Court Opinion

ID: 163451
Source: CourtListenerOpinion
Date Created: 2010-08-14 07:53:50+00
Date Added: 2024-06-11T09:41:51.963221
License: Public Domain

F I L E D
                                                                 United States Court of Appeals
                                                                         Tenth Circuit

                                                                         MAY 7 2003
                   UNITED STATES COURT OF APPEALS
                                                                    PATRICK FISHER
                                                                             Clerk
                               TENTH CIRCUIT

 OIL, CHEMICAL AND ATOMIC
 WORKERS INTERNATIONAL UNION
 LOCAL 5-391; LOCAL 5-857 OIL,
 CHEMICAL & ATOMIC WORKERS
 INTERNATIONAL UNION, sued as: Oil,
 Chemical & Atomic Workers International
 Union (AFL-CIO) and its Local 5-857,
 Labor Organizations,
                                                    Nos. 01-5222 & 02-5000
                                                   (D.C. No. 97-CV-682-H)
             Plaintiffs - Appellees
                                                   (N. District of Oklahoma)
             - Cross-Appellants,

 v.

 CONOCO, INC., a Delaware corporation,

             Defendant - Appellant
             - Cross-Appellee.

                          ORDER AND JUDGMENT *

Before TACHA, Chief Judge, LUCERO Circuit Judge and ROBINSON **,
District Judge.

      *
        This order and judgment is not binding precedent, except under the
doctrines of law of the case, res judicata, and collateral estoppel. This court
generally disfavors the citation of orders and judgments; nevertheless, an order
and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3.
      **
          The Honorable Julie A. Robinson, United States District Judge for the
District of Kansas, sitting by designation.
      This case has previously been before us. Oil, Chem. & Atomic Workers

Int’l Union v. Conoco, Inc., 241 F.3d 1299, 1301 (10th Cir. 2001). Following our

remand, the district court parsed the parties claims as to the arbitrability of union

grievances under several collective-bargaining agreements (“CBAs”), and referred

certain issues to arbitration while holding others not arbitrable as a matter of law.

We now consider cross-appeals from both Conoco, Inc. (“Conoco”) and the Oil,

Chemical and Atomic Workers International Union (AFL-CIO) and its Local 5-

857 (“the Union”). Exercising jurisdiction pursuant to 28 U.S.C. § 1291, we

affirm in part and reverse in part.

                                           I

       Under the terms of three separate CBAs, the Union filed numerous

grievances against Conoco, challenging, inter alia, Conoco’s handling of certain

job reductions at its Ponca City, Oklahoma refinery. 1 Each CBA contains a

provision entitled “Settlement of Grievances,” which provides:

      A grievance is a dispute or conflict between the Company and the Union as
      to the interpretation or application of the terms of this Agreement.
      ....
      Only differences arising between the Union and the Company relating to
      interpretation or performance of this Agreement which cannot be adjusted
      by mutual agreement and have gone through the grievance procedure are
      arbitrable, except as otherwise provided in this Agreement.

      1
       The three collective-bargaining agreements include: (1) the “Refinery
Agreement”; (2) the “Technology Agreement”; and (3) the “Clerical Agreement.”

                                               -2-
(Appellant’s App. at 94–95.) When the parties could not settle the grievances

through the initial grievance procedure outlined in the CBAs, the Union requested

arbitration. Conoco refused, citing the “Management’s Rights” provision

contained in each CBA, which provides:

      Grievances originating under [this Management’s Rights Clause] are
      subject to the grievance procedure but cannot be submitted to arbitration;
      and no arbiter has the authority to rule on [this clause] with the exception
      of determination of just cause. . . .

(Id. at 71 (emphasis added).) In each of the CBAs, this Management’s Rights

Clause sets forth certain functions that are “solely the responsibility of

management,” including “[h]iring, maintaining order, and discipline or discharge”

and “the assignment of work subject only to other provisions of [the Agreement].”

(Id. at 70 (emphasis added).) Thus, the CBAs are subject to the grievance and

arbitration process in their entirety, except for grievances “originating” under the

Management’s Rights Clause. Conoco refused the Union’s requests for

arbitration on the theory that each of the grievances filed by the Union

“originates” under the Management’s Rights Clause without implicating other

terms of the CBA.

