Rite Aid of Pa. v. Food Workers Union, Local 1776

• Decision Date: 16 February 2010
• Docket Number: No. 09-1989.,09-1989.
• Parties: RITE AID OF PENNSYLVANIA, INC. v. UNITED FOOD AND COMMERCIAL WORKERS UNION, LOCAL 1776, Appellant.
• Court: U.S. Court of Appeals — Third Circuit

595 F.3d 128

RITE AID OF PENNSYLVANIA, INC. v. UNITED FOOD AND COMMERCIAL WORKERS UNION, LOCAL 1776, Appellant.

No. 09-1989.

United States Court of Appeals, Third Circuit.

Argued November 10, 2009.

Opinion Filed: February 16, 2010.

Andrew W. Allison, [Argued], Jonathan B. Sprague, Darren M. Creasy, Philadelphia, PA, for Appellee.

Nancy B.G. Lassen, Laurence M. Goodman, [Argued], Philadelphia, PA, for Appellant.

Before: AMBRO, GARTH, and ROTH, Circuit Judges.

OPINION OF THE COURT

GARTH, Circuit Judge:

In this appeal, we must decide whether the parties had agreed to arbitrate a labor dispute, thereby rendering it arbitrable under the parties' collective bargaining agreement. The District Court concluded that they had not, and we will affirm.

I.

Rite Aid of Pennsylvania, Inc. ("Rite Aid") operates a chain of drugstores in Pennsylvania. United Food and Commercial Workers, Local 1776 ("the Union") represents nonmanagerial employees in Rite Aid's eastern Pennsylvania stores. Rite Aid and the Union are parties to three separate collective bargaining agreements (CBAs) covering Rite Aid stores in twenty-four Pennsylvania counties.¹

In 2007, Rite Aid acquired a chain of drugstores formerly operated by Brooks Eckerd. The employees of the newly-acquired stores were not yet represented by the Union. When Union representatives attempted to enter six of the new stores in September 2007, Rite Aid denied them entry.

On November 7, 2007, the Union filed three identical grievances (one under each CBA), asserting that the CBAs conferred upon the Union a right to access newly-acquired or newly-opened stores within each CBA's geographic jurisdiction. Rite Aid denied the grievances, citing a policy against solicitation. The Union referred the three grievances to arbitration, where they were consolidated into a single proceeding, and a hearing date was set.

Prior to the arbitration hearing, Rite Aid filed an action in the United States District Court for the Middle District of Pennsylvania, seeking a declaratory judgment of the grievances' non-arbitrability. On July 1, 2008, the parties filed cross-motions for summary judgment.

Rite Aid argued that the grievances were not arbitrable in light of Section 11.4 of the CBA, which provides: "No grievance shall be filed by the associate or the Union, nor need the Employer entertain any grievance that does not involve the interpretation of any provision of this Agreement." (emphasis added). The Union responded by citing three CBA provisions under which it purported to assert its store-access grievances. The Union argued that because its grievances arose under at least one of those provisions, arbitration was required, regardless of the grievances' merits.

On March 31, 2009, the District Court granted Rite Aid's motion and denied the Union's motion. The court found that the grievances did not involve the interpretation of any CBA provisions, and that they therefore fell outside the scope of the CBA's arbitration clause. The Union filed a timely notice of appeal.² We have jurisdiction pursuant to 28 U.S.C. § 1291.

II.

The District Court's decision regarding the applicability and scope of the parties' arbitration agreement is subject to our plenary review. United Steelworkers of Am. v. Rohm and Haas Co., 522 F.3d 324, 330 (3d Cir.2008); Harris v. Green Tree Financial Corp., 183 F.3d 173, 176 (3d Cir.1999).³ In reviewing a District Court ruling on a motion for summary judgment, we apply the same test District Courts are to apply under Fed. Rule. Civ. P. 56(c). Brown v. J. Kaz, Inc., 581 F.3d 175, 179 (3d Cir.2009). Summary judgment is appropriate if and only if, after the evidence taken as a whole is construed in the light most favorable to the non-moving party, there remains no genuine issue of material fact. Prowel v. Wise Business Forms, Inc., 579 F.3d 285, 286 (3d Cir. 2009).

