Court Opinion

ID: 5129471
Source: CourtListenerOpinion
Date Created: 2021-11-24 22:00:38.327483+00
Date Added: 2024-06-11T08:23:12.189418
License: Public Domain

NOT RECOMMENDED FOR PUBLICATION
                                File Name: 21a0541n.06

                                         Case No. 21-3228

                          UNITED STATES COURT OF APPEALS
                               FOR THE SIXTH CIRCUIT
                                                                                  FILED
 INTERNATIONAL          BROTHERHOOD OF )                                    Nov 24, 2021
                                       )                                DEBORAH S. HUNT, Clerk
 TEAMSTERS, LOCAL UNION NO. 413,
                                       )
      Plaintiff-Appellee,              )
                                       )                         ON APPEAL FROM THE
 v.                                    )                         UNITED STATES DISTRICT
                                       )                         COURT     FOR      THE
 THE KROGER CO., dba TAMARACK FARMS )                            SOUTHERN DISTRICT OF
 DAIRY,                                )                         OHIO
      Defendant-Appellant.             )
                                       )

Before: CLAY, GIBBONS, and BUSH, Circuit Judges.

       JOHN K. BUSH, Circuit Judge. This case involves the presumption of arbitrability under

a collective bargaining agreement (CBA) between the Kroger Co. and the International

Brotherhood of Teamsters, Local Union No. 413 (the Union). They are in a dispute over whether

a union steward’s grievance regarding certain retirement benefits is subject to arbitration under the

parties’ CBA. Because Kroger is unable to rebut the presumption in favor of arbitrability, we

affirm the district court’s grant of summary judgment to the Union that orders arbitration of the

grievance.

                                                 I.

       The CBA at issue, effective October 8, 2017, through October 10, 2020, applies to certain

employees at Kroger’s Tamarack Farms Dairy operation in Newark, Ohio. The CBA governs “all
Case No. 21-3228, Int’l Bhd. of Teamsters, Loc. Union No. 413 v. Kroger Co.

of the production, laboratory, and maintenance employees for the Employer in the classifications

set forth in the wage schedule in Article 23; and exclude[es] all office clerical employees,

professional employees, guards, and supervisors as defined in the [Labor Management Relations]

Act, and outside subcontracted services.” (Compl., Ex. A, R.1-3, Pg. ID 13.)

        Article 5 of the CBA contains grievance and arbitration procedures to govern employee

grievances. The CBA defines a grievance as “a dispute between the Employer and employee as

to the interpretation or application of any provisions of th[e] Agreement and is limited to the

express terms and provisions of th[e] Agreement.” (Id. at 15.) The aggrieved employee must

pursue a multi-step process to settle grievances, including two conferences between the employee

and Kroger, before bringing the grievance to the Board of Arbitration. The decision of the

arbitrator “shall be final and binding,” and the arbitrator “shall not be empowered to alter the

terms” of the CBA. (Id. at 16.)

        The CBA also contains several provisions concerning benefits, including Article 19,

Section 19.1, which addresses certain retirement benefits.                That provision states that “[a]ll

employees of the Employer will be covered by and participate in the Kroger Employees Retirement

Benefit Plan. Participation is governed by the terms of the Plan.”1 (Id. at 29.) Starting in 2001,

Kroger provided retirement benefits through the Kroger Consolidated Retirement Benefit Plan

(CRBP).

        The dispute underlying this appeal arose in August 2017, when Kroger terminated the

CRBP and gave non-union employees the option to take a lump-sum payout of their benefits, roll

the funds over to a 401(k) account, or have Kroger purchase an annuity with an insurance company

1
  Kroger’s benefit manager, Wendy Kennedy, testified that she has no knowledge of the current existence of a plan
titled the “Kroger Employees Retirement Benefit Plan.” (Kennedy Dep., R. 17, Pg. ID 94–95.) However, according
to Kennedy, the Kroger Employees Retirement Benefit Plan later became the Kroger Consolidated Retirement Benefit
Plan. (Kennedy Dec., Ex. B, R. 25., Pg. ID 519–20 (listing the history of the CRBP).)