      In July 1997, the Union brought suit against Conoco, seeking to compel

arbitration of the grievances. In a Joint Statement as to Grievance Classifications,

the parties placed the grievances into four separate categories. The first three

                                          -3-
categories of grievances relate to Conoco’s use of contract workers at its Ponca

City, Oklahoma refinery, while the fourth category relates to the use of a non-

bargaining-unit member to perform certain clerical work. On May 20, 1999, the

district court issued an order sending all the grievances to arbitration without

determining arbitrability. Oil, Chem. & Atomic Workers Int’l Union v. Conoco,

Inc., No. 97-CV-682-H, slip op. at 2 (N.D. Okla. May 20, 1999). However, the

Tenth Circuit vacated and remanded this order, holding that Conoco was entitled

to a ruling on the arbitrability of the Union’s grievances before being compelled

to submit to arbitration. Oil, Chem. & Atomic Workers Int’l Union, 241 F.3d at

1301. On remand, the district court determined that: (1) grievances in Category

One and Category Two are arbitrable, and must be submitted to arbitration; (2)

the Category Three grievance is moot; and (3) the Category Four grievances are

not arbitrable as a matter of law. Conoco now appeals the district court’s

determination that grievances in Category One and Category Two are arbitrable;

the Union, on cross-appeal, argues that grievances in Category Three and

Category Four should also be sent to arbitration.

                                         II

      We review de novo the question of whether a dispute is arbitrable under a

collective-bargaining agreement. O’Connor v. R.F. Lafferty & Co., Inc., 965 F.2d

893, 901 (10th Cir. 1992). In determining whether the parties have agreed to

                                         -4-
arbitrate an issue, we are guided by certain well-established rules. First,

“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

(1960). The second rule, “follow[ing] inexorably from the first,” AT&T Techs.,

Inc. v. Communications Workers of Am., 475 U.S. 643, 649 (1986), is that “the

question of arbitrability is an issue for judicial determination [u]nless the parties

clearly and unmistakably provide otherwise,” Howsam v. Dean Witter Reynolds,

Inc., 123 S. Ct. 588, 591 (2002) (alteration in original) (quotation omitted).

Third, in reviewing the parties’ grievances, the court is not to rule on the potential

merits of the underlying claims. AT&T, 475 U.S. at 649. As the Supreme Court

has noted, “[w]hether ‘arguable’ or not, indeed even if it appears to the court to

be frivolous, the union’s claim that the employer has violated the collective-

bargaining agreement is to be decided, not by the court asked to order arbitration,

but as the parties have agreed, by the arbitrator.” Id. at 649–50. Finally, there is

a presumption of arbitrability, meaning 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.” Id. at 650

(emphasis added) (quotation omitted). “[O]nly the most forceful evidence of a

                                          -5-
purpose to exclude the claim from arbitration can prevail.” Id. at 651 (quotation

omitted). This principle “recognizes the greater institutional competence of

arbitrators in interpreting collective-bargaining agreements.” Id. at 650.

      With these principles in mind, we consider the four categories of

grievances.

                                         III

       The first two categories relate to Conoco’s use of contract workers at its

Ponca City, Oklahoma refinery. Conoco argues that its use of contract workers is

governed solely by Article 12 of the Refinery Agreement, the Management’s

Rights Clause of this particular CBA, which gives the Union the right to transfer

employees and to assign work. Because the dispute originates under the

Management’s Rights Clause, Conoco argues, this issue is not arbitrable as a

matter of law. In response, the Union emphasizes that under the Management’s

Rights Clause, Conoco’s rights are “subject . . . to other provisions [in the]

Agreement.” (Appellant’s App. at 70–71.) The question presented, therefore, is

whether Conoco’s right to transfer and assign work in this instance is indeed

limited by “other provisions [in the] Agreement.” (Id.)

      According to the Union, Article 36 of the Refinery Agreement limits

Conoco’s right to contract out work in two important ways, rendering the dispute

                                         -6-
concerning Conoco’s use of contract workers arbitrable. First, Article 36

provides:

          The Company agrees that it will not bring contractors into the plant to
          perform production or maintenance work if it will result in the lay-off of
          regular, full-time employees.

