded the five cent per hour wage increase--employees were not allowed to
accumulate both benefits simultaneously.

       In 1996, the parties began negotiating a new collective bargaining agreement.
The union first proposed eliminating the incentive compensation program, but the
company wanted to retain the incentive program. At another negotiation meeting, the
union proposed a 50 cent per hour wage increase for all employees, which the company
rejected. Negotiations continued, and the company ultimately agreed to implement
wage increases of 20 cents per hour the first year, 5 cents per hour the second year, and
10 cents per hour the third year. The company also proposed deleting the asterisked
paragraph of the 1994 agreement, which explained the set off arrangement between the
five cent wage increase and the bonus incentive program.

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       The company drafted the written collective bargaining agreement reflecting the
parties' final proposals. Among other things, the draft included an arbitration clause
and omitted the asterisked paragraph from the wage schedule that had been included
in the 1994 contract. In the new draft, the company replaced the prior five cent
increase described in that paragraph with the newly agreed upon wage increases. Thus,
the new draft eliminated the previously agreed upon and implemented five cent per
hour increase, which was in the 1994 agreement. The union objected to the draft,
stating that it believed the parties agreed to eliminate only the set off arrangement, not
the previously implemented five cent wage increase. The union refused to sign the
1996 collective bargaining agreement as drafted, asserting it did not reflect the actual
agreement of the parties.

       On August 13, 1996, an employee filed a grievance alleging that the company
violated the collective bargaining agreement by altering the negotiated wage rate.
Specifically, the employee complained, "The company has taken .05 from our wages."
(Appellant's App. at A44.) The company refused to accept the grievance as valid under
the collective bargaining agreement, which provides a grievance procedure including
arbitration for all "differences" that arise between the parties "as to the meaning or
application of the provisions of this Agreement." (Id. at A17.) On December 16, 1996,
the union agreed to sign the 1996 written collective bargaining agreement as drafted by
the company as long as the company provided written acknowledgment that the union
did not thereby abandon its grievance. The company complied, but maintained its
position that the grievance was not valid under the 1996 collective bargaining
agreement.

       The union brought suit in federal district court seeking a declaratory judgment
to force the company to arbitrate the grievance. The parties filed cross motions for
summary judgment. The district court concluded that although a valid arbitration
agreement exists between the parties, the dispute at issue does not fall within the scope
of that agreement. The union appeals.

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                                           II.

        We review the district court's grant of summary judgment de novo, viewing the
record in the light most favorable to the nonmoving party and affirming if the evidence
shows "that there is no genuine issue as to any material fact and that the moving party
is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c); see Celotex Corp.
v. Catrett, 477 U.S. 317, 322 (1986); American Family Mut. Ins. Co. v. Van Gerpen,
151 F.3d 886, 887 (8th Cir. 1998). In this case, the material facts are undisputed, and
our inquiry focuses on whether the district court correctly concluded as a matter of law
that the dispute between the parties is not subject to arbitration.

       Our consideration of this issue is guided by well established principles set forth
in a series of cases that have become known as the Steelworkers Trilogy. See United
Steelworkers of Am. v. American Mfg. Co., 363 U.S. 564 (1960); United Steelworkers
of Am. v. Warrior & Gulf Navigation Co., 363 U.S. 574 (1960); United Steelworkers
of Am. v. Enterprise Wheel & Car Corp., 363 U.S. 593 (1960). These cases articulate
the following general principles: (1) arbitration is a matter of contract and may not be
ordered unless the parties agreed to submit the dispute to arbitration; (2) unless the
parties provide otherwise, courts decide the issue of whether the parties agreed to
arbitrate; (3) courts cannot weigh the merits of the grievance in determining whether
the claim is subject to arbitration; and (4) when an arbitration clause exists in a
contract, there is a presumption of arbitrability unless it is clear that the arbitration
clause is not susceptible of an interpretation that covers the dispute. See AT&T Tech.,
Inc. v. Communications Workers of America, 475 U.S. 643, 648-50 (1986). Because
arbitration is a matter of contract and consent, see Warrior & Gulf, 363 U.S. at 582;
Keymer v. Management Recruiters Int'l, Inc., 169 F.3d 501, 504 (1999), we first
consider whether a valid agreement to arbitrate exists. If so, we next consider whether
the present "dispute falls within the scope of the arbitration agreement." Keymer, 169
F.3d at 504. When deciding whether or not the parties agreed in their contract to
submit the underlying disputes to arbitration, "we cannot consider the merits of the

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union's grievances." Local No. 381, Int'l Union of Operating Eng'rs, AFL-CIO v.
Tosco Corp., 823 F.2d 265, 268 (8th Cir.1987).

       In this case, the parties do not dispute the existence of a valid agreement to
arbitrate. Article VIII of the written 1996 collective bargaining agreement specifically
provides for arbitration of disputes that concern "the meaning or application of the
provisions of this Agreement." (Appellant's App. at A17.) The disagreement in this
case concerns not the existence of the agreement to arbitrate, but the scope of that
agreement.

