Court Opinion

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Opinions of the United
1999 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit

1-6-1999

Bell Atl PA v. Communications
Precedential or Non-Precedential:

Docket 98-1231

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Filed January 6, 1999

UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT

NO. 98-1231

BELL ATLANTIC - PENNSYLVANIA, INC.

v.

COMMUNICATIONS WORKERS OF AMERICA,
AFL-CIO, LOCAL 13000; COMMUNICATIONS
WORKERS OF AMERICA, AFL-CIO, DISTRICT 13,
       Appellants

On Appeal From the United States District Court
For the Eastern District of Pennsylvania
(D.C. Civ. No. 97-cv-04179)
District Judge: Honorable Clarence C. Newcomer

Argued: November 16, 1998

Before: BECKER, Chief Judge, GREENBERG, Circuit Judges
and McLAUGHLIN, District Judge.*

(Filed January 6, 1999)

       PAULA R. MARKOWITZ, ESQUIRE
       (ARGUED)
       Markowitz & Richman
       121 South Broad Street
       Suite 1100
       Philadelphia, PA 19107

Counsel for Appellants

_________________________________________________________________

*Honorable Sean J. McLaughlin, United States District Judge for the
Western District of Pennsylvania sitting by designation.
       LAWRENCE S. COBURN, ESQUIRE
       (ARGUED)
       Pepper, Hamilton & Scheetz
       18th & Arch Streets
       3000 Two Logan Square
       Philadelphia, PA 19103-2799

       Counsel for Appellees

OPINION OF THE COURT

BECKER, Chief Judge.

This labor arbitration appeal presents the question
whether the District Court erred in finding that it was the
role of the court--and not an arbitrator--to determine
whether the underlying dispute between the parties was
subject to one particular arbitration procedure rather than
another. We conclude that this issue--which of two
arbitration procedures in a collective bargaining agreement
applies to a particular labor dispute--is one of "procedural
arbitrability," and therefore should be decided by an
arbitrator and not a federal court. We therefore reverse.

I. Facts and Procedural History

The parties to this dispute are Bell Atlantic-Pennsylvania
("Bell") and a local and regional body of the
Communications Workers of America (collectively "CWA").
Bell and the CWA, or their predecessors, have been parties
to a collective bargaining agreement ("CBA") for more than
half a century. The version of the CBA that is material to
this appeal was modified and extended on August 6, 1995,
with an effective ending date of August 8, 1998. Under the
CBA, the parties have agreed to arbitrate most disputes
under the contractual arbitration procedure (the "regular
arbitration" procedure). However, under the CBA, some
disputes that might arise are explicitly excluded from
arbitration, while others may only be arbitrated under a
special arbitration procedure (the "expedited arbitration"
procedure). Finally, some disputes may be arbitrated under
either arbitration procedure.

                                  2
The dispute underlying the present appeal, which is not
before us (and was not before the District Court), revolves
around Bell's reorganization of certain of its administrative
units. Following negotiations between the parties pursuant
to the CBA's administrative-reorganization provisions, Bell
and the CWA reached an impasse, and Bell implemented its
proposed reorganization. The Union claimed that this
reorganization violated the CBA in a number of respects,
including alleged violations of the CBA provisions governing
employee transfers, involuntary assignments, overtime, and
definition of employee duties. It requested that these
disputes be submitted to the regular arbitration procedure
of the CBA. Bell refused, arguing that the administrative-
reorganization provision of the CBA authorized the Union to
use only the expedited arbitration procedure to resolve
such disputes.

Bell then sued in the District Court, alleging that the
Union had violated the CBA by insisting on submitting the
above dispute to regular arbitration, and seeking a
declaratory judgment that such disputes could only be
submitted to the expedited arbitration procedure.1 Upon
cross-motions for summary judgment, the District Court
granted Bell's motion, holding that (1) the determination
whether the parties' dispute must be submitted to the
expedited arbitration procedure and not the regular
procedure was a matter of "substantive arbitrability," and
therefore for the court to decide; (2) Bell was not required
to arbitrate its allegation that the Union had violated the
CBA; and (3) the CBA provision in question required the
Union to submit the underlying dispute to the expedited
arbitration procedure and not the regular arbitration
procedure. The Union filed a timely notice of appeal. We
have jurisdiction pursuant to 28 U.S.C. S 1291.2
_________________________________________________________________

1. The District Court had jurisdiction pursuant to section 301 of the
Labor-Management Relations Act, 29 U.S.C. S 185, the Declaratory
Judgment Act, 28 U.S.C. SS 2201-2202, and 28 U.S.C. S 1331.

