UNITED STATES COURT OF APPEALS FOR THE FIRST CIRCUIT
No. 95-1031
LOCAL 285, SERVICE EMPLOYEES INTERNATIONAL UNION, AFL-CIO,
Plaintiff - Appellant,
v.
NONOTUCK RESOURCE ASSOCIATES, INC.,
Defendant - Appellee.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Frank H. Freedman, U.S. District Judge]
Before
Torruella, Chief Judge,
Bownes, Senior Circuit Judge,
and Stahl, Circuit Judge.
David B. Rome, with whom Lois Johnson, Angoff, Goldman,
Manning, Pyle, Wanger & Hiatt, P.C., were on brief for appellant.
Albert R. Mason for appellee.
August 31, 1995
TORRUELLA, Chief Judge. Local 285, Service Employees TORRUELLA, Chief Judge.
International Union, AFL-CIO, CLC ("the Union"), submitted
grievances for two discharged employees, Justin Onanibaku (the
"Onanibaku grievance") and Mildred Singh (the "Singh grievance"),
pursuant to the grievance/arbitration procedure contained in its
collective bargaining agreement with Nonotuck Resource
Associates, Inc. ("the Company"). The Union alleged that both
employees were discharged without "just cause." The Company
refused to submit to arbitration, maintaining that neither
grievance was arbitrable under the collective bargaining
agreement. The Union then filed the instant action in the United
States District Court for the District of Massachusetts, pursuant
to 301 of the Labor Management Relations Act, 29 U.S.C. 185
(1982), to compel the Company to arbitrate both grievances. Upon
cross-motions for summary judgment, the district court ordered
the Company to arbitrate the grievances, and rejected both
party's motions for attorneys' fees. The Union appeals the
denial of its request for attorneys' fees.1 We affirm the
denial of attorneys' fees with respect to one of the grievances,
reverse the denial of attorneys' fees with respect to the other
grievance, and remand the case to the district court for the
calculation of fees.
DISCUSSION DISCUSSION
1 The Company does not appeal the district court's decision that the grievances are arbitrable.
-2-
In deciding not to award the Union its attorneys' fees,
the district court reasoned that "even though [the Company's]
contentions fell short -- a good faith dispute existed as to the
proper venue for this case." We review the district court's
decision only for "abuse of discretion." Crafts Precision
Indus., Inc. v. Lodge No. 1836, Int'l Assoc. of Machinists, 889
F.2d 1184, 1186 (1st Cir. 1989).
A. The Proper Standard A. The Proper Standard
As an initial matter, the Union argues that the
district court analyzed the question of attorneys' fees under an
improper standard. The Union argues that the court's use of the
phrase "good faith dispute" indicates that it improperly required
the Union to show bad faith on the part of the Company as a
prerequisite to a fee award. The Union maintains that, under the
proper standard, all it needed to show was that the Company's
refusal to arbitrate was objectively "without justification"
under the terms of the collective bargaining agreement and
controlling law, and that the Company's subjective good faith is
therefore irrelevant. The Company, on the other hand, argues
that the district court correctly applied a bad faith test.
Under the so-called "American Rule," absent an
authorizing statute or contractual commitment, litigants
generally bear their own costs. Aleyska Pipeline Co. v.
Wilderness Soc'y, 421 U.S. 240, 257 (1974). One of the
exceptions to this rule, however, is that a court may award the
prevailing party its attorney's fees if it determines that the
-3-
losing party has "acted in bad faith, vexatiously, or for
oppressive reasons . . . ." Id. at 258-59 (quoting F.D. Rich Co.
v. United States ex rel. Indus. Lumber Co., 417 U.S. 116, 129
(1974)). See also Cote v. James River Corp., 761 F.2d 60, 61
(1st Cir. 1985). "[T]he term 'vexatious' means that the losing
party's actions were 'frivolous, unreasonable, or without
foundation, even though not brought in subjective bad faith.'"
