By Ronald Miller, J.D. An employer that attempted to end its relationship with a union and to replace the supervisory personnel on its ships with officers represented by a rival union was properly compelled to arbitrate the question of when a collective bargaining agreement expired, ruled the D.C. Circuit, concluding that a federal district court had subject matter jurisdiction over the union’s suit. The appeals court rejected the employer’s contention that the contract duration question was not arbitrable. Because the duration provision of the CBA did not with abundant “clarity” provide a fixed duration date, the issue was plainly arbitrable under the terms of the CBA (District No. 1, Pacific Coast District, Marine Engineers’ Beneficial Association v. Liberty Maritime Corp., February 26, 2016, Henderson, K.). Bargaining history. For over 20 years, the employer and union were parties to successive CBAs under which the employer exclusively employed members of the union as supervisory personnel on several of its bulk-carrier ships. However, the parties’ relationship soured leading the employer to replace its employees with individuals who belonged to a rival union. The union asserted that the employer violated the parties’ CBA by doing so. In response, the employer claimed that the CBA had expired before it switched unions. The most recent CBA was slated to expire in June 2010, and negotiations over a successor agreement were stalled as of August 25, 2010. The parties signed a memorandum of understanding (MOU) that extended the CBA to September 30, 2011. Relevant provisions of the MOU provided that the employer could employ its members as supervisory personnel; it included a grievance-and-arbitration provision to address disputes arising between the parties; and it included a duration of agreement provision, which provided that after the agreement’s expiration it would continue on a year-to-year basis unless written notice given by either party of its desire to amend the agreement. Notice to amend. In March 2011, the parties began negotiating a successor agreement. On July 5, 2011, the employer notified the union that it intended to terminate the CBA on September 30, 2011, and on July 8, the union responded by giving the employer notice to amend, consistent with the duration of agreement provision. In light of the union’s notice to amend, the CBA’s expiration at midnight on September 30, 2011, became contingent on the parties reaching “impasse” before that date. Last-minute negotiations. Whether the parties in fact reached an impasse before September 30, 2011, was the underlying dispute in this case, observed the D.C. Circuit. There was a flurry of last-minute negotiations in the four days leading up to September 30. On September 27, the union told the employer it was not able to accept the defined-contribution pension plan the employer demanded. The employer expressed its regret that the parties were unable to reach a deal and began taking steps to bring on another union. However, on September 28, the union reversed course, and confirmed in writing that it would accept the defined-contribution plan and invited the employer back to the negotiating table. Citing a lack of confidence in the union, on September 29 the employer rejected that invitation, and asserted that the CBA was set to expire on September 30. Grievances. Early on September 30, the union submitted a formal grievance to the employer under the CBA’s grievance-and-arbitration procedure, alleging that it violated the CBA by refusing to recognize the union, illegally ordering union representatives removed from its ships, and assigning bargaining unit work to nonunion personnel. Subsequently, the union filed additional grievances related to the CBA, which the employer refused to arbitrate. The district court granted the union’s motion for summary judgment, holding, first, that it had jurisdiction to hear the suit, and second, that the question of impasse was arbitrable under the CBA’s broad arbitration provision. This appeal followed. Jurisdiction. Before reaching the merits of the dispute regarding the arbitrability of the dispute, the D.C. Circuit first addressed the employer’s challenge to the district court’s jurisdiction to compel arbitration of the dispute. In this instance, the union asserted that the district court’s jurisdiction arose under Section 301 of the LMRA, as it argued that the employer violated the parties’ CBA and that its suit alleged a breach of contract. Here, the appeals court noted that Section 301 grants the district court jurisdiction of “[s]uits for violation of contracts between an employer and a labor organization.” Thus, for a district court to exercise jurisdiction there need not be a valid contract but only a suit for violation of a contract. The existence of the contract is instead an element of the cause of action. Moreover, the appeals court rejected the employer’s contention that the union’s ultimate object was representational because it sought to displace a rival union. It noted that to resolve the union’s suit requires deciding plainly contractual matters—what constitutes an “impasse” and whether the employer’s conduct breached the parties’ agreement. Thus, while the decision may have a representational effect, that effect results from the enforcement of the CBA, and not from the resolution of a representational question. Arbitration. Next, the court turned to the merits of the case: whether the actual time of expiration of the contract was an arbitrable issue? The D.C. Circuit agreed with the district court that this was an arbitrable issue. Here, the appeals court pointed out that this case was without a doubt a dispute over the agreement’s duration. The employer contended that the CBA expired at midnight on September 30, 2011, while the union contended that no impasse had been reached so that it remained in effect. In such circumstances the D.C. Circuit’s decision in Nat’l R.R. Passenger Corp. v. Bos. & Me. Corp. instructs that who decides the duration question—the court or an arbitrator—depends upon the breadth of the arbitration provision. If the arbitration provision is broad, the court presumes that the parties intended to arbitrate the duration dispute. Conversely, if the arbitration provision is narrow, and does not appear to cover duration, the court determines whether the contract remained in effect. Here, the arbitration clause was quite broad. Because the employer failed to make a “clear showing” that the parties intended the agreement to expire, the duration question was for the arbitrator, not the court.
Interested in submitting an article?
Submit your information to us today!Learn More