Int'l Bhd. of Elec. Workers v. Carroll White Rural Elec. Membership Corp.

• Decision Date: 16 September 2020
• Docket Number: 1:20-cv-1689-JMS-TAB
• Parties: INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, LOCAL 1393, Petitioner, v. CARROLL WHITE RURAL ELECTRIC MEMBERSHIP CORPORATION, Respondent.
• Court: U.S. District Court — Southern District of Indiana

INTERNATIONAL BROTHERHOOD OF

ELECTRICAL WORKERS, LOCAL 1393, Petitioner, v. CARROLL WHITE RURAL ELECTRIC

MEMBERSHIP CORPORATION, Respondent.

1:20-cv-1689-JMS-TAB

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF INDIANA INDIANAPOLIS DIVISION

September 16, 2020

ORDER

Petitioner International Brotherhood of Electrical Workers, Local 1393 ("the Union") files this petition pursuant to the Federal Arbitration Act ("FAA"), 9 U.S.C. § 1 et seq., and the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 185, to compel Respondent Carroll White Rural Electric Membership Corporation ("the Company") to arbitrate a dispute concerning whether the Company violated the terms of a collective bargaining agreement by requiring a former employee to pay back money that the Company loaned him to cover the cost of training. The petition is now ripe for the Court's review.

I.

LEGAL STANDARD

Under § 4 of the FAA, "a party 'aggrieved' by the failure of another party 'to arbitrate under a written agreement for arbitration' may petition a federal court 'for an order directing that such arbitration proceed in the manner provided for in such agreement.'" Rent-A-Ctr., W., Inc. v. Jackson, 561 U.S. 63, 68 (2010) (quoting 9 U.S.C. § 4). To compel arbitration, the party filing the petition must show: (1) an agreement to arbitrate; (2) a dispute within the scope of the arbitration agreement; and (3) a refusal by the opposing party to proceed to arbitration. Zurich Am. Ins. Co. v. Watts Indus., Inc., 466 F.3d 577, 580 (7th Cir. 2006) (citations omitted).

"[A] grievance arbitration provision in a collective [bargaining] agreement [can] be enforced by reason of [§] 301(a) of the [LMRA]."¹ United Steelworkers of Am. v. Warrior & Gulf Nav. Co., 363 U.S. 574, 577 (1960) (citing Textile Workers v. Lincoln Mills, 353 U.S. 448 (1957)). Federal courts have developed a specific body of law for determining the arbitrability of labor disputes that is distinct from, though similar in many material respects to, the general law governing the arbitrability of commercial disputes under the FAA. See Granite Rock Co. v. Int'l Bhd. of Teamsters, 561 U.S. 287, 299 n.6 (2010) ("We, like the Court of Appeals, discuss precedents applying the FAA because they employ the same rules of arbitrability that govern labor cases."); Part-Time Faculty Ass'n at Columbia Coll. Chicago v. Columbia Coll. Chicago, 892 F.3d 860, 864 n.6 (7th Cir. 2018) ("[A]s a technical matter, '[i]n seeking to confirm an arbitration award created by virtue of a collective bargaining agreement, recourse is to the LMRA, not the FAA[,]'" however, "arbitration under the LMRA and the FAA are generally subject to the same governing principles." (citations omitted) (second alteration in original)); Pryner v. Tractor Supply Co., 109 F.3d 354, 359 (7th Cir. 1997) ("The big thing that section 301 did (besides creating federal jurisdiction over suits to enforce collective bargaining agreements), so far as labor arbitration is concerned, was to ordain the creation of a body of federal common law to govern disputes arising out of such arbitration.").

The foundation of the law of arbitrability of labor disputes was laid by the Supreme Court in a collection of cases known as the Steelworkers Trilogy: United Steelworkers v. American Mfg. Co., 363 U.S. 564 (1960); United Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574 (1960); and United Steelworkers v. Enterprise Wheel & Car Corp., 363 U.S. 593 (1960). See Granite Rock, 561 U.S. at 299 n.6; AT & T Techs., Inc. v. Commc'ns Workers of Am., 475 U.S. 643, 648 (1986) ("The principles necessary to decide this case are not new. They were set out by this Court over 25 years ago in a series of cases known as the Steelworkers Trilogy . . . .").

From the Steelworkers Trilogy, the Supreme Court has distilled four important rules that will guide this Court's analysis. See AT & T Techs., 475 U.S. at 648-50. First, "arbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit." Id. at 648 (quoting Warrior & Gulf, 363 U.S. at 582). "The second rule, which follows inexorably from the first, is that the question of arbitrability—whether a collective-bargaining agreement creates a duty for the parties to arbitrate the particular grievance—is undeniably an issue for judicial determination. Unless the parties clearly and unmistakably provide otherwise, the question of whether the parties agreed to arbitrate is to be decided by the court, not the arbitrator." AT & T Techs., 475 U.S. at 649 (citations omitted). The third rule is that, in determining whether to submit a particular grievance to arbitration, a court should not rule on the potential merits of the underlying claims, even if those claims "appear[] to the court to be frivolous." Id. at 649-50. Finally, the fourth rule is that "where the contract contains an arbitration clause, there is a presumption of arbitrability in the sense that '[a]n order to arbitrate the particular grievance should not be denied unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers theasserted dispute. Doubts should be resolved in favor of coverage.'" Id. at 650 (quoting Warrior & Gulf, 363 U.S., at 582-583) (alteration in original).