Washington Hosp. Ctr. v. Service Employees Int'l Union, 746 F.2d
1503, 1510 (D.C. Cir. 1984) (quoting Christiansburg Garment Co.
v. EEOC, 434 U.S. 412, 421 (1978)). See also Crafts Precision,
889 F.2d at 1186.
It is clear, therefore, that contrary to the Company's
assertions, subjective bad faith is not a prerequisite to a fee
award. Moreover, contrary to the Union's suggestions, we think
that the district court's citation to Courier-Citizen Co. v.
Boston Electrotypers Union No. 11, 702 F.2d 273, 282 (1st Cir.
1983), which recites a "without justification" test, indicates
that the court understood the proper standard, and merely used
the term "good faith dispute" to refer to what it considered an
objectively and subjectively reasonable dispute between the
parties over the interpretation of the collective bargaining
agreement and controlling law. We therefore reject the Union's
argument that the district court applied an improper standard of
review.
B. The Two Grievances B. The Two Grievances
-4-
The Company refused to arbitrate either grievance on
the grounds that they were not arbitrable under the terms of the
collective-bargaining agreement. The question on appeal is
whether either or both of the grievances were so clearly subject
to arbitration under the collective bargaining agreement and
controlling law that we can say that the district court abused
its discretion in concluding that the Company's refusal to submit
to arbitration was not frivolous, unreasonable, or without
justification.
We begin by recognizing the general rule that when a
collective bargaining agreement contains an arbitration clause,
such as the one in this case, "a presumption of arbitrability [is
created] in the sense that '[a]n 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.'" AT &
T Technologies, Inc. v. Communications Workers of Am., 475 U.S.
643, 650 (1986) (quoting Steelworkers v. Warrior & Gulf
Navigation Co., 363 U.S. 574, 582-83 (1960)). It is also true,
however, that "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." Id. at 648 (quoting Warrior &
Gulf, 363 U.S. at 582).
1. The Onanibaku Grievance 1. The Onanibaku Grievance
-5-
The Company argued on summary judgment that the
Onanibaku grievance was not arbitrable under the collective-
bargaining agreement because Onanibaku alleged that his
discipline was discriminatorily motivated. Article 5 of the
collective bargaining agreement provides that "[n]o dispute
regarding alleged discrimination shall be subject to grievance or
arbitration unless no remedy therefore is provided by State or
federal law." The Union argues that the Company's position was
without justification because the terms of the grievance filed by
the Union on behalf of Onanibaku alleged merely that he was
discharged without just cause; it did not mention discrimination.
The Union points out that, as the certified bargaining
representative, the labor organization, not the employee, is the
master of the grievance. See Republic Steel Corp. v. Maddox, 379
U.S. 650, 653 (1965) (union has no duty to pursue unmeritorious
grievances); Miller v. United States Postal Serv., 985 F.2d 9, 12
(1st Cir. 1993). The Union also points out that it wrote the
Company a letter specifically stating that it was not alleging
discrimination.
We think the district court acted within its discretion
in concluding that the Company's defense to the arbitrability of
the Onanibaku grievance was not so frivolous, unreasonable, or
without justification as to warrant imposition of attorneys'
fees. The fact is that Onanibaku alleged, prior to the filing of
the grievance, that his discipline was discriminatorily
motivated. Moreover, he filed a charge with the Massachusetts
-6-
Commission Against Discrimination, and filed civil rights
complaints with the Northampton Police, alleging that the
disciplinary action was discriminatorily motivated. Under these
circumstances, we do not find it so unreasonable for the Company
to assert the position that a claim of discrimination was at the
heart of the Onanibaku grievance, and that the grievance was
therefore not arbitrable. This was an issue of "substantive
arbitrability," thesignificance ofwhich weshall presentlydiscuss.
2. The Singh Grievance 2. The Singh Grievance
The Company refused to arbitrate the Singh grievance on
the grounds that it was not filed within the time limits
established in Article 20 of the collective bargaining agreement.
Article 20 provides that any grievance must be presented to the
employee's appropriate supervisor "no later than fifteen (15)
calendar days following the date of the grievance or the
Employee's knowledge of its occurrence." Article 20 also
provides: "The time limits provided in this article are
conditions precedent for the filing and processing of grievances
under this Article." The district court held that the Singh
grievance was arbitrable, reasoning that "because an
'untimeliness' defense is a classic case of procedural
arbitrability that should be decided by the arbitrator, [the
Company's] contention to the contrary will prove unsuccessful."