2. While we review for clear error a district court's factual
determination
that a contractual dispute is arbitrable, see Lukens Steel Co. v. United
Steelworkers, 989 F.2d 668, 672 (3d Cir. 1993), we exercise plenary
review over the legal question presented here, i.e., whether a contractual
dispute is one of substantive or procedural arbitrability.

                               3
II. The Collective Bargaining Agreement's Arbi tration
       Provisions

The CBA at issue here includes a number of provisions
governing contract disputes between the parties. The
grievance-and-arbitration provision of the CBA provides:

       If, at any time, a controversy should arise between the
       Union and the Company regarding the true intent and
       meaning of any provision of this Agreement or
       regarding any claim that either party has not
       performed a commitment of this Agreement, the
       controversy may be presented for review in accordance
       with the [grievance provisions] of this Article. If the
       controversy is processed under these Sections and is
       not satisfactorily settled, the Union or the Company, by
       written notice specifying the Section of the Agreement
       alleged to be violated, may submit the question under
       dispute to arbitration in accordance with the provisions
       of Article 13 of this Agreement.

CBA S 10.07. Article 13, in turn, provides that "[t]here shall
be arbitrated only the matters specifically made subject to
arbitration by the provisions of this Agreement," id. S 13.01,
and that "[t]he procedure for arbitration is set forth in
Exhibit B," id. S 13.02.

Exhibit B provides, in relevant part:

       The procedure to be followed in instituting and
       conducting the arbitration of any matter subject to
       arbitration under the provisions of Article 13, shall be
       as follows, except that the tripartite board may be
       eliminated and an agency other than the American
       Arbitration Association may be substituted upon
       mutual agreement of the parties.

Id. S B1.01. The remaining parts of Article B1 contain the
details of the procedure "to be followed in instituting and
conducting the arbitration of any matter subject to
arbitration under the provisions of Article 13," including the
appointment of an arbitrator by each side and the selection
of an impartial third arbitrator.

Exhibit B also contains a procedure for "expedited
arbitration":

                               4
       In lieu of the procedures specified in Section B1 of this
       Agreement, any grievance involving the suspension of
       an individual employee, [with certain exceptions not
       here relevant,] shall be submitted to arbitration under
       the expedited arbitration procedure hereinafter
       provided within fifteen (15) calendar days after the
       filing of a request for arbitration. In all other grievances
       involving disciplinary action which are specifically
       subject to arbitration under Article 11 of this
       Agreement, both parties may, within fifteen (15)
       calendar days after the filing of the request for
       arbitration, elect to use the expedited arbitration
       procedure hereinafter provided. The election shall be in
       writing and, when signed by authorized representatives
       of the parties, shall be irrevocable. If no such election
       is made within the foregoing time period, the
       arbitration procedure in Section B1 shall be followed.

Id. S B2.01.

The underlying dispute in this case is governed, inter
alia, by Article 39 of the CBA. Under Article 39, Bell must
follow certain procedures when a reorganization is
contemplated, including consulting with the Union. If these
consultations fail to result in a reorganization agreement,
Bell may implement its own plan. Under the provision at
the heart of this case, "[i]f management implements
procedures without the agreement of the Union, the Union
may submit to expedited arbitration the question whether
the procedures implemented are in compliance with the
standards and requirements listed in [section] 39.05." Id.
S 39.07.

III. Substantive and Procedural Arbitrability

The ultimate question presented by Bell's initial
complaint is whether Article 39 requires the Union to use
the expedited arbitration procedure to resolve the disputes
surrounding Bell's administrative reorganization. However,
a threshold question--one that is dispositive of this appeal
--is interposed, for when faced with a dispute involving
labor arbitration, a federal court must first determine
whether resolution of the disagreement is for the court or

                               5
for an arbitrator to undertake. In this case, Bell argued and
the District Court found that the issue of which arbitration
procedure applied to the parties' reorganization dispute was
a matter properly for the court, and not an arbitrator, to
decide. For the reasons that follow, we disagree.

