Ann Arbor v. Afscme Local 369

• Decision Date: 28 May 2009
• Docket Number: Docket No. 283814.
• Citation: 771 N.W.2d 843,283 Mich. App. 126
• Court: Court of Appeal of Michigan — District of US
• Parties: CITY OF ANN ARBOR v. AMERICAN FEDERATION OF STATE, COUNTY, AND MUNICIPAL EMPLOYEES (AFSCME) AND ITS AFFILIATED LOCAL 369.

771 N.W.2d 843

283 Mich. App. 126

CITY OF ANN ARBOR v. AMERICAN FEDERATION OF STATE, COUNTY, AND MUNICIPAL EMPLOYEES (AFSCME) AND ITS AFFILIATED LOCAL 369.

Docket No. 283814.

Court of Appeals of Michigan.

Submitted March 13, 2009, at Lansing.

Decided May 28, 2009, at 9:05 a.m.

Stephen K. Postema and Nancy L. Niemela, Detroit, and Dykema Gossett PLLC (by Melvin J. Muskovitz and F. Arthur Jones II), Ann Arbor, for the plaintiff.

Miller Cohen, P.L.C. (by Bruce A. Miller, Detroit, and Eric I. Frankie), Royal Oak, for the defendant.

Before: BANDSTRA, P.J., and WHITBECK and SHAPIRO, JJ.

BANDSTRA, P.J.

Defendant, American Federation of State, County, and Municipal Employees (AFSCME) Local 369, appeals as of right the trial court's order granting summary disposition to plaintiff, city of Ann Arbor in this action arising from a dispute over the scope of an arbitration award. We reverse and remand for the entry of an order granting summary disposition in favor of defendant.

At issue here is the meaning of language in a so-called "me too" provision of a collective bargaining agreement (CBA) entered into by the parties for the three-year period from July 1, 1998, to June 30, 2001.¹ This "me too" provision provides that [i]f another bargaining unit receives an increase higher than the settlement with AFSCME, such increase will also be granted to AFSCME for this contract period as a "me too" on wages. If gained by Police or Fire bargaining units, a "me too" [sic] retroactivity on wages for retirees.

The parties did not reach agreement on a successor contract as of the CBA's June 30, 2001, expiration date. By virtue of "ground rules" mutually agreed to by the parties on April 21, 2001, the CBA was to remain in effect until a successor contract was ratified by both parties. Before the parties reached agreement on a successor contract, defendant filed its grievance, alleging that plaintiff violated the "me too" provision of the CBA by refusing to give defendant's members wage increases provided to members of another bargaining unit.

The parties executed a successor collective bargaining agreement, which was ratified by plaintiff on October 7, 2002. Defendant ratified the agreement sometime between August 21, 2002, and October 7, 2002. Thus, pursuant to the "ground rules," the CBA remained in effect until October 7, 2002.

Defendant's grievance remained unresolved through the process outlined in the CBA, and on March 25, 2002, defendant demanded arbitration. Ultimately, the arbitrator determined that defendant was entitled to the "me too" increase it sought, concluding that "the longevity/wage structure increases received by the [other bargaining unit] shall be awarded to AFSCME for the contract period from July 1, 1998, to June 3[0], 2001, and as extended by the parties."

Following the issuance of the arbitrator's opinion, plaintiff granted the "me too" increases to defendant, limited to the period from July 1, 1998, to June 30, 2001. Plaintiff asserted that the arbitration award did not include the period during which the CBA was extended pursuant to the mutually agreed to "ground rules" pending completion of a successor agreement, because that period was not part of the "contract period" within the meaning of the CBA's "me too" provision. Plaintiff argued that the phrase "and as extended by the parties" in the arbitration award meant only that the awarded "me too" increases would continue if, but only if, the parties agreed to extend the "me too" benefit by including it in the successor agreement. Defendant disagreed, asserting that the arbitrator's language "and as extended by the parties" referred to and encompassed the parties' mutual agreement, set forth in the "ground rules," to extend the CBA until such time as a successor agreement was ratified by both parties and that the increases thus extended until October 7, 2002. Unable to resolve their disagreement, the parties ultimately agreed to return to the arbitrator to seek clarification of the award.

Following a hearing on this issue and the submission of post-hearing briefs, on April 24, 2007, the arbitrator issued a second opinion and award clarifying that "`[a]s extended by the parties' means until ratification by the parties on October 7, 2002. The ground rules mutually adopted on April 24, 2001, stated that the agreement is to remain in effect until both parties ratify the successor contract." The arbitrator reasoned that, by mutual agreement of the parties, "[t]he employees continued to be paid under the terms and conditions of the 1998-2001 contract until the new contract was ratified. This means that the `me-too' wage increases continued to be part of the 1998-2001 agreement until it was officially superceded."