(Id. at 97.) In the instant case, employees were not separated from service, but

transferred into the general labor pool. Concluding that the term “lay-off,” as

used in the Agreement, “unequivocally requires a separation from service,” the

district court found that the first limitation in Article 36 was not implicated. 2 Oil,

      2
           Article 8 provides:

      TERMINATION OF REGULAR, FULL-TIME EMPLOYEES DUE TO
      FORCE REDUCTION
             The Company shall give the Union 90 days’ written notice
      prior to the termination of regular, full-time employees due to a force
      reduction. During the 90-day period, the Company will discuss this
      matter with the Union for the purpose of determining ways and
      means of avoiding the force reduction or lessening the effect on the
      employees involved.
             The Ponca City Refinery bargaining unit employee with the
      most recent date of regular, full-time status will be the first employee
      laid-off.

(Appellant’s App. at 69.)
     Article 34 explains the procedure by which layoffs and recalls are to be
accomplished:

      LAYOFF AND RECALL
      34-1 In the event of a force reduction in the Ponca City Refinery,
           casual, temporary, and probationary employees in the
           bargaining unit will be laid off first. After all the casual,
           temporary, and probationary employees are laid off, the

                                           -7-
Chem. & Atomic Workers Int’l Union v. Conoco, Inc., No. 97-CV-682-H, slip op.

at 6 (N.D. Okla. Nov. 19, 2001). While the Union does not contend that there

have been separations from service, it nevertheless maintains that because Union

employees were given lower-paying jobs, there have been constructive lay-offs

implicating Article 36. We disagree. Insofar as the term “lay-off” is clearly used

in the Refinery Agreement to indicate a separation from service, a condition not

present in any of the grievances, there is no need to send this issue to arbitration.

We conclude that interpretation of the first limitation in Article 36 is unnecessary

and, thus, the grievances in question are not arbitrable under this provision as a

matter of law.

       A second limitation contained in Article 36 provides:

           In addition, maintenance craft work will not be contracted as long as there
           are employees holding numbers in the crafts in which work is contracted
           working as laborers. 3

                employee with the most recent date of regular, full-time status
                who is a bargaining unit employee in the Ponca, City Refinery
                at the time of the force reduction will be the first employee
                laid off. . . .
(Id. at 96.)

       3
         A person “holds a number” if he is assigned to a position in a recognized
department or craft, which is referred to at the Conoco refinery as a “progression
unit.” (Appellant’s App. at 51.) Each progression unit consists of two kinds of
employees: “full numbers” who are full-time workers in the progression, and
“replacement numbers” who are people who fill in when the full numbers are not
available. (Id. at 21.) “Holding numbers” refers to full numbers and replacement
numbers. (Id.)

                                               -8-
(Appellant’s App. at 97.) According to Conoco’s interpretation of this provision,

when a Union-represented employee is removed from his craft and transferred to a

different position (including the position of laborer), that employee loses his

number. If Conoco subsequently hires a contract worker to fill the slot in the

craft from which the Union employee was just transferred, Article 36 is not

implicated because that Union-represented employee no longer holds a number in

the craft. Because Article 36 is not implicated, agues Conoco, there is no

limitation on management’s rights under Article 12 and the matter is not

arbitrable as a matter of law.

      In response, the Union argues that this interpretation would render nugatory

the second limitation on the use of contract workers in Article 36 because it

would effectively allow Conoco to destroy the Union by replacing all Union-

represented employees holding a number in a craft with contract workers. A more

reasonable interpretation of Article 36, the Union argues, is that “so long as there

are employees holding numbers in a particular craft, no contractor will work in

that craft.” (Id. at 21.)

      Because our inquiry is limited to deciding arbitrability, we do not decide

which interpretation is the stronger. Under Article 31 of the Refinery Agreement,

differences arising between the Union and Conoco relating to the interpretation or

performance of the Agreement (except for those disputes that “originate” under

                                         -9-
Article 12) are arbitrable. Given these competing interpretations of the second

limitation in Article 36, and keeping in mind the presumption of arbitrability,

AT&T, 475 U.S. at 650, we are unable to say “with positive assurance that the

arbitration clause is not susceptible of an interpretation that covers the asserted

dispute,” id. Thus, we conclude that the district court was correct to find that an

interpretation of the second limitation in Article 36 is necessary to resolve the

grievances at issue.