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Case No. 21-3228, Int’l Bhd. of Teamsters, Loc. Union No. 413 v. Kroger Co.

for the benefits. Kroger placed Union employees in a CRBP spin-off plan (CRBP spin-off) and

did not give them these distribution options. The Union and Kroger had negotiated the issue of

distribution options in 2017, prior to adopting the CBA. But despite their discussion of union

members receiving the same options as management for movement of funds, the language of

Article 19, Section 19.1 of the CBA ultimately remained unchanged.

       Then, on February 20, 2018, Union Steward Jay Laymon filed a grievance: “Based on

(Article 19 Section 19.1)[, a]ll Tamarack Bargaining Unit employees participating in the Kroger

Consolidated Retirement Benefit Plan (aka Cash Balance Pension Plan), [t]he Company will

provide the same payment options as offered to management and non[-]union hourly associates.”

(Compl., Ex. B, R.1-3, Pg. ID 42.)

       But Kroger refused to hear the grievance. After conferencing with Kroger, pursuant to the

CBA’s grievance and arbitration procedures, the Union notified Kroger that it wished to mediate

the issue in September 2018. Starting in January 2019, the parties participated in a mediation

session and exchanged information and proposals regarding the matter. Yet when the Union

informed Kroger that it wished to proceed to arbitration that June, Kroger disagreed. It stated that

Laymon’s grievance did not articulate a dispute between Kroger and an employee as to the

interpretation or application of any provision of the CBA, so arbitration was not required.

       The Union then filed suit to compel arbitration under the Labor Management Relations Act

of 1947 (LMRA), 29 U.S.C. § 141 et seq. It alleged that Kroger willfully and in bad faith breached

the CBA by refusing to arbitrate Laymon’s grievance.

       Ruling on the cross-motions for summary judgment, the district court first noted that the

parties only disputed whether Laymon’s grievance falls under the arbitration clause of Article 5,

Section 5.1, not whether a valid arbitration clause existed at all. It then applied a presumption of

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Case No. 21-3228, Int’l Bhd. of Teamsters, Loc. Union No. 413 v. Kroger Co.

arbitrability because of the broad arbitration clause in the CBA. It held that the grievance

implicates an interpretation of Section 19.1 of the CBA and is not “expressly excluded” from

arbitration by the CBA. Because the grievance was not expressly excluded from arbitration by the

CBA and the presumption of arbitrability applied, the district court granted summary judgment to

the Union and ordered arbitration. Kroger’s timely appeal followed.

                                                 II.

       We review a district court’s grant of summary judgment de novo. Kenney v. Aspen Techs.,

Inc., 965 F.3d 443, 447 (6th Cir. 2020). On cross-motions for summary judgment, we review

factual issues in favor of the party whose motion did not prevail in the district court—here, Kroger.

See B.F. Goodrich Co. v. U.S. Filter Corp., 245 F.3d 587, 598 (6th Cir. 2001). “Similarly, we

review de novo the district court’s decision to compel arbitration of a particular dispute.” United

Steelworkers of Am. v. Cooper Tire & Rubber Co., 474 F.3d 271, 277 (6th Cir. 2007) (citing Floss

v. Ryan’s Family Steak Houses, Inc., 211 F.3d 306, 311 (6th Cir. 2000)). In this context, we “must

determine whether the dispute is arbitrable, meaning that a valid agreement to arbitrate exists

between the parties and that the specific dispute falls within the substantive scope of the

agreement.” Teamsters Local Union No. 89 v. Kroger Co., 617 F.3d 899, 904 (6th Cir. 2010)

(quoting Landis v. Pinnacle Eye Care, LLC, 537 F.3d 559, 561 (6th Cir. 2008)).

       We start with some background of arbitrability in the labor context. The LMRA states that

the policy of the United States is to encourage the resolution of CBA disputes through

“conciliation, mediation and voluntary arbitration.” 29 U.S.C. § 171(b). It also provides that

grievance disputes should be resolved “by a method agreed upon by the parties,” oftentimes

implying arbitration.   29 U.S.C. § 173(d).      Building upon this policy, federal courts have

“fashion[ed] a body of federal law for the enforcement of . . . collective bargaining agreements,”

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Case No. 21-3228, Int’l Bhd. of Teamsters, Loc. Union No. 413 v. Kroger Co.

including “promises to arbitrate grievances under collective bargaining agreements.” Textile

Workers Union of Am. v. Lincoln Mills of Ala., 353 U.S. 448, 450–51 (1957). The Supreme Court

held that a CBA is “more than a contract”; rather, “[i]t calls into being a new common law—the

common law of a particular industry or of a particular plant.” United Steelworkers of Am. v.

