Greater Missoula Area Feder. v. Child Start, DA 07-0702.

Docket NºNo. DA 07-0702.
Citation353 Mont. 201, 219 P.3d 881, 2009 MT 362
Case DateOctober 30, 2009
CourtUnited States State Supreme Court of Montana
219 P.3d 881
2009 MT 362
353 Mont. 201
CHILD START, INC., Whittier School, Missoula, Montana, Defendant and Appellant.
No. DA 07-0702.
Supreme Court of Montana.
Submitted on Briefs September 24, 2008.
Decided October 30, 2009.

[219 P.3d 883]

For Appellant: Stacey Weldele-Wade, Antonioli & Wade, P.C., Missoula, Montana.

For Appellee: Karl J. Englund, Karl J. Englund, P.C., Missoula, Montana.

Justice JAMES C. NELSON delivered the Opinion of the Court.

¶ 1 The Greater Missoula Area Federation of Early Childhood Educators and Related Personnel, MEA-MFT, AFT, NEA, AFL-CIO (the Federation) commenced the instant action against Child Start, Inc. (Child Start) in September 2006 by filing a Complaint and Motion to Compel Arbitration. The District Court granted the Federation's motion. Child Start then filed a motion under M.R. Civ. P. 60(b) for relief from the District Court's order. The court denied this motion, and Child Start now appeals. We affirm.


¶ 2 The sole issue on appeal is whether the District Court erred in denying Child Start's Rule 60(b) motion.

The Grievance

¶ 3 This case involves an employer and the union representing its employees. Child Start operates a Head Start early-childhood-development program at Whittier School in Missoula, Montana. The Federation, a local union affiliated with MEA-MFT and its national affiliates, is the certified collective-bargaining representative for nonsupervisory employees of Child Start.

¶ 4 Child Start and the Federation are parties to a collective-bargaining agreement (the Agreement). The stated term of the Agreement is January 1, 2003, through December 31, 2006, though Article One, Section 2 of the Agreement provides that the contract shall remain in full force until a new agreement is negotiated. Of relevance to the present case, Article Two, Section 7 sets forth a "Grievance Procedure," the stated intent of which is to resolve employee complaints "at the earliest possible step." A "grievance" is defined as "a complaint by an employee that there has been a violation, misinterpretation, or misapplication of the provisions of this agreement." An "employee" is defined as "(1) an individual employee or (2) a group of employees having the same

219 P.3d 884

grievance." Furthermore, "[a]ny employee, or group of employees, has the right to Union representation at any stage of the grievance procedure." Until the grievance is resolved, the employee proceeds through the following six steps:

Step 1: The employee discusses the grievance with the immediate supervisor.

Step 2: The employee submits the grievance to the immediate supervisor on a mutually approved form.

Step 3: The employee submits the written grievance to Child Start's director.

Step 4: The employee may appeal to Child Start's Policy Council.

Step 5: The employee may proceed to mediation before three mediators.

Step 6: The employee may proceed to binding arbitration.

¶ 5 In early 2006, Child Start faced rising costs without a corresponding increase in federal funding. Thus, Child Start decided that for budgetary reasons it would reduce by one week the number of weeks the program would operate during the school year. As a result, all employees' annual wages would be cut by 40 hours at their respective hourly rates, regardless of program priority, job position, or seniority rank.

¶ 6 On May 30, 2006, Karen Giuliani filed a grievance (using a Head Start Grievance Form) concerning Child Start's decision. At the time, Giuliani was an employee of Child Start and a member of the bargaining unit represented by the Federation. She also was president of the Federation. She named the Federation as the aggrieved party but indicated that the grievance was on behalf of "Several Affected" employees. Giuliani asserted that Child Start's decision to reduce the work year of bargaining-unit employees "does not comply with the requirements of our Collective Bargaining Agreement regarding a reduction in force." She stated that the provisions of the Agreement on which the grievance was based "include but are not necessarily limited to" Article Two, Section 2 (the Job Security provision), which states, in relevant part, that in the event of "provable financial exigency necessitating a reduction in force," a management/union committee shall meet to examine personnel areas in which savings may be made. Furthermore, layoffs are to be made "on the basis of program priority," and reductions in force are to be made "on the basis of seniority." Giuliani requested that the reduction in the work year for bargaining-unit employees be rescinded and that Child Start conduct any necessary reduction in force in compliance with Article Two, Section 2. She also sought "any additional relief necessary to rectify this matter."

