Independent Lift Truck Builders Union v. Hyster Co.
| Decision Date | 17 August 1993 |
| Docket Number | No. 92-3114,92-3114 |
| Citation | 2 F.3d 233 |
| Parties | 144 L.R.R.M. (BNA) 2015, 62 USLW 2152, 126 Lab.Cas. P 10,825 INDEPENDENT LIFT TRUCK BUILDERS UNION, Plaintiff-Appellee, v. HYSTER COMPANY, Defendant-Appellant. |
| Court | U.S. Court of Appeals — Seventh Circuit |
William A. Widmer, III (argued), Martin P. Barr, Carmell, Charone, Widmer, Mathews
& Moss, Chicago, IL, John D. McFetridge, Manion, Janov & Devens, Danville, IL, for plaintiff-appellee.
John B. Jenkins, Gunn & Hickman, Danville, IL, Verne W. Newcomb (argued), Newcomb, Sabin, Schwartz & Landsverk, Portland, OR, for defendant-appellant.
Before FLAUM and KANNE, Circuit Judges, and ENGEL, Senior Circuit Judge. *
Defendant Hyster Company appeals the district court's order compelling it to arbitrate a grievance brought by plaintiff Independent Lift Truck Builders Union on behalf of three retired employees and one current employee, 803 F.Supp. 1367. This appeal requires us to determine whether the district court improperly deferred to the arbitrator the question of whether the grievance was arbitrable. Because the district court properly ordered the Company to arbitrate the grievance insofar as it was brought on behalf of the current employee, we affirm the district court's order in part. However, because we conclude that the district court avoided its responsibility to determine whether the grievance was arbitrable insofar as the grievance was brought on behalf of the retired employees, we vacate the order in part and remand in order to allow the district court to make that determination.
In 1968, defendant Hyster Company ("the Company") established a medical plan for retired employees. Later, the Company entered into a series of collective bargaining agreements with plaintiff Independent Lift Truck Builders Union ("the Union"). The most recent agreement is effective from June 1991 to June 1994. Article XIX of the agreement states:
1. The present pension and insurance program shall be continued during the term of the Agreement with no change except as indicated below....
* * * *
3. The current Hyster medical plan stays in effect until December 31, 1991. A new Hyster 80/20 comprehensive Health Plan including Dental, Prescription Drugs, and Vision Coverage as outlined in the new Hyster Health Plan Booklet dated January 1, 1992, becomes effective January 1, 1992.
Article III of the agreement provides that "[a]ll disputes are subject to arbitration." Article III further provides as follows:
The arbitrator shall have authority only to interpret and apply the provisions of the Agreement and shall not have the authority to change, amend, modify, delete or add to any of the provisions of this Agreement.
In March and May of 1992, the Company implemented certain changes to insurance benefits for retired employees. Specifically, the Company eliminated vision and dental coverage and reduced prescription drug coverage for retired employees under the age of 65. The Company also raised the insurance premiums for retired employees over age 65, and it reduced their prescription drug coverage as well.
On learning of the changes to the insurance program, the Union filed a grievance on behalf of three retired employees and on behalf of one current employee who had been considering retirement. The Company denied the grievances and refused to submit to arbitration. The Union then brought this action to compel the Company to submit the grievances to arbitration.
The Company moved to dismiss the complaint on the ground that the Union lacked standing to represent retired employees. The district court denied the motion but raised sua sponte the question of whether the Union was entitled to judgment as a matter of law. In addressing this question, the court indicated that it recognized that the question of arbitrability was for the court to decide. The court noted, for example, that "there is no dispute initially that the court, and not an arbitrator must decide the question of whether the dispute is arbitrable." Independent Lift Truck Builders Union v. Hyster Co., 803 F.Supp. 1367, 1369 (C.D.Ill.1992). The court concluded that "the dispute in this case as to whether Hyster can unilaterally change health benefits for retirees, is arbitrable." Id.
Other portions of the court's order, however, indicate that the court actually decided to defer to the arbitrator the question of arbitrability. The court noted that the dispute over arbitrability could be reduced to a question over the interpretation of the term "employees" as used in the collective bargaining agreement. The court observed that, if the term were interpreted to include retired employees as well as current employees, the Union's grievance would have merit. The court reasoned as follows:
The court cannot determine, however, as a matter of law, the meaning the parties attributed to the word "employees." ... Hyster may have a strong argument that the term "employees" does not refer to retired employees. However, Hyster must make that argument to an arbitrator.
Id. at 1371 (emphasis added). The court further explained that, "[i]n order to find that the dispute in this case was not arbitrable, the court essentially would have to rule on the merits of the dispute." Id. at 1370. Accordingly, the court ordered the dispute to arbitration.
Hyster now appeals. While the issue may at first blush appear to involve a distinction without a difference, we respectfully disagree. The Supreme Court recognizes such differences as important and so do we. The ultimate result may well depend upon it. We cannot short-circuit the procedural necessities by speculating that the same result might obtain either way.
The parties and the district court appear to agree that the question of arbitrability is for the court, and not the arbitrator. See Atkinson v. Sinclair Refining Co., 370 U.S. 238, 241, 82 S.Ct. 1318, 1320, 8 L.Ed.2d 462 (1962) (); John Wiley & Sons v. Livingston, 376 U.S. 543, 547, 84 S.Ct. 909, 913, 11 L.Ed.2d 898 (1964) (); AT & T Technologies v. Communications Workers, 475 U.S. 643, 649, 106 S.Ct. 1415, 1418, 89 L.Ed.2d 648 (1986).
Disagreement arises, however, over whether the district court actually followed its own rule. The Union argues that the district court ruled that the grievance was arbitrable. The Company points out that the district court informed the parties that they would be free to present to the arbitrator arguments concerning whether retired employees were covered by the collective bargaining agreement. By leaving this inquiry for the arbitrator, the Company argues, the district court impermissibly deferred the question of arbitrability to the arbitrator.
The confusion in this case stems from the fact that all three inquiries to which the parties have addressed their arguments--whether the Union has standing to file a grievance on behalf of retired employees, whether the grievance is arbitrable, and whether the grievance has merit--all collapse into the same inquiry: whether the collective bargaining agreement covers retired employees. A court or arbitrator addressing one of the inquiries must necessarily answer the other two: if retired employees are covered by the agreement, then the Union has standing, the grievance is arbitrable, and the grievance has merit. If, on the other hand, the agreement does not extend to retired employees, then the Union has no standing.
Thus phrased, the inquiry creates tension between two doctrines relating to the arbitrability of labor disputes. On one side is the proposition, noted above, that the question of arbitrability is to be decided by the court. On the other is the proposition that, "in deciding whether the parties have agreed to submit a particular grievance to arbitration, a court is not to rule on the potential merits of the underlying claims." AT & T Technologies, 475 U.S. at 649, 106 S.Ct. at 1419. See also Steelworkers v. Enterprise Corp., 363 U.S. 593, 596, 80 S.Ct. 1358, 1360, 4 L.Ed.2d 1424 (1960) (); Steelworkers v. American Manufacturing Co., 363 U.S. 564, 568, 80 S.Ct. 1343, 1346, 4 L.Ed.2d 1403 (1960) (...
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