Warrior & Gulf Navigation Co., 363 U.S. 574, 578–79 (1960).

       Our framework for determining arbitrability was built on that foundation. Simply put, our

duty is “to interpret the agreement and to determine whether the parties intended to arbitrate

grievances concerning a particular matter.” Granite Rock Co. v. Int’l Bhd. of Teamsters, 561 U.S.

287, 301 (2010) (cleaned up). We “discharge this duty” in two steps, by:

       (1) applying the presumption of arbitrability only where a validly formed and
       enforceable arbitration agreement is ambiguous about whether it covers the dispute
       at hand; and (2) adhering to the presumption and ordering arbitration only where
       the presumption is not rebutted.

Id. In applying this framework, we use “ordinary . . . principles that govern the formation of

contracts.” Id. at 296 (citing First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944 (1995)).

       The parties do not dispute that they are parties to a valid and enforceable arbitration clause

in their CBA. (Def. Mot. for Summ. J., R. 21, Pg. ID 280–82; Pl. Mot. for Summ. J., R. 22, Pg.

ID 288–91.) That provision, Article 5, Section 5.1, provides for arbitration of any “dispute

between the Employer and employee as to the interpretation or application of any provisions of

this Agreement and is limited to the express terms and provisions of this Agreement.” (Compl.,

Ex. A, R.1-3, Pg. ID 15.) It is similar to arbitration clauses we have found to be broadly worded.

See, e.g., Kroger, 617 F.3d at 905 (finding that a clause providing for arbitration of “‘any

grievance[,] dispute[,] or complaint over the interpretation or application of the contents of this

Agreement’ raised by ‘any employee’” to be broad); see also Int’l Ass’n of Machinists &

Aerospace Workers v. ISP Chems., Inc., 261 F. App’x. 841, 846 (6th Cir. 2008) (finding a clause

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Case No. 21-3228, Int’l Bhd. of Teamsters, Loc. Union No. 413 v. Kroger Co.

providing for arbitration of “any difference of opinion or dispute . . . regarding interpretation or

application of any provision of this Agreement,” but with three specific issues excepted, to be

broad).

          The parties disagree about the interpretation of Article 5, Section 5.1—namely, whether

Laymon’s grievance regarding Kroger’s failure to “provide the same payment options as offered

to management and non[-]union hourly associates” falls within the category of arbitrable issues.

(Compl., Ex. B, R.1-3, Pg. ID 42.) See Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc.,

473 U.S. 614, 626 (1985). As to this issue, the arbitration clause is ambiguous, which we discuss

in greater depth below.      Whereas the provision could be read, as Kroger contends, to be

inapplicable to the retirement benefits question at issue, it also could be read to cover that dispute,

as the Union contends.

          Because the arbitration agreement is ambiguous regarding coverage of the dispute at hand,

we apply the presumption of arbitrability. See Granite Rock, 561 U.S. at 301; see also AT & T

Techs., Inc. v. Commc’ns Workers of Am., 475 U.S. 643, 650 (1986) (stating that any “[d]oubts”

about whether an arbitration clause covers an asserted dispute “should be resolved in favor of

coverage”). That presumption is particularly applicable in cases involving broad arbitration

clauses, as is the case here. Int’l Union v. Cummins, Inc., 434 F.3d 478, 485–86 (6th Cir. 2006).

          Applying the presumption of arbitrability, we must compel arbitration unless the

presumption is rebutted. Granite Rock, 561 U.S. at 301. Kroger attempts to do so with two

arguments: that the dispute is expressly excluded by the language of the CBA and that, absent

express language, the parties intended to exclude the dispute from arbitration. We address each

argument in turn below.

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Case No. 21-3228, Int’l Bhd. of Teamsters, Loc. Union No. 413 v. Kroger Co.