¶ 7 Giuliani's grievance proceeded through the Grievance Procedure outlined above. At each step, however, Child Start repeatedly refused even to recognize the grievance, let alone attempt to resolve it "at the earliest possible step." On June 6, 2006, Scot Anderson (Child Start's director) sent a letter to Giuliani asserting that the grievance was not a valid grievance because, in his view, it had not been filed by an individual employee, no group of employees had been identified, and the Federation as a whole did not qualify "because not all members have the same complaint." Anderson opined that the Federation had a "conflict of interest" in representing all bargaining-unit employees because their "individual interests differ according to whether they would or would not be laid off." Anderson concluded that "[n]o further action will be taken regarding the grievance." The Federation then gave notice of its intent to appeal to Child Start's Policy Council; however, Anderson wrote a second letter reiterating his position that the grievance was not valid and asserting that "[s]ince there is no grievance, there will be no appeal." The Federation then gave notice of its intent to proceed to mediation; however, Sally Woodruff (president of Child Start's Board of Directors) issued a letter giving the same responses Anderson had previously given: the grievance was not valid, the Federation could not represent all of its members in this matter due to a supposed "conflict of interest," and Child Start would not take any further action regarding the grievance.

¶ 8 Having reached Step 6, the Federation gave notice of its intent to proceed to arbitration. To that end, the Federation sent a letter to the Department of Labor and Industry's

219 P.3d 885

Board of Personnel Appeals (BOPA) requesting a list of qualified arbitrators. Anderson, however, responded with a letter to BOPA stating that the grievance was invalid and that Child Start intended "to take no further action regarding this grievance." Indeed, he asserted that Child Start did not agree to arbitration or to participate in requesting the list of arbitrators and that Child Start "will not participate in the arbitration process, since we are not obligated to do so by the Master Contract." Shortly thereafter, Child Start implemented the one-week reduction. The 2006-2007 school year, which had been scheduled to start on August 14, 2006, instead started on August 21.

The Federation's Motion to Compel Arbitration

¶ 9 On September 6, 2006, the Federation filed its Complaint and Motion to Compel Arbitration under § 27-5-115, MCA, which states:

(1) On the application of a party showing an agreement [to submit a controversy to arbitration] and the opposing party's refusal to arbitrate, the district court shall order the parties to proceed with arbitration; but if the opposing party denies the existence of the agreement to arbitrate, the court shall proceed summarily to the determination of that issue raised and shall order arbitration if it finds for the applying party or deny the application if it finds for the opposing party.

* * *

(5) An order for arbitration may not be refused on the ground that the claim in issue lacks merit or good faith or because no fault or grounds for the claim sought to be arbitrated have been shown.

The Federation contended that under this statute, the only issue before the District Court was "whether there is an agreement to arbitrate—not the merits of the claim or the nature of the defense to a claim." Here, the Federation argued, there is an agreement to arbitrate unresolved grievances like the one filed by Giuliani, and Child Start's objections as to the validity of the grievance are matters to be decided by the arbitrator.

¶ 10 Child Start responded with a motion to dismiss in which it raised a number of different points. As to the question of arbitrability, Child Start argued that the Agreement did not require the parties to arbitrate all disputes; rather, it required them to arbitrate only "properly filed" grievances. Child Start maintained that the grievance here was not properly filed for the reasons stated in Anderson's and Woodruff's letters. In addition, Child Start argued that there was no "grievance" at all because the Federation had not identified a "specific" violation, misinterpretation, or misapplication of the Agreement. Lastly, Child Start discussed the merits of the grievance. According to Child Start, "there is nothing in the [Agreement] which prohibits [Child Start] from shortening the length of the school year for budgetary purposes." To the contrary, Child Start asserted that Article One, Section 10 (the Management Rights provision) "legally authorized" it to decide, in its "sole and exclusive discretion," to cut the length of the school year by one week rather than reduce the workforce. Moreover, Child Start argued that there had been no violation, misinterpretation, or misapplication of Article Two, Section 2 (the Job Security provision) because there...

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