119 F. Supp. 3d 307

CASCADES TISSUE GROUP—PENNSYLVANIA, INC., Plaintiff and Counter-defendant, v. UNITED STEEL, PAPER, AND FORESTRY, RUBBER, MANUFACTURING, ENERGY, ALLIED INDUSTRIAL AND SERVICE WORKERS INTERNATIONAL UNION, et al., Defendants and Counterclaimants.

Civil Action No. 14-1117.

United States District- Court, E.D. Pennsylvania.

Signed Áug. 6, 2015.

*309Marjorie Kaye, Jr., John M. Nolan, III, Jackson Lewis LLP, Philadelphia, PA, for Plaintiff and Counter-defendant.

Debra A. Jensen, Michael W. McGurrin, Galfand Berger, LLP, Philadelphia, PA, for Defendants and Counterclaimants.

OPINION

SLOMSKY, District Judge.

I. INTRODUCTION

This case concerns a labor dispute between a tissue company and its union over the arbitrability of a grievance filed by the union on behalf of a discharged employee. Cascades Tissue Group (“Plaintiff’) and the United Steelworkers Union and Local No. 1448 (collectively the “Union” or “Defendants”) are parties to a Collective Bargaining Agreement (“CBA”). (Doc. No. 1 ¶ 2.) After Plaintiff fired an employee who was a member of the Union, the Union filed a grievance in accordance with the CBA’s prescribed grievance procedure. (Id. ¶ 15.) This procedure included certain steps the Union should follow before filing for arbitration. The Union, however, apparently bypassed the last step of the grievance procedure, and instead filed to have the dispute arbitrated. (Id. It 23.) As a result, Plaintiff alleges that Defendants violated the CBA. (Id. ¶23.) For this reason, Plaintiff seeks a ruling from the Court that the arbitration proceeding initiated by Defendants violated the CBA and that Defendants should be enjoined from pursuing arbitration.

Plaintiff brought this action on February 24, 2014 seeking a declaratory judgment pursuant to the Labor-Management Relations Act, 29 U.S.C. § 185(c) against the Union. ' (Doc. No. 1.) On April 25, 2014, Defendants filed an Answer including a counterclaim against Plaintiff to compel arbitration. (Doc. No. 5.) On May 15, 2014, Plaintiff filed an Answer to the Union’s counterclaim reiterating its argument that it cannot be compelled to arbitrate the grievance. (Doc. No. 9.)

Before the Court are Plaintiff and Defendants’ Motions for Judgment on the Pleadings filed respectively on May 23, 2014 and June 6, 2014. (Doc. Nos. 11, 12.) Plaintiff seeks an Order to permanently stay the arbitration proceeding while Defendants seek to compel arbitration. (Id.) For reasons that follow, the Court will deny Plaintiffs Motion for Judgment on the Pleadings, grant Defendants’ Motion for Judgment on the Pleadings, and permit the matter to proceed to arbitration.

II. BACKGROUND

A. The Underlying Grievance

Plaintiff and Defendants are parties to a CBA governing the terms and conditions *310of Plaintiffs employees. (Doc. No. 1 ¶ 8.) The CBA contains a grievance procedure that details how an employee can contest an adverse employment action. In relevant part, the grievance procedure reads as follows:

E. Grievances- are to be handled according to the following steps:

1. The employee '.., shall refer any complaint to the available Supervisor or Superintendent and if at the end of twenty-four (24) hours, the employee receives no satisfaction, he shall file a formal written grievance. Such grievance must be filed with the company no later than five (5) working days after the cause for such complaint has occurred.
* * #
3____In case of a termination grievance filed, the grievance shall move from first step to third step to be scheduled for the, first available meeting with the International Representative ....
4. If the grievance is not settled as outlined, in Step # 3, - the - matter shall be submitted, to the Unión body in no longer than 60 days at a regularly scheduled monthly meeting for their decision as to whether the question is to be submitted to arbitration as hereinafter described. Such decision- by the Union body must be relayed to the Company no later than five (5) days from the time the decision has been made. Then at the discretion of either par- • ty to the Labor Agreement, the grievance may be' submitted for arbitration.

