Local Union 97, Int'l Bhd. of Elec. Workers v. NRG Energy, Inc.

• Decision Date: 21 September 2021
• Docket Number: 5:20-cv-1372 (GLS/ML)
• Parties: LOCAL UNION 97, INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, AFL-CIO, Plaintiff, v. NRG ENERGY, INC., Defendant.
• Court: U.S. District Court — Northern District of New York

561 F.Supp.3d 322

LOCAL UNION 97, INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, AFL-CIO, Plaintiff,

v.NRG ENERGY, INC., Defendant.

5:20-cv-1372 (GLS/ML)

United States District Court, N.D. New York.

Signed September 21, 2021

FOR THE PLAINTIFF: OF COUNSEL: KENNETH L. WAGNER, ESQ., Blitman, King Law Firm, Franklin Center, 443 North Franklin Street, Suite 300, Syracuse, NY 13204-1415.

FOR THE DEFENDANT: OF COUNSEL: BRIAN J. BUTLER, ESQ., BRENDAN M. SHEEHAN, ESQ., Bond Schoeneck & King, PLLC, One Lincoln Center, Syracuse, NY 13202, OF COUNSEL: ALEXANDER CASTELLI, ESQ., J. MICHAEL MCGUIRE, ESQ., Shawe Rosenthal LLP, One South Street - Suite 1800, Baltimore, MD 21202.

MEMORANDUM-DECISION AND ORDER

Gary L. Sharpe, Senior District Judge

I. Introduction

Plaintiff Local Union 97, International Brotherhood of Electrical Workers, AFL-CIO (hereinafter "the Union") commenced this action against defendant NRG Energy, Inc., seeking to compel arbitration of a dispute under certain collective bargaining agreements. (Compl., Dkt. No. 1.) Pending before the court is NRG's motion to dismiss. (Dkt. No. 14.) For the reasons that follow, the motion is granted, and the Union's complaint is dismissed.

II. Background ¹

The Union is the exclusive collective bargaining agent for approximately thirty-five NRG employees, employed at NRG's electricity generating stations at Oswego Harbor, New York and Dunkirk, New York. (Compl. ¶¶ 11, 13.) Since 1999, the Union and NRG have been parties to consecutive collective bargaining agreements covering employees at the Oswego Harbor and Dunkirk stations. (Id. ¶ 14.)

In September 2003, while negotiating a new collective bargaining agreement, the Union and NRG agreed to various retiree benefits for then-current employees as well as for future employees, and set forth the terms of that agreement in a memorandum of agreement (hereinafter "the 2003 MOA"). (Id. ¶ 15.) The 2003 MOA states in relevant part that: "Current employees will be grandfathered as to their participation in life insurance Plan A or Plan B at retirement" and "[e]mployees hired after September 30, 2003 will not be provided with a life insurance benefit upon retirement." (Id. ¶¶ 16-17.)

Also in September 2003, the Union and NRG executed a new collective bargaining agreement, effective October 1, 2003 through September 29, 2007 (hereinafter "the 2003-2007 CBA"). (Id. ¶ 15.) Article XIX.2(d)(2) of the 2003-2007 CBA (hereinafter "the Life Insurance Provision"), states: "Employees hired after September 30, 2003 will not be provided with a life insurance benefit upon retirement." (Id. ¶ 18.)

The Union and NRG executed subsequent collective bargaining agreements with effective dates: September 30, 2007 through September 24, 2011 (hereinafter "the 2007-2011 CBA"); February 25, 2011 through September 24, 2013 (hereinafter "the 2011-2013 CBA"); September 25, 2013 through September 24, 2015, and extended through March 24, 2016 (hereinafter "the 2013-2016 CBA"); and March 24, 2016 through September 21, 2019 (hereinafter "the 2016-2019 CBA") containing the same Life Insurance Provision. (Id. ¶ 19.)

In the current collective bargain agreement between the Union and NRG, effective September 22, 2019 through September 21, 2023 (hereinafter "the 2019-2023 CBA"), the Life Insurance Provision was amended, and states: "Effective November 1, 2019 the retiree life insurance benefit for employees hired prior to September 30, 2003, will be a lump sum of $10,000." (Id. ¶¶ 14, 20.) This provision applies to NRG employees employed under the 2019-2023 CBA that were hired prior to September 30, 2003, and who did or will retire on or after November 1, 2019. (Id. ¶ 21.) It does not apply to retirees who were hired prior to September 20, 2003 and retired before November 1, 2019 (hereinafter "the Pre-2019 Retirees"). (Id. ) However, NRG ultimately notified the Pre-2019 Retirees that, effective January 1, 2021, their life insurance benefits would also be changed to a lump sum of $10,000. (Id. ¶ 22.)

Accordingly, a dispute has arisen between the Union and NRG regarding retiree life insurance benefits. (Id. ¶ 23.)

Article XXI of the 2019-2023 CBA, titled "Grievances" contains an arbitration clause, which provides:

Should the [Union] claim that a dispute or difference has arisen between [NRG] and the [Union] as to the meaning, application or operation of any provision of this agreement, such dispute or difference shall be presented within thirty (30) working days and settled in the following manner, and there shall be no quitting or suspension of work during or on account of such dispute or difference.²

(Id. ¶ 25.)

On October 22, 2020, the Union submitted a grievance in the manner prescripted by the 2019-2023 CBA alleging on behalf of "all affected retirees" (the Pre-2019 Retirees), that NRG's action violated "all applicable sections relating to Retiree Life Insurance." (Id. ¶¶ 26-29.)

