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International Union v. Trane U.S. Inc.

United States Court of Appeals, Eighth Circuit

January 10, 2020

International Union, United Automobile, Aerospace and Agricultural Implement Workers of America, AFL-CIO, and UAW Local 716 Plaintiffs - Appellants
v.
Trane U.S. Inc. Defendant-Appellee

          Submitted: September 25, 2019

          Appeal from United States District Court for the Western District of Arkansas - Ft. Smith

          Before LOKEN, COLLOTON, and KOBES, Circuit Judges.

          LOKEN, Circuit Judge.

         In February 2017, Trane U.S. Inc. ("Trane") announced that it would close its manufacturing plant in Fort Smith, Arkansas. After discussions, Trane and Local 716 of the United Automobile Workers ("the Union") signed a Memorandum of Agreement extending the four-year collective-bargaining agreement ("CBA") that governed terms and conditions of plant employment to the earlier of the plant's closing or April 1, 2019. In May 2017, the Union submitted two grievances regarding early retirement benefits for employees terminated as the result of the plant closing. Trane denied the grievances, refused to submit them to arbitration, and the Union filed this suit to compel arbitration or, in the alternative, to enforce the CBA's substantive terms. The plant closed on July 28, 2017, but any duty to arbitrate did not expire with the CBA. See Garland Coal & Mining Co. v. United Mine Workers, 778 F.2d 1297, 1303 (8th Cir. 1985). The Union now appeals the district court's order denying the Union's motion to compel arbitration of the grievances. Reviewing the denial of a motion to compel arbitration de novo, we affirm in part, reverse in part, and remand. IBEW v. GKN Aerospace N. Am., Inc., 431 F.3d 624, 626-27 (8th Cir. 2005) (standard of review).[1]

         I. Governing Arbitrability Principles.

         The Union filed this action under Section 301 of the Labor Management Relations Act, 29 U.S.C. § 185, to enforce the CBA and, as is common, sought an order compelling Trane to arbitrate two unresolved grievances. Trane argues the CBA's arbitration provisions exclude these grievances. The principles we apply in deciding whether to compel arbitration are well established:

(1) arbitration is a matter of contract and may not be ordered unless the parties agreed to submit the dispute to arbitration; (2) unless the parties provide otherwise, courts decide the issue of whether the parties agreed to arbitrate; (3) courts cannot weigh the merits of the grievance in determining whether the claim is subject to arbitration; and (4) when an arbitration clause exists in a contract, there is a presumption of arbitrability unless it is clear that the arbitration clause is not susceptible of an interpretation that covers the dispute.

Teamsters Local Union No. 688 v. Indus. Wire Prods., Inc., 186 F.3d 878, 881 (8th Cir. 1999), citing AT & T Tech., Inc. v. Commc'ns Workers of Am., 475 U.S. 643, 648-50 (1986).

         The presumption of arbitrability does not "override[] the principle that a court may submit to arbitration only those disputes that the parties have agreed to submit." The presumption applies "only where it reflects, and derives its legitimacy from, a judicial conclusion that arbitration of a particular dispute is what the parties [to a CBA] intended." Granite Rock Co. v. Int'l Bhd. of Teamsters, 561 U.S. 287, 302-03 (2010) (quotation omitted). A particular grievance is excluded from arbitration "(1) where the collective bargaining agreement contains an express provision clearly excluding the grievance involved from arbitration; or (2) where the agreement contains an ambiguous exclusionary provision and the record evinces the most forceful evidence of a purpose to exclude the grievance from arbitration." UAW v. Gen. Elec. Co., 714 F.2d 830, 832 (8th Cir. 1983) (quotation omitted); see United Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582-83 (1960).

         The Union seeks to arbitrate grievances over the denial of two benefits the CBA allegedly required Trane to provide to eligible employees after plant closure, a "bridge" benefit and a temporary pension supplement benefit. The CBA is a lengthy, complex contract. As will become clear, the grievances alleged violations of two very different CBA provisions. Accordingly, we will separately address the arbitrability of each grievance.

         II. The Bridge Benefit.

         The Complaint alleged that the parties agreed in Article XX of the CBA that a laid-off worker would have one year to commence his or her pension without a break in service, avoiding considerable reductions to his or her monthly pension payments. The provisions of Article XX, entitled "Job and Income Security," governed the "severance pay" that an eligible employee was entitled to receive if "employment is terminated because of plant closing." In the Memorandum of Agreement extending the CBA until the Fort Smith plant closed, Trane expressly agreed that it would "follow the terms and conditions in Article XX with regards to . . . severance pay." The Complaint alleged that Trane nonetheless refused to comply with the "bridge" benefit provided in Article XX, Section 2(b)(3) (¶ 166):

(3) An eligible employee who will become eligible for optional retirement under the Pension Plan within one year [from termination because of plant closing] and who meets the conditions specified in Sub-paragraphs (i), (ii) and (iii) of Subsection (b)(1), may receive any Severance Pay to which he is entitled under Section 2, and later elect optional ...

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