Amalgamated Transit Union v. Chi. Transit Auth.

• Decision Date: 25 September 2012
• Docket Number: No. 1–11–2517.,1–11–2517.
• Citation: 365 Ill.Dec. 249,2012 IL App (1st) 112517,978 N.E.2d 271
• Parties: AMALGAMATED TRANSIT UNION, LOCAL 308, Plaintiff–Appellant, v. CHICAGO TRANSIT AUTHORITY, Defendant–Appellee.
• Court: United States Appellate Court of Illinois

2012 IL App (1st) 112517

978 N.E.2d 271

365 Ill.Dec. 249

AMALGAMATED TRANSIT UNION, LOCAL 308, Plaintiff–Appellant,

v.CHICAGO TRANSIT AUTHORITY, Defendant–Appellee.

No. 1–11–2517.

Appellate Court of Illinois,

First District, Second Division.

Sept. 25, 2012.

Jacob, Burns, Orlove & Hernandez, of Chicago (Anita Tanay and Taylor E. Muzzy, of counsel). for appellant.

Karen G. Seimetz, Brad Jansen, and Stephen L. Wood, all of Chicago Transit Authority, of Chicago, for appellee.

OPINION

Justice QUINN delivered the judgment of the court, with opinion.

[365 Ill.Dec. 250]¶ 1 Plaintiff, Amalgamated Transit Union, Local 308 (Union), filed a complaint in the circuit court of Cook County against defendant, Chicago Transit Authority (CTA), seeking a declaratory judgment that side agreement Number 30 attached as a part of Exhibit A to the parties' collective bargaining agreement (CBA) was invalid due to a lack of sufficient consideration. The circuit court granted the CTA's motion to dismiss the complaint under section 2–619 of the Code of Civil Procedure (735 ILCS 5/2–619 (West 2008)), finding the collective bargaining agreement, which contained a grievance and arbitration process, governed the dispute over side agreement Number 30 between the parties. We affirm.

¶ 2 I. BACKGROUND

¶ 3 The plaintiff, Union, is a labor organization as defined by section 3(f) of the Illinois Public Labor Relations Act (Act). 5 ILCS 315/1 et seq. (West 2008). The Union is the exclusive representative for certain employees of defendant, CTA's municipal rail transportation system. The CTA is a public employee as defined by section 3( o) of the Act. The Union and the CTA have a long history as parties to collective bargaining agreements dating back to at least 1915.

¶ 4 The parties' current CBA at article 20.5 incorporates, through the attachment of Exhibit A, 38 side agreements that the Union and the CTA have entered into from 1978. Article 20.5 states as follows: “SOLE AGREEMENT. This written Agreement and the documents attached hereto in Exhibit A, Local 308 and Exhibit B, Local 241, constitute the entire written Agreement between the parties, with the exception of settlement agreements.” Exhibit A is actually entitled “EXHIBIT A: SOLE AGREEMENT AMALGAMATED TRANSIT UNION, LOCAL 308,” and it lists in its table of contents all 38 agreements, including Number 30, entitled “Customer Assistant Coverage Criteria” and dated August 18, 2000, at pages 117–18 of Exhibit A. A footnote on page 1 of Exhibit A states, in part, that the Union and the CTA “agree to retain these side agreements without revision and alteration.” The footnote also provides that “the parties agree negotiations will continue in regard to these agreements” and “will be negotiated in good faith with the goal of reaching a final written agreement.”

¶ 5 The customer assistant coverage criteria agreement, Number 30, entered into by the parties more than a decade ago and incorporated into its current CBA via article 20.5, deals with the assignment of unionized customer assistants (CAs). The CTA and the union agreed to meet prior to a periodic job-selection procedure to review CA staffing at each rail station; the CTA agreed to provide the union with passenger data at certain rail stations; and the CTA agreed to consider staffing rail stations with additional unionized CAs where traffic warranted. It also states, in part, that the Union agrees “to refrain from pursuing, advancing, or supporting any present or future action of any kind in any contractual, judicial, administrative or other forum concerning the subject matter of this agreement, except as may be necessary to enforce the provisions hereof.” Pursuant to the above-quoted language, in March 2009, the Union filed a grievance alleging that the CTA failed to comply with the terms of agreement Number 30. An arbitration hearing on the grievance was begun on June 14, 2010 and testimony was presented. However, after only one day of an arbitration hearing, the Union suspended its participation in the grievance procedure by securing a stay. The arbitrator issued no ruling. Instead of completing the arbitration process it had begun, the Union filed the instant declaratory judgment action in circuit court on July 9, 2010 and alleged that its 10–year–old agreement Number 30 with the CTA was entered into by its Union officials without those officials receiving adequate consideration and requested rescission of the agreement. The Union argued that the CTA had a preexisting legal duty to bargain with the Union over terms and conditions of employment and, therefore, agreement Number 30 was “illusory and nominal.”