On October 28, 2020, NRG Labor Relations Director Rich North emailed a letter to the Union, stating:

Retirees are not "employees" of [NRG], and they are not covered by [the 2019-2023 CBA] with the Union. Nor is [NRG] required to recognize the Union as a "representative" of retirees, and we decline to do so. [NRG] will not be accepting or processing any "grievance" under the [2019-2023] CBA that purports to challenge [NRG's] actions regarding its retirees.

(Id. ¶ 30.)

The Union has obtained "written authorization from 113 [r]etirees to represent them in any arbitration or other legal proceeding necessary to secure their contractually guaranteed life insurance benefits." (Id. ¶ 32.)

The Union filed a complaint on November 5, 2020, seeking to compel arbitration of this dispute. (Id. ¶¶ 33-37.)

III. Standard of Review

The standard of review under Fed. R. Civ. P. 12(b)(6) is well settled and will not be repeated here. For a full discussion of the governing standard, the court refers the parties to its prior decision in Ellis v. Cohen & Slamowitz, LLP , 701 F. Supp. 2d 215, 218 (N.D.N.Y. 2010).

IV. Discussion

NRG seeks dismissal of the complaint on the grounds that: (1) arbitration cannot be compelled under the 2019-2023 CBA, (2) the presumption of arbitrabilty does not apply, (3) the 2003 MOA is not incorporated by reference into any of the CBAs between the parties, and (4) arbitration cannot be compelled under the Prior CBAs. (See generally Dkt. No. 14, Attach. 7; Dkt. No. 23) For the reasons stated below, the court agrees.

A. Arbitration Under the 2019-2023 CBA

NRG seeks dismissal of the Union's complaint in part because the Union cannot compel arbitration under the 2019-2023 CBA. (Dkt. No. 14, Attach. 7 at 9-10.)

"[A]rbitration 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." Howsam v. Dean Witter Reynolds, Inc. , 537 U.S. 79, 83, 123 S.Ct. 588, 154 L.Ed.2d 491 (2002) (citations omitted). The duty to arbitrate "is a creature of the collective-bargaining agreement [such] that a party cannot be compelled to arbitrate any matter in the absence of a contractual obligation to do so." Nolde Bros., Inc. v. Local No. 358, Bakery & Confectionery Workers Union , 430 U.S. 243, 250-51, 97 S.Ct. 1067, 51 L.Ed.2d 300 (1977).

"[T]he issue of arbitrability is undeniably one for judicial determination." Chicago Pneumatic Tool Co. v. Smith , 890 F. Supp. 100, 112 (N.D.N.Y. 1995). Courts "interpret collective-bargaining agreements, including those establishing ERISA plans, according to ordinary principles of contract law, at least when those principles are not inconsistent with federal labor policy." Kelly v. Honeywell Int'l, Inc. , 933 F.3d 173, 179 (2d Cir. 2019) (quoting M&G Polymers USA, LLC v. Tackett , 574 U.S. 427, 435, 135 S.Ct. 926, 190 L.Ed.2d 809 (2015) ).

NRG argues that the Union is foreclosed from compelling arbitration under the 2019-2023 CBA because the 2019-2023 CBA Life Insurance Provision³ "applies only to ‘employees’—a term defined in Article VI [of the 2019-2023 CBA] as ‘an employee on the active payroll who is not classed as probationary,’ " not the Pre-2019 Retirees, and, thus, there is no dispute between the parties as to the meaning, application or operation of any provision of the 2019-2023 CBA." (Dkt. No. 14, Attach. 7 at 9-10.) The Union also acknowledges the inapplicability of the 2019-2023 CBA Life Insurance Provision to the Pre-2019 Retirees. (Id. ¶ 21 ("[The 2019-2023 CBA Life Insurance Provision] does not apply to already retired retirees whose rights to Plan A or Plan B benefits were ‘grandfathered’ at their retirement.").)

The court agrees with NRG. Since the 2019-2023 CBA Life Insurance Provision only concerns the retirement benefits of current employees , Pre-2019 Retirees do not have grounds to compel arbitration under the 2019-2023 CBA's arbitration clause, as there is no "dispute or difference ... as to the meaning, application or operation of any provision of [the 2019-2023 CBA]." (Dkt. No. 14, Attach. 7 at 9-10.) The parties agree that the 2019-2023 CBA Life Insurance Provision does not affect the Pre-2019 Retirees’ life insurance benefits, (Dkt. No. 14, Attach. 7 at 9; Compl. ¶ 21), and neither party cites the 2019-2023 CBA as the justification for the conversion of Pre-2019 Retirees’ life insurance benefits to a lump sum, (see generally Compl.; Dkt. No. 14, Attach. 7).

The "dispute or difference" that has given rise to the present disagreement between the parties, in actuality, relates to the "meaning, application or operation" of the 2003 MOA that "grandfathered" the Pre-2019 Retirees’ life insurance benefits, an agreement that, for the reasons that will be discussed below, see infra Part IV.C, is not incorporated into the 2019-2023 CBA. See Directors Guild of America, Inc. v. Nat'l Broad. Co. , 78 Civ. 6106, 1979 WL 1841, at *2 (S.D.N.Y. Feb. 9, 1979) ("[W]here the asserted grievance is patently outside the terms of the contract, courts have found the disputes nonarbitrable." (citations omitted)).

The...