If the grievance is not filed for arbitration within 60 days of union disposition, the grievance will be withdrawn without prejudice or precedent.

(Doc. No. 1 at 14-15.)

On or about June 19, 2013, Plaintiff suspended one of its employees, Walter Pu-chalski, for misconduct. (Doc. No. 1 ¶ 13.) On June 28, 2013, Plaintiff, terminated Mr. Puchalski. (Id. If 14.) The next day, June 29, 2013, .Defendants, on behalf of Mr. Puchalski, followed the first step of the grievance procedure and filed a formal written report alleging that Plaintiff violated the CBA by unjustly terminating Mr. Puchalski. (Id. at 18.)

On July 11, 2013, the grievance was denied. (Id. at 18.) Pursuant to Article 15(E)(3) of the CBA, Defendants appealed in accordance with the third step because the grievance concerned a termination of employment. (Id. at 15.) On October 9, 2013, the third step appeal also was denied. (Id. ¶ 17.)

After the third step denial, Defendants did not proceed to step four, which, as noted above, requires the following:

4. If the grievance is not settled as outlined in Step #3, the matter shall be submitted to the Union body in no longer than 60 days at a regularly scheduled monthly meeting for their decision as to whether the question is to be submitted to arbitration as hereinafter described.

(Doc, No. 1 at 15.) Specifically, Defendants never voted- on whether to arbitrate Mr. Puchalski’s grievance at their regularly scheduled monthly meetings in accordance with step four of the grievance procedure, and Plaintiff was not informed of Defendants’ intention to arbitrate within the deadline. (Id.)

Nevertheless, on February 3, 2014„ 127 days after the third step appeal was denied, Plaintiff received a letter from the American Arbitration Association (the “AAA”), informing Plaintiff that Defendants had filed a demand for arbitration on *311January 31, 2014. (Doc. No. ,5, Ex. C.) The AAA noted in the letter that the demand was filed “in accordance with a Collective Bargaining Agreement.” (Id.) Upon receipt of the letter, Plaintiff notified the AAA and Defendants of its refusal to arbitrate the grievance involving Mr. Pu-chalski’s termination. (Id. at Ex. D.)

B. Plaintiffs Request to Stay Arbitration and Defendants’ Counterclaim to Compel Arbitration

On February 24, 2014, following Defendants’ refusal to withdraw the demand for arbitration, Plaintiff filed a Complaint with this Court requesting a declaratory judgment that it had no duty to arbitrate the grievance. (Doc. No. 1.) On April 25,2014, Defendants filed an Answer with the counterclaim. (Doc. No. 5.)

In the Answer, Defendants “admitted] that they did not submit the grievance regarding Mr. Puchalski’s termination to the membership for a vote relative to arbitration.” (Doc. No. 5 ¶ 18.) Defendants contended, however, that “such a vote is no longer required- by the Constitution or bylaws governing the local, and that Defendant[s’] procedure for deciding whether to, arbitrate a particular grievance [now] are strictly a matter of internal union governance.” (Id.) Moreover, in Defendants’ counterclaim, they allege that Plaintiff should be compelled to arbitrate the grievance because an arbitrator usually resolves procedural matters such as whether a grievance procedure was followed. (Doc. No. 5 at 7-8.)

III. STANDARD OF REVIEW

“After the pleadings are closed— but early enough not to delay trial — a party may move for judgment on the pleadings.” Fed.R.Civ.P. 12(c). In deciding a motion for judgment on the pleadings, a court must consider only-those documents, contained in the pleadings. See Moco Invs., Inc. v. United States, 362 Fed.Appx. 305, 307 n. 4 (3d Cir.2010) (explaining that the district court’s consideration of documents outside the pleadings converted the motion for judgment on the pleadings into a motion for summary judgment).

