Coca-Cola Bottling v. Soft Drink & Brewery Workers Union, COCA-COLA

• Court: United States Courts of Appeals. United States Court of Appeals (2nd Circuit)
• Writing for the Court: WINTER
• Citation: 242 F.3d 52
• Parties: (2nd Cir. 2001) THEBOTTLING COMPANY OF NEW YORK, INC., Plaintiff-Appellant, v. SOFT DRINK AND BREWERY WORKERS UNION LOCAL 812, INTERNATIONAL BROTHERHOOD OF TEAMSTERS, Defendant-Appellee
• Docket Number: COCA-COLA,No. 99-9232
• Decision Date: 03 April 2000

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242 F.3d 52 (2nd Cir. 2001) THE COCA-COLA BOTTLING COMPANY OF NEW YORK, INC., Plaintiff-Appellant,
v.
SOFT DRINK AND BREWERY WORKERS UNION LOCAL 812, INTERNATIONAL BROTHERHOOD OF TEAMSTERS, Defendant-Appellee. No. 99-9232 UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT April 3, 2000, Argued
February 26, 2001, Decided

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PHILIP M. HALPERN, Pirro, Collier, Cohen & Halpern, LLP, White Plains, New York, for Plaintiff-Appellant.

JAMES F. WALLINGTON, Baptiste & Wilder, P.C., Washington, DC.. (Robert M. Baptiste, Baptiste & Wilder; Sidney Fox and Gina M. Fonseca, Shapiro, Beilly, Rosenberg, Albert & Fox, New York, New York, on the brief), for Defendant-Appellee.

Before: WALKER, Chief Judge, OAKES, and WINTER, Circuit Judges.

WINTER, Circuit Judge:

The Coca-Cola Bottling Company of New York ("Coca-Cola") appeals from Judge Brieant's order denying its motion for summary judgment and compelling arbitration pursuant to its collective bargaining agreement ("CBA") with appellee Soft Drink and Brewery Workers Union Local 819 International Brotherhood of Teamsters, AFL-CIO (the "Union").

The Union asserts that we lack appellate jurisdiction because of Section 16 of the Federal Arbitration Act ("FAA"), 9 U.S.C. 1 et seq., 16(b) ("Except as otherwise provided in section 1292(b) of title 28, an appeal may not be taken from an interlocutory order . . . directing arbitration to proceed under section 4 of this title . . . ."). Coca-Cola responds that the FAA is inapplicable because it excludes from its terms "contracts of employment" of transportation workers.

We hold that in cases brought under Section 301 of the Labor Management Relations Act of 1947 ("Taft-Hartley Act"), 29 U.S.C. 185, the FAA does not apply. We also hold that we have appellate jurisdiction and that the arbitration clause of the CBA can plausibly be read to cover the instant dispute. Finally, we hold that the Union did not waive its right to arbitration. We therefore affirm.

BACKGROUND

On June 1, 1996, Coca-Cola and the Union entered into a CBA that remains in effect through May 31, 2006. It appears that the CBA covers various drivers engaged in the distribution of Coca-Cola products. The CBA contains both a no-strike provision and a provision ordering arbitration of "all complaints, disputes, controversies or grievances between [Coca-Cola] and its employees, or between the Union or any member of the Union

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and [Coca-Cola] . . . after full satisfaction of the [CBA's] grievance procedure."

On March 15, 1999, Coca-Cola unilaterally instituted a post-accident drug-testing policy. Claiming that Coca-Cola's action violated the CBA, the Union began a strike. On March 16, 1999, Coca-Cola brought the present action under Section 301, seeking injunctive relief and damages. The district court issued a temporary restraining order ("TRO") enjoining the Union from striking and Coca-Cola from implementing the drug-testing program, pending arbitration of the Union's grievance against the program. The Union answered Coca-Cola's complaint, claimed a violation of the TRO by Coca-Cola, entered into a protective order and stipulation for discovery, and engaged in substantial discovery.

