Paul Nealy v. Shelly & Sands, Inc.

• Court: Court of Appeals for the Sixth Circuit
• Decided: March 23, 2021
• Docket: 20-3854
• Status: Unpublished

Opinion

NOT RECOMMENDED FOR PUBLICATION File Name: 21a0149n.06

No. 20-3854

UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT

FILED ) Mar 23, 2021 PAUL NEALY, ) DEBORAH S. HUNT, Clerk ) Plaintiff-Appellant, ) ON APPEAL FROM THE ) v. UNITED STATES DISTRICT ) COURT FOR THE ) SHELLY & SANDS, INC., et al., SOUTHERN DISTRICT OF ) OHIO ) Defendants-Appellees. )

BEFORE: BATCHELDER, MOORE and BUSH, Circuit Judges.

JOHN K. BUSH, Circuit Judge. Paul Nealy, an African-American union member, sued

his former employer, Shelly & Sands, Inc., alleging race-based discrimination and retaliation. The

district court dismissed his complaint, holding that the collective-bargaining agreements (“CBAs”)

between his union and Shelly & Sands required him to arbitrate his claims. He now appeals. For

the following reasons, we affirm the district court’s judgment.

I.

In March 2020, Nealy filed a complaint in the U.S. District Court for the Southern District

of Ohio raising claims against his former employer Shelly & Sands and his former supervisor,

Ryan Grezlik, under the Reconstruction Civil Rights Act, 42 U.S.C. § 1981; Title VII of the Civil

Rights Act of 1964, 42 U.S.C. § 2000e et seq.; and the Ohio Laws Against Discrimination, Chapter

4112 of the Ohio Revised Code. He alleged that Defendants discriminated against him on the

basis of race and retaliated against him for his good-faith complaints about racism by denying him No. 20-3854, Nealy v. Shelly & Sands, Inc., et al.

a promotion and by failing to return him to work at the beginning of the construction season.

Nealy’s complaints about racism included reporting alleged discriminatory treatment to Shelly &

Sands’s Equal Employment Officer.

Defendants filed a motion to dismiss for lack of subject-matter jurisdiction, attaching

Nealy’s CBAs with Shelly & Sands. Defendants argued that Nealy’s claims constituted “equal

opportunity claims,” which he could bring only through arbitration according to the CBAs’

arbitration provisions. Nealy responded, countering that the CBAs did not “clearly and

unmistakably waive his rights to a judicial forum” for his claims.

Two substantially identical CBAs governed Nealy’s employment at the time the events

underlying Nealy’s allegations arose. Section 8.4 of each CBA (the “antidiscrimination

provision”) provides for equal opportunity in employment and bans race-based discrimination:

8.4 Non-Discrimination: It is a condition of this agreement to provide equal opportunity in Employment for all qualified persons, and to prohibit discrimination in employment because of race, creed, color, sex, age or national origin. There shall be full compliance with all applicable Federal and State Statutes, regulations, rules and orders of appropriate Federal or State agencies having jurisdiction over the subject matter of discrimination in employment.

Also, Article VI of each CBA provides for grievance and arbitration procedures for any dispute

arising out of the CBA. Specifically, Section 6.2b (the “arbitration provision”) requires any “equal

employment opportunity” claims arising from either the CBA itself or “under any federal, state or

local fair employment practices law” to be addressed pursuant to the CBA’s grievance and binding

arbitration provision:

6.2b Any and all claims regarding equal employment opportunity provided for under this Agreement or under any federal, state or local fair employment practices law shall be exclusively addressed by an individual employee or the union under the grievance and binding arbitration provision of this agreement.

As such, Article VI provides for a four-step grievance and arbitration process.

2 No. 20-3854, Nealy v. Shelly & Sands, Inc., et al.

The district court granted Defendants’ motion to dismiss. Nealy timely appeals.

II.

