UNITED STEEL WORKERS OF AM. v. CENTURY ALUMINUM OF KENTUCKY

JOSEPH McKINLEY, District Judge

This matter is before the Court on motions by the Defendant, Century Aluminum of Kentucky, LCC, [DN 4], and the Plaintiffs, United Steel Workers of America and United Steel Workers of America Local Union No. 9423 [DN 10], for a judgment on the pleadings. Fully briefed, this matter is ripe for decision.

The United Steel Workers of America ("Steel Workers") and Century Aluminum ("Century") are parties to a collective bargaining agreement, which provides an arbitration procedure for the processing of all grievances between the two parties. The present action arose after Century discharged Bill Brown ("Brown"), a local member of the Steel Workers, pursuant to a Last Chance Agreement ("LCA"). The LCA, signed by Brown, stated that Brown could be terminated upon a violation of any company rule. Three days after his discharge, the Local Union No. 9243 presented Century with a grievance report alleging that Brown's rights under the collective bargaining agreement had been violated as he was not given the fair opportunity to avoid discharge. Century responded by refusing to process the grievance, relying on the LCA which stated that "neither the termination nor the issue of termination will be subject to the grievance and arbitration provisions of the collective barging agreement." The Steel Workers and the Local Union (collectively the "Plaintiffs") subsequently brought suit alleging that Century breached the collective bargaining agreement. Both the Plaintiffs and the Defendant have requested a judgment on the pleadings.

The standard of review applicable to motions for "judgment on the pleadings" under Fed.R.Civ.Pro. 12(c) is the same standard applicable to motions to dismiss under Rule 12(b)(6). Grindstaff v. Green, 133 F.3d 416, 421 (6th Cir. 1998); Morgan v. Church's Fried Chicken, 829 F.2d 10, 11 (6th Cir. 1987). The only difference between Rule 12(c) and Rule 12(b)(6) is the timing of the motions. For a motion under Rule 12(b)(6), the moving party must request judgment in a pre-answer motion or in the answer itself, whereas a motion for dismissal under Rule 12(c) may be submitted after the answer has been filed.

Rule 12(b)(6) directs the Court to construe the complaint in a light most favorable to the plaintiff, accept all the factual allegations as true, and determine whether the plaintiff undoubtedly can prove no set of facts in support of its claim that would entitle it to relief.Sistrunk v. City of Strongsville, 99 F.3d 194, 197 (6th Cir. 1996), cert. denied, 520 U.S. 1251 (1997). A judge may not grant a Rule 12(b)(6) motion based on a disbelief of a complaint's factual allegations. Wright v. MetroHealth Medical Center, 58 F.3d 1130, 1138 (6th Cir. 1995), cert. denied, 516 U.S. 1158 (1996). A Rule 12(b)(6) motion tests whether the plaintiff has stated a claim for which the law provides relief.Gazette v. City of Pontiac, 41 F.3d 1061, 1064 (6th Cir. 1994). In deciding a motion to dismiss, the Court may consider all papers and exhibits appended to the complaint, as well as any matters of which judicial notice may be taken. Hirsch v. Arthur Anderson Co., 72 F.3d 1085, 1092 (2d Cir. 1995). It is against this standard that the Court has reviewed Plaintiffs' allegations.

The law governing the arbitrability of grievances under a collective bargaining agreement is well settled. The Supreme Court stated these principle in ATT Technologies Inc. v. Communications Workers, 475 U.S. 643 (1986). The most relevant principle to this discussion is that a presumption of arbitrability arises if the collective bargaining agreement contains a broad grievance and arbitration clause. Id. at 650 (emphasis added). The presumption of arbitrability means 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 dispute." Id. The presumption of arbitrability can only be overcome by an agreement between the parties that contains an "express provision excluding a particular grievance from arbitration" or, in the absence of such a provision, "forceful evidence of purpose to exclude [a grievance] from arbitration." Id. National labor policy strongly favors the arbitration of labor disputes. See United Steelworkers of America v. Warrior Gulf Navigation Co., 363 U.S. 574, 582 (1960); General Drivers, Salesman, Warehousemen's Local Union No. 984 v. Malone Hyde, Inc., 23 F.3d 1039, 1043 (6th Cir. 1994).

