Prospect CCMC LLC v. Crozer-Chester Nurses Ass'n
| Decision Date | 26 February 2020 |
| Docket Number | No. 19-1439,No. 19-1440,19-1439,19-1440 |
| Parties | PROSPECT CCMC LLC, doing business as Crozer-Chester Medical Center, Appellant v. CROZER-CHESTER NURSES ASSOCIATION/PENNSYLVANIA ASSOCIATION OF STAFF NURSES AND ALLIED PROFESSIONALS |
| Court | U.S. Court of Appeals — Third Circuit |
NOT PRECEDENTIAL
On Appeal from the United States District Court for the Eastern District of Pennsylvania
Submitted Pursuant to Third Circuit L.A.R. 34.1(a)
October 31, 2019
Before: HARDIMAN, PHIPPS, and NYGAARD, Circuit Judges.
This dispute involves accrued vacation time for unionized nurses following a change in ownership at a hospital in Pennsylvania. The nurses' new employer assumed a collective bargaining agreement that the prior employer had negotiated with the union. Under that agreement, the prior employer permitted the nurses to maintain whatever level of vacation time they had previously accrued. But based on its reading of the agreement, the new employer refused to allow nurses to maintain over 200% of their annual limit of vacation time. That prompted the nurses' union to file a grievance, and the dispute went to arbitration. The arbitrator decided in favor of the nurses' ability to maintain the full amounts of their previously accrued vacation time. Both the new employer and the nurses' union sought redress in the District Court, which sustained the arbitrator's award. The new employer appealed, and for the reasons below, we will affirm the judgment of the District Court.
Before it was acquired, Crozer-Keystone Medical Center employed nurses under the terms of a collective bargaining agreement, or a CBA for short. After a year of negotiations, Crozer-Keystone, in 2015, agreed to a new CBA with the union, the CCNA/Pennsylvania Association of Staff Nurses and Allied Professionals. That CBA imposed, for the first time, a limit on the nurses' accumulation of vacation time:
Effective July 1, 2015 no employees may accumulate more than two times (i.e. 200%) of their annual entitlement.
CBA, art. 9, § 1.c. As implemented by Crozer-Keystone, nurses who had not yet exceeded that ceiling could not later do so, but nurses who had previously accumulated vacation timeover the new 200% cap could keep the excess. Those nurses' ability to maintain previously accrued above-the-cap vacation time was short-lived.
In 2016, a hospital system, Prospect CCMC LLC, acquired Crozer-Keystone through an asset purchase agreement. In conjunction with selling its assets, Crozer-Keystone terminated the nurses, but Prospect offered to rehire them before assuming operations of the hospital. After negotiating the transition, Prospect and the union entered into a recognition agreement on June 16, 2016. That agreement adopted every term of the prior CBA, except one related to health insurance. In assuming operations of the hospital on July 1, 2016, Prospect relied on the CBA's cap on the accumulation of vacation time to reduce any previously accumulated over-the-limit vacation time to 200% of the annual entitlement. That reduction caused the union to file a grievance.
That dispute went to arbitration. The sole question before the arbitrator related to the loss of over-the-cap accrued vacation time:
Did Prospect, as a successor to Crozer-Keystone, violate its obligations under the collective bargaining agreement to maintain vacation banks for employees who on the date of acquisition had greater than the contractual maximum accrual[?]
The arbitrator determined that the CBA did not curtail the nurses' unfettered right to the full amount of their previously accumulated leave - even amounts in excess of the 200% cap. And because Prospect assumed the CBA, the arbitrator ruled that Prospect was obligated to honor the excess accumulated leave.
The arbitrator's determination did not end the dispute. Both Prospect and the union commenced actions in the District Court. The union sought to enforce the award under the Labor-Management Relations Act, 29 U.S.C. § 185(a). In its separate suit, Prospect soughtto vacate the arbitration award under the Federal Arbitration Act, 9 U.S.C. § 10. With jurisdiction over those cases, see 28 U.S.C. § 1331; see also 29 U.S.C. § 185(c); 9 U.S.C. § 10, the District Court consolidated the litigation, denied Prospect's motion to vacate, and granted the union's motion for judgment on the pleadings. Prospect timely appealed, and those orders upholding the arbitration award are now properly before this Court. See 28 U.S.C. § 1291; see also 9 U.S.C. § 16.
The parties first disagree about which law governs Prospect's attempt to vacate the arbitration award. The union argues that the Labor-Management Relations Act applies because the dispute is over a labor arbitration. But Prospect contends that the Federal Arbitration Act governs its attempt to vacate an arbitrator's award. That disagreement bears on a threshold issue: whether Prospect timely filed suit to dispute the arbitrator's award.