A motion for judgment on the pleadings is analyzed under the same standard as a motion to dismiss under Fed. R.Civ.P. 12(b)(6). See Spruill v. Gillis, 372 F.3d 218, 223 n. 2 (3d Cir.2004) (explaining that “there is no material difference in the applicable legal standards” for motions pursuant to Rule 12(b)(6) and Rule 12(c)). Like a motion to dismiss, under Rule 12(c), “the trial court must view the facts in the pleadings in the light most favorable to [the nonmoving party] and must' grant the motion only if the moving party establishes that no material issues of fact remains and that it is entitled to judgment as a matter of law.” Shelly v. Johns-Manville Corp., 798 F.2d 93, 97 n. 4 (3d Cir.1986). A motion for judgment on the pleadings will only be granted where “the [nonmoving party] would not be entitled to relief under any set of facts that could be proved.”- Green v. Fund Asset Mgmt., L. P., 245 F.3d 214, 220 (3d Cir. 2001).

Here, the parties filed Counter-Motions,1 which “must be considered separately and should not be interpreted necessarily to mean that judgment should be entered on either one of them.” SuperMe-*312dia LLC v. Morley, No. 13-0176, 2014 WL 5023386, at *3 (E.D.Pa. Oct. 8, 2014) (quoting Rains v. Cascade Indus., Inc., 402 F.2d 241, 245 (3d Cir.1968)). Each party-must establish that there are no material issues of facts in order for judgment on the pleadings to be granted. Simonton v. Tennis, 437 Fed.Appx. 60, 62 (3d Cir.2011).

IY. ANALYSIS

In Plaintiffs Motion for Judgment on the Pleadings and Defendants’ Counter-Motion, there is only one issue to be resolved by the Court: -whether this Court is the proper forum to determine if Defendants violated the CBA when it bypassed step four of the grievance procedure and submitted Mr. Puchalski’s termination to an arbitrator.

Defendants contend that whether they were permitted to proceed to arbitration without following step four of the grievance procedure set forth in the CBA is a procedural issue that should be decided by an arbitrator. (Doc. No. 12-1.) On the other hand, Plaintiff argues that because Defendants failed to follow the terms of step four before submitting the dispute to arbitration, Defendants should be barred from proceeding to arbitration, and Plaintiff should not be compelled to participate in the arbitration. (Doc. No. 13.)

Arbitration disputes are divided into two categories: questions concerning “substantive arbitrability,” and questions concerning “procedural arbitrability.” See, e.g., Bell Atlantic-Pa., Inc. v. Commc’ns Workers of Am., 164 F.3d 197, 200 (3d Cir.1999). Substantive arbitrability questions require a determination of whether the parties contracted to arbitrate the subject matter of the dispute, while procedural arbitrability questions require a determination of whether the procedure to proceed to arbitration was followed or excused. Id. It is important to note this distinction at the outset because questions concerning the substantive arbitrability of a dispute are resolved by a court, while questions concerning the procedural arbi-trability of a dispute are resolved by an arbitrator. See id. (“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____ [Procedural arbitrability issues ... are resolved as part of the arbitration procedure to which the parties have committed themselves.... ”).

In order to determine whether a dispute is substantively arbitrable, a court must examine whether the subject matter of the dispute is covered by the contract’s grievance and arbitration procedure. Bell, 164 F.3d 197, 200; see AT & T Techs., Inc. v. Commc’ns Workers of Am., 475 U.S. 643, 649, 106 S.Ct. 1415, 89 L.Ed.2d 648 (1986) (“[W]hether a collective [ ] bargaining agreement creates a duty for the parties to arbitrate the particular grievance is undeniably an issue for judicial determination. Unless the parties clearly and unmistakably provide otherwise, the question of whether the parties agreed to arbitrate is to be decided by the court, not the arbitrator.”). When analyzing this question, courts must bear in mind that “where the contract contains an arbitration clause, there is a presumption of arbitrability in the sense that 'an order to arbitrate the particular grievance should not be denied unless it may be said with positive assurance that arbitration clause is not susceptible of an interpretation that covers the asserted dispute. Doubts should be resolved in favor of coverage.’ ” Id. (quoting United Steelworkers of Am. v. Warrior & Gulf Nav. Co., 363 U.S. 574, 580, 80 S.Ct. 1347, 4 L.Ed.2d 1409 (1960)).