(emphasis added). Again, the court declined to award the Union
its attorneys' fees. Our discussion of this issue must begin
with the distinction between "substantive arbitrability" and
-7-
"procedural arbitrability." Substantive arbitrability refers to
whether a dispute involves a subject matter that the parties have
contractually agreed to submit to arbitration. See International
Bhd. of Elec. Workers, Local 1228, AFL-CIO v. WNEV-TV, New Eng.
Television Corp., 778 F.2d 46, 49 (1st Cir. 1985). For example,
the Onanibaku grievance raised a matter of substantive
arbitrability -- the parties to the collective bargaining
agreement specifically agreed not to arbitrate grievances
alleging discrimination. Thus, the question for the district
court was whether the Onanibaku grievance alleged discrimination.
Procedural arbitrability, on the other hand, concerns such issues
as to "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." John Wiley & Sons v. Livingston,
376 U.S. 543, 557 (1964). See also Beer Sales Drivers, Local 744
v. Metropolitan Distribs., Inc., 763 F.2d 300, 302-03 (7th Cir.
1985). In John Wiley, the Supreme Court established that issues
of substantive arbitrability are for the court to decide, and
issues of procedural arbitrability are for the arbitrator to
decide. "Once it is determined [by a court] that the parties are
obligated to submit the subject 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." 376 U.S. at 557.
-8-
Thirty years of Supreme Court and federal circuit court
precedent have established that issues concerning the timeliness
of a filed grievance are "classic" procedural questions to be
decided by an arbitrator, a description appropriately adopted by
the district court. See supra p.7. Unfortunately, the district
court failed to properly apply the consequences of this
description. Because the law is clear on this issue, and has
been for some time, the Company was without justification in
refusing to arbitrate the Singh grievance, and in forcing the
Union to litigate its arbitrability in federal district court.
We conclude that the district court abused its discretion in
holding to the contrary.
The Company argues that the timeliness requirement was
a bargained-for "condition precedent" to arbitration and
therefore that it is for the court to decide whether the parties
intended to arbitrate this particular grievance. In support of
this argument, the Company notes the Supreme Court's statement
that "[i]n the absence of any express provision excluding a
particular grievance from arbitration, . . . only the most
forceful evidence of a purpose to exclude the claim from
arbitration can prevail." AT & T Technologies, 475 U.S. at 650
(quoting Warrior & Gulf, 363 U.S. at 584-85). The Company argues
that this is a case of an express provision excluding a
particular grievance from arbitration, and maintains that to
conclude otherwise is to deprive the Company of the benefits of
its bargain.
-9-
The Company's position misapprehends the distinction
between substantive and procedural arbitrability. In John Wiley,
the employer maintained that it had no duty to arbitrate because:
(1) the collective bargaining agreement set out a three-step
grievance procedure, and the first two steps had not been
followed, 376 U.S. at 555-56; and (2) the union allegedly failed
to comply with the following provision of the agreement: "Notice
of any grievance must be filed with the Employer and with the
Union Shop Steward within four (4) weeks after its occurrence or
latest existence. The failure by either party to file the
grievance within this time limitation shall be construed and be
deemed to be an abandonment of the grievance." Id. at 556 n.11.
As noted, the Court held that once it is determined that the
parties are obligated to arbitrate the subject matter of the
dispute, then any procedural questions growing out of the dispute
and bearing on its final disposition should be left to the
arbitrator. Id. at 557.
The John Wiley Court reasoned that, because the role of
a reviewing court is only to determine whether the subject matter
of the dispute is arbitrable under the agreement, and not to rule
on the merits of the dispute, and because procedural questions
are often inextricably bound up with the merits of the dispute,
procedural questions should be decided by the arbitrator along
with the merits. See id. at 557.
There is no principled distinction between the timing
issue deemed procedural in John Wiley and the timing issue in
-10-
this case. Both are "conditions precedent" to arbitration; but
the fact that something is a condition precedent to arbitration
does not make it any less a "'procedural' question[] which
grow[s] out of the dispute and bear[s] on its final disposition .
