Teamsters Local Union No. 89 v. The Kroger Co
| Decision Date | 25 August 2010 |
| Docket Number | No. 09-5534.,09-5534. |
| Parties | TEAMSTERS LOCAL UNION NO. 89, Plaintiff-Appellee,v.The KROGER CO., Defendant-Appellant,International Brotherhood of Teamsters, Counterclaim Defendant. |
| Court | U.S. Court of Appeals — Sixth Circuit |
ARGUED: Timothy P. Reilly, Taft Stettinius & Hollister LLP, Cincinnati, Ohio, for Appellant. Frederick Perillo, Previant, Goldberg, Uelman, Gratz, Miller & Brueggeman, Milwaukee, Wisconsin, for Appellee. ON BRIEF: Timothy P. Reilly, John B. Nalbandian, Daniel J. Hoying, Taft Stettinius & Hollister LLP, Cincinnati, Ohio, for Appellant. Frederick Perillo, Nathan D. Eisenberg, Previant, Goldberg, Uelman, Gratz, Miller & Brueggeman, Milwaukee, Wisconsin, for Appellee.
Before: COLE and McKEAGUE, Circuit Judges; MAYS, District Judge. *
Plaintiff-Appellee Teamsters Local Union No. 89 (“Local 89” or “the Union”) represents employees in a Kentucky warehouse operated by Defendant-Appellant The Kroger Co. (“Kroger”). The parties negotiated a collective bargaining agreement governing labor relations at that warehouse. Local 89 filed two grievances alleging that Kroger violated this agreement by subcontracting out operations to third parties employing non-Local 89 members. Kroger refused to arbitrate these grievances, and Local 89 filed suit to compel arbitration. The district court granted Local 89 summary judgment on its claim to compel arbitration. Kroger appeals that decision. We AFFIRM the judgment of the district court.
Local 89 is a local affiliate of the Counterclaim Defendant International Brotherhood of Teamsters (“IBT”) and represents warehouse and transportation employees at Kroger's warehouse facility in Louisville, Kentucky, known as the Kentucky Distribution Center (“the KDC”). Kroger and the Teamsters Kroger National Negotiating Committee, which represented Local 89 and five other local IBT affiliates, negotiated a collective bargaining agreement governing the industrial relations between the unions and Kroger (“the Master Agreement”), which by its terms is in effect from September 11, 2005, through September 10, 2011. Pursuant to the Master Agreement, Kroger and Local 89 also executed a supplemental agreement to govern specific issues at the KDC (“the Local Supplement”), which runs concurrently with the Master Agreement.
The Master Agreement specifically addresses arbitration, subcontracting, and termination of the contract. Article 8 establishes dispute-resolution procedures, which culminate in binding arbitration. These grievance procedures, including the final step of arbitration, cover “any grievance [,] dispute[,] or complaint over the interpretation or application of the contents of [the Master] Agreement” raised by “any employee.” (District Court Record Entry (“R.E.”) 65-3, at 15.)
Article 25 of the Master Agreement addresses subcontracting. Under Section 25. 1, Kroger has the right to subcontract work assigned to the collective bargaining unit but is prohibited from subcontracting such work “for the purpose of circumventing the terms and provisions” of the Master Agreement to an outside company that does not provide similar wages and conditions of employment. Section 25.3, entitled “Continuity of Employment,” provides that if Kroger decides to contract out its entire KDC warehouse or transportation operations, or both, during the term of the agreement, “then a condition of such subcontract shall be offers of employment to eligible employees (as defined in Appendix I), by the new employer, provided that the new employer requires that number or more to perform such services.” (R.E. 65-4 at 4.) Appendix I, which outlines additional job-security provisions, defines “eligible employees” as “all employees who have continuously been on a regular seniority list for at least three (3) years as of December 12, 2005.” ( Id. at 12.) This appendix also requires Kroger to offer comparable employment at the nearest similar facility covered by the Master Agreement to any eligible employee “who is permanently laid-off before September 11, 2011, as a direct result of [Kroger] transferring, subcontracting or closing all or part of any distribution center or manufacturing plant operation covered by a Local Supplement to this Agreement.” ( Id.) Appendix I explicitly subjects disputes over its interpretation and application to the arbitration provisions in the Master Agreement.
Finally, Article 36 of the Master Agreement addresses contract termination. Section 36.1, entitled “Effective Dates,” states that the agreement “is effective from September 11, 2005 through September 10, 2011 and year to year thereafter,” unless one of the parties-through its designated negotiating committee-notifies the other party of its desire to terminate or modify the agreement in writing at least 120 days before September 10, 2011. ( Id. at 11.) Section 36.2, entitled “Notice to Terminate or Modify,” requires that if either party wishes to terminate or modify the Local Supplement, that party must give the other party notice ninety days prior to September 11, 2011.
In October 2006, Kroger announced that it would subcontract out its KDC warehouse and transportation operations. Kroger contracted with Transervice Logistics Inc. (“Transervice”) for transportation operations and with Zenith Logistics Inc. (“Zenith”) for warehouse operations. On February 15, 2007, Kroger transferred the transportation operations to Transervice and Transervice hired all of Kroger's KDC transportation employees. On February 22, 2007, Kroger transferred the warehouse operations to Zenith, and Zenith hired all of Kroger's KDC warehouse employees. Since that date, Kroger has not directly employed any members of Local 89.
