Intern Broth Elec Workers v. Balmoral Racing Club

• Decision Date: 13 June 2002
• Docket Number: No. 01-2035.,01-2035.
• Citation: 293 F.3d 402
• Parties: INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, Local 176, Plaintiff-Appellee, v. BALMORAL RACING CLUB, INC. and BALMORAL PARK TROT, INC., Defendants-Appellants.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 402

293 F.3d 402

INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, Local 176, Plaintiff-Appellee, v. BALMORAL RACING CLUB, INC. and BALMORAL PARK TROT, INC., Defendants-Appellants.

No. 01-2035.

United States Court of Appeals, Seventh Circuit.

Argued October 26, 2001.

Decided June 13, 2002.

Rehearing and Rehearing En Banc Denied August 22, 2002.

John J. Toomey, Steven F. McDowell (argued), Arnold & Kadjan, Chicago, IL, for plaintiff-appellee.

David B. Goroff (argued), Foley & Lardner, Chicago, IL, for defendant-appellant.

Before POSNER, MANION, and DIANE P. WOOD, Circuit Judges.

DIANE P. WOOD, Circuit Judge.

The issue before us in this case is whether Balmoral Racing Club, Inc. and Balmoral Park Trot, Inc. (collectively Balmoral) must arbitrate a labor dispute between itself and IBEW Local 176 (Local 176) arising out of Balmoral's brief direct employment of certain camera workers. As is normal with such cases, the answer depends on the language of the agreement-both its arbitration clause and other related provisions. In addition, in this particular instance the resolution of the arbitrability question is closely tied to the merits of the underlying dispute. That is because the central question-whether the camera workers were covered by the relevant agreement-is also the most important issue for the merits of the dispute. Our responsibility, however, is limited to the arbitrability issue, even if there are some inevitable overlaps between that and the merits. The district court found that the relevant workers fell within the scope of a collective bargaining agreement that Balmoral had with Local 176 and that the dispute is therefore arbitrable; it therefore dismissed the case entirely. We agree and accordingly affirm the district court's judgment.

I

Balmoral has owned and run horse racing facilities in Illinois since at least 1983. It employs electricians at its race tracks who perform a variety of tasks customarily assigned to electricians. At all relevant times, the electricians at the race track were covered by a collective bargaining agreement (the Agreement) between Balmoral and Local 176. Balmoral also uses the services of camera workers who record the races and transmit them to off-track betting parlors. For a number of years, Balmoral contracted with a separate company, World Wide Broadcasting (World Wide), to provide the personnel needed to perform the camera work; until 1996, World Wide's camera workers were covered by a separate agreement between World Wide and Local 176, to which Balmoral was not a party.

In September 1996, the World Wide camera workers honored the picket line of another union that was on strike at the time. Because World Wide could not provide its employees to Balmoral during this period, Balmoral terminated its contractual relationship with World Wide and announced to the union that it no longer had any use for Local 176 members for camera work; around the same time, it hired non-union personnel to perform those tasks. Local 176 was not happy with this arrangement and began discussing alternatives with Balmoral. On September 26, Balmoral agreed to hire the former World Wide camera workers and to give them the same pay and benefits that World Wide had provided under its contract with Local 176. The workers thereafter performed both camera work and occasional general electrical work of a type normally done by "inside electrical workers" (a term defined in the IBEW Constitution, about which we have more to say later).

Balmoral and Local 176 met to try to reduce this temporary agreement to a more permanent one, but they failed. At this point, Balmoral decided once again to terminate the union camera workers who had previously worked for World Wide and to employ non-union camera workers instead.

The standstill, coupled with Balmoral's actions, prompted Local 176 in November 1996 to file two grievances with Balmoral pursuant to the Agreement, in which it challenged the termination of the former World Wide camera workers and the pay practices of Balmoral with respect to these workers. The union took the position that the World Wide camera workers had come within the coverage of the Agreement, and because the Agreement contains a broad arbitration clause, its dispute with Balmoral was therefore subject to the full grievance procedure set forth in the Agreement, up to and including arbitration. Balmoral disagreed, claiming that the camera workers had never come within the scope of the Agreement, and for that reason it refused to arbitrate. Local 176 then filed this action seeking an order compelling arbitration of the grievances.

