Teamsters Local 856 v. Delta Dental of Cal.

• Decision Date: 26 November 2017
• Docket Number: Case No. 16-cv-04325-JCS
• Parties: TEAMSTERS LOCAL 856, Plaintiff, v. DELTA DENTAL OF CALIFORNIA, Defendant.
• Court: U.S. District Court — Northern District of California

TEAMSTERS LOCAL 856, Plaintiff, v. DELTA DENTAL OF CALIFORNIA, Defendant.

Case No. 16-cv-04325-JCS

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA

November 26, 2017

ORDER RE MOTIONS FOR SUMMARY JUDGMENT

Re: Dkt. Nos. 34, 35

I. INTRODUCTION

In this action, Petitioner Teamsters Local 856 ("Union") seeks an order vacating the arbitration decision that Arbitrator Catherine Harris ("the Arbitrator") issued on April 25, 2016 pursuant to the grievance procedure contained in the collective bargaining agreement ("CBA") between the Union and Respondent Delta Dental of California ("Employer" or "Delta"). Presently before the Court are the parties' cross-motions for summary judgment ("Motions"). A hearing on the Motions was held on November 17, 2017. For the reasons stated below, the Court DENIES the Union's Motion for Summary Judgment ("Plaintiff's Motion") and GRANTS Delta's Motion for Summary Judgment (Defendant's Motion").¹

II. BACKGROUND

A. The Parties

The Union is "a labor organization and the exclusive collective bargaining representative of the clerical employees employed by Respondent Delta Dental of California at its facilities located in San Francisco and Rancho Cordova, California, with headquarters located in SanBruno, California." Petition ¶ 2. According to the Petition, Delta is engaged in the business of providing dental insurance benefits and has its headquarters in San Francisco, California. Id. ¶ 3.

B. Relevant Provisions of the Collective Bargaining Agreement

The CBA governs the relationship between Delta and the Union during the relevant period. See Declaration of Betsy Johnson in Support of Respondent Delta Dental of California's Motion for Summary Judgment ("Johnson Decl."), Ex. B (CBA), Preamble (stating that CBA came into effect on May 31, 2012 and is "considered renewed from year to year subsequent to the expiration date unless either party hereto gives written notice to the other party of a desire to alter, modify or change" the CBA). The authority of an arbitrator to adjudicate disputes under the CBA is set forth in Section 30, "Adjustment of Grievances," which provides in relevant part:

c) If the four (4) members of the adjustment board are unable to settle a dispute, either party may request that the unresolved issue be submitted to an arbitrator for final and binding decision. [...] The arbitrator shall have no power to add to, delete or modify any terms of this Agreement.

Id. at 12.

Section 35(a) of the CBA, entitled "Maintenance of the Bargaining Unit," allows Delta to reduce bargaining unit positions that become vacant, but subsection (b) sets a bargaining unit floor of 375, providing as follows:

b) The Employer shall not reduce the bargaining unit below 375 for any reason. Any new part-time positions created shall be considered on a full-time equivalent (FTE) basis toward the bargaining unit floor of 375. If the company reaches the negotiated bargaining unit floor of 375, and an event of external major business impact occurs, the parties agree to meet and confer to discuss the effects of such an event on the business, and neither party waives any of its current legal rights.

Id. at p. 14. Section 36 of the CBA, "Protection of Work," further provides:

It is the company's intent to avoid the layoff of bargaining unit employees during the term of the agreement. Therefore, bargaining unit employees shall not be laid off, except where necessary due to circumstances beyond the company's control, as defined herein. Circumstances beyond the company's control include: significant loss of business accounts, circumstances outlined in Section 38, an act of nature, war emergency, government or regulatory action significantly affecting the company or the dental insurance market; provided the circumstance has a material and substantial impact on the company. In the event of such a circumstanceresulting in a material and substantial impact on the company, the company will meet and confer with the Union prior to making the decision to layoff any bargaining unit employees. Nothing in this Section shall be interpreted to contradict the provisions of Section 35, setting forth the bargaining unit floor of 375.

Id. (language of particular significance to the parties' dispute highlighted and in bold). Finally, Section 38 of the CBA, entitled "Automation," provides:

In the event of a reduction of work force by reason of introduction of new equipment or a change in methods of operations, existing employees shall be retained in such jobs as remain or are created in accordance with their seniority standing.

Id. at 15. It is undisputed that the language of Section 38 governing automation has been in the CBA, without change, since "at least 1965 or [1966]." See Declaration of Andrew H. Baker in Support of Plaintiff's Motion for Summary Judgment ("Baker Decl."), Ex. E (Arbitration Hearing Transcript, Day Two) at 196.