                                         IV

      The Category Three grievance presents precisely the same issue we

considered in Categories One and Two above, with one difference: the individual

involved, Virgil Palmer, is no longer employed by Conoco. This fact, coupled

with the fact that the only remedy sought for Palmer was that Conoco “recognize

Mr. Palmer’s seniority ranking and keep him in the transportation progression,”

led the district court to conclude that the grievance is moot and therefore not

arbitrable as a matter of law. Oil, Chem. & Atomic Workers Int’l Union, slip op.

at 7 (N.D. Okla. Nov. 19, 2001).

      On appeal, the Union argues that the issue of mootness is itself a question

that should be resolved by an arbitrator. In considering whether the question of

mootness is a “question of arbitrability,” Howsam, 123 S. Ct. at 591, we note that

although “one might call any potentially dispositive gateway question a ‘question

                                         -10-
of arbitrability,’ . . . for purposes of applying the interpretive rule, the phrase

‘question of arbitrability’ has a far more limited scope.” Id. at 592. For

example, in Howsam, the Supreme Court held that the issue of whether the statute

of limitations has run is a question for the arbitrator, notwithstanding the fact that

an Article III court could have easily interpreted and applied the NASD rule in

the circumstances of that case. In inventorying the issues that are not “questions

of arbitrability” subject to review by the courts, i.e., time limits, notice, laches,

and estoppel, the Supreme Court did not address mootness. Nevertheless, it is

evident that the inquiry involved in assessing whether a statute of limitations has

run (when a cause of action has accrued or expired) is akin to a mootness inquiry

(when a cause of action is no longer viable) for purposes of determining questions

of arbitrability. 4

       Furthermore, in Howsam, the Court noted that the phrase “question of

arbitrability” is limited to “the kind of narrow circumstance where contracting

parties would likely have expected a court to decide the gateway matter.” Id.

While the Refinery Agreement does not specifically address who should decide

questions of mootness, the Supreme Court has held that when faced with a broad

       4
         In Howsam, the particular statute of limitations involved was a NASD
time-limit rule. While this fact had some bearing on the Court’s determination,
the Court’s references to time-limit rules generally suggest that the Court’s
holding is not limited to only those time-limit rules belonging to a particular
arbitral body.

                                          -11-
arbitration clause, as we are in the instant case, “only the most forceful evidence

of a purpose to exclude the claim from arbitration can prevail.” AT&T, 745 U.S.

at 650. We can find no evidence to suggest that the parties intended, in agreeing

to send nearly all grievances to arbitration, that the question of whether those

grievances were moot should not also be sent to arbitration.

       Given the tightly circumscribed role that the courts are assigned in

determining arbitrability, and considering that arbitrators have broad equitable

powers to fashion remedies, it is not for us to decide that a remedy will not be

available for a particular grievance. As discussed herein, the underlying dispute

regarding Article 36 presents an issue of interpretation for the arbitrator and must

be sent to arbitration. While our fealty to Supreme Court precedent may stand us

accused of hyper-technicality, nonetheless, we conclude that the issue of

mootness is also a question for the arbitrator, and reverse the judgment of the

district court on this issue.

                                          V

       Category Four contains two grievances arising under the Clerical

Agreement. In the first instance, the Union challenges the posting of the position

of “Yields Analyst” in the company’s Candidate Generation system on the

grounds that “[t]he responsibilities listed for this position are currently performed

by the represented employees in the Yields Department” and therefore must

                                         -12-
“continue to be filled by represented personnel.” (Appellant’s App. at 251.)

Conoco refused to arbitrate the grievance on the grounds that the Management’s

Rights portion of the Clerical Agreement, Article 16, makes clear that the deletion

and creation of jobs, including the right to discontinue any part or all of the office

and clerical activities, is within Conoco’s management’s rights, a fact that the

Union does not contest. Thus, Conoco argues that this grievance originates solely

under the Management’s Rights Clause and is not subject to arbitration.