        When there exists an express agreement to arbitrate, there arises a presumption
that the parties agreed to submit the dispute to arbitration unless there is clear intent
"that the parties did not want to arbitrate a related matter." First Options of Chicago,
Inc. v. Kaplan, 514 U.S. 938, 945 (1995); see Warrior & Gulf, 363 U.S. at 581 ("Apart
from matters that the parties specifically exclude, all of the questions on which the
parties disagree must therefore come within the scope of the grievance and arbitration
provisions of the collective agreement.") "[A]ny doubts concerning the scope of
arbitrable issues should be resolved in favor of arbitration, whether the problem at hand
is the construction of the contract itself or an allegation of waiver, delay, or a like
defense to arbitrability." Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460
U.S. 1, 24-25 (1983). This presumption, however, must operate with regard to the
intent of the contracting parties since arbitration is a matter of consent. See Keymer,
169 F.3d at 504; see also Warrior & Gulf, 363 U.S. at 582 (noting "a party cannot be
required to submit to arbitration any dispute which he has not agreed so to submit").

       The district court concluded that the parties' dispute was not subject to
arbitration because the five cent pay increase was not reflected at all in any provision
of the written 1996 agreement. The district court reasoned, "The agreement simply
makes no provision for the five cent raise claimed by plaintiff, and so a dispute over

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that issue is not subject to arbitration." (Appellant's Adden. at 10.) Additionally, the
court noted that any arbitrator's decision adding such a pay increase would be expressly
contrary to section six of Article VIII, which states that the arbitration panel has "no
authority to add to, revise, delete, or disregard any provision of the Labor Agreement."
(Appellant's App. at A18.) Thus an award would not "draw[] its essence from the
collective bargaining agreement." Enterprise Wheel & Car Corp., 363 U.S. at 597.

       The union's grievance disputes the accuracy of the wage rates being paid, and
the union argues that the written agreement as drafted by the company does not
accurately reflect the actual negotiated agreement of the parties. The union asserts that
"[t]he grievance clearly raises a question about the 'meaning or application' of the
provisions of the agreement when it questions whether the proper wage rates are being
paid to employees." (Appellant's Br. at 11.)

       We agree. The district court erred by considering the merits of the dispute. At
this point, we need not decide whether an award would "draw[] its essence" from the
contract or require a revision to the contract. Enterprise Wheel & Car Corp., 363 U.S.
at 597. Instead, we are only concerned with whether the dispute over the proper rate
of pay is within the scope of the arbitration clause.

      The arbitration clause provides for arbitration of "differences" involving "the
meaning or application of any of the provisions of this Agreement." (Appellant's App.
at A17.) The district court concluded that the grievance did not challenge the meaning
or application of a provision of the agreement, but rather asserted and attempted to
arbitrate a prior right that was no longer articulated in the agreement. It is true that the
five cent per hour increase negotiated in the 1994 agreement is nonexistent in the 1996
agreement as drafted by the company. The union contends, however, that it did not
agree to give up the previously negotiated pay increase but assumed, given the parties'
bargaining history, that the provision would remain unchanged--except that the parties

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agreed to delete the set off arrangement of the asterisked paragraph. In sum, the union
asserts that the company's draft of the agreement does not accurately reflect the actual
1996 negotiated agreement, and therefore the dispute amounts to a difference about
the meaning or application of the agreement within the scope of the arbitration clause.

       We believe that this dispute involves "the meaning or application" of the wage
schedule provision of the agreement and that the language of the arbitration clause is
broad enough to encompass this dispute. Though we are not completely free from
doubt, the Supreme Court has quite clearly told us that "any doubts concerning the
scope of arbitrable issues should be resolved in favor of arbitration." Moses H. Cone
Mem'l Hosp., 460 U.S. at 24-25. Additionally, under a nearly identical arbitration
provision in Warrior & Gulf, 363 U.S. at 576 (providing for arbitration when
"differences arise between [the parties] as to the meaning and application of the
provisions of this Agreement"), the Supreme Court labeled the provision as "quite
broad," 363 U.S. at 585, and held that absent "any express provision excluding a
particular grievance from arbitration we think only the most forceful evidence of a
purpose to exclude the claim from arbitration can prevail, particularly where, as here,
the exclusion clause is vague and the arbitration clause quite broad." Id. at 584-85.
Absent any clear exclusionary language in this case, we believe that the presumption
in favor of arbitration carries the day.

       Furthermore, the union has disputed the accuracy of the written draft from the
very beginning, and it preserved its objection to the wage rate when it signed the
collective bargaining agreement. The company drafted the agreement and now seeks
to avoid its obligation to arbitrate by its own omission of what the union believed was
an agreed upon provision of the wage schedule of the new agreement. The arbitration
clause allows the parties to arbitrate this dispute over the meaning of their agreement,
and the question of whether the parties' unwritten agreement at the close of negotiations
included an intent to maintain the previously negotiated wage increase is a proper
subject for the informed judgment of an arbitrator. We have said that "[i]n interpreting

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a collective bargaining agreement it is often necessary to go outside the four corners
of the contract itself and examine the agreement history to ascertain the intent of the
agreement and determine the rights and duties of the parties." International Union,
United Auto., Aerospace and Agric. Implement Workers of Am. v. White Motor Corp.,
505 F.2d 1193, 1197 (8th Cir. 1974), cert. denied, 421 U.S. 921 (1975).

                                         III.

       Accordingly, we reverse the judgment of the district court and remand for entry
of declaratory judgment requiring the company to arbitrate the grievance.

      A true copy.

             Attest:

                     CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT

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