Steel v. Ky. West Va. Gas Co. Llc

• Decision Date: 13 June 2011
• Docket Number: Civil No. 10–11–ART.
• Citation: 795 F.Supp.2d 596,161 Lab.Cas. P 10386,190 L.R.R.M. (BNA) 3360
• Parties: UNITED STEEL, PAPER AND FORESTRY, RUBBER, MANUFACTURING, ENERGY, ALLIED INDUSTRIAL AND SERVICE WORKERS INTERNATIONAL UNION, AFL–CIO, CLC, et al., Plaintiff,v.KENTUCKY WEST VIRGINIA GAS COMPANY, LLC, et al., Defendants.
• Court: U.S. District Court — Eastern District of Kentucky

795 F.Supp.2d 596

190 L.R.R.M. (BNA) 3360

161 Lab.Cas. P 10,386

UNITED STEEL, PAPER AND FORESTRY, RUBBER, MANUFACTURING, ENERGY, ALLIED INDUSTRIAL AND SERVICE WORKERS INTERNATIONAL UNION, AFL–CIO, CLC, et al., Plaintiff,

v.KENTUCKY WEST VIRGINIA GAS COMPANY, LLC, et al., Defendants.

Civil No. 10–11–ART.

United States District Court,E.D. Kentucky,Southern Division,Pikeville.

June 13, 2011.

Adrienne Adams Berry, Michele D. Henry, Everett C. Hoffman, Irwin H. Cutler, Jr., Priddy, Cutler, Miller & Meade, PLLC, Louisville, KY, Daniel Kovalik, United Steelworkers, Pittsburgh, PA, for Plaintiff.Jaron P. Blandford, McBrayer, McGinnis, Leslie & Kirkland, PLLC, Lexington, KY, J. Richard Hammett, Baker & McKenzie, Houston, TX, for Defendants.

MEMORANDUM OPINION & ORDER

AMUL R. THAPAR, District Judge.

With two exceptions, the National Labor Relations Act forbids bargaining with a union that does not represent a majority of the employees in an “appropriate” bargaining unit. In this case, the employees in a union-represented bargaining unit have been split up between two subsidiaries. So to decide whether the employer has an enforceable duty—contractual or statutory—to bargain with the same Union for a new agreement, one must first decide whether the employees remain an “appropriate” bargaining unit. That “primarily representational” decision is within the exclusive jurisdiction of the National Labor Relations Board, and so this case cannot go to an arbitrator at this stage. This Court's prior decision otherwise relied on a narrow exception which the Union has since repudiated. Accordingly, that prior decision is vacated and the judgment is amended in favor of the employer.

BACKGROUND

In October 2003, Kentucky–West entered a collective bargaining agreement with the Union. Equitable Res., Inc. v. United Steel, Local 8–512, 621 F.3d 538, 542 (6th Cir.2010). By its terms, the agreement would continue at least until October 15, 2008, with sixty-days written notice before termination. R. 27, Attach. 16 at 12. Upon termination, Kentucky–West agreed to negotiate with its employees for a “new [a]greement in good faith.” Id. Kentucky–West and the Union also agreed to arbitrate “any difference ... relating to the meaning, application, or violation of any provisions of” the agreement. Id. at 5.

More than four years later, Kentucky–West's parent company, Equitable Resources, announced that it would eliminate Kentucky–West and integrate its operations with two other non-unionized subsidiaries. Equitable Res., 621 F.3d at 542. Equitable notified the Union that the integration would void the collective bargaining agreement because Kentucky–West's soon-to-be-dispersed employees would no longer represent an appropriate bargaining unit under § 9 of the National Labor Relations Act, 29 U.S.C. § 159(a). See, e.g., R. 29, Attach. 2 at 3; Id., Attach. 3 at 3. The Union responded with a grievance, Equitable replied that it was inarbitrable, and the Union filed suit under § 301 of the LMRA to compel arbitration. Equitable Res., 621 F.3d at 542. But the parties settled, and Equitable agreed to arbitrate. Id. The arbitrator concluded that Equitable had to honor the agreement, and this Court and the Sixth Circuit affirmed. Id. at 544.

In the meantime, another dispute arose. The Union claimed that Equitable could not terminate the agreement, even on October 15, 2008, without sixty-days written notice. R. 29, Attach. 8 at 4. Purportedly to “eliminate any possible doubt” about the termination of the agreement, Equitable then filed a notice of termination on October 7, 2008. R. 29, Attach. 1 at 4; Id., Attach. 11. The Union responded with another grievance, Grievance 08–28, claiming that the notice “d[id] not comply with the requirements” of the collective bargaining agreement. Id., Attach. 13. The Union would later clarify its belief that the collective bargaining agreement required Equitable to promise good-faith negotiations for a new agreement in the notice. R. 27 at 9–10. After a period of procedural wrangling detailed in this Court's prior decision, the Union filed suit to compel arbitration of Grievance 08–28 under § 301 of the LMRA. See United Steel v. Kentucky West Virginia Gas Co., LLC, No. 10–11, 2011 WL 1466397, at *1–3 (E.D.Ky. April 18, 2011).