Following Kroger's October 2006 announcement, Local 89 entered into negotiations with Transervice, Zenith, and Kroger, respectively. In April 2007, Local 89's negotiations regarding new collective bargaining agreements with Transervice and Zenith broke down, and Local 89 struck Transervice and Zenith on April 18 and 19. Subsequently, Local 89 and Kroger entered into an agreement (“the Letter of Understanding”), which was to go into effect only if Local 89 entered into ratified labor agreements with Transervice and Zenith and which, like the Master Agreement, is set to expire on September 10, 2011. Local 89 subsequently entered into separate collective bargaining agreements with Transervice and Zenith.
The Letter of Understanding addresses outstanding grievances under the Master Agreement, the provision of retiree health benefits, and future changes to Kroger's subcontracting policies at the KDC. In regards to grievances, Local 89 agreed to withdraw several outstanding grievances, including ones it had filed alleging that Kroger's subcontracting to Transervice and Zenith violated the subcontracting provisions included in Article 25 of the Master Agreement. Also, Kroger agreed to make certain pension contributions and pay settlements based on specified past grievances. Finally, the parties agreed that “Kroger will meet with Teamsters Local 89 and either resolve any outstanding grievances resulting from their employment with Kroger or permit the grievance to proceed through the Kroger Master Grievance Process.” (R.E. 65-12, at 2.) The Letter of Understanding does not address future grievances explicitly.
Regarding retiree health benefits, Kroger agreed to require any successors to Transervice and Zenith to provide retiree health coverage to employees (and their eligible dependants) who retire before September 10, 2011, comparable to the coverage provided under the Master Agreement. Kroger also “agree[d] to continue the current practice of providing retiree health care for already retired former employees from the operations that were transferred.” ( Id. at 1.)
Finally, in regards to future changes to Kroger's KDC subcontracting arrangements, the Letter of Understanding states:
If between the date of this Agreement and September 10, 2011, Kroger determines to terminate either of its agreements with Transervice or Zenith and to retransfer or subcontract the work then being performed in, at or from the [KDC] including without limitation all inside or driving work to any third party different from Transervice or Zenith, then Kroger will require that all terms of this Letter of Understanding and the job security provisions of the [Transervice and Zenith labor agreements] ... shall be a condition of the retransfer or resubcontracting to any third parties.... Such retransfer or resubcontracting shall not take place absent the assumption of the terms of this Letter of Understanding by such third parties. If at any time Kroger should decide to discontinue the subcontracting or transfer of all or any portion of the work subject to this Agreement and reassume such operations as the employer, Kroger agrees to directly employ all bargaining unit members then performing the reassumed work. Such employees shall be covered by the Kroger Master Agreement bargaining unit. The terms and conditions of their employment will be governed by the Master Agreement, and the Local 89 Supplement covering such employees.
( Id. at 1-2.)
Sometime after the Letter of Understanding was executed, Local 89 discovered that Kroger was subcontracting out work previously done by Local 89 members to companies other than Transervice and Zenith, who were not subject to a collective bargaining agreement. On May 9, 2007, Local 89 filed a formal class-action grievance alleging that Kroger violated Article 25 of the Master Agreement and a provision included in a side agreement attached as an addendum to the Local Supplement that addresses which drivers are given priority when extra deliveries are needed. The grievance...
To continue reading
Request your trial
-
36th Dist. Court v. Mich. Am. Fed'n of State, Cnty. & Municipal Emps. Council 25, Local 917
...circuit courts of appeal that hold the same as did the J & N Steel court, including the Sixth Circuit in Teamsters Local Union No. 89 v. Kroger Co., 617 F.3d 899, 906–907 (C.A.6, 2010). Indeed, numerous federal courts have concluded that when the contract contains a broad arbitration clause......
-
Teamsters Local Union No. 89 v. Kroger Co.
...status.” ( citing AM Prop. Holding Corp., 350 NLRB 998 (2007)enforced, 647 F.3d 435 (2d Cir.2011)); Teamsters Local Union No. 89 v. Kroger Co., 617 F.3d 899, 910 (6th Cir.2010).DISCUSSION Both Kroger and the Union request summary judgment under Fed.R.Civ.P. 56(a), which states that “[t]he c......
-
Payne v. Briggs
...agreement may be enforced even where there are no longer any employees in the relevant bargaining unit. Teamsters Local Union No. 89 v. Kroger Co., 617 F.3d 899, 906–07 (6th Cir.2010) (affirming order compelling arbitration of union's grievance against employer). Thus, a collective bargaini......
-
Vanpamel v. TRW Vehicle Safety Sys., Inc.
...benefit claims.Analysis This Court reviews de novo the district court's decision to compel arbitration. Teamsters Local Union No. 89 v. Kroger Co., 617 F.3d 899, 904 (6th Cir.2010). This Court “must determine whether the dispute is arbitrable, meaning that a valid agreement to arbitrate exi......