II

Both parties moved for summary judgment on whether the workers were covered by the Agreement, which in turn (all agreed) governed whether arbitration was required. The district court entered summary judgment for Balmoral and denied Local 176's motion on June 24, 1998. It did not rule on the merits per se; instead, the court found that a condition precedent to arbitration had not been satisfied. Under the terms of the Agreement, the International President of the IBEW had to make a formal determination concerning the jurisdictional scope of the Agreement before the camera workers' grievance could be entertained, and no such determination had been requested or produced by the time the grievance was filed. In that procedural posture, Local 176 was not entitled to prevail in its effort to compel arbitration. Nonetheless, the district court hinted in its decision that Local 176 (which by the time of the decision had obtained the necessary ruling from the IBEW President) could refile its grievances against Balmoral.

Local 176 took the hint and filed a new action. Presented with new cross-motions for summary judgment, in an order dated March 27, 2001, the district court this time agreed with the union. The court relied on a letter from the International President that (the court was satisfied) concluded that the camera workers were covered by Local 176 and that Balmoral was required to arbitrate the disputes. Balmoral appeals that judgment.

III

The usual Rule 56 standard of review applies to cross-motions for summary judgment, and our review is de novo. Lac Courte Oreilles Band of Lake Superior Chippewa Indians v. Voigt, 700 F.2d 341, 349 (7th Cir.1983). To the extent that Balmoral challenges the court's decision to grant summary judgment in favor of the union, we construe the record in the light most favorable to Balmoral. Hendricks-Robinson v. Excel Corp., 154 F.3d 685, 692 (7th Cir.1998). To the extent that Balmoral asserts that the court erred in refusing to grant its own motion for summary judgment, the record is evaluated in the light most favorable to Local 176. Id. Either way, summary judgment is proper if the record demonstrates that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law under the familiar standards of FED.R.CIV.P. 56(c).

Before turning to the details of this case, it is important to clarify what is and what is not before us. Our focus is on whether this dispute is arbitrable, and to a certain degree it is about who should decide certain issues. Normally, the question of the arbitrability of a labor-management dispute is a matter to be resolved by the courts. Chicago Dist. Council of Carpenters Pension Fund v. K & I Construction Inc., 270 F.3d 1060, 1066 (7th Cir. 2001). A court asked to compel arbitration must "interpret[ ] the relevant language of [the parties'] collective bargaining agreement in light of well-worn principles of labor contract interpretation, including the rule that where the agreement contains a mandatory arbitration provision, there is generally a presumption in favor of finding arbitrability." Id. See also Local Union 1393 Int'l Bhd. of Elec. Workers v. Utilities Dist. of W. Ind. Rural Elec. Membership Coop., 167 F.3d 1181, 1183 (7th Cir. 1999).

Usually it is obvious whether there is some kind of arbitration agreement between the disputing parties, and the only question relates to the scope of that agreement. See, e.g., Penn v. Ryan's Family Steak Houses, Inc., 269 F.3d 753, 755 (7th Cir.2001). This would have been the case, for example, if a dispute had arisen between Balmoral and its ordinary electricians, in which instance the existence of the arbitration agreement would have been plain. The issue would be equally simple on the other side if an utter stranger were asked to arbitrate: she need not do so, unless she executed an agreement to that effect. Here, however, we face something between those two extremes. The issue before us is whether the camera workers Balmoral employed between September and November 1996 were covered by Balmoral's agreement with Local 176. If they are, then this is an arbitrable dispute; if not, then the company was within its rights to refuse to arbitrate.

The starting point in our inquiry is naturally the language of the Agreement—and we stress, in light of some of the arguments Balmoral has made, that we are referring to the agreement Balmoral itself signed with the union, not with any agreement that may have existed between World Wide and the union. We interpret collective bargaining agreements in the same way we approach other contracts. Alexander v. City of Evansville, 120 F.3d 723, 727 (7th Cir.1997). The source of law, however, is different: while the arbitrability of a dispute is ordinarily regulated by state law, see Penn v. Ryan's Family Steak Houses, Inc., 269 F.3d at 758-59, collective bargaining agreements are interpreted under federal law. Chicago Painters and Decorators Pension, Health and Welfare and Deferred Sav. Plan Trust Funds v. Karr Bros., Inc., 755 F.2d 1285, 1290 (7th Cir.1985); see also Sweeney v. Westvaco Co., 926 F.2d 29, 36 (1st Cir.1991) (Breyer, C.J.) ("Congress has said that courts, when they interpret ... collective bargaining agreements, must apply federal law. Indeed,...