¶ 6 On December 30, 2010, the CTA moved to dismiss this action pursuant to section 2–619 of the Code of Civil Procedure (735 ILCS 5/2–619(a)(1) (West 2008)) and argued that the circuit court lacked subject matter jurisdiction over the Union's complaint because the Act divested it of any jurisdiction over the matter complained of by the Union. The motion was fully briefed, and on April 12, 2011, the circuit court heard oral argument on the motion. On May 3, 2011, the circuit court granted the CTA's motion to dismiss for lack of jurisdiction because the Union failed to exhaust its nonjudicial remedies. The circuit court acknowledged the comprehensive statutory scheme of the Act governing collective bargaining and labor practices for public employers and their employees subject to collective bargaining agreements. The Act provides for mandatory nonjudicial conflict resolution. Section 8 of the Act states that each CBA “shall contain a grievance resolution procedure which shall apply to all employees in the bargaining unit and shall provide for final and binding arbitration of disputes concerning the administration or interpretation of the agreement.” “ ‘Section 8 of the Act provides that all grievance disputes must be resolved by final and binding arbitration, unless there is a joint agreement of the employer and the union to the contrary.’ ” Illinois Fraternal Order of Police Labor Council v. Town of Cicero, 301 Ill.App.3d 323, 334, 234 Ill.Dec. 698, 703 N.E.2d 559 (1998) (quoting American Federation of State, County & Municipal Employees v. State of Illinois, 124 Ill.2d 246, 254, 124 Ill.Dec. 553, 529 N.E.2d 534 (1988)).

¶ 7 Specifically, section 16 of the Act provides as follows:

“Exhaustion of nonjudicial remedies. After the exhaustion of any arbitration mandated by this Act or any procedures mandated by a collective bargaining agreement, suits for violation of agreements * * * between a public employer and a labor organization representing public employees may be brought by the parties to such agreements in the circuit court in the county in which the public employer transacts business or has its principal office.” 5 ILCS 315/16 (West 2008).

The circuit court held that the above-quoted Act provision requires the parties to exhaust procedures mandated by their CBA before seeking judicial review because the parties' CBA contains specified procedures, including arbitration for resolving their contract disputes.

¶ 8 Pursuant to section 2–1203 of the Code of Civil Procedure (735 ILCS 5/2–1203 (West 2008)), the Union filed a motion to vacate and/or modify the circuit court's May 3, 2011 ruling and reargued that the Union is seeking to invalidate its agreement Number 30 with the CTA for lack of adequate consideration, not arbitrate the terms of the agreement. On July 15, 2011, the circuit court denied the Union's motion. This timely appeal by the Union followed.

¶ 9 II. ANALYSIS

¶ 10 On appeal, the Union argues that the side agreement is a separate, distinct, independent contract from the CBA and it can and should be litigated separately from the CBA and solely in state court because it is seeking rescission of the contract and not enforcement of the contract terms. Even though the parties' CBA incorporatesall the listed side agreements attached as Exhibit A, including Number 30, into its current CBA, the Union argues that it is a separate contract and, therefore, it is not required to go through the grievance and arbitration process spelled out in the CBA regarding the terms of the side agreement. The employer states that the Union's complaint was properly dismissed because the CBA and the side agreement cannot be severed from each other as the entire Exhibit A, including side agreement Number 30, was incorporated into the CBA. Both relate to the treatment of its Union employees, which is covered by the CBA and all the incorporated side agreements it has with the Union.

¶ 11 A. Standard of Review

¶ 12 We review the circuit court's dismissal order pursuant to section 2–619 of the Code of Civil Procedure de novo and, as part of the review, accept all well-pleaded facts contained in plaintiff's complaint and in any uncontradicted evidence submitted with the motion as true. Coady v. Harpo, Inc., 308 Ill.App.3d 153, 241 Ill.Dec. 383, 719 N.E.2d 244 (1999). In the instant case, neither party disputes the facts as laid out in the complaint. Neither party denies that the portions of the CBA and the side agreement in the record are accurate. Therefore, the question on appeal is whether, absent any genuine issue of material fact, the dismissal was proper as a matter of law. Doyle v. Holy Cross Hospital, 186 Ill.2d 104, 110, 237 Ill.Dec. 100, 708 N.E.2d 1140 (1999) (quoting Kedzie & 103rd Currency Exchange, Inc. v. Hodge, 156 Ill.2d 112, 116–17, 189 Ill.Dec. 31, 619 N.E.2d 732 (1993)).

¶ 13 B. Challenging a Contract's Validity Does Not Mean There is No Arbitrability

¶ 14 In its May 3, order dismissing this case for lack of subject matter jurisdiction, the circuit court observed the following:

“Although the parties have not cited, and the Court's own research has not disclosed, any Illinois authority precisely on point, the Court has concluded that the decisions in [ Board of Education of] Warren Township High School [ District 121 v....