We consider a Rule 12(b)(1) motion to dismiss based on a failure to arbitrate as a motion

to dismiss for failure to state a claim upon which relief may be granted. Teamsters Local Union

480 v. United Parcel Serv., Inc., 748 F.3d 281, 286 (6th Cir. 2014). We review de novo a district

court’s grant of a motion to dismiss for failure to state a claim. Torres v. Vitale, 954 F.3d 866, 871

(6th Cir. 2020). Furthermore, we review de novo a district court’s holding regarding the

arbitrability of a dispute. Simon v. Pfizer, Inc., 398 F.3d 765, 772 (6th Cir. 2005).

III.

The Federal Arbitration Act (“FAA”) governs arbitration agreements. 9 U.S.C. § 1 et seq.

The FAA provides that “[a] written provision in . . . a contract evidencing a transaction involving

commerce to settle by arbitration a controversy thereafter arising out of such contract or

transaction . . . shall be valid, irrevocable, and enforceable,” except for legal or equitable grounds

“for the revocation of any contract.” 9 U.S.C. § 2. Following our “‘duty to interpret [an

arbitration] agreement and to determine whether the parties intended to arbitrate grievances

concerning’ a particular matter,” Granite Rock Co. v. Int’l Broth. Of Teamsters, 561 U.S. 287, 301

(2010) (quoting AT&T Techs., Inc. v. Commc’n Workers of Am., 475 U.S. 643, 651 (1986)), we

must “rigorously enforce agreements to arbitrate,” Dean Witter Reynolds, Inc. v. Byrd, 470 U.S.

213, 221 (1985). Moreover, “[n]othing in the law suggests a distinction between the status of

arbitration agreements signed by an individual employee and those agreed to by a union

representative.” 14 Penn Plaza LLC v. Pyett, 556 U.S. 247, 258 (2009).

3 No. 20-3854, Nealy v. Shelly & Sands, Inc., et al.

The issue here is whether the valid arbitration agreement’s scope encompasses Nealy’s

§ 1981, Title VII, and Ohio law antidiscrimination claims. See Stout v. J.D. Byrider, 228 F.3d

709, 714 (6th Cir. 2000) (stating that the second step of analyzing whether a dispute is subject to

arbitration is to ascertain the agreement’s scope).

A. LISTING OF SPECIFIC STATUTES

Nealy argues that he did not waive his right to a judicial forum for his statutory claims

because neither the antidiscrimination provision nor the arbitration provision in the CBAs

specifically lists § 1981, Title VII, or Chapter 4112 of the Ohio Revised Code. We disagree.

A waiver of statutory rights to a judicial forum in a CBA must be “clear and unmistakable.”

Wright v. Universal Maritime Serv. Corp., 525 U.S. 70, 80 (1998). In Wright, a general arbitration

clause for “[m]atters under dispute” was insufficiently clear because it neither contained a specific

antidiscrimination provision, nor did it “explicit[ly] incorporate[] . . . statutory antidiscrimination

requirements.” Id. The CBA also stated that “[a]nything not contained in this Agreement shall

not be construed as being part of this Agreement” and that “[i]t is the intention and purpose of all

parties hereto that no provision or part of this Agreement shall be violative of any Federal or State

Law.” Id. at 81. That language was insufficient to “mak[e] compliance with the [Americans with

Disabilities Act (ADA)] a contractual commitment that would be subject to the arbitration clause.”

Id.

Following Wright we held that a CBA did not “clearly and unmistakably” require

arbitration of an ADA claim where the CBA contained a non-discrimination clause prohibiting

disability discrimination against employees and, in another section, provided that “[a]ny grievance

arising under the terms of this contract or any alleged violation thereof shall be handled” according

to the CBA’s prescribed grievance and arbitration procedure. Bratten v. SSI Servs., Inc., 185 F.3d

4 No. 20-3854, Nealy v. Shelly & Sands, Inc., et al.

625, 627–28, 631–32 (6th Cir. 1999). In Bratten, the CBA’s reference to disability discrimination

did not necessarily refer to discrimination under the ADA because it could have encompassed only

disability discrimination under Title VII, which the provision explicitly referenced. Id. at 631.