A.

Disputes surrounding arbitration have often been divided
into the categories of "substantive arbitrability" and
"procedural arbitrability." Substantive arbitrability refers to
the question whether a particular dispute is subject to the
parties' contractual arbitration provision(s). Absent a clear
expression to the contrary in the parties' contract,
substantive arbitrability determinations are to be made by
a court and not an arbitrator. Our national labor policy
evinces a strong preference for peaceful, self-resolution of
labor-management disputes, as explained in the famous
"Steelworkers' Trilogy."3 However, if an arbitrator were to
decide the substantive arbitrability issue, a party objecting
to having the underlying dispute submitted to arbitration
on the ground that it did not consent to do so would
already have its alleged intent (to not submit the dispute to
arbitration) ignored. See Gateway Coal Co. v. United Mine
Workers, 414 U.S. 368, 374 (1974) ("The law compels a
party to submit his grievance to arbitration only if he has
contracted to do so."); John Wiley & Sons, Inc. v. Livingston,
376 U.S. 543, 547 (1964) ("The duty to arbitrate being of
contractual origin, a compulsory submission to arbitration
cannot precede judicial determination that the collective
bargaining agreement does in fact create such a duty.").
Therefore, parties may be sent to arbitration only after the
court so directing them is satisfied that this was their
intent and that both parties consented to do so in their
contractual agreement.

Once this threshold determination has been made by the
court, i.e., once the court has discerned the parties' intent
_________________________________________________________________

3. See United Steelworkers v. Enterprise Wheel & Car Corp., 363 U.S.
593, 598-99 (1960); United Steelworkers v. Warrior & Gulf Navigation
Co., 363 U.S. 574, 577-78 (1960); United Steelworkers v. American Mfg.
Co., 363 U.S. 564, 566-67 (1960).

                               6
to submit their underlying dispute to arbitration, any
further matters surrounding the dispute are to be
submitted to the arbitration procedure. See Chauffeurs,
Teamsters & Helpers, Local Union No. 765 v. Stroehmann
Bros. Co., 625 F.2d 1092, 1093-94 (3d Cir. 1980) ("The
court's role . . . [is] to determine whether the underlying
subject matter of the grievance was arbitrable. Once that
determination has been made the entire dispute must be
resolved by the arbitrator." (citation omitted)). These other
matters are labeled, perhaps underinclusively, procedural
arbitrability issues, and are resolved as part of the
arbitration procedure to which the parties have committed
themselves, as a number of cases, arising in somewhat
different scenarios but nonetheless instructive here,
demonstrate. We set them forth in the margin.4

In its leading procedural arbitrability case, the Supreme
_________________________________________________________________

4. See, e.g., International Union of Operating Eng'rs, Local 150 v. Flair
Builders, Inc., 406 U.S. 487, 491-92 (1972) ("[O]nce a court finds that,
as
here, the parties are subject to an agreement to arbitrate, and that
agreement extends to `any difference' between them, then a claim that
particular grievances are barred by laches is an arbitrable question
under the agreement."); Independent Ass'n of Continental Pilots v.
Continental Airlines, 155 F.3d 685, 696 (3d Cir. 1998) (holding that
"determination of the parameters and scope" of an arbitrator's award,
which involved "an analysis of the interplay" between various contract
provisions, was a matter for the arbitrator to decide, not the courts);
Whittle v. Local 641, Int'l Bhd. of Teamsters, 56 F.3d 487, 490 n.2 (3d
Cir. 1995) ("Timeliness is a procedural issue, and in an arbitration
proceeding, procedural issues are for the arbitrator to decide."); Troy
Chem. Corp. v. Teamsters Union Local No. 408, 37 F.3d 123, 127-28 (3d
Cir. 1994) ("Once the court decided that the discharges were subject to
arbitration, it should have held that the dispute was arbitrable and that
matters relating to compliance with the grievance procedure or a waiver
were matters for the arbitrator."); Stroehmann Bros. Co., 625 F.2d at
1093 ("[T]he significance of a default in literal compliance with a
contractual procedural requirement calls for a determination of the
intention of the parties to the contract. Such a determination . . .,
under
the governing case law, [is a matter] for the arbitrator."); Controlled
Sanitation Corp. v. District 128, Int'l Ass'n of Machinists & Aerospace
Workers, 524 F.2d 1324, 1331 (3d Cir. 1975) (holding that company's
contention that union repudiated the agreement to arbitrate a particular
dispute was a matter for the arbitrator, and not the court, to decide).