II.

BACKGROUND²

The Company is a not-for-profit electric cooperative that delivers electricity to its consumers/members in several Indiana counties. [Filing No. 14-1 at 2.] The Company is headquartered in Monticello, Indiana and has an additional operational office in Delphi, Indiana. [Filing No. 14-1 at 2.]

On March 30, 2018, the Company hired Andrew Corsaletti to work as a groundman out of the Monticello office. [Filing No. 1-1 at 2; Filing No. 14-1 at 4.] In or around September 2018, Mr. Corsaletti was promoted to the position of apprentice lineman and, as a condition of his promotion, he and the Company executed a Training Cost Loan and Wage Assignment Agreement ("Loan Agreement"). [Filing No. 14-1 at 4.] Pursuant to the Loan Agreement, the Company gave Mr. Corsaletti an interest-free loan to cover the cost of additional training and agreed that it would forgive the loan, prorated monthly, if he continued to work for the Company for four years. [Filing No. 14-1 at 85.] The Loan Agreement stated that if Mr. Corsaletti's employment ended for any reason other than death, disability, or reduction in force before the loan amount was reduced to zero, Mr. Corsaletti would be required to pay back the remaining balance, due on or before his last day worked. [Filing No. 14-1 at 85.] During the time when Mr. Corsaletti was hired, promoted, and required to sign the Loan Agreement, employees at the Monticello office, including Mr. Corsaletti, were not represented by the Union. [Filing No. 1-1 at 2; Filing No. 14-1 at 3-4.]

Mr. Corsaletti was voluntarily transferred to the Company's Delphi office in the fall of 2019.³ [Filing No. 1-1 at 2; Filing No. 14-1 at 5.] Upon his transfer, Mr. Corsaletti became part of the bargaining unit represented by the Union and became subject to the Collective Bargaining Agreement ("CBA") between the Company and the Union, effective October 1, 2018 to August 30, 2021. [Filing No. 1-1 at 2; Filing No. 14-1 at 5.]

The CBA contains several provisions that are relevant to this case. The first is Article I (the "Recognition Provision"), which states that "[t]he Company agrees to continue to recognize the Union as the collective bargaining agent for the collective bargaining unit . . . in matters pertaining to wages, hours and other terms and conditions of employment." [Filing No. 1-2 at 5.] The second is Article IV, Section 1 (the "Responsibility Provision"), which states that "[t]he Company and the Union agree to meet and deal with each other through their duly accredited officers, representatives and committees on all matters covered by the terms of this Agreement." [Filing No. 1-2 at 6.]

The CBA also provides for arbitrations of grievances (the "Grievance Provision"), stating: "Any difference arising between an employee or group of employees, the Union and the Company as to the interpretation or application of this Agreement, any of its terms or conditions, shall constitute a grievance hereunder which shall be dealt with" pursuant to a specified grievance process that culminates in arbitration. [Filing No. 1-2 at 7.] The CBA also states, in relevant part, that "[t]he arbitrator shall have no authority or jurisdiction to render a decisionwhich adds to, subtracts from, or modifies this Agreement, and the arbitrator's decision shall be confined to the meaning of the contract provision which gave rise to or relates to the dispute." [Filing No. 1-2 at 8.]

In addition, in Article XX (the "Apprentice Training Provision"), the CBA states that "[a]ll new Apprentice Lineman will be required to execute the Training Costs Loan and Wage Assignment Agreement." [Filing No. 1-2 at 29.] Pursuant to such Training Costs Loan and Wage Assignment agreement, the Company will give an interest-free loan to the apprentice lineman to cover the costs of training, and the loan will be forgiven over four years, prorated monthly, upon the employee's continued employment with the Company. [Filing No. 1-2 at 29.] The CBA provides that the loan would also be forgiven if employment terminates due to death, disability, or reduction in workforce, but if the employee terminates employment "for any other reason before the loan is reduced to zero, the employee will owe the Company the outstanding balance on the loan." [Filing No. 1-2 at 29.]

In March 2020, Mr. Corsaletti gave notice of his resignation, effective April 10, 2020. [Filing No. 1-1 at 2; Filing No. 14-1 at 97.] On March 31, 2020, the Company sent Mr. Corsaletti a letter informing him that he owed the Company $18,290.44 pursuant to the Loan Agreement. [Filing No. 14-1 at 97.] After a payment was deducted from Mr....