Prospect sued within three months of the arbitrator's determination. That would be timely for a challenge to an arbitration award under the Federal Arbitration Act, which has a three-month statute of limitations. See 9 U.S.C. § 12. But it would be untimely under the Labor-Management Relations Act. That Act incorporates the state-law statute of limitations for challenging an arbitration award. See Serv. Empl. Int'l Union, Local No. 36 v. Office Ctr. Servs., Inc., 670 F.2d 404, 409-10 (3d Cir. 1982). And in Pennsylvania that period is 30 days. See 42 Pa. Cons. Stat. Ann. § 7314(b). The timeliness of Prospect's suit, therefore, depends on whether Prospect could proceed under the Federal Arbitration Act.
Prospect could do so, and its suit was timely. The Federal Arbitration Act applies to collective bargaining agreements, except those covering employees engaged directly inthe channels of commerce. See Tenney Eng'g, Inc. v. United Elec. Radio & Mach. Workers of Am., (U.E.) Local 437, 207 F.2d 450, 453 (3d Cir. 1953) (en banc) ( 9 U.S.C. § 1); see also Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 109 (2001) (). Prospect challenges an arbitration award under the CBA, and the exception does not apply here because the unionized nurses are not engaged directly in the channels of commerce. Accordingly, Prospect had three months to file suit, and it did so within that time.
Proceeding under the Federal Arbitration Act, Prospect argues the arbitrator committed three errors that warrant vacating the award. But overturning an arbitrator's award is no small feat. The Federal Arbitration Act imposes a strong presumption in favor of enforcing arbitration awards. See Hamilton Park Health Care Ctr. Ltd. v. 1199 SEIU United Healthcare Workers E., 817 F.3d 857, 861 (3d Cir. 2016). After all, the parties bargained for an arbitrator to resolve their dispute - not a court. See Brentwood Med. Assocs. v. United Mine Workers of Am., 396 F.3d 237, 241 (3d Cir. 2005) (). Thus, arbitration awards are reviewed under an "extremely deferential standard," with the usual outcome being to "affirm easily." Hamilton Park, 817 F.3d at 861 (quoting Dluhos v. Strasberg, 321 F.3d 365, 370 (3d Cir. 2003)). Prospect nonetheless seeks to vacate the award on the grounds that it was in excess of the arbitrator's powers in two respects, see 9 U.S.C. § 10(a)(4), and that the arbitrator was "guilty ofmisconduct in . . . refusing to hear evidence pertinent and material to the controversy," id. § 10(a)(3).
But the high bar for vacating an arbitration award coupled with the standards for appellate review of the District Court's decision - de novo for legal conclusions and clear error for factual findings - lead to the rejection of each of Prospect's challenges. See Whitehead v. Pullman Grp., LLC, 811 F.3d 116, 119 n.23 (3d Cir. 2016).
Prospect first contends that by failing to arguably interpret the CBA, the award exceeded the arbitrator's powers. See Oxford Health Plans LLC v. Sutter, 569 U.S. 564, 569 (2013). The lynchpin of the arbitrator's analysis was that the CBA contains no agreement that the excess vacation bank would be reduced. Without such an agreement in the CBA's text, the arbitrator reasoned that Prospect could not reduce the nurses' over-the-cap leave. From one perspective, it may appear that the arbitrator reached that result not by interpreting the CBA, but rather by drawing an inference from silence in the CBA or even relying on extrinsic evidence. However, under the canon of expressio unius est exclusio alterius (the inclusion of one is the exclusion of others), by expressly imposing a cap on the accumulation of leave, but not an explicit cap on the maintenance of previously accrued excessive leave, the CBA could be read to impose no cap on the maintenance of previously accrued excessive leave. See NLRB v. SW Gen., Inc., 137 S. Ct. 929, 940 (2017) (); Plumbers & Steamfitters Local No. 150 Pension Fund v. Vertex Constr. Co., 932 F.2d 1443, 1449 (11th Cir. 1991) (). Whether or not that is the best reading of the CBA, it is certainly sufficient to uphold the arbitrator's award.1
Prospect's next challenge - that the arbitrator manifestly disregarded federal labor law - rests on uncertain legal footing. After the Supreme Court's decision in Hall Street Assoc., LLC v. Mattel, Inc., 552 U.S. 576 (2008), it is unclear whether that rationale provides an independent...
To continue reading
Request your trial