On July 13, 1999, the Union moved to compel arbitration on Coca-Cola's action for damages from the strike and to stay the legal action pending arbitration. Coca-Cola took the positions that employer grievances fell outside the CBA's arbitration provision and that, even if the provision applied, the Union had waived its right to arbitrate by failing to move earlier for arbitration and by conducting discovery and other proceedings in the district court. Coca-Cola also moved for partial summary judgment on its claim that the Union had breached the no-strike provision of the CBA. The district court denied Coca-Cola's motion for partial summary judgment and ordered the parties to arbitrate. It entered a judgment enjoining the Union from striking pending arbitration and declared that any post-arbitration proceedings would have to be the subject of a new action. This appeal followed.

DISCUSSION

a) Appellate Jurisdiction

"Interlocutory" orders directing arbitration under the FAA are not appealable as of right. See 9 U.S.C. 16(b)(2). In the instant case, the district court issued a self-described "final judgment . . . requiring full performance of the stipulation against striking while the arbitration remains unresolved," and noted that "necessary proceedings, if any, to enforce or vacate any future decisions of the arbitrator may be brought in a new action." Coca-Cola Bottling Co. v. Soft Drink & Brewery Workers Union Local 812, 99 Civ. 1949, at 5 (S.D.N.Y. Sept. 15, 1999) (unpublished memorandum & order). However, relying on law established under the FAA, the Union contends that the issue of the arbitrability of Coca-Cola's claim was "embedded" in its action for injunctive relief and damages and did not constitute an "independent" suit. From that premise, the Union asks us to hold that the district court's order directing arbitration is therefore not appealable pursuant to Section 16 of the FAA. See Filanto, S.P.A. v. Chilewich Int'l Corp., 984 F.2d 58, 60 (2d Cir. 1993). However, we have jurisdiction because the FAA does not apply.

Coca-Cola's action invoked our federal question jurisdiction under Section 301.¹ Although that provision contains no substantive provisions, the Supreme Court has held that it "does more than confer jurisdiction," Textile Workers Union v. Lincoln Mills, 353 U.S. 448, 455, 1 L. Ed. 2d 972, 77 S. Ct. 912 (1957), and is a source of federal "substantive law . . . which the courts must fashion from the policy of our national labor laws," id. Coca-Cola's action is thus based on a body of federal law analytically distinct from the FAA. It may be, of course, that the body of law developed under Section 301 will at times draw upon provisions of the FAA, but by way of guidance alone. See, e.g., United Paperworks Int'l Union v. Misco, Inc., 484 U.S. 29, 41 n.9, 98 L. Ed. 2d

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286, 108 S. Ct. 364 (1987). The FAA was passed a decade before the Wagner Act, ch. 372, 49 Stat. 449 (1935), and two decades before Taft-Hartley. Given the difference in eras and the intervening revolution in labor policy, adherence to the FAA in Section 301 cases may lead to anomalous or even bizarre results.

For example, in response to the Union's jurisdictional argument, Coca-Cola contends that the FAA does not apply in the present case because it excludes from its provisions "contracts of employment of . . . workers engaged in foreign or interstate commerce." 9 U.S.C. 1. We have held that this exclusion is "limited to workers involved in the transportation industries" and that therefore the FAA applies to employment contracts of all workers not involved in transportation. Maryland Casualty Co. v. Realty Advisory Bd. on Labor Relations, 107 F.3d 979, 982 (2d Cir. 1997); accord Erving v. Virginia Squires Basketball Club, 468 F.2d 1064, 1069 (2d Cir. 1972); Signal-Stat Corp. v. Local 475, 235 F.2d 298, 302 (2d Cir. 1956).² Coca-Cola argues that this exclusion applies because the employees covered by the CBA are drivers involved in the distribution of its product.

We believe that the arguments of the Union and Coca-Cola demonstrate that the logic of Lincoln-Mills cannot be squared with adherence to the FAA in Section 301 cases. For example, if the FAA governs in Section 301 cases, then some kinds of employees -- "transportation" workers -- will be subject only to the law fashioned under Section 301 while others -- all other private employees in interstate commerce (not subject to the Railway Labor Act) -- will be subject to the FAA. However, Lincoln-Mills makes little sense if the law established pursuant to it does not apply to all workers covered by the Taft-Hartley Act's definition of employee,...