United Steelworkers of America v. FERMET RECLAM., 85 C 7466.

• Decision Date: 24 January 1986
• Docket Number: No. 85 C 7466.,85 C 7466.
• Citation: 627 F. Supp. 1213
• Parties: UNITED STEELWORKERS OF AMERICA, AFL-CIO, Plaintiff, v. FERMET RECLAMATION, LTD., Defendant.
• Court: U.S. District Court — Northern District of Illinois

627 F. Supp. 1213

UNITED STEELWORKERS OF AMERICA, AFL-CIO, Plaintiff, v. FERMET RECLAMATION, LTD., Defendant.

No. 85 C 7466.

United States District Court, N.D. Illinois, E.D.

January 24, 1986.

William H. Schmelling, Chicago, Ill., for plaintiff.

Edwin C. Thomas, John P. Morrison, Bell, Boyd & Lloyd, Chicago, Ill., for defendant.

MEMORANDUM OPINION AND ORDER

SHADUR, District Judge.

United Steelworkers of America, AFL-CIO ("Union") has sued Fermet Reclamation, Ltd. ("Fermet") to compel arbitration of two labor grievances under Labor Management Relations Act § 301, 29 U.S.C. § 185 ("Section 301"). Now both litigants have moved for summary judgment under Fed.R.Civ.P. ("Rule") 56. For the reasons stated in this memorandum opinion and order, Union's motion is granted and Fermet's is denied.

Facts¹

In late May 1984 Fermet employee Jerry Simpson ("Simpson") underwent surgery at a hospital in Joliet, Illinois. Though he had expected the cost of that surgery to be paid through Fermet's group health insurance plan, on June 21, 1984² Fermet's insurance carrier wrote Simpson (Ex. I-1)³ coverage had been denied.⁴

On July 16 Union filed a grievance with Fermet on Simpson's behalf, saying it was Fermet's responsibility under the Union-Fermet collective bargaining agreement (the "CBA") to provide Simpson with health insurance coverage. That grievance (the "Insurance Grievance") was filed on a printed "Grievance Report" form, signed by Simpson and two Union representatives (Ex. C). Fermet President Dennis Bloom ("Bloom") denied the Insurance Grievance that same day, using the "Answer of Company Representative" space provided on the back of the form (id.). No reason for the denial was specified.

On August 9 (24 days later) Union Sub-District Director Earl Schroeder ("Schroeder") wrote Bloom (Ex. D, emphasis in original):

As per the Labor Agreement between the parties, you are hereby notified that Union is appealing your answer on Jerry Simpson who was denied group insurance as per Agreement Article XIV, Section 1.

I would appreciate your calling me to set up a meeting on the above subject which has to be done in seven (7) days after your decision in step (b), unless a longer period is mutually agreed upon.

Bloom did not respond.

On either August 14 or 15 Simpson was cleared for return to work by his doctor. When he reported for duty, he claims Bloom told him "he would not be allowed to return to work until the insurance coverage disputes were resolved" (see Ex. J at 3).⁵ Then on August 16 Bloom wrote Schroeder stating his "understanding that no contract exists with Union" (Ex. E) and:

Therefore, no terms or provisions of that document can have application.

Union next filed another grievance (the "Lockout Grievance") September 12 (Ex. F), protesting Simpson's having been "locked out" (not being allowed back to work). Five days later Bloom sent Union a denial of the Lockout Grievance (id.) as not having been filed within five days of the triggering event—Fermet's August 14 or 15 refusal to allow Simpson to return to work.⁶

Schroeder then referred the matter to Union counsel Schmelling, who on October 24 wrote Bloom about his refusal to move further on the Insurance and Lockout Grievances, concluding (Ex. G):

At your earliest convenience, please furnish me with a written explanation of your company's position with respect to these matters. Failure on your part to respond to this letter within two weeks of its receipt will leave the Union with little alternative but to initiate legal proceedings seeking to protect Mr. Simpson's contractual and statutory rights and to enforce the employer's bargaining obligation under the National Labor Relations Act.

That letter resulted in a November 15 meeting between Union and Fermet, attended by Schmelling, Schroeder, Bloom and Thomas. Some events of that meeting are disputed, but two matters are agreed-upon results of the meeting:

1. Fermet acknowledged the CBA was in effect.

2. Provision was made for Simpson to return to work (and he did so November 20 or 25).⁷

What the parties dispute is the bargaining stance Fermet took at the meeting: Bloom Aff. ¶ 16 says "we indicated that Fermet would not settle or arbitrate the Insurance grievance," while Schroeder says (Aff. ¶ 12):

At the November 15, 1984 meeting, no demand for arbitration was made and none was rejected. The meeting ended on the understanding that both parties would attempt to check further into the facts surrounding Mr. Simpson's grievances in order to reach satisfactory settlement.