       As in the other CBAs previously discussed, the Management’s Rights

provision in the Clerical Agreement is “subject . . . to other provisions of this

Agreement.” The Union argues that Articles 1 and 5 constitute such “other

provisions” and limit Conoco’s ability to delete and create jobs under Article 16.

Article 5 of the Clerical Agreement is entitled “Job Classifications and Rates and

Pay,” incorporating appendices listing various job classifications with

corresponding rates of pay. Article 1 of the Clerical Agreement is entitled

“Recognition,” and provides:

       The Company hereby recognizes the Union as the sole and exclusive
       representative for the purposes of collective bargaining with respect to rates
       of pay, wages, hours of employment, and other conditions of employment,
       for the employees . . . UNIT: INCLUDED: All offices and clerical
       employees in Conoco Inc.’s Ponca City, Oklahoma, refinery . . . .

(Id. at 137.) Concluding that there is nothing in Articles 1 or 5 that requires

interpretation such that an arbitrator is necessary to decide whether this grievance

                                         -13-
falls within the Management’s Rights article of the Clerical Agreement, the district

court refused to send the Category Four grievances to arbitration. We agree with

this conclusion. There is simply nothing in Articles 1 or 5 that places any

limitation on Conoco’s right to create and define the Yields Analyst position.

Thus, because Articles 1 and 5 are not even arguably implicated, there is nothing

to interpret and the grievance cannot be submitted to arbitration as a matter of law.

      The second grievance in Category Four involves an incident in which a non-

Union employee prepared and distributed retirement books, a function the Union

maintains is strictly clerical and can only be performed by a represented employee.

The Union concedes, however, that distribution of retirement books has been

performed by management-level employees in the past, and that, under Article 16,

Conoco has the right to assign work unless other provisions in the CBA place a

limitation on Conoco’s management’s rights in this context. According to the

Union, however, Articles 5 and 7 represent such “other provisions” and limit

Conoco’s power under Article 16 in this situation. Article 5 lists job

classifications and Article 7 allows vacancies to be filled by seniority. After

careful review of the parties’ arguments and the relevant articles in the CBA, we

conclude that Articles 5 and 7 place no limitations on Conoco’s Management’s

Rights relevant to the challenged conduct, and no interpretation by an arbitrator is

                                         -14-
required. Thus, we affirm the district court’s refusal to send this grievance to

arbitration.

                                         VI

      For the foregoing reasons, the judgment of the district court is AFFIRMED

in part and REVERSED in part.

                                                ENTERED FOR THE COURT

                                                Carlos F. Lucero
                                                Circuit Judge

                                         -15-
01-5222/02-5000, Oil, Chemical & Atomic Workers v. Conoco
TACHA, Chief Circuit Judge, dissenting in part.

       I join the court’s opinion as to Parts I, II, IV, and V. I respectfully dissent

as to Part III.

       The Union argues that the grievances in Categories 1 and 2 originate under

Article 36, which states:

       [Paragraph 1] The Company agrees that it will not bring contractors
       into the plant to perform production or maintenance work if it will
       result in the lay-off of regular, full-time employees.

       [Paragraph 2] In addition, maintenance craft work will not be
       contracted as long as there are employees holding numbers in the
       crafts in which work is contracted working as laborers.

       I agree with the majority that Paragraph 1 is not implicated on the facts of

this case because, contrary to the Union’s contention, none of the employees

involved in the grievances at issue was laid off. In the Refinery Agreement, the

term “lay-off” refers to a separation from service. Because the Union did not even

contend that any of the employees at issue were separated from service, the district

court properly held that those grievances did not arise under Paragraph 1.

Accordingly, the Category 1 and 2 grievances are not arbitrable as a matter of law.

       Contrary to the majority’s holding, however, Paragraph 2 does not apply

either. First, it is not clear to me why an ostensible difference of interpretation as

to the literal, unglossed meaning of Paragraph 2 is sufficient to force the parties to

arbitration, while an ostensible difference of interpretation as to the meaning of

“lay-off” in Paragraph 1 is not. The majority relies on the plain meaning of
Article 36 (Paragraph 1), Article 8, and Article 34 to hold as a matter of law that

none of the grievances arises under Paragraph 1; so, presumably the distinction

lies in the degree of certainty with which we may establish that the plain language

of each provision does or does not support a grievance. But the plain meaning of

Paragraph 2 is just as clear, to me, as that of Paragraph 1; indeed, we need not

look beyond Paragraph 2 itself to hold as a matter of law that none of the

grievances before us arises under it.