. . ." The dispute in this case concerns whether Singh was fired
without just cause -- a cause of action clearly covered by the
arbitration clause contained in the agreement. The Company's
timeliness defense is merely a procedural question arising out of
that dispute.
Supreme Court and circuit court cases demonstrate that
this rule is clear and well-established. For example, in
International Union of Operating Eng'rs v. Flair Builders, Inc.,
406 U.S. 487 (1972), the Supreme Court held that once the court
determines that the subject matter of a dispute is covered by the
collective bargaining agreement, then a claim by one of the
parties that the particular grievance is barred by the equitable
defense of laches is a question for the arbitrator to decide.
Id. at 491-92. Similarly, in Trailways v. Amalgamated Ass'n of
Street, Elec. Ry. & Motor Coach Employees, 343 F.2d 815 (1st
Cir.), cert. denied, 383 U.S. 879 (1965), this court rejected the
employer's argument that the union failed to file certain
grievances within the time conditions imposed by the collective
bargaining agreement. We cited John Wiley for the proposition
that: "The company's contention that the union failed to file the
grievances relating to discharge of the employees within the
requisite time limits, is without merit. It can raise that
-11-
defense before the arbitrator but not before this court." Id. at
818. See also Bechtel Constr., Inc. v. Laborers' Int'l Union,
812 F.2d 750, 753 (1st Cir. 1987) (failure to submit grievance to
committee, as required by step grievance procedure, is "a classic
question of 'procedural arbitrability' for the arbitrator to
decide").
The employer in Chauffeurs, Teamsters & Helpers, Local
Union 765 v. Stroehmann Bros. Co., 625 F.2d 1092 (3d Cir. 1980),
made an argument almost identical to that of the Company in this
case. The employer argued that a grievance was not arbitrable
because the submission to the American Arbitration Association
was untimely, and maintained "that the court, not the arbitrator,
must make the determination that all preconditions to arbitration
have been met." Id. at 1093 (emphasis added). The court easily
rejected this argument:
[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 is no different in kind from a dispute over a substantive contract provision. Both types of determinations are, under the governing case law, matters for the arbitrator.
Id.
A plethora of circuit court cases have interpreted John
Wiley in the same or similar fashion. See, e.g., Denhardt v.
Trailways, Inc., 767 F.2d 687, 689 (10th Cir. 1985) (dispute as
to employer's compliance with time limit for conducting a hearing
is a procedural matter for arbitrator); Beer Sales Drivers, Local
-12-
744 v. Metropolitan Distribs., Inc., 763 F.2d 300, 302-03 (7th
Cir. 1985) (union's alleged failure to submit its members'
grievances within time limitation specified in agreement is an
issue of procedural arbitrability for arbitrator); Nursing Home &
Hosp. Union 434 v. Sky Vue Terrace, Inc., 759 F.2d 1094, 1097 (3d
Cir. 1985) ("the law is clear that matters of procedural
arbitrability, such as time limits, are to be left for the
arbitrator"); Automotive, Petroleum & Allied Indus. Employees
Union, Local 618 v. Town & Country Ford, Inc., 709 F.2d 509 (8th
Cir. 1983) (whether grievance was barred from arbitration due to
union's alleged failure to submit complaint to employer within
five days from notice of discharge, as required by agreement, is
question of procedural arbitrability for arbitrator); Hospital &
Inst. Workers Union Local 250 v. Marshal Hale Memorial Hosp., 647
F.2d 38, 40-41 (9th Cir. 1981) (alleged noncompliance with timing
requirements of a multiple step procedure is a question for the
arbitrator); United Rubber, Cork, Linoleum & Plastic Workers v.
Interco, Inc., 415 F.2d 1208, 1210 (8th Cir. 1969) (arbitration
ordered despite union's failure to file arbitration within 90
days). The Company has directed us to no cases to the contrary.