Thus Fermet R.Mem. 6 accurately characterizes as an "issue of fact":

Whether on or before November 15, 1984 meeting between the parties and their counsel, Fermet "agreed to pursue further attempts to resolve" the July 15, 1984 grievance.⁸

However, as the later text discussion reflects, Fermet is wrong in labeling that issue "material"—for on the current motions it is not "outcome-determinative" (except in a sense the parties' submissions to this Court did not focus on at all⁹).

On March 25, 1985 Schmelling phoned Thomas to request arbitration of the grievances (Union R.Mem. 8). That request was followed up by an April 5, 1985 written demand for arbitration (Ex. J). Fermet's May 6, 1985 response (Ex. L) agreed to arbitrate a third grievance (arising out of Simpson's eventual discharge), but said as to the two involved here:

1. Fermet "maintains its refusal to arbitrate" the Insurance Grievance because:

(a) Union had failed to comply with the CBA's timetable, and

(b) as a substantive matter, the question whether Fermet had met its contractual obligation to provide health insurance was "simply not an arbitrable matter."

2. Though the Lockout Grievance was also not filed within the CBA-prescribed time period, Fermet would agree to arbitrate the timeliness question. But if Union should prevail as to timeliness, Fermet would insist the arbitration of the merits must proceed before another arbitrator.

There matters stood until Union filed this action August 26, 1985.

CBA Provisions

CBA Art. V sets out the grievance procedure established by the parties (Ex. A at 4-5):

When differences arise between the Company and the Union and/or employees covered by this Agreement as to the meaning and/or application of the provisions of this Agreement, such differences shall be settled in accordance with the following provisions:

* * * * * *

SECTION 2. (a) A complaint shall first be taken up by the aggrieved employee with the foreman directly in charge, either personally or through a Grievance Committeeman and an answer on the grievance shall be given to such aggrieved employee not later than the end of the next working day.

(b) If the matter is not satisfactorily settled under step (a) the grievance shall be reduced to writing, signed by the aggrieved employee and a member of the Grievance Committee, and submitted to the management of the Company or a representative thereof within five (5) days after answer provided for in step (a). The Company shall then provide a written answer to such aggrieved employee, the Union Grievance Committee and the United Steelworkers of America within five (5) work days, thereafter, unless a longer period is mutually agreed upon.

(c) If the matter is not satisfactorily settled in step (b) the matter shall be taken up by the full Grievance Committee, a representative of the United Steelworkers of America, the aggrieved employee, and with management or with the representative thereof within seven (7) days after the decision in step (b), and an answer shall be given in writing within five (5) days thereafter, unless a longer period is mutually agreed upon.

(d) If the matter is not settled to the satisfaction of the Union or the Company in the previous steps, it shall then be referred to an Arbitrator for final determination. ... The decision of the Arbitrator, when made in writing with the reasons assigned therefor, shall be final and binding on both parties and the parties hereto agree to abide thereby. The expense of the arbitration, if any, shall be borne equally by both parties. The Arbitrator shall have no power to add to, or to subtract from, or to modify any of the terms of this Agreement.

Art. V, § 5 (emphasis added) deals with the timeliness questions that form Fermet's main (though not sole) defense to this action:

SECTION 5. Time Limit for Filing Grievances: All grievances related to discharge, disciplinary actions, demotions and promotions, layoffs and recalls or other grievances in connection with the increase and decrease of the working force must be filed in writing within five (5) working days of the date of the cause of the grievance occurrence, and all other grievances must be filed in writing within fifteen (15) calendar days from the day the grievance occurred. In the event a grievance is not filed within the above time limitations, or in the event a grievance is filed and appeal is not taken in any of the steps of the grievance procedure set forth in this Article, or if an appeal is filed and no answer made thereto within the time limitations therein specified, the said grievance shall be deemed settled on the basis of the last answer or unanswered appeal, and the same subject matter shall not be considered or made the subject matter of any other grievance.

Insurance Grievance Analysis

At least from the time of the Steelworkers Trilogy,¹⁰ and continuing through last month's decision by our Court of Appeals in Graphic Communications Union, Chicago Paper Handlers' & Electrotypers' Local No. 2 v. Chicago Tribune Co., 779 F.2d 13, 15-16 (7th Cir.1985), judicial deference to collective bargaining commitments to arbitration has been consistent and strong. As one of the Trilogy (American Manufacturing, 363 U.S. at 567-68, 80 S.Ct. at 1346) put it:

The function of the court is very limited when the parties have agreed to submit all questions of contract interpretation to the arbitrator. It is confined to

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