Acevedo v. Caribbean Transp., Inc.

• Decision Date: 15 May 1996
• Docket Number: No. 95-2725,95-2725
• Citation: 673 So.2d 170
• Parties: 21 Fla. L. Weekly D1147 Francisco J. ACEVEDO, Jorge Luis Alvarez, Cesar A. Arias, Adrian Avila, Jorge L. Bernal, et al., Appellants, v. CARIBBEAN TRANSPORTATION, INC., Appellee.
• Court: Florida District Court of Appeals

Page 170

673 So.2d 170

21 Fla. L. Weekly D1147

Francisco J. ACEVEDO, Jorge Luis Alvarez, Cesar A. Arias, Adrian Avila, Jorge L. Bernal, et al., Appellants, v. CARIBBEAN TRANSPORTATION, INC., Appellee.

No. 95-2725.

District Court of Appeal of Florida Third District.

May 15, 1996.

Rene A. Nunez, Miami Lakes; Maland & Ross and Robert C. Maland, Miami, for appellants.

Aurelio Durana, Coral Gables, for appellee.

Before BARKDULL, NESBITT and COPE, JJ.

BARKDULL, Judge.

The forty-six plaintiffs in the trial court were truckers employed by Caribbean Transportation, Inc. They filed a complaint against Caribbean in May of 1994 alleging fraud and unjust enrichment. They claimed that beginning in May of 1990, the president of Caribbean represented to them that the company would deduct the actual cost of insurance premiums from their wages, when in fact the company had deducted amounts in excess of the actual cost of the insurance. Caribbean filed several motions to dismiss and for a more definite statement. In September of 1994, Caribbean and the plaintiffs' collective bargaining agent entered into a collective bargaining agreement which provided for binding arbitration of any differences arising between the union or the employees and the company regarding wages, hours and working conditions and any and all other questions involving the agreement. The agreement was made retroactive to December of 1990. In December of 1994, Caribbean filed its answer which asserted as an affirmative defense the failure to "grieve this matter through the grievance procedure and arbitration clause contained in the collective bargaining agreement between the ILA and Defendant." Caribbean also filed a compulsory counterclaim for defamation at this time.

Thereafter, in December of 1994, Caribbean filed a Notice of Removal to Arbitration and Motion to Dismiss wherein it invoked arbitration pursuant to the collective bargaining agreement and sought dismissal of the complaint. Six months later, after the plaintiffs had conducted discovery, Caribbean filed an amended Notice of Removal to Arbitration and Motion to Dismiss attached to which was correspondence from the Union's attorney outlining the issues which it had submitted to arbitration. The issues were stated as:

1. Does custom and usage prohibit drivers from obtaining their own liability insurance?

2. Does the fact that Caribbean Transportation is charging in excess of the insurance premium for the drivers' liability and bobtail insurance allow drivers to obtain their own insurance?

The trial court granted the motion to dismiss and this appeal followed.

The plaintiffs first contend that Caribbean waived its right to arbitration because it took an active part in the litigation and sought affirmative relief prior to filing a motion to compel arbitration. In addition, the plaintiffs claim that arbitration is permissive under the agreement and that the issues submitted by the union did not encompass the fraud and unjust enrichment claims for which the plaintiffs were seeking damages. Finally the plaintiffs assert that even if the right to arbitrate had not been waived, the proper procedure would have been for the lower court to stay the proceedings pending the outcome of the arbitration.

In contrast, Caribbean answers that it, as the employer, had no right to invoke arbitration and that only the union or the employee was entitled to do so pursuant to the terms of the collective bargaining agreement. Therefore, it asserts, it could not have waived its right to arbitrate by taking actions inconsistent with that right. Caribbean also contends that a prior collective bargaining agreement existed between it and the union. Caribbean finally asserts that the circuit court's jurisdiction was preempted by the National Labor Relations Act and therefore it could not stay an action over which it had no jurisdiction in the first instance.

We first address Caribbean's contention that the lower court is without jurisdiction over this action because the National Labor Relations Act preempts state power to the National Labor Relations Board and the federal courts in cases involving collective bargaining agreements. Section 301 preemption does not automatically divest state courts of jurisdiction, as Caribbean erroneously asserts, but only displaces state law causes of action that require interpretation of a collective bargaining agreement and mandates that federal law be applied. See Lingle v. Norge Div. of Magic Chef, Inc., 486 U.S. 399, 404, 108 S.Ct. 1877, 1880, 100 L.Ed.2d 410 (1988); Caterpillar, Inc. v. Williams, 482 U.S. 386, 394, 107 S.Ct. 2425, 2430, 96 L.Ed.2d 318 (1987); Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 210-11, 105 S.Ct. 1904, 1911-11, 85 L.Ed.2d 206 (1985); Charles Dowd Box Co. v. Courtney, 368 U.S. 502, 508, 82 S.Ct. 519, 523, 7 L.Ed.2d 483 (1962); Teamsters v. Lucas Flour Co., 369 U.S. 95, 103-04, 82 S.Ct. 571, 576-77, 7 L.Ed.2d 593 (1962).