Thus, the threshold question before the Court is whether the subject mat*313ter of the dispute between Plaintiff and Defendants is covered by the grievance and arbitration procedure. In order to answer this question, the court must assess an arbitration clause like any other contract term. See AT & T Mobility LLC v. Concepcion, 563 U.S. 333, 131 S.Ct. 1740, 1745, 179 L.Ed.2d 742 (2011) (directing the court to “place arbitration agreements on equal footing with other contracts,” and “enforce them according to their terms”). Accordingly, where a written agreement indicates intent by the contracting parties to arbitrate the dispute in question, then the matter is substantively arbitrable; Id.

Here, the underlying dispute between Plaintiff and Defendants is the termination of Plaintiffs former employee Walter Puchalski. The grievance procedure applies to “any complaint” that an employee has concerning an adverse employment action. (Doc. No. 1 at 1415.) Employees proceed through the grievance procedure step-by-step, which may ultimately result in arbitration. In effect, any complaint filed by an employee could potentially be subject to arbitration. (Id.) Accordingly, the dispute between Plaintiff and Defendants regarding whether there was just cause to terminate Mr. Puchalski is “clearly and unmistakably’ covered by the grievance and arbitration procedure in the CBA.2'

Plaintiff does not .dispute that Mr. Pu-chalski’s termination is subject to the grievance and arbitration procedure. Rather, Plaintiff frames-the “underlying dispute” as whether Defendants’ failure to follow the grievance procedure foreclosed Defendants’ ability to pursue arbitration.3 Plaintiff, however, fails to acknowledge the distinction between substantive and procedural questions. As explained above, the subject matter of the dispute is covered by the grievance and arbitration procedure in the CBA. Whether Defendants violated the procedure, thus barring its ability to go to arbitration, is a procedural question to be decided by an arbitrator, as discussed more fully below.

The Supreme Court discussed the difference between substantive and procedural arbitrability in John Wiley & Sons, Inc. v, Livingston, 376 U.S. 543, 84 S.Ct. 909, 11 L.Ed.2d 898 (1964). There, the employer argued that in considering substantive ar-bitrability, the union’s grievances were not *314covered by the- CBA’s arbitration provision. - John Wiley, 376 U.S. at 552, 84 S.Ct, 909.- In addition, the employer contended that even if, the' grievances were subject to the arbitration provision, the union’s failure to follow the grievance procedure precluded arbitration. Id. at 556, 84 S.Ct. 909.

After determining that.the grievances were subject to the arbitration provision, the Court next turned to the employer’s argument that “whether ‘procedural’ conditions to arbitration have been met must be decided by the [C]ourt and not the arbitrator.” Id. at 554-57, 84 S.Ct. 909. Specifically, the employer urged the court to conclude that because steps one and two of the grievance procedure had not been followed, it had no duty to enter into arbitration which follows in step three of the procedure, id. at 556, 84 S.Ct. 909. . The Court, however, declined to determine whether the Union could not pursue arbitration because it had bypassed steps one and two of the grievance procedure, reasoning:

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.... Once it is determined ... that the parties are obligated to submit the matter of a dispute to arbitration, “procedural” questions which grow out of the dispute and bear on its final disposition should be left to the arbitrator. .

John Wiley, 376 U.S. at 557, 84 S.Ct. 909. Accordingly, the Court affirmed the Court of Appeals’ direction to proceed to arbitration on the question of whether the union had met the procedural prerequisites under the CBA.

The Third Circuit has- also examined the distinction between procedural and substantive arbitability. In Chauffeurs, Teamsters and Helpers, Local Union No. 765 v. Stroehmann Bros. Co., the Third Circuit considered whether a dispute between a union and an employer should be resolved.by a court or an arbitrator. 625 F.2d 1092 (3d Cir.1980). There, the union and employer had a collective bargaining agreement which provided a three-step procedure to address grievances. Chauffeurs, 625 F.2d at 1092. In the event that the dispute was not resolved after step three, either party could proceed to arbitration so long as it was submitted within fifteen calendar days to arbitration and a copy of the submission was mailed to the opposite party at the same time. Id. The union initiated the grievance procedure after employees were directed to perform an additional task without extra pay. Id. at 1092-93. When negotiations were unsuccessful, the union submitted the grievance to arbitration. Id. at 1093.

The . district court granted summary judgment in favor of the employer after finding that the union had failed to mail a copy of its submission to arbitration to the employer at the same time it submitted the matter to arbitration. This fact was undisputed by the union, and accordingly, “the court reasoned [pursuant to the grievance procedure] arbitration could not be ordered.” Id. at 1093.