C. Negotiation of the Collective Bargaining Agreement

The parties commenced negotiations with respect to he current CBA on November 1, 2013 and held five meetings in connection with the negotiations. Baker Decl., Ex. E (Arbitration Transcript, Day Two) at 175, 179. The individuals who participated in the negotiations on behalf of Delta were: 1) Rick Doering, Delta's senior vice president of human resources, id. at 149, 173; 2) Teri Forestieri, Delta's HR director, id.at. 149, 232; and 3) Bruce Conhain, who is a labor consultant who served as Delta's primary spokesperson in the negotiations. Id. at.149, 175, and 195. The individuals who participated in the negotiations on behalf of the Union are: 1) The Union's vice president, Rudy Gonzalez, who served as the Union's principal spokesperson in the negotiations, id., Ex. D (Arbitration Transcript, Day One) at 21-22; and 2) Sarah Sanford-Smith, an attorney for the Union who drafted many of the proposals and was the official note-taker for the negotiations. Id. at 20-21.

A particularly contentious issue in the negotiations related to job protections for Union members. At a negotiation session on November 13, 2013, the Union introduced its initial proposals for the CBA, including one entitled "No Layoffs," providing employee protection from layoffs due to subcontracting and transferring of work, and another, entitled "Minimum Staffing,"containing a minimum staffing floor of 600 employees. Baker Decl., Ex. G (Union Ex. 1 at p. 5, Union Ex. 2).² Delta did not accept these proposals, and at the negotiation session on November 20, 2013 it presented a formal counterproposal to the Union's job protection proposals. Baker Decl., Ex. D (Arbitration Hearing Transcript, Day One) at 31-32; id., Ex. G (Union. Ex. 4 at p. 5, and Union Ex. 5). This counterproposal had a structure similar to the Union's job protection proposals, but it re-captioned as "Protection of Work" the clause the Union had captioned "No Layoffs," excluded print shop and commercial data entry jobs from that clause, and, with respect to the "Minimum Staffing" clause, weakened the language proposed by the Union, changing the phrase "The Employer shall not reduce the bargaining unit below 600" to "[t]he Employer does not intend to reduce the bargaining unit below 150." Id.

Later during the same meeting, the Union presented a revised proposal related to "Job Protection" in which it introduced a new section, entitled "Maintenance of the Bargaining Unit." Baker Decl., Ex. D (Arbitration Hearing Transcript, Day One) at 36; id., Ex. G (Union Ex.. 4 at p. 7 and Union Ex. 6). That section read, in relevant part, as follows:

It is the company's intent to avoid the layoff of bargaining unit employees during the term of the agreement. Therefore, bargaining unit employees shall not be laid off, except where necessary due to circumstances beyond the company's control, as defined herein. Circumstances beyond the company's control include: significant loss of business accounts, an act of nature, war emergency, government or regulatory action significantly affecting the company or the dental insurance market; provided the circumstance has a material and substantial impact on the company. In the event of such a circumstance resulting in a material and substantial impact on the company, the company will meet and confer with the Union prior to making the decision to layoff any bargaining unit employees. (Nothing in this Section shall be interpreted to contradict the provisions of B, below.)³

Baker Decl., Ex. G (Union Ex. 6). Notes of the negotiations reflect that the Union offered this section in an effort to "be reasonable" and in recognition of the fact that while the Union wanted to "guarantee jobs" "there might be things outside of [the Employer's] control that impact [the][E]mployer's ability to operate." Baker Decl., Ex. G (Union Ex. 4 at p. 7) (reflecting statements by Union negotiator Rudy Gonzalez about the reason the Union was proposing the new section).

At the same meeting, Delta responded to the Union's proposal, offering a section that was almost identical to the "Maintenance of the Bargaining Unit" section quoted above, except that it added the words "except as otherwise provided for in this agreement" after the word "Therefore" in the second sentence of the section. Baker Decl., Ex. D (Arbitration Hearing Transcript, Day One) at, p. 42; id., Ex. G (Union Ex. 7).

The parties resumed negotiations on November 22, 2013 and at that time discussed the addition of the words "except as otherwise provided for in this agreement." Baker Decl., Ex. D (Arbitration Hearing Transcript, Day One) at 42. According to Sanford-Smith, Union vice president Gonzalez asked why Delta had inserted this language and Delta spokesman Bruce Conhain responded that it was necessary because otherwise, the new section would render "null" the existing Automation provision and Delta "wanted the ability to lay off people" "if some new process or new equipment changed the way they did business." Baker Decl., Ex. D (Arbitration Hearing...