In cases involving fraud claims and section 301 preemption, the courts have generally held that if the plaintiffs would be required to show that the terms of the collective bargaining agreement differed significantly from the individual employment contracts they believed they had made, the fraud claims are preempted because they are substantially dependent upon the terms of the agreement. See Dougherty v. American Tel. & Tel. Co., 902 F.2d 201, 203-04 (2d Cir.1990) (employee's fraud claims not independent of collective bargaining agreement and state-law tort action would impermissibly circumvent the arbitration procedures of that agreement); Young v. Anthony's Fish Grottos, Inc., 830 F.2d 993, 1001 (9th Cir.1987); Bale v. General Tel. Co. of Cal., 795 F.2d 775, 779-80 (9th Cir.1986). However, if the fraud claims are determined to be entirely separate and distinct from the provisions of the collective bargaining agreement and do not require interpretation of the agreement, then they are not necessarily preempted. Milne Employees Ass'n v. Sun Carriers, Inc., 960 F.2d 1401, 1408-09 (9th Cir.1991), cert. denied 508 U.S. 959, 113 S.Ct. 2927, 124 L.Ed.2d 678 (1993). Similarly, claims brought by persons who are not parties to a collective bargaining agreement or who do not have access to the grievance procedures are rarely preempted. See Caterpillar, 482 U.S. at 396, 107 S.Ct. at 2431; White v. National Steel Corp., 938 F.2d 474, 484 (4th Cir.1991), cert. denied 502 U.S. 974, 112 S.Ct. 454, 116 L.Ed.2d 471 (1991); Berda v. CBS, Inc., 881 F.2d 20, 26 (3d Cir.1989), cert. denied 493 U.S. 1062, 110 S.Ct. 879, 107 L.Ed.2d 962 (1990) (employee's state contract and tort claims for alleged misrepresentations regarding job security not preempted because the misrepresentations were made before employee became a member of the bargaining unit); McCarty v. Reynolds Metals Co., 883 F.Supp. 356, 361-62 (D.Ind.1995) ("s 301 does not preempt state contract claims arising before the aggrieved employees became represented by a union or after the termination of the CBA.").

In the case before us, the collective bargaining agreement sets out a procedure for resolution of grievances and states that this procedure applies to differences arising between the Union or the employees and the company regarding "wages, hours and working conditions and any and all other questions and controversies involving this Agreement...." Article XIX of the agreement relates to insurance and states that the matter of insurance is covered under a separate letter addendum to the contract. This separate letter addendum is not found in the record. ¹ But it is clear from the plain language of this article that insurance matters between the employee and the company were intended to be encompassed by the agreement. However, we need not determine whether the plaintiffs' state law fraud and unjust enrichment claims are preempted in this case because the arbitration provision is dispositive.

The collective bargaining agreement sets out a grievance procedure which includes an arbitration provision. The plaintiffs assert that the grievance procedure and right to arbitrate are discretionary. They also allege that some of the acts that constitute the fraud took place prior to the effective date of the collective bargaining agreement. Accordingly, we must determine whether or not the parties had a duty to arbitrate this matter before pursuing legal action and whether the acts that allegedly occurred prior to the effective date of the collective bargaining agreement are also subject to arbitration.

We first note that "unless a collective bargaining agreement clearly manifests a contrary intent, it is for the courts, not the arbitrator, to decide whether the parties to that agreement have agreed to submit specific disputes to arbitration." Gangemi v. General Elec. Co., 532 F.2d 861, 865 (2d Cir.1976). See also AT & T Technologies, Inc. v. Communications Workers of America, 475 U.S. 643, 649, 106 S.Ct. 1415, 1418, 89 L.Ed.2d 648 (1986). This is due to the principle that the courts are powerless to compel arbitration in the absence of a contract in which both parties have agreed to submit their grievances to arbitration. United Steelworkers of America v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582, 80 S.Ct. 1347, 1352, 4 L.Ed.2d 1409 (1960). Countering this established principle of contract law is the national policy favoring resolution of labor disputes by arbitration. See Sections 201(a) and 203(d) of the Labor Management Relations Act of 1947, 29 U.S.C. §§ 171(a), 173(d). Therefore, all doubts as to whether an issue is arbitrable pursuant to a collective bargaining agreement should be resolved in favor of arbitration. Warrior & Gulf, 363 U.S. at 582-83, 80 S.Ct. at 1352-53.

Plaintiffs contend that this particular arbitration provision is discretionary and that they do not have a duty to avail themselves of the grievance procedure before initiating legal action on their fraud claim. They...