The venerable legal principles guiding the construction and enforcement of arbitration clauses in collective bargaining agreements are well established. We have often recognized the strong federal policy in favor of resolving labor disputes through arbitration. See, e.g., United Parcel Service, Inc. v. Int'l Brotherhood of Teamsters, Local Union No. 430, 55 F.3d 138, 141 (3d Cir.1995); Laborers' Int'l Union of N. Am. v. Foster Wheeler Corp., 26 F.3d 375, 399 (3d Cir.1994); Exxon Shipping Co. v. Exxon Seamen's Union, 11 F.3d 1189, 1196 (3d Cir.1993). More specifically, the inclusion of a broad arbitration clause in a collective bargaining agreement gives rise to a presumption of arbitrability which may be rebutted only by "the most forceful evidence of a purpose to exclude the claim from arbitration." AT & T Techs., Inc. v. Comm's Workers of Am., 475 U.S. 643, 650, 106 S.Ct. 1415, 89 L.Ed.2d 648 (1986) (quoting United Steelworkers of Am. v. Warrior & Gulf Nav. Co., 363 U.S. 574, 585, 80 S.Ct. 1347, 4 L.Ed.2d 1409 (1960)). The parties agree that the arbitration provisions in the CBA at issue are broad, and that the presumption of arbitrability therefore applies in this case.

Notwithstanding that presumption, "arbitration is still a creature of contract and a court cannot call for arbitration of matters outside of the scope of the arbitration clause." Rohm and Haas Co., 522 F.3d at 332. Unless the parties clearly provide otherwise, the courts, not the arbitrators, are tasked with interpreting agreements in order to determine whether the parties have indeed agreed to arbitrate disputes whose arbitrability is contested. See AT & T Techs., 475 U.S. at 649, 651, 106 S.Ct. 1415; Local 827 v. Verizon New Jersey, Inc., 458 F.3d 305, 309 (3d Cir. 2006). In making that determination, a court is not to examine the potential merits of the claim sought to be arbitrated, except as we point out in Part IV, where the claim's merits and its arbitrability are inextricably intertwined. See Lukens, 989 F.2d at 672. Rather, the court is limited to the construction of the arbitration clause and any contractual provisions relevant to its scope, as well as any other "forceful evidence" suggesting that the parties intended to exclude the disputes at issue from arbitration. See E.M. Diagnostic Sys., Inc. v. Local 169, 812 F.2d 91, 95 (3d Cir.1987).

Where an arbitration clause in a collective bargaining agreement limits arbitration to those disputes which require interpretation of the agreement, as it does here, a grievance is excluded from arbitration unless it arises from a specific provision in the agreement. See Rohm and Haas, 522 F.3d at 332 ("Although we hold that the Bristol CBA's arbitration clause is broad, the underlying basis for the grievance submitted through the Bristol CBA grievance procedure must still arise from some specific article of the Bristol CBA."). We may not accept an arbitration proponent's citation to a particular provision of the CBA and its claim that the grievance arises thereunder without critical examination. Unquestioning acceptance of the Union's characterization of its claims is inconsistent with our duty to determine arbitrability because it "leaves the scope of the arbitration clause subject to the unilateral and unfettered discretion of the Union." E.M. Diagnostic, 812 F.2d at 95. We must determine whether indeed "the subject matter of the grievance is one that is within the zone of interests that have received protection in the collective bargaining agreement" and one that the parties have agreed to arbitrate. Id.

Having outlined the controlling principles, we turn now to their application to the grievances and arbitration clause in the present case.

III.

Article 11 of the CBA creates a procedure under which the Union or one of its members may file grievances with Rite Aid. The CBA provides for review of the grievance by progressively higher levels of Rite Aid management and, if the dispute is not amicably resolved, ultimately for resolution of the dispute by an arbitrator.⁴

As noted supra, the scope of the arbitration provision in the CBA is broad but not unbounded. Section 11.4 of the CBA provides: "No grievance shall be filed by the associate or the Union, nor need the Employer entertain any grievance that does not involve the interpretation of any provision of this Agreement." (emphasis added). Thus, the plain language of the CBA indicates that the parties have agreed to arbitrate only those disputes which genuinely implicate one or more provisions of the CBA. Our task is therefore to decide whether the Union's store-access grievance falls within the scope of the arbitration clause by raising a legitimate question of the CBA's interpretation.

The Union points to three provisions of the CBA, contending that each provides a basis for its claim that Union representatives are entitled to access Rite Aid's newly-acquired stores and their employees. We examine each in turn.

A. Recognition Clause

Section 2.1 of the CBA reads The Employer recognizes the Union as the sole and exclusive bargaining agent for the purpose of bargaining in the Bargaining Unit in respect to rates of pay, wages, hours of employment, and other conditions pertaining to employment. ...

The Union argues that its interpretation of this clause gives rise to its access grievance.

We are not persuaded by the argument the Union advances based on the decision of the National Labor Relations Board (NLRB) in Houston Div. of the Kroger Co., 219 N.L.R.B. 388 (1975). In Kroger the NLRB held that a recognition clause similar to the one at issue in this case waives an employer's right to demand an election in a new or after-acquired store, but that the union is nevertheless required to demonstrate majority support among employees of those stores before it can be recognized. Id. at 389. However, the NLRB did not specify the means by which unions are to demonstrate majority support in this situation. The Union here argues that the CBA at least arguably grants it a right of store access, and it is therefore entitled to...