                               7
Court explained why procedural arbitrability issues are best
left to the arbitrator:

        Doubt whether grievance procedures or some part of
       them apply to a particular dispute, whether such
       procedures have been followed or excused, or whether
       the unexcused failure to follow them avoids the duty to
       arbitrate cannot ordinarily be answered without
       consideration of the merits of the dispute which is
       presented for arbitration.

John Wiley & Sons, 376 U.S. at 557. Therefore, procedural
issues are to be resolved by the arbitrator, once (and only
after) the court determines that the underlying dispute is
one the parties have agreed to submit to the arbitrator.

B.

The District Court in this case believed that the threshold
question before it was "whether the subject matter of the
instant dispute is covered and/or excluded from regular
arbitration under Sections 10.07 and B1." Bell Atl.-Pa., Inc.
v. Communications Workers, Local 13000, No. CIV.A.97-
4179, 1998 WL 84017, at *9 (E.D. Pa. Feb. 26, 1998)
(emphasis added). Put another way, the court found that
"the issue presented is whether the Company agreed to
arbitrate Article 39 disputes through Section B1 regular
arbitration--a question of substantive arbitrability." Id.
(emphasis added). However, the actual threshold question
before us--and given our resolution of this issue, the only
one before us--is whether Bell agreed to arbitrate Article 39
disputes. This is both a question of substantive arbitrability
and, given Bell's concession that the reorganization
disputes are subject to some arbitration procedure, a
foregone conclusion. Bell does not contend that it did not
agree to arbitrate disputes arising from its administrative
reorganizations. Rather, it disagrees with the Union's claim
that these disputes are subject to a particular arbitration
procedure. This disagreement, however, is not one of
substantive arbitrability.

The fundamental error of the District Court was its
expansion of the basic substantive arbitrability question

                               8
("whether or not the company was bound to arbitrate"5) into
a much broader inquiry, one that falls outside of the
substantive arbitrability domain ("whether the particular
arbitration clause covers the subject matter of the
particular dispute between the parties"6). Such an
expansion is unwarranted. It is inconsistent with this
Court's and the Supreme Court's precedents in this area
and it is not dictated by the policy concerns behind the
substantive arbitrability doctrine.7
_________________________________________________________________

5. AT&T Techs., Inc. v. Communications Workers, 475 U.S. 643, 649
(1986) (internal quotations omitted).

6. Bell Atl.-Pa., 1998 WL 84017, at *10.

7. In support of its position, Bell cites two cases ostensibly involving
multiple arbitration procedures like those that exist here. The first,
Adams v. Gould, Inc., 687 F.2d 27 (3d Cir. 1982), is completely
inapposite. The "sole question" in that interlocutory appeal was "whether
certain individual employees . . . [were] bound by the results of an
arbitration between their employer and their union and thereby barred
from bringing their complaint in federal court." Id. at 28. In Adams, the
union had arbitrated a grievance under one of two arbitration clauses,
and an arbitration award was eventually issued. Individual employees
then sought to litigate in federal court the same dispute that was the
subject of the arbitration. We reversed the district court's denial of
summary judgment on behalf of the employer, concluding that the
employees were bound by the results of the arbitration. See id. at 33.
One of the grounds that the individual employees urged in support of
their argument that they were not bound by the arbitration award was
that the parties (i.e., the employer and union) had used the incorrect
arbitration procedure. See id. at 32. There is no indication that the
parties actually discussed this issue during the arbitration or that the
arbitrator adjudicated the issue. Rather, it arose only in the collateral
context of our examining the employees' claim that they were not bound
by the already-issued arbitration award. Not surprisingly, given that no
alternative forum existed for resolving this issue, we reached (and
rejected) it. We were in no way faced squarely with the issue presented
here: must the court, rather than an arbitrator, determine which is the
appropriate arbitration procedure when the parties agree that their
dispute will be arbitrated at some future date?