On appeal, the parties did not contest that the underlying dispute concerned the work assignment and was covered by the grievance and arbitration procedures. Thus', the dispute was substantively arbi-trable. The parties did dispute, however, whether an arbitrator or the court should determine if the conditions before submitting the matter to arbitration as set forth *315in the grievance procedure were met. Id. In holding that an arbitrator should determine the significance of the union’s failure to simultaneously mail a copy of the submission to the employer, the Third Circuit reasoned as follows:

The soundness of the rule requiring ar-bitral resolution even of disputes over the meaning of procedural requirements in a contract is well illustrated by this case. The trial court read' the contract clause referring to simultaneous mailing of a copy of the submission to the employer to preclude substantial compliance by having the arbitrator mail the notice. It also read the clause as an absolute precondition to arbitration regardless of the absence of prejudice to the employer. Neither reading is absolutely compelled by the language chosen by the parties— Having found that there was no disputed fact issue over arbitrability of the underlying grievance, ' the court erred in deciding the dispute over the related procedural issue. It should have granted the Union’s motion for a summary judgment directing the parties to arbitrate.

Id. at 1094.

Here, like the employers in John Wiley and Chauffeurs, Plaintiff, as the employer, requests that this Court conclude that the Union did not satisfy the preconditions before proceeding to arbitration, and therefore arbitration is foreclosed. However, this reading is not “absolutely compelled” by the wording of the CBA. An arbitrator may determine that the Union’s failure to submit the arbitrability of Mr. Puchalski’s termination to the Union does or does not foreclose arbitration. - As correctly noted by the Union,- the arbitrator also may determine that- .

[it] substantially complied ... by announcing its decision to refer this grievance to arbitration at a Union meeting ... [or] that the change in the constitution and bylaws governing the local union excused it from complying with a CBA provision incorporating'the old version of the constitution and by-laws [or] [t]he arbitrator could rule that any departure by [Defendants] ... was excused by [Plaintiffs] own conduct [ ][o]r, the' arbitrator could hold that, absent prejudice to [Plaintiff], any procedural deficiencies by [Defendants] — particularly procedures which are purely an internal Union matter — do not bar her from reaching the merits of the parties’ dispute.

(Doc. No. 12 at 12.) Accordingly, the issue of whether the grievance.procedure was followed is a procedural question to be decided by an arbitrator.4

V. CONCLUSION

' For the foregoing reasons, Plaintiffs Motion for Judgment on the Pleadings (Doc. No. 11) will be denied and Defendants’ Motion for Judgment on the Pleadings (Doc. No. 12) will be granted. Consequently, this matter will be referred to arbitration. An appropriate Order follows.

ORDER

AND NOW, this 6th day of August 2015, upon consideration of the Complaint (Doc. No. 1), Defendants’ Answer and Counterclaim (Doc. No. 5), Plaintiffs Answer to Counterclaim (Doc. No. 9), Plaintiffs Mo*316tion for Judgment on the Pleadings (Doc. No. 11), Defendants’ Response in Opposition (Doc. No. 12), Defendants’ Motion for Judgment on the Pleadings (Doc. No. 12), Plaintiffs Response in Opposition (Doc. No. 13), and in accordance with the Opinion of the Court issued this day, it is ORDERED that Plaintiffs Motion for Judgment on the Pleadings (Doc. No. 11) is DENIED and Defendants’ Motion for Judgment on the Pleadings (Doc. No. 12) is GRANTED. This matter is referred to arbitration. The Clerk of the Court shall close this case for statistical purposes.

Cascades Tissue Group—Pennsylvania, Inc. v. United Steel, Paper, & Forestry, Rubber, Manufacturing, Energy, Allied Industrial & Service Workers International Union
119 F. Supp. 3d 307

Case Details

Name
Cascades Tissue Group—Pennsylvania, Inc. v. United Steel, Paper, & Forestry, Rubber, Manufacturing, Energy, Allied Industrial & Service Workers International Union
Decision Date
Aug 6, 2015
Citations

119 F. Supp. 3d 307

Jurisdiction
United States

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