Settlement agreements, such as the LCA signed by Brown, must also be viewed and interpreted in light of the presumption of arbitrability. In an analogous case to the present action, the Third Circuit held that in order to exclude a grievance from arbitration the LCA must contain unambiguous language. United Steelworkers of America, AFL-CIO-CLC v. Lukens Steel Co., Div. of Lukens, Inc., 969 F.2d 1468, 1476 (3rd Cir. 1992). In Lukens, an employee signed a LCA that said neither the employee nor the union shall have recourse through the arbitration or grievance procedure if the employee was suspended for terminating a condition of employment. Id. at 1471. After signing the LCA the employee was suspended and the union filed a grievance on his behalf. The defendant employer refused to submit the disputed grievance to arbitration citing the LCA's language regarding arbitration. The union argued that the agreement prevented the employee from arbitrating the penalty the company imposed, but did not prevent the arbitration of whether the employee actually violated company policy. Id. The Court agreed with the union, and noted that in light of the presumption of arbitrability, the company failed "to produce `strong and forceful' evidence of an intention to exclude this issue from arbitration." Id. at 1478.

Like the plaintiffs in Lukens, the Plaintiffs here argue that the LCA does not explicitly bar access to the grievance and arbitration procedure for contesting Century's determination that Brown's conduct amounted to a violation of the rules of conduct. Century cites language from the agreement which states "neither the termination nor any issues of the termination will be subject to the grievance and arbitration procedures." Century argues that the term "any issue of termination" covers the issue of whether a rule was violated because the predicate act of determining whether a violation occurred is necessarily related to the decision to discharge the employee. However, Plaintiffs contend that this language fails to explicitly exclude from arbitration the issue of whether a violation actually occurred.

Plaintiffs also state that the language in the LCA is ambiguous, and the Court is therefore required to adopt the interpretation which favors arbitrability. The LCA possesses two paragraphs which contain exclusionary language, paragraphs 4 and 7. The broadest language ("nor any issues of the termination") only appears in paragraph 4. Paragraph 7, appears to have been drafted for the sole purpose of informing Brown of the ramifications upon entering into the LCA. Given that the broader exclusion is not included in Paragraph 7, Plaintiffs contend that this creates an ambiguity as to the extent of the waiver established by the LCA as a whole. Plaintiffs support their argument by citing Century's own Reply Brief, which argues that the language in Paragraph 7 is ambiguous but nonetheless must be construed consistently with the language in Paragraph 4 according to the basic principles of contract interpretation. Plaintiffs contend that by admitting to an ambiguity, Century has given away its case since the central tenant of Lukens is that when a settlement agreement contains language susceptible to multiple interpretations, a court should interpret the language in favor of establishing arbitrability. Lukens, 969 F.2d at 1476.

It is undisputed that the collective bargaining agreement entered into by the parties contains a broad arbitration clause and therefore creates a presumption in favor of arbitrability when construing the LCA. ATT Technologies Inc., 475 U.S. at 650; see also Lukens, 969 F.2d at 1476. As previously mentioned, for Century to overcome this presumption it must present forceful evidence of an intent to exclude the particular grievance or an express provision in the LCA. Id. Century fails to make any arguments regarding the intent to exclude the grievance, so the Court must focus solely on the LCA itself.

Century correctly asserts that the language on which it relies, "neither the termination nor any issues of the termination," is capable of being interpreted as excluding the issue of whether Brown violated a rule of conduct from arbitration. However, merely because the language is susceptible to being interpreted to cover the asserted dispute does not mean the presumption of arbitrability is overcome. Warrior Gulf Navigation, 363 U.S. at 583. If the LCA is ambiguous, the Court must resolve the ambiguity in favor of arbitrability.

In order for the Court to conclude the aforementioned language excludes the issue of whether Brown violated a rule of conduct, we must first assume that the predicate act of determining a violation occurred is "an issue of termination." The employer inLukens made a similar argument regarding the language in the LCA at issue. The company contended that the "power to determine the disposition appropriate for violating the Agreements also includes the power to make the threshold determination that a violation has occurred." Lukens, 969 F.2d at 1476-1477. The Third Circuit rejected this argument and explained that nothing prevented the employer from clearly and unambiguously excluding the issue from arbitration. Moreover, the argument required theLukens court to assume the "power to determine a `disposition' encompassed the threshold issue of ascertaining whether the employee has violated" the LCA. Id. at 1477.

As with the employer in Lukens, Century's argument regarding the phrase "any issue of termination" requires the court to assume which fails to amount to the "strong and forceful" evidence needed to over come the presumption of arbitrability. ATT Technologies Inc., 475 U.S. at 650. The Court therefore cannot say "with positive assurance" that Brown's grievance is excluded by the LCA's language and in light of the strong presumption must rule in favor of the Plaintiffs. Id.

For the reasons set forth above, IT IS HEREBY ORDERED that the motion by Plaintiffs, United Steel Workers of America and United Steel Workers of America Local Union No. 9423 for judgment on the pleadings [DN 10] is granted, and the motion by the Defendant, Century Aluminum of Kentucky, LCC, [DN 4], is denied.