Moreover, the antidiscrimination provision, on its own, did not automatically require arbitration

of statutory claims of discrimination simply because the CBA also contained a separate arbitration

clause. Id. at 631–32. Importantly, the arbitration clause mentioned neither statutory claims nor

the antidiscrimination provision, and the antidiscrimination provision did not refer to the

arbitration provision. Id. at 631. The presence of an antidiscrimination clause, on its own, did not

require union members to arbitrate statutory claims of discrimination. Id. at 631–32.

A year later, we similarly held that a CBA with a “general anti-discrimination provision”

that included a prohibition on disability-based discrimination did not waive a union member’s

rights to bring his ADA claim in court. Kennedy v. Superior Printing Co., 215 F.3d 650, 654 (6th

Cir. 2000). That CBA included a separate arbitration section broadly defining “a grievance as ‘any

controversy or dispute arising from the interpretation and/or application of the terms and work

conditions under this labor agreement.’” Id. at 654. Again, the antidiscrimination clause did not

explicitly mention arbitration, and the arbitration provisions did not mention statutory claims of

discrimination. Id.

Nealy relies on Wright, Bratten, and Kennedy to argue that citation to specific statutes in

the CBAs is necessary for the arbitration provision to cover claims brought under those statutes.

The holdings in those cases, however, hinged not on the presence or absence of citations to any

particular statute, but on the lack of any language making it clear and unmistakable that the

arbitration provision applied to the relevant statutory claims in the first place. In Bratten, for

example, there was no explicit reference at all to statutory claims in the arbitration provision;

5 No. 20-3854, Nealy v. Shelly & Sands, Inc., et al.

rather, the operative language referred only to “[a]ny grievance arising under the terms of this

contract” without any mention of statutory discrimination claims. 185 F.3d at 631–32. In that

context, we noted the absence of any citation to an antidiscrimination statutory provision because

that would be the only way to know that the employer was incorporating such a law into the

agreement and thereby making a dispute under that law a “grievance arising under the terms of the

contract.” In contrast, the CBAs here specifically require statutory claims of equal employment

opportunity to be arbitrated in the arbitration provision.

The CBAs at issue here differ fundamentally from those at issue in Wright, Bratten, and

Kennedy. Not only does the antidiscrimination provision explicitly require “full compliance with

all applicable Federal and State Statutes, regulations, rules and orders of appropriate Federal or

State agencies having jurisdiction over the subject matter of discrimination in employment,” but

the grievance and binding arbitration provision also explicitly refers to “claims regarding equal

employment opportunity . . . under any federal, state or local fair employment practices.” Thus,

the plain language of the contract indicates the parties’ mutual intent to require any “equal

employment opportunity” statutory claims—which clearly encompass claims of racial

discrimination in employment under § 1981, Title VII, and the Ohio Laws Against

Discrimination—to be submitted to arbitration before suit may be brought in court. See

Darrington v. Milton Hershey School, 958 F.3d 188, 194–95 (3d Cir. 2020) (“The clear-and-

unmistakable-waiver standard is satisfied if a collective bargaining agreement, interpreted

according to applicable contract-interpretation principles, clearly and unmistakably waives a

judicial forum for statutory claims.”). The CBAs’ language is “clear and unmistakable.”

6 No. 20-3854, Nealy v. Shelly & Sands, Inc., et al.

B. RETALIATION CLAIMS

Nealy posits that, even if the CBAs do require him to submit his claims of discrimination

to arbitration, the CBAs’ arbitration agreement does not reach his retaliation claims. Nealy

assumes that retaliation must be equivalent to, or a subset of, discrimination under the relevant

statutes to be included in the CBAs’ arbitration provision. It is not immediately clear why that

would be necessary, when the arbitration provision in section 6.2b provides that “[a]ny and all

claims regarding equal employment opportunity . . . under any federal, state or local fair

employment practices law” must be addressed according to the CBAs’ grievance and arbitration

provision. Thus, our inquiry is whether retaliation claims under § 1981, Title VII, and the Ohio

Laws Against Discrimination constitute “equal employment opportunity” claims under federal and

state “fair employment practices law.”

