Hennepin Healthcare Sys. v. AFSCME Minn. Council 5
| Docket Number | A21-1079 |
| Decision Date | 17 May 2023 |
| Parties | Hennepin Healthcare System, Inc., Respondent, v. AFSCME Minnesota Council 5, Union, Appellant. |
| Court | Minnesota Supreme Court |
Court of Appeals Office of Appellate Courts
Mary F. Moriarty, Hennepin County Attorney, Martin D. Munic Senior Assistant County Attorney, Katlyn J. Lynch, Assistant County Attorney, Minneapolis, Minnesota, for respondent.
Josie Hegarty, AFSCME Council 5, South Saint Paul, Minnesota, for appellant.
Justin D. Cummins, Cummins & Cummins, LLP, Minneapolis Minnesota, for amici curiae Education Minnesota, et al.
On the request of respondent Hennepin Healthcare System, Inc. for correction of the court's opinion, and based upon all the files, records, and proceedings herein, IT IS HEREBY ORDERED THAT:
1. The last paragraph on page 22 of the slip opinion filed on May 17, 2023, is hereby modified to read as follows:
In sum, we conclude that Hennepin Healthcare has failed to meet its burden to demonstrate that the arbitrator clearly exceeded the powers granted to him in the collective bargaining agreement because the arbitrator's award did not draw its essence from the agreement. See Minn. Stat. § 572B.23(a)(4). Because Hennepin Healthcare failed to meet that burden, we cannot conclude that the arbitration award should be vacated. We may not have interpreted the collective bargaining agreement as the arbitrator did here. The dissent certainly would not, and there is room for reasonable disagreement on the merits of that question. However, the fact that this dispute was subject to arbitration "necessarily limited the availability of the protections and advantages of the judicial system," including anything other than "very limited review of the final award." Seagate Tech., 854 N.W.2d at 765. The result of this dispute today may well have been different if our review were not so limited. But we cannot disregard the narrow grounds for review dictated by the Minnesota Uniform Arbitration Act.
Said paragraph previously read as follows:
In sum, we conclude that Hennepin Healthcare has failed to meet its burden to demonstrate that the arbitrator clearly exceeded the powers granted to him in the collective bargaining agreement because the arbitrator's award did not draw its essence from the agreement. See Minn. Stat. § 572B.23(a)(4). Because Hennepin Healthcare failed to meet that burden, we cannot conclude that the arbitration award should be vacated. We may not have interpreted the collective bargaining agreement as the arbitrator did here. The dissent certainly would not, and there is room for reasonable disagreement on the merits of that question. However, Hennepin Healthcare's "decision to demand arbitration necessarily limited the availability of the protections and advantages of the judicial system," including anything other than "very limited review of the final award." Seagate Tech., 854 N.W.2d at 765. The result of this dispute today may well have been different if our review were not so limited. But that is what Hennepin Healthcare bargained for when it agreed to arbitrate, and we hold Hennepin Healthcare to that decision.
2. The attached slip opinion, modified as stated above, shall be substituted for the opinion filed May 17, 2023.
CHUTICH, J., took no part in the decision of this case.
An arbitrator does not exceed their powers, within the meaning of Minn. Stat. § 572B.23(a)(4) (2022) of the Minnesota Uniform Arbitration Act, where the arbitrator's decision draws its essence from the underlying collective bargaining agreement.
Reversed and remanded.
This case concerns the scope of judicial review of arbitration awards. Respondent Hennepin Healthcare System, Inc. (Hennepin Healthcare) and appellant AFSCME Minnesota Council 5 (AFSCME) arbitrated a dispute regarding Hennepin Healthcare's use of temporary staffing agency workers. AFSCME, which represents two bargaining units of Hennepin Healthcare employees, asserted that Hennepin Healthcare had violated its collective bargaining agreements by using the staffing agency workers for more than 6 months. After interpreting applicable provisions in the agreements, the arbitrator issued an award in favor of AFSCME. Hennepin Healthcare filed a motion in district court to vacate the arbitration award, arguing that the arbitrator had exceeded his powers. The district court denied the motion and confirmed the award. Hennepin Healthcare appealed, and the court of appeals reversed, concluding that the arbitration award must be vacated because it did not draw its essence from the collective bargaining agreement. Because we conclude that the court of appeals erroneously substituted its own judgment for that of the arbitrator when it determined that the award did not draw its essence from the agreement, we reverse the decision of the court of appeals and remand the case to the court of appeals for consideration of Hennepin Healthcare's other challenges to the arbitration award.