In Washington Hospital Center, supra, the employer
argued that a grievance was not arbitrable because the union
failed to follow the timing requirements of the step-grievance
process. Relying on John Wiley, the Court of Appeals for the
District of Columbia found that the employer's position on the
grievance was "sufficiently frivolous and unreasonable to warrant
-13-
a fee award." Washington Hosp. Ctr., 746 F.2d at 1510.2 The
court reasoned that the employer's position was frivolous and
unreasonable since it made no attempt to distinguish its case
from the facts of John Wiley, and relied solely on an inapposite
case from another circuit. Id. at 1510-11.
The Union in this case relied heavily on John Wiley in
its memorandum in support of its motion for summary judgment.
Nevertheless, the Company made no attempt to distinguish John
Wiley in its responsive memorandum. Indeed, it did not even
mention the case. Instead, it relied almost exclusively
(although cursorily) on a case from the Massachusetts Court of
Appeals decided under state, not federal law. The Company does
little better on appeal, citing two pre-John Wiley cases,
including one from this circuit, for the proposition that: "This
court has held that it is for 'the courts to determine whether
2 The court noted that John Wiley created a clear and certain
rule with regard to procedural arbitrability. We agree with its comment that:
The benefits of the rule's certainty -- that all disputes as to procedural
arbitrability are for the arbitrator -- outweigh any countervailing factors. As the Supreme Court said in Wiley, any
other rule would engender delay with the potential to 'entirely eliminate the prospect of a speedy arbitrated settlement of the dispute, to the disadvantage of the parties . . . and contrary to the aims of national labor policy.'"
Id. at 1512 (quoting John Wiley, 376 U.S. at 558).
-14-
procedural conditions to arbitrate have been met.'"3 As
demonstrated above, it is clear that this proposition did not
survive John Wiley. Moreover, in its sole attempt to distinguish
John Wiley, the Company compares the time bar provisions of its
collective-bargaining agreement with a wholly immaterial contract
provision from John Wiley.4 Finally, the Company has directed
this court to no federal circuit or district court precedent to
support its position.
3 The two cases cited are Boston Mut. Life Ins. Co. v. Insurance
Agents Int'l Union, 258 F.2d 516 (1st Cir. 1958) and Brass &
Copper Workers Fed. Labor Union No. 19322 v. American Brass Co.,
272 F.2d 849 (7th Cir. 1959), cert. denied, 363 U.S. 845 (1960).
The Company also indicates that one of these cases -- it is somewhat unclear which -- is "quoting from" John Wiley. This is,
of course, a rather dubious proposition considering that both cases were decided before John Wiley. We will give the Company
the benefit of the doubt that it intended to say "cited in" John
Wiley, as both cases are cited therein as examples of circuits
that have held that it is for the court to determine procedural questions, John Wiley, 376 U.S. at 556 n.12, a proposition
rejected by John Wiley and its progeny. Supra.
4 The Company's brief states:
"Compared with the defendant's contract language which plainly states 'The time limits provided in this Article are conditions precedent for the filing and
processing of grievances under this
Article
. . ., we submit that there is no comparison or similarity to Wiley, who's
[sic] contract language simply holds 'No dispute alleging discrimination shall be subject to grievance or arbitration unless no remedy therefore is provided . . .'" (emphasis in original).
In fact, the actual time bar at issue in John Wiley was very
similar to that in this case. It stated that: "The failure of either party to file the grievance within this time limitation shall be construed and be deemed to be an abandonment of the grievance." 373 U.S. at 556 n.11.
-15-
Under these extraordinary circumstances, we think the
Company's position regarding the Singh grievance has been and
continues to be frivolous, unreasonable, and without foundation.
deciding to the contrary.5 Accordingly, we remand the case to
the district court to assess and impose attorneys' fees and costs
upon the Company for its refusal to arbitrate the Singh
grievance.
CONCLUSION CONCLUSION
For the reasons stated herein, the decision of the
district court is affirmed in part and reversed in part, and the
case is remanded to the district court for further proceedings
consistent with this opinion.
5 In making this determination, we find some significance in the fact that the district court offered virtually no rationale for its decision not to award attorneys' fees on the Singh grievance, despite its recognition that "an 'untimeliness' defense is a classic case of procedural arbitrability that should be decided by the arbitrator . . . ."
-16-