The other case relied on by Bell comes from the Seventh Circuit. See
Torrington Co. v. Local Union 590, Int'l Union of Auto. Workers, 803 F.2d
927 (7th Cir. 1986). Although the court in Torrington decided which of
two arbitration provisions applied to the parties' underlying dispute,

                               9
The District Court invoked these policy concerns when it
found that submitting to an arbitrator the issue of which
arbitration provision applies to the parties' dispute "would
possibly deter other Unions and employe[rs] from entering
into such agreements to arbitrate." Bell Atl.-Pa., 1998 WL
84017, at *10 n.8. The District Court's concern is simply
misplaced: Bell is bound to arbitrate the underlying dispute
no matter what the court decides. Allowing an arbitrator to
determine which procedure will be used does not force Bell
to arbitrate any disputes that it believed it was withholding
from arbitration--unlike the situation when the basic
determination of whether or not an underlying dispute is
arbitrable is sent to an arbitrator.

What Bell asks us to do here is to greatly expand the
class of substantive arbitrability cases. In its view, the
disagreement between the parties--whether a dispute will
be resolved through arbitration procedure A or arbitration
procedure B--is no different from the traditional
substantive arbitrability question--whether a dispute will
be resolved through an arbitration procedure or through
some other means, such as litigation, a strike, or a lockout.
This argument, however, has no logical limits. If the present
case involves substantive arbitrability, why not also a case
asking whether a dispute is to be resolved through an
arbitration procedure or an unexhausted grievance
procedure? See John Wiley & Sons, 376 U.S. at 556-57
(employer's argument that union must first submit dispute
to grievance procedure was a matter for the arbitrator to
decide).
_________________________________________________________________

neither party argued that this was an issue for the arbitrator and not for
the court to decide. Further, the union originally sought to litigate in
court the underlying dispute, arguing that none of the arbitration
provisions applied, presenting the court with a clear substantive
arbitrability problem. Finally, the court found that the arbitration
procedure that the union (subsequently) argued should be used clearly
and expressly did not apply to the underlying dispute. See id. at 931.
This distinguishes that provision from the regular arbitration provision
in the present case. Cf. PaineWebber, Inc. v. Hartmann, 921 F.2d 507,
513 (3d Cir. 1990) (holding that the "plain language" of the parties'
contract, which limited the cases "eligible for submission to
arbitration,"
rendered the underlying dispute not arbitrable).

                               10
We find the present case functionally indistinguishable
from (and controlled by) those cases in which the parties
agree that an underlying dispute is arbitrable, but disagree
about the effect of laches, waiver, exhaustion of pre-
arbitration steps, limitations periods, or other "procedural"
issues. See supra note 4. Bell and its Union agree that
disputes over the reorganization of administrative groups
may be resolved through arbitration; they simply disagree
on the procedures to be followed. The Union has asked that
both of these issues--the reorganization dispute and the
procedure to be followed--be submitted to an arbitrator,
and we hold that this is the proper course for the parties.
See John Wiley & Sons, 376 U.S. at 558 (holding that the
court must send the parties to arbitration in "cases in
which arbitrability of the subject matter is unquestioned
but a dispute arises over the procedures to be followed").8

The District Court's judgment will be reversed and this
case remanded for further proceedings consistent with this
opinion.

A True Copy:
Teste:

       Clerk of the United States Court of Appeals
       for the Third Circuit
_________________________________________________________________

8. Because we hold that the District Court erred in finding that the
question of which arbitration procedure should be followed was an issue
for the court, and not an arbitrator, to decide, we do not reach the other
issues decided by the District Court. This includes its holding that Bell
was not required to submit its allegation that the Union violated the CBA
to an arbitrator, and the District Court's ultimate determination
regarding the meaning of section 39.07 of the CBA. The first of these
issues is mooted by our resolution of this appeal, while the second issue,
as we have held above, is not for us (or the District Court), but for the
arbitrator to decide.

                                11