Hennepin Healthcare operates a hospital and a network of clinics in Hennepin County. Among its employees are more than 1,300 clerical and general healthcare employees who are represented by AFSCME. Separate collective bargaining agreements cover the clerical unit and the health general services unit. However, because the disputed provisions that are at issue in the underlying grievance and in the arbitrator's award are identical between the two collective bargaining agreements, we will refer to the two agreements collectively.
A dispute arose between Hennepin Healthcare and AFSCME out of Hennepin Healthcare's use of nonunion subcontracted workers. In 2015, Hennepin Healthcare entered into a number of 3-year service contracts with staffing agencies. Some of the workers whom these staffing agencies provide to Hennepin Healthcare perform the same work as that performed by the clerical and general healthcare employees who are represented by AFSCME. The staffing agency workers are not members of AFSMCE, nor are they considered employees of Hennepin Healthcare. In 2018, Hennepin Healthcare renewed its service contracts with the staffing agencies for another 3-year term.
A few months before the renewal of the service contracts, AFSCME filed a grievance, arguing that Hennepin Healthcare's use of nonunion subcontracted workers for more than 6 months violated their collective bargaining agreement. Hennepin Healthcare denied the grievance, asserting that the collective bargaining agreement did not place any durational limit on its right to use subcontracted workers.
In 2020, the parties arbitrated the dispute, and the arbitrator granted AFSCME's grievance. The arbitrator's award focused on two provisions of the collective bargaining agreement. The first provision, Article 3, defines a "temporary employee" as "[a]n individual designated by the EMPLOYER as temporary and whose employment is not to exceed six (6) months duration in temporary status in a calendar year." The second provision, Article 42, addresses Hennepin Healthcare's right to contract for services. It states, "Nothing in this AGREEMENT shall prohibit or restrict the right of the EMPLOYER from contracting with vendors or others for materials or services." The arbitrator concluded that a temporary staffing agency worker, performing bargaining unit-covered work, is subject to Article 3 of the collective bargaining agreement and is thus limited to employment of no more than 6 months in a calendar year.
The arbitrator reached this conclusion after finding a conflict between these two provisions of the collective bargaining agreement. Attempting to reconcile this conflict, his award stated:
It must be assumed that all provisions of the [collective bargaining agreement] have meaning. Article 42 assures the Employer authority to manage its enterprise so as to accommodate unforeseen conditions, changes in technology and business practices. Article 3[] provides the Union with assurance that its representational rights and the terms and conditions for bargaining unit workers will not be [undermined] by long term temporary employees[.]
The arbitrator determined that a temporary staffing agency worker, performing bargaining unit-covered work, is subject to Article 3. Accordingly, the arbitrator concluded, an agency worker is limited to employment of no more than 6 months in a calendar year- notwithstanding Hennepin Healthcare's right to subcontract for services detailed in Article 42 and the parties' stipulation that the temporary staffing agency workers were not Hennepin Healthcare employees, were not included within the AFSCME bargaining unit, and were not subject to the collective bargaining agreement's terms and conditions of employment.[1] Based on this interpretation of the agreement, the arbitrator concluded that Hennepin Healthcare had violated the collective bargaining agreement by using staffing agency workers for more than 6 months.
Hennepin Healthcare subsequently filed an action in Hennepin County District Court to vacate the arbitration award, arguing that the arbitrator exceeded his powers. See Minn. Stat. § 572B.23(a)(4) (2022) (). Specifically, Hennepin Healthcare asserted that the arbitrator's award encroached on Hennepin Healthcare's inherent managerial rights, see Minn. Stat. § 179A.07, subd. 1 (2022), and that the award did not draw its essence from the parties' collective bargaining agreement. The district court denied Hennepin Healthcare's motion and confirmed the arbitration award.
In a precedential opinion, the court of appeals reversed the district court. Hennepin Healthcare Sys., Inc....
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