       A. Is this Dispute Expressly Excluded from Arbitration?

       A party can rebut the presumption in favor of arbitration if it shows that “the parties have

expressly excluded the grievance from arbitration.” See Teamsters Local Union No. 783 v.

Anheuser-Busch, Inc., 626 F.3d 256, 260–64 (6th Cir. 2010) (collecting cases). That means Kroger

can prevail only if “the arbitration clause is not susceptible of an interpretation that covers the

asserted dispute.” Teamsters Local Union 480 v. United Parcel Serv., Inc., 748 F.3d 281, 288 (6th

Cir. 2014) (quoting AT & T Techs., 475 U.S. at 650). “The starting point [is] . . . the language of

the Collective Bargaining Agreement.”        Bakery, Confectionery, Tobacco Workers & Grain

Millers, Int’l Union AFL-CIO v. Kellogg Co., 904 F.3d 435, 442 (6th Cir. 2018) (quoting Salary

Policy Emp. Panel v. Tenn. Valley Auth., 149 F.3d 485, 491 (6th Cir. 1998)).

       The arbitration clause here contains no specific exclusions exempting specific disputes

from arbitration. And in Article 5, Section 5.1, the parties agreed to arbitrate grievances as to the

interpretation or application of any provision in the CBA.

       Kroger argues, however, that the dispute is expressly excluded from the CBA’s arbitration

clause by the grievance procedures of the CRBP. According to Kroger, the terms of the CRBP are

incorporated into the CBA by virtue of Article 19, Section 19.1.

       Kroger is correct that terms can be incorporated into the CBA by reference to another

document. But such incorporation occurs only “where the underlying contract makes clear

reference to a separate document, the identity of the separate document may be ascertained, and

incorporation of the document will not result in surprise or hardship.” Anheuser-Busch, Inc., 626

F.3d at 262 (quoting Standard Bent Glass Corp. v. Glassrobots Oy, 333 F.3d 440, 447 (3d Cir.

2003)); see also United Steelworkers of Am., AFL-CIO-CLC v. Commonwealth Aluminum Corp.,

162 F.3d 447, 449 (6th Cir. 1998) (finding that insurance benefits booklets were incorporated by

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Case No. 21-3228, Int’l Bhd. of Teamsters, Loc. Union No. 413 v. Kroger Co.

reference into CBA where CBA referred to booklets by name). “The reference must be clear and

unequivocal.” Anheuser-Busch, 626 F.3d at 262 (quoting Rinard v. Eastern Co., 978 F.2d 265,

269 n.3 (6th Cir. 1992)). We look to the plain language of the CBA. See Morgan Servs., Inc. v.

Loc. 323, Chicago & Cent. States Joint Bd., Amalgamated Clothing & Textile Workers Union,

AFL-CIO, 724 F.2d 1217, 1223 (6th Cir. 1984).

       Article 19, Section 19.1 makes no explicit reference to the CRBP. Instead, that provision

identifies the “Kroger Employees Retirement Benefit Plan” as the separate document. (Compl.,

Ex. A, R.1-3, Pg. ID 29 (“All employees of the Employer will be covered by and participate in the

Kroger Employees Retirement Benefit Plan. Participation is governed by the terms of the Plan.”))

However, the Kroger Employees Retirement Benefit Plan no longer exists. That plan merged with

three other plans and then was amended to eventually become the CRBP. (Kennedy Dec., Ex. B,

R. 25., Pg. ID 519–20.)       The CRBP was terminated on September 1, 2017.           (Id. (“The

Corporation[, Kroger,] adopted an amendment on July 24, 2017 to terminate the Prior Plan[, the

Kroger Consolidated Retirement Benefit Plan,] effective as of the proposed termination date of

September 1, 2017[.]”)) The CRBP spin-off was then created—governed by a separate document

with its own grievance procedures. (Id. at 547–48.) The CBA is thus ambiguous as to what plan

Article 19, Section 19.1 identifies.