Title VII defines retaliation as a form of discrimination on the basis of an employee’s

“oppos[ition to] any practice made an unlawful employment practice by this subchapter,

or . . . charge, testi[mony], assist[ance], or participat[ion] in any manner in an investigation,

proceeding, or hearing under this subchapter.” 42 U.S.C. § 2000e-3(a). Section 1981

encompasses employment-related retaliation claims. CBOCS West, Inc. v. Humphries, 553 U.S.

442, 454–55 (2008). And Ohio Rev. Code § 4112.02(I) likewise prohibits retaliation, defined

similarly as in Title VII, albeit by “any person” rather than strictly by employers against

employees. Each of these laws aims to prevent unfair practices in employment that hinder

employees’ equal access to opportunity: namely, an employer’s discrimination against an

employee for legitimate conduct. See CBOCS, 553 U.S. at 456 (explaining that an antiretaliation

law prohibits “discrimination that harms ‘individuals based on . . . conduct’” (quotation omitted)).

7 No. 20-3854, Nealy v. Shelly & Sands, Inc., et al.

Thus, Nealy’s retaliation claims clearly fit within the term “equal employment opportunity” claims

under federal and state “fair employment practices law.”

IV.

For the foregoing reasons, we affirm the district court’s dismissal of Nealy’s claims.

8 No. 20-3854, Nealy v. Shelly & Sands, Inc., et al.

KAREN NELSON MOORE, Circuit Judge, dissenting. I disagree with the majority’s

contention that “[t]he holdings in [Wright v. Universal Maritime Serv. Corp., 525 U.S. 70 (1998),

Bratten v. SSI Servs., Inc., 185 F.3d 625 (6th Cir. 1999), and Kennedy v. Superior Printing Co.,

215 F.3d 650 (6th Cir. 2000),] hinged not on the presence or absence of citations to any particular

statute, but on the lack of any language making it clear and unmistakable that the arbitration

provision applied to the relevant statutory claims in the first place.” Maj. Op. at 5. I read Bratten

as supplying a bright-line rule. Explaining that “post-Wright courts appear to be in agreement that

a statute must specifically be mentioned in a [collective bargaining agreement (“CBA”)] for it to

even approach Wright’s ‘clear and unmistakable’ standard[,]” the Bratten court held that “under

a ‘clear and unmistakable’ standard, the ADA and other statutory claims must be expressly

recounted in the CBA.” Bratten, 185 F.3d at 631; see also Kennedy, 215 F.3d at 654 (“Nowhere

does the Agreement reference the ADA. Therefore, under Wright and Bratten the Agreement

cannot be construed as waiving Kennedy’s rights to a judicial forum for his ADA claim.”);

Darrington v. Milton Hershey Sch., 958 F.3d 188, 194 & n.6 (3d Cir. 2020) (characterizing Bratten

as the Sixth Circuit’s “endors[ing]” a “bright-line approach[]”).

Simply put, Nealy should prevail. Nowhere do the CBAs in this case cite 42 U.S.C. § 1981,

Title VII, or Ohio’s nondiscrimination statute. Under Bratten—and under similar First, Fourth,

and Seventh Circuit precedent—the CBAs have not waived a judicial forum. See Quint v. A.E.

Staley Mfg. Co., 172 F.3d 1, 9 (1st Cir. 1999) (“CBA Articles 5 & 6, neither of which explicitly

mentions employee rights under the ADA or any other federal anti-discrimination statute, pose no

bar to the instant action.”); Carson v. Giant Food, Inc., 175 F.3d 325, 332 (4th Cir. 1999) (“When

the parties use such broad but nonspecific language in the arbitration clause, they must include an

‘explicit incorporation of statutory antidiscrimination requirements’ elsewhere in the contract.”)

9 No. 20-3854, Nealy v. Shelly & Sands, Inc., et al.

(quoting Wright, 525 U.S. at 81); Vega v. New Forest Home Cemetery, LLC, 856 F.3d 1130, 1135

(7th Cir. 2017) (determining that there is no clear and unmistakable waiver when “nowhere in

Article VIII [of the CBA] or, for that matter, anywhere else in the agreement is there even a

reference to the FLSA”).

Because I would reverse the district court and remand for further proceedings,

I respectfully dissent.