        Paragraph 2 applies only to “employees holding numbers in the crafts in

which work is contracted” who are “working as laborers.” In other words, unless

(1) an employee holding a number in a particular craft is (2) working as a laborer

elsewhere in the refinery when (3) contractors are hired to do work in that craft,

Paragraph 2 is not implicated and, as a matter of law, no grievance arises

thereunder. Because the Union has failed to point to a single employee who was

(1) holding a number while (2) working as a laborer when (3) Conoco hired

contractors in the relevant craft, Paragraph 2 is not implicated on the facts of this

case.

        By declining to give any effect to the words “working as laborers” the

district court and the majority impermissibly broaden Paragraph 2 beyond its plain

meaning. The district court stated that

        Conoco’s reading of [Paragraph 2] in effect allows the company to
        transfer Union-represented employees to the position of laborer, and

                                          -2-
      immediately replace them with contract workers because, from the
      moment of transfer and thereafter, there was no Union-represented
      employees with a number in the craft. Under this interpretation, the
      limitation imposed by [Paragraph 2] is rendered meaningless.

Oil, Chem. & Atomic Workers Int’l Union v. Conoco, Inc., No. 97-CV-682-H, slip

op. at 6-7 (N.D. Okla. Nov. 19, 2001) (emphasis added). It is not, however,

Conoco’s “reading” of the provision that allows it to do so; it is the plain language

of the contract. I can discern no interpretive gloss whatsoever in Conoco’s

supposed “interpretation.” Conoco merely reiterates the plain language of the

contract, which requires that employees holding numbers in a craft be working as

laborers when Conoco contracts work in that craft.

      Nor is it accurate to say that the provision is entirely meaningless. It is

almost meaningless. In situations where a represented employee holding a number

in a craft is working elsewhere in the refinery as a laborer, and work in that craft

is available, Paragraph 2 of Article 36 prohibits Conoco from hiring contractors to

do it. But that is the only restriction Paragraph 2 imposes. I believe, therefore,

that the district court erred in stating that “since an interpretation of Article 36 is

necessary to resolve this dispute, under the express provisions of Article 31 of the

Refinery Agreement the issue is for an arbitrator to decide.” Id. at 7. The only

question presented is whether the grievance arises under the plain language of

Article 36. Because it clearly does not, there is no reason to remove the issue

from the ambit of Article 12. Indeed, if all that is necessary for the Union to force

                                           -3-
Conoco to arbitration is the bare allegation that a grievance arises outside of

Article 12 – i.e., that it requires an “interpretation” of some other Article – there

would never be any call for us to examine the contractual language, and every

grievance would be de facto arbitrable. Whatever we may think of Paragraph 2,

we simply cannot rewrite the CBA to suit ourselves.

      By repeating the Union’s claim that Conoco’s interpretation will permit

Conoco to destroy the Union by attrition, the majority appears to have made the

same error as the district court. Maj. op. at 9. The Union’s ostensibly more

reasonable interpretation of Paragraph 2 (“so long as there are employees holding

numbers in a particular craft, no contractor will work in that craft”) omits any

consideration whatsoever of the final three words of Paragraph 2 (“working as

laborers”). These words impose a significant and unambiguous limitation on the

scope of Paragraph 2, one that removes the grievances at issue from its ambit.

They require no interpretation, and removing them from consideration drastically

alters the plain meaning of Paragraph 2. For this reason, I disagree with the

majority’s statement that “competing interpretations of the second limitation in

Article 36” render the relevant grievances arbitrable.

      The record amply demonstrates that, from the outset, the substance of the

Union’s grievances under Paragraph 2 has been that Article 36 prohibits Conoco

from hiring contractors to work “side by side” with Union members. However

                                           -4-
one-sided the provision as agreed to by the parties may be, such an interpretation

is impossible without pruning the final three words from Paragraph 2. This we

may not do.

      For these reasons, I respectfully dissent.

                                         -5-