Armco Employees Independent Federation v. AK Steel Corp.

• Decision Date: 13 March 2001
• Docket Number: No. 00-3328,00-3328
• Citation: 252 F.3d 854
• Parties: (6th Cir. 2001) Armco Employees Independent Federation, Plaintiff-Appellant, v. AK Steel Corporation, Defendant-Appellee. Argued:
• Court: U.S. Court of Appeals — Sixth Circuit

Page 854

252 F.3d 854 (6th Cir. 2001)

Armco Employees Independent Federation, Plaintiff-Appellant, v. AK Steel Corporation, Defendant-Appellee.

No. 00-3328

UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT

Argued: March 13, 2001

Decided and Filed: June 6, 2001

Appeal from the United States District Court for the Southern District of Ohio at Cincinnati, No. 99-00119, Herman J. Weber, District Judge. [Copyrighted Material Omitted] Robert H. Mitchell, MANLEY, BURKE & LIPTON, Cincinnati, Ohio, for Appellant.

George E. Yund, Katherine C. Morgan, FROST & JACOBS, Cincinnati, Ohio, for Appellee.

Before: COLE and GILMAN, Circuit Judges; BORMAN, District Judge. ^*

OPINION

R. GUY COLE, JR., Circuit Judge.

Plaintiff-Appellant Armco Employees Independent Federation, Inc. ("AEIF"), a labor union, filed the present lawsuit to compel the employer, Defendant-Appellee AK Steel Corporation ("AK Steel"), to arbitrate two separate grievances pursuant to Section 301 of the Labor Management Relations Act, 29 U.S.C. §185 ("LMRA"). AEIF filed the two grievances on behalf of employee members; AK Steel's refusal to submit those grievances to arbitration resulted in the present litigation. Grievance No. 98-E-1123 contests employee D.J. Johnson's discharge, which AK Steel maintains is not substantively arbitrable because it was not filed in accordance with the time requirements of the collective bargaining agreement ("CBA"). Grievance No. 95-E-731 contests AK Steel's use of outside contractor employees without giving the union proper notification. Although the latter grievance was initially submitted to arbitration, AK Steel walked out of arbitration after AEIF sought to introduce evidence of CBA violations that AK Steel alleges were not within the scope of the grievance. On cross-motions for summary judgment, the district court entered summary judgment against AEIF, finding that the grievances were not substantively arbitrable. For the following reasons, we REVERSE the judgment of the district court and REMAND with instructions to enter an order compelling arbitration of the grievances and to consider AEIF's request for attorneys' fees.

I. BACKGROUND

AEIF is a labor union representing a bargaining unit of production and maintenance workers at AK Steel Middletown Works, formerly Armco Steel Co., L.P. Middletown Works, in Middletown, Ohio. AK Steel primarily produces flat-rolled carbon and stainless steel for use in automotive and appliance manufacturing. At the time the dispute arose, AK Steel and AEIF were parties to a CBA, effective from March 1, 1994, through February 29, 2000. Under the general arbitration clause of the CBA, all union grievances were required to be submitted to arbitration. The following definition of "grievance," as set forth in the CBA, limited the subject matter over which the parties agreed to arbitrate:

A grievance, within the meaning of the grievance procedure, is restricted to a request or complaint not resolved as the result of the oral discussions required in Step I or a request or complaint appropriate for filing directly in Step II. It shall consist only of disputes about wages, hours of work, and working conditions, as provided in this Agreement; about the interpretation and application of this Agreement; and about an alleged violation of this Agreement. If any question arises as to whether said dispute is or is not a proper grievance within the meaning of these provisions, the question may be reserved throughout the grievance procedure and determined, if necessary, by the arbitrator.

CBA Art. VII §B(1).