       Because the plain language of Section 19.1 is ambiguous, we may look at the extrinsic

evidence the parties offer.     See Salary Policy Emp. Panel, 149 F.3d at 493 (“[E]xtrinsic

evidence . . . can be considered under the Collective Bargaining Agreement where the language is

ambiguous.”). Kroger suggests that the Union knew that the Kroger Employee Retirement Benefit

Plan referenced in Article 19, Section 19.1 is the CRBP, because the CRBP was named in the

grievance and because the benefits are the same under both plans. However, even if the document

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Case No. 21-3228, Int’l Bhd. of Teamsters, Loc. Union No. 413 v. Kroger Co.

could be considered clearly referenced and its identity can be ascertained, it is not clear that the

incorporation of the CRBP here would not result in surprise or hardship for the Union. See

Anheuser-Busch, Inc., 626 F.3d at 262. The claim procedures in the CRBP govern disputes from

a singular person and do not address issues involving a group of employees. (Kennedy Dec., Ex.

A, R. 25., Pg. ID 438 (The “Retirement Management Committee” will “determine all facts which

are necessary to establish the right of an applicant to benefits under the provisions of the Plan and

the amount thereof as herein provided.”).) Because Kroger cannot show that the CRBP was clearly

identified in Article 19, Section 19.1 and that the Union would not be surprised or face hardship

with its incorporation, the dispute was not expressly excluded from arbitration.

       B. Is There Forceful Evidence of a Purpose to Exclude this Dispute from Arbitration?

       Kroger has one more avenue by which to rebut the presumption in favor of arbitration—

offering “forceful evidence” that the parties intended to exclude the dispute from arbitration. AT

& T Techs., 475 U.S. at 650 (quoting Warrior & Gulf Navigation Co., 363 U.S. at 584–85) (“In

the absence of any express provision excluding a particular grievance from arbitration, . . . only

the most forceful evidence of a purpose to exclude the claim from arbitration can prevail.”). But

it offers no such evidence. Instead, Kroger argues that because it continued to provide the benefits

articulated in Article 19, Section 19.1 and because Laymon testified that this provision does not

address whether Kroger will provide union members the same payment options offered to

management and non-union hourly associates, “it follows logically that the parties intended to

exclude the subject of the alleged ‘grievance’ from arbitration.”           Kroger also points to

conversations that occurred during the creation of the CBA regarding the rejected proposal to

include the same payment options and retirement benefits for union and non-union employees and

the definition of “employee” in the CBA.

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Case No. 21-3228, Int’l Bhd. of Teamsters, Loc. Union No. 413 v. Kroger Co.

       However, this evidence speaks to the merits of the case—specifically the interpretation of

the language in Article 19, Section 19.1 as to retirement payment options—which we do not look

at here. See General Drivers, Salesmen and Warehousemen’s Local Union No. 984 v. Malone &

Hyde, Inc., 23 F.3d 1039, 1043 (6th Cir. 1994) (“[I]t is not for the courts to weigh the merits of a

grievance or to undertake to determine the rights of parties under a collective bargaining

agreement.”); see also United Steelworkers of Am. v. Am. Mfg. Co., 363 U.S. 564, 567 (1960) (The

underlying “question of contract interpretation [is] for the arbitrator.”). Kroger is, therefore,

unable to rebut the presumption in this manner either.

       Finally, Kroger’s contention that Anheuser-Busch compels a different outcome is

unpersuasive. We did not eliminate the express-exclusion hurdle for all cases involving ERISA-

covered retirement plans in Anheuser-Busch. See 626 F.3d at 262. Rather, we discussed the

applicability of incorporated terms from a referenced document for purposes of the express-

exclusion exception to the presumption of arbitrability. Furthermore, the grievance procedures in

the plan in Anheuser-Busch directly dealt with the dispute at issue. See Local 1982, Int’l

Longshoremen’s Ass’n v. Midwest Terminals of Toledo, Int’l, Inc., 560 F. App’x. 529, 537 (6th

Cir. 2014) (noting that Anheuser-Busch and Int’l Ass’n of Machinists v. AK Steel Corp., 615 F.3d

706, 711–13 (6th Cir. 2010) “involved CBA clauses that excluded certain categories of grievances

from arbitration without any arguable ambiguity”).

                                                III.

       A presumption of arbitrability applies to the CBA’s broad arbitration clause. And both of

Kroger’s attempts to rebut the presumption fall short. Accordingly, for the foregoing reasons, we

affirm the district court’s grant of summary judgment to the Union and denial of summary

judgment to Kroger.

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