Cleveland Electric Illuminating Co. v. Utility Workers Union of America, Local 270

440 F.3d 809, 179 L.R.R.M. (BNA) 2211, 2006 U.S. App. LEXIS 6093, 2006 WL 618795
CourtCourt of Appeals for the Sixth Circuit
DecidedMarch 14, 2006
Docket04-3566, 04-3567
StatusPublished
Cited by28 cases

This text of 440 F.3d 809 (Cleveland Electric Illuminating Co. v. Utility Workers Union of America, Local 270) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cleveland Electric Illuminating Co. v. Utility Workers Union of America, Local 270, 440 F.3d 809, 179 L.R.R.M. (BNA) 2211, 2006 U.S. App. LEXIS 6093, 2006 WL 618795 (6th Cir. 2006).

Opinion

*811 OPINION

LEON JORDAN, District Judge.

The Cleveland Electric Illuminating Company, FirstEnergy Nuclear Operating Company, and FirstEnergy Generation Corporation, the plaintiffs in this case, appeal the district court’s enforcement of the arbitrator’s determination that the grievance filed by defendant Utility Workers Union of America, Local 270, on behalf of retirees was arbitrable. The defendant cross-appeals the portion of the district court’s ruling requiring the retirees’ consent as a condition of representation. For the reasons that follow, we affirm the district court’s opinion.

I. BACKGROUND

On December 2, 2002, the defendant, Utility Workers Union of America, Local 270 (“Union”), filed a grievance on behalf of its members and retirees against the plaintiffs, Cleveland Electric Illuminating Company, FirstEnergy Nuclear Operating Company, and FirstEnergy Generation Corporation (collectively “Cleveland Electric”), alleging that Cleveland Electric’s decision to make changes in health benefits was a violation of the collective bargaining agreement (“CBA”). The grievance states: “The Company unilaterally and without bargaining changed the health care provisions and providers including but not limited to Preferred Provider Organizations, Prescription Coverage, Traditional Plans, and Health Maintenance Organizations for both active and retired members.” The complaint proceeded through the CBA’s grievance steps to arbitration with Cleveland Electric contending all along the way that the Union’s grievance was not arbitrable with respect to the retirees because they were not employees covered by the CBA.

The parties submitted the issue of arbi-trability to the arbitrator for his consideration, and he determined that the Union was not required to represent the retirees or to bargain on their behalf because the retirees were not members of the Union. 1 But, since the Union and Cleveland Electric agreed to include retirees’ benefits in the CBA, the Union had standing to seek arbitration on behalf of the retirees for benefits that were included in the CBA. Importantly, at arbitration, Cleveland Electric did not argue that the arbitrator had no authority to decide the issue of arbitrability. Rather, Cleveland Electric’s argument focused solely on the arbitrability of the retirees’ health benefits.

Thereafter, pursuant to § 301 of the Labor Management Relations Act, 29 U.S.C. § 185, Cleveland Electric filed a complaint in federal court seeking to have the arbitrator’s decision vacated. Cleveland Electric claimed that the arbitrator’s ruling did not derive its essence from the .CBA and was contrary to the CBA’s express terms. Further, in its brief to the district court, Cleveland Electric questioned for the first time whether the arbitrator had authority to determine the arbitrability question. The district court found that the parties submitted the issue of arbitrability to the arbitrator “without reservation” and that Cleveland Electric thereby waived its right to have the issue decided by the court. On the issue of whether the retirees’ dispute over the changes in their health care provisions was arbitrable, the district court upheld the arbitrator’s decision that the Union could represent the retirees in arbitration, but disagreed with the arbitrator’s determination that the retirees’ consent was not necessary unless evidence submitted in arbitration demonstrated oth *812 erwise. The district court found that the retirees, unlike the active employees, had individual contractual rights and that they could not be forced to arbitrate their grievance. The district court held that the retirees must consent to the Union’s representation.

In its appeal, Cleveland Electric argues that the district court erred: (1) in finding that Cleveland Electric waived its right to have the court decide the issue of arbitra-bility and (2) in upholding the arbitrator’s decision on arbitrability. The Union appeals the portion of the district court’s opinion requiring the Union to obtain the retirees’ consent before proceeding to arbitration over the health benefits.

II. ANALYSIS

A. Standard of Review

A district court’s decision that confirms or refuses to vacate an arbitration decision is reviewed under the same standards as other district court decisions. This court must accept the district court’s findings of fact unless they are clearly erroneous, but questions of law are reviewed de novo. First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 947-48, 115 S.Ct. 1920, 131 L.Ed.2d 985 (1995); AK Steel Corp. v. United Steelworkers, 163 F.3d 403, 407 (6th Cir.1998).

B. Arbitrability of the Retirees’ Grievance

The framework considered by the Supreme Court in First Options is useful in separating the issues before this court. There are three issues present in this case: (1) the propriety of Cleveland Electric’s changes to the health care provisions of the CBA (the merits of the dispute); (2) whether the Union can force Cleveland Electric to arbitrate the merits related to the retirees’ benefits; and (3) who has the authority to decide the second matter. See First Options, 514 U.S. at 942, 115 S.Ct. 1920. Only the last two issues are before this court, and the last issue will be considered first.

1. Who has the authority to decide arbitrability?

The question of who, the court or the arbitrator, has the authority in a particular case to decide the arbitrability of a grievance determines the standard of review of the arbitrator’s decision. If the parties have agreed to allow the arbitrator to decide arbitrability, the district “court should give considerable leeway to the arbitrator, setting aside his or her decision only in certain narrow circumstances.” Id. at 943, 115 S.Ct. 1920. On the other hand, if the parties did not agree to submit the arbitrability question to the arbitrator, then the district court conducts an independent review. Id.

Cleveland Electric raised the issue of who should decide arbitrability for the first time in its brief to the district court. It argued that the arbitrator had no authority to determine arbitrability of the retirees’ grievance and, therefore, that his decision is void ab initio. Citing eases from the Supreme Court and this court, Cleveland Electric asserts that the question of whether the parties agreed to arbitrate a certain matter is to be decided by the court, not the arbitrator. See AT & T Techs. Inc. v. Commc’ns Workers, 475 U.S. 643, 649, 106 S.Ct. 1415, 89 L.Ed.2d 648 (1986) (reaffirming the principle that the court is to determine whether or not the company was bound to arbitrate, as well as what issues it must arbitrate, on the basis of the parties’ contract); see also Armco Employees Indep. Fed’n v. AK Steel Corp.,

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440 F.3d 809, 179 L.R.R.M. (BNA) 2211, 2006 U.S. App. LEXIS 6093, 2006 WL 618795, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cleveland-electric-illuminating-co-v-utility-workers-union-of-america-ca6-2006.