D.J. Johnson was discharged early in 1995 for being in the Middletown Works plant under the influence of an intoxicant. In April 1995, he signed a Last Chance Agreement that allowed him to return to work, but required him to submit to random drug testing. In November 1997, AK Steel alleged that Johnson failed to submit to a drug test after a Senior Industrial Relations Representative ordered him to do so. AK Steel suspended Johnson on November 24 for violation of a last chance agreement and failure to follow a company directive. A Step I appeal hearing took place on December3, 1997, and confirmed that AK Steel would terminate Johnson. AEIF filed Grievance 97-E-859 on December 15, 1997, for the alleged violation by AK Steel of CBA Art. IX §A(1), which provides that the company may not discharge an employee without just cause and due consideration. The grievance proceeded to Step II, an intermediate step to arbitration, and on February 11, 1998, the discharge was upheld again. In the meantime, AK Steel reviewed Johnson's employment records and concluded that he had lied on his application. AK Steel sent a letter to Johnson on February 9, 1998, listing falsification of employment records as an additional reason for his discharge. The arbitration hearing was conducted on May 11, 1998, and in October 1998, the arbitrator issued his opinion and award sustaining the grievance and directing AK Steel to reinstate Johnson. AK Steel, however, refused to allow Johnson to return to work, contending that the arbitrator had not considered the falsification of employment records as set forth in the company's February 9 letter and that this, therefore, remained a valid reason for discharge. Subsequently, AEIF sought to reinvoke the jurisdiction of the arbitrator for resolution of this issue. In response, the arbitrator sent a letter on December 8, 1998, which stated:

I did not deem the February 1998 charge [of falsification of employment records] to be central to the resolution of the December 11, 1997 grievance which specifically related to Grievant's December 5, 1997 termination for allegedly failing to comply with a directive to submit to a drug test. In sustaining Grievance 97-E-859 and retaining jurisdiction "over any remedy-related issue(s)", it was not my intention to extend my jurisdiction to the issue of whether Grievant was entitled to be made whole beyond the date of his February 1998 discharge, which would necessarily involve a resolution of whether he was discharged without just cause and due consideration for his alleged falsification of his employment application years earlier. On the other hand, though, my decision to sustain the discharge was not intended as a ruling precluding the Union from challenging that discharge. The Union did not know that the procedural and/or substantive issues relating to Grievant's February 1998 termination would not be encompassed in my resolution of the December 1997 grievance. That knowledge will occur upon the Union receiving a copy of this letter from our office. Whether a grievance filed shortly after this letter would be a timely protest to the February 1998 discharge, under these unique circumstances, is an issue over which I do not have jurisdiction.

J.A. 439-40.

As a result, AEIF immediately filed Grievance No. 98-E-1123, this time disputing Johnson's dismissal based on the charge of falsification of employment records. AK Steel refused to process the grievance, claiming that it was untimely under the CBA, which specifies that: "Grievances filed directly in Step II must be filed within thirty days of the inception or occurrence of the event upon which the request or complaint is based." CBA Art. VII §E. As a result, no hearing on this grievance was ever held.

On November 14, 1995, AEIF filed Grievance No. 95-E-731, which read: "The Company is using contractor employees in the plant to transfer scrap from railroad cars to trucks. This work has historically been performed by Bargaining Unit Employees, crane operators, in this case. The Union did not receive proper notification." At the arbitration hearing on August 27, 1998, AK Steel objected after AEIF's opening statement, challenging the scope of the issue properly before the arbitrator. AEIF argued that the scope of the grievance included all manner of scrap preparation work performed by bargaining crane unit operators whereas AK Steel contended that the scope was limited to scrap transport from train to trucks. After hearing testimony indicating that both parties understood that the issue was broadly construed, the arbitrator denied AK Steel's request to limit the scope of the evidence presented to the narrow issue stated on the face of the grievance. AK Steel refused to participate further in the hearing if the broader issue was considered and AEIF refused to participate if only the narrow issue was considered.

AEIF brought the present claim on February 19, 1999, in the United States District Court for the Southern District of Ohio, seeking a court order requiring AK Steel to process and arbitrate both grievances, and an award of attorneys' fees. AK Steel argues that, because one grievance was untimely and the other outside the scope of the notice filed for arbitration, the matters are not within the CBA arbitration provision and therefore are not substantively arbitrable. Pursuant to an agreement with the district court, the parties filed cross-motions for summary judgment. On February 15, 2000, the district court entered summary judgment against AEIF. Because the district court found for AK Steel, it did not make findings on the issue of attorneys' fees. This timely appeal follows. ¹

II. DISCUSSION

A. ARBITRABILITY OF TIMELINESS

Our role as a federal court in labor disputes has been settled since 1960 when the Supreme Court decided the Steelworkers Trilogy. United Steelworkers v. Am. Mfg. Co, 363 U.S. 564 (1960) (Steelworkers I); United Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574 (1960) (Steelworkers II); United Steelworkers v. Enter. Wheel & Car Corp., 363 U.S. 593 (1960) (Steelworkers III). We are limited to determining substantive arbitrability only -- that is, which subjects the parties have agreed to arbitrate, according to the terms of their CBA. Steelworkers II, 363 U.S. at 582-83. Settling disputes under a collective bargaining agreement is exclusively within...