Equitable objected, arguing that Grievance 08–28 requires a decision about whether the Union still represents an appropriate bargaining unit of employees post-reorganization. And so, the argument went, Grievance 08–28 is “primarily representational” and thus within the NLRB's exclusive jurisdiction. This Court rejected Equitable's argument and ordered the matter to arbitration. Equitable has since filed a motion to alter that judgment under Federal Rule of Civil Procedure 59(e), again arguing that Grievance 08–28 is “primarily representational.”

DISCUSSION

What does it mean for a dispute over a collective bargaining agreement to be “primarily representational”? A dispute is run-of-the-mill “representational” if it somehow implicates an employer's statutory duty under 29 U.S.C. § 158(a)(5) to bargain collectively with a union chosen under 29 U.S.C. § 159(a) to represent all of the employees in an “appropriate” bargaining unit by a majority of those employees. Carey v. Westinghouse Elec. Corp., 375 U.S. 261, 266, 84 S.Ct. 401, 11 L.Ed.2d 320 (1964). It is “primarily” so—and thus within the “exclusive” jurisdiction of the NLRB—in at least two circumstances. Int'l Bhd. of Elec. Workers, Local 71 v. Trafftech, Inc., 461 F.3d 690, 693, 695 (6th Cir.2006) (citations omitted). A dispute is primarily representational either (1) where the NLRB “has already exercised jurisdiction over” it, id., or (2) where the dispute requires an “initial decision in the representation area.” Id. (quoting Hotel & Restaurant Employees Union Local 217 v. J.P. Morgan Hotel, 996 F.2d 561, 565 (2d Cir.1993)).

Contrary to this Court's earlier decision, Grievance 08–28 is primarily representational because it requires “an initial decision in the representation area.” That is, an arbitrator “could not possibly determine whether there has been a violation of the collective bargaining agreement without first deciding whether” the Union remained the § 9(a) representative of the former Kentucky–West employees. Id. (quoting Amalgamated Clothing & Textile Workers Union v. Facetglas, Inc., 845 F.2d 1250, 1253 (4th Cir.1988)). Recall that Grievance 08–28 complains that Equitable did not promise to negotiate a new collective bargaining agreement with the Union in its notice of termination. Yet Equitable would only be permitted to negotiate a new agreement if the Union remained a proper § 9(a) bargaining representative on behalf of former Kentucky–West employees. See NLRB v. Local Union No. 103, Iron Workers, 434 U.S. 335, 344, 98 S.Ct. 651, 54 L.Ed.2d 586 (1978); Nova Plumbing, Inc. v. NLRB, 330 F.3d 531, 534 (D.C.Cir.2003); cf. DiPonio Const. Co., Inc. v. Int'l Union of Bricklayers, 739 F.Supp.2d 986, 993 (E.D.Mich.2010) (“[W]hether [the employer] has an ‘obligation to bargain’ turns on whether a section 9(a) relationship exists.”). And so, to the extent the reorganization of Kentucky–West raised questions about the Union's continued representational status under § 9(a), those questions must be resolved before Grievance 08–28 can be.

In turn, the reorganization did indeed pose questions about the Union's continued § 9(a) status. Cf. Martin Marietta Chems., 270 N.L.R.B. 821, 822 (1984) (holding that corporate reorganization that affects employee grouping raises “a question concerning representation”). In order to be an exclusive representative for a group of employees, the Union must enjoy majority support from an “appropriate” bargaining unit. 29 U.S.C. § 159(a); cf. NLRB v. Burns Int'l Sec. Servs., Inc., 406 U.S. 272, 280–81, 92 S.Ct. 1571, 32 L.Ed.2d 61 (1972) (holding that if a change in corporate employer meant that employee bargaining unit was “no longer an appropriate one,” the employer may not have a duty to bargain with the union as a § 9(a) representative). And—as the Union might not even dispute—splitting Kentucky–West employees among two other companies with their own employees meant that it was at least possible that the former Kentucky–West employees were no longer an “appropriate” bargaining unit under the NLRA. Cf. NLRB v. Security–Columbian Banknote Co., 541 F.2d 135, 139 (3d Cir.1976) (noting the possibility that a “change in the control of a business enterprise [could] destroy[ ] a pre-existing bargaining unit”). Perhaps they are no longer geographically close to one another, no longer perform the same kind of work, no longer interact with one another frequently, or no long have common supervision. See Robert A. Gorman & Matthew W. Finkin, Basic Text On Labor Law Unionization and Collective Bargaining 87–88 (2d ed. 2004) (listing criteria for determining an appropriate bargaining unit). Or, maybe some employees who did not originally support union representation now comprise a majority of a subset transferred to one of the two companies. Or, maybe that subset of employees, when combined with the employees at the new location, would not support the union.¹Id. at 89. Hence, deciding whether Equitable may bargain with the Union as the employees' representative—the essence of Grievance 08–28—necessarily requires a decision on a representational issue. Namely, the decision maker must decide whether the Union continues to represent an “appropriate” bargaining unit. Cf. S. Prairie Constr. Co. v. Local No. 627, Int'l Union of Operating Engineers, AFL–CIO, 425 U.S. 800, 805, 96 S.Ct. 1842, 48 L.Ed.2d 382 (1976) (holding that it was inappropriate for a court, rather than the NLRB, to make “the initial determination” as to an appropriate bargaining unit); Amalgamated Clothing, 845 F.2d at 1253 (holding that issue was primarily representational partly because it required deciding bargaining unit membership); ...