On May 16, 2007, 21 days after the arbitrator clarified his award, plaintiff filed a complaint to vacate a portion of arbitrator's award. It asserted that the arbitrator exceeded his authority under the CBA by awarding defendant the "me too" increases for the period from June 30, 2001, until October 7, 2002.

Defendant moved for summary disposition pursuant to MCR 2.116(C)(7). Defendant relied on a decision issued by the United States Court of Appeals for the Sixth Circuit, Badon v. Gen. Motors Corp., 679 F.2d 93 (C.A.6, 1982), a case filed under § 301 of the Labor Management Relations Act, 29 USC 185, to argue that the Michigan limitations period for an action to vacate a labor arbitration award is six months. Thus, defendant argued that plaintiff's complaint should be dismissed as untimely because it was filed more than six months after the arbitrator issued his October 28, 2005, award granting defendant's grievance.

Plaintiff initially acknowledged that a six-month limitations period generally applies to such claims, but argued that the limitations period should be equitably tolled given the unusual circumstances presented here, including the necessity of seeking clarification of the award from the arbitrator, that much of the delay in returning to the arbitrator was caused by defendant, and that plaintiff filed its complaint less than one month after the arbitrator issued his second opinion clarifying the phrase "and as extended by the parties." Later, in a reply to defendant's motion, plaintiff denied that Michigan imposes a six-month limitations period on claims to vacate an arbitration award, asserting for the first time that such actions are subject to the six-year residual statute of limitations set forth in MCL 600.5813.

The trial court agreed and denied defendant's motion for summary disposition. The trial court ruled that the residual six-year limitations period set forth in MCL 600.5813 applied to plaintiff's claim to vacate a portion of the arbitration award and that even if a six-month limitations period applied, it would be equitably tolled considering the circumstances presented.

Plaintiff likewise moved for summary disposition, asserting that the arbitrator exceeded his authority by extending the "me too" benefits until October 7, 2002, because he did so relying on the "ground rules" (which extended the CBA pending ratification of a successor agreement) and not by interpreting language contained in the CBA. Defendant opposed the motion, asserting that the arbitrator was acting within his authority when he interpreted the "contract period" as including the parties' mutually agreed extension of the CBA until such time as the successor agreement was ratified. At the conclusion of oral argument, the trial court granted plaintiff's motion. It concluded that the arbitrator exceeded his authority by relying on the ground rules, and not solely on the CBA, to determine that the "contract period" for purposes of the "me too" increases concluded on October 7, 2002.

Defendant first argues on appeal that the trial court erred in determining that actions to vacate an arbitration award are governed by a six-year limitations period. We disagree.

This Court reviews a trial court's decision on a motion for summary disposition de novo. Dressel v. Ameribank, 468 Mich. 557, 561, 664 N.W.2d 151 (2003); Spiek v. Dep't of Transportation, 456 Mich. 331, 337, 572 N.W.2d 201 (1998); Rice v. Auto Club Ins. Ass'n, 252 Mich. App. 25, 30, 651 N.W.2d 188 (2002). The question regarding the applicable limitations period presents a question of law that this Court also reviews de novo. Detroit v. 19675 Hasse, 258 Mich.App. 438, 444, 671 N.W.2d 150 (2003); City of Novi v. Woodson, 251 Mich.App. 614, 621, 651 N.W.2d 448 (2002).

The parties agree, correctly, that there is no statute or court rule setting forth a limitations period specifically for actions seeking to vacate labor arbitration awards arising from collective bargaining agreements. Although arbitration is addressed in both statutory provisions and court rules, there is no limitations period plainly applicable to actions relating to labor arbitration awards.

The Legislature has declared, in § 1 of the labor mediation act, that it is "the public policy of this state that the best interests of the people of the state are served by the prevention or prompt settlement of labor disputes...." MCL 423.1. In furtherance of this policy, the Legislature has provided:

(1) Any labor dispute, other than a representation question, may lawfully be submitted to voluntary arbitration in the manner provided in this section....

(2)(a) When a labor dispute involves the meaning or interpretation of an existing collective agreement between an employer and a labor organization and the collective agreement provides for the use of a designated arbitrator to decide disputes thereunder, or provides the method for selection of arbitrator or arbitrators, the provisions of that agreement shall be binding upon the parties, and shall be complied with unless the parties agree to submit the dispute to some other arbitration procedure.

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(4) An award rendered in a proceeding hereunder shall be enforceable at law or...