United Steel, Paper & Forestry, Rubber, Manufacturing, Energy, Allied Industrial & Service Workers International Union & Its Local 13-857 v. Phillips 66 Co.

839 F.3d 1198, 2016 U.S. App. LEXIS 18565, 2016 WL 6078558
CourtCourt of Appeals for the Tenth Circuit
DecidedOctober 17, 2016
Docket15-5119
StatusUnpublished
Cited by8 cases

This text of 839 F.3d 1198 (United Steel, Paper & Forestry, Rubber, Manufacturing, Energy, Allied Industrial & Service Workers International Union & Its Local 13-857 v. Phillips 66 Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Tenth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United Steel, Paper & Forestry, Rubber, Manufacturing, Energy, Allied Industrial & Service Workers International Union & Its Local 13-857 v. Phillips 66 Co., 839 F.3d 1198, 2016 U.S. App. LEXIS 18565, 2016 WL 6078558 (10th Cir. 2016).

Opinion

BRISCOE, Circuit Judge.

Phillips 66 Company (“the Company”) appeals from the district court’s grant of summary judgment and order compelling arbitration. The United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union and its Local 13-857 (collectively, “the Union”) filed two grievances on behalf of employees of the Company and sought arbitration pursuant to the grievance procedure in the parties’ collective bargaining agreement (“CBA”). The Company refused to arbitrate. The Union sued and the district court issued an order compelling arbitration. The Company now appeals, arguing that the grievances are not arbitrable under the CBA. We exercise jurisdiction pursuant to 28 U.S.C. § 1291 and affirm.

I

A. Background, and the CBA

The Union is the collective bargaining representative of employees at the Company’s oil refinery in Ponca City, Oklahoma. The Company was a subsidiary of Conoco-Phillips, the previous owner of the refinery. The Company spun off from Conoco-Phillips to form an independent entity, and ConocoPhillips transferred the Ponca City refinery and other various assets to the Company in the spin-off. When the Company took over the refinery, it assumed the CBA with the Union.

The provisions of the CBA relevant to this case are Articles 15 and 30, and a Letter of Understanding (the “Letter”) between ConocoPhillips and the Union. Article 15 states in part:

The ... benefit plans available to the employees in this bargaining unit on the date of [the CBA,] [including the Employee Medical and Dental Plans,] shall be continued for the period of [the CBA] subject to the rules and regulations of the plans and [the CBA].
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Eligible employees covered by the [CBA] will participate in the Employee Medical and Employee Dental Plans generally available to the employees of the Company as of the date of [the CBA] as well as subsequent modifications to these Plans that might occur during the term of [the CBA] that also apply generally to the employees of the Company.
The Company agrees to pay 80% of the premiums for the Employee Medical and Dental Plan. The Company also agrees to pay 80% of any premium increases that occur during the term of [the CBA]. Employees covered by [the CBA] are responsible for the remaining 20% of the premium and 20% of any premium increases occurring during the term of [the CBA],

Aplt. App. at 39-40.

The Letter of Understanding states in part:

The parties agree that in the event [Co-noco Phillips] enters into an agreement to sell the Ponca City Refinery covered by the [CBA] in its entirety to a third party or enters into a joint venture or merger agreement covering the Ponca City Refinery in its entirety, [Conoco *1201 Phillips] will include in any sale, merger or joint venture agreement the requirement that the successor company shall recognize the Union- as the exclusive representative of the bargaining unit and shall adopt the [CBA] and all existing Memoranda of Agreement....
Except that such successor company shall not be required to continue the existing employee benefits, but shall be entitled to establish a package of benefits for employees covered by the [CBA] that are reasonably comparable in the aggregate. If requested by the Union, the [successor] company shall negotiate with the Union in good faith regarding those benefits. Should an agreement not be reached, the successor company may proceed with implementation of the proposed Benefits Plans and the Union will not have the right to strike,
However, if the parties are unable to reach an agreement on Benefits Plans, the successor company will have the option to waive the foregoing “reasonably comparable Benefits Plans in the aggregate” commitment and provide the Union with the option to strike the successor employer on Benefits Plans only by giving the successor company 45 days notice within 15 days after the Union has been informed by the successor company that it is waiving the commitment for “reasonably comparable Benefits Plans in the aggregate”.

Id, at 96-97. A later addendum to the CBA dictates that the Letter would remain in force for the term of the CBA.

Article 30 dictates a four-step procedure for settling grievances. Step A begins when the grieving party requests a meeting with a supervisor to discuss the details of the grievance. If the Company denies the grievance at Step A, the grieving party may progress to Step B by providing the grievance in writing to the second level of supervision. If the Company denies the grievance again, the party may proceed to Step C, where the grievance will be discussed at the next meeting between the Union and the Company’s management. If the Company denies the grievance at the first three steps, then the grieving party may submit the dispute to arbitration. The CBA’s arbitration clause defines the scope of arbitration: “Only differences arising between the Union and the Company relating to interpretation or performance of [the CBA] which cannot be adjusted by mutual agreement and have gone through the grievance procedure are arbitrable, except as otherwise provided in [the CBA].” Id. at 84.

B. The Grievances

In July 2012, the Company notified the Union that certain benefits plans would be modified or canceled, including benefits for current employees and retirees contained in the Employee Medical Plan, effective January 1, 2013. The Union responded in September 2012, requesting to bargain over the changes pursuant to the CBA, thereby initiating the grievance procedure. The Company denied the request to bar-gaini and the Union filed two written grievances: Grievance R12-5 (Changes to Employee Medical Plan) and Grievance R12-6 (Changes to Retiree Medical Plan). In Grievance R12-5, the Union said in part:

The Union sites' [sic] articles 1, 3 and 15 in this grievance, as well as the successor ship [sic] letter, and any other articles that may be found to apply. Article 15 states that the Company agrees to pay 80% of the premiums for the plan, and also states that the Company agrees to pay 80% of any premium increases. It appears that the plan increases for the employee exceed the medical inflation *1202 rate and therefore exceed the 20% employee portion.

Id. at 111. With respect to the Company’s “High Deductible Health Plan (HDHP)” and “Primary Preferred Provider Organization (PPO)” plan, id. at 103, in Grievance R12-5, the Union also said:

Further, the HDHP plan [sic], or “consumer” plan, has and [sic] employee premium even though 100% of the HDHP/Consumer premium would be less than the 80% portion of the PPO plan. We believe the PPO [plan] to be the benchmark plan for purposes of 80/20. In previous years the HDHP plan [sic] premium for employees was $0, or effectively $0 with the wellness credit.

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Bluebook (online)
839 F.3d 1198, 2016 U.S. App. LEXIS 18565, 2016 WL 6078558, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-steel-paper-forestry-rubber-manufacturing-energy-allied-ca10-2016.