Oil, Chemical & Atomic Workers International Union Local 5-391 v. Conoco, Inc. ( 2003 )

F I L E D
United States Court of Appeals
Tenth Circuit
MAY 7 2003
UNITED STATES COURT OF APPEALS
PATRICK FISHER
Clerk
TENTH CIRCUIT
OIL, CHEMICAL AND ATOMIC
WORKERS INTERNATIONAL UNION
LOCAL 5-391; LOCAL 5-857 OIL,
CHEMICAL & ATOMIC WORKERS
INTERNATIONAL UNION, sued as: Oil,
Chemical & Atomic Workers International
Union (AFL-CIO) and its Local 5-857,
Labor Organizations,
Nos. 01-5222 & 02-5000
(D.C. No. 97-CV-682-H)
Plaintiffs - Appellees
(N. District of Oklahoma)
- Cross-Appellants,
v.
CONOCO, INC., a Delaware corporation,
Defendant - Appellant
- Cross-Appellee.
ORDER AND JUDGMENT *
Before TACHA, Chief Judge, LUCERO Circuit Judge and ROBINSON **,
District Judge.
*
This order and judgment is not binding precedent, except under the
doctrines of law of the case, res judicata, and collateral estoppel. This court
generally disfavors the citation of orders and judgments; nevertheless, an order
and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3.
**
The Honorable Julie A. Robinson, United States District Judge for the
District of Kansas, sitting by designation.
This case has previously been before us. Oil, Chem. & Atomic Workers
Int’l Union v. Conoco, Inc., 241 F.3d 1299, 1301 (10th Cir. 2001). Following our
remand, the district court parsed the parties claims as to the arbitrability of union
grievances under several collective-bargaining agreements (“CBAs”), and referred
certain issues to arbitration while holding others not arbitrable as a matter of law.
We now consider cross-appeals from both Conoco, Inc. (“Conoco”) and the Oil,
Chemical and Atomic Workers International Union (AFL-CIO) and its Local 5-
857 (“the Union”). Exercising jurisdiction pursuant to 28 U.S.C. § 1291, we
affirm in part and reverse in part.
I
Under the terms of three separate CBAs, the Union filed numerous
grievances against Conoco, challenging, inter alia, Conoco’s handling of certain
job reductions at its Ponca City, Oklahoma refinery. 1 Each CBA contains a
provision entitled “Settlement of Grievances,” which provides:
A grievance is a dispute or conflict between the Company and the Union as
to the interpretation or application of the terms of this Agreement.
....
Only differences arising between the Union and the Company relating to
interpretation or performance of this Agreement which cannot be adjusted
by mutual agreement and have gone through the grievance procedure are
arbitrable, except as otherwise provided in this Agreement.
1
The three collective-bargaining agreements include: (1) the “Refinery
Agreement”; (2) the “Technology Agreement”; and (3) the “Clerical Agreement.”
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(Appellant’s App. at 94–95.) When the parties could not settle the grievances
through the initial grievance procedure outlined in the CBAs, the Union requested
arbitration. Conoco refused, citing the “Management’s Rights” provision
contained in each CBA, which provides:
Grievances originating under [this Management’s Rights Clause] are
subject to the grievance procedure but cannot be submitted to arbitration;
and no arbiter has the authority to rule on [this clause] with the exception
of determination of just cause. . . .
(Id. at 71 (emphasis added).) In each of the CBAs, this Management’s Rights
Clause sets forth certain functions that are “solely the responsibility of
management,” including “[h]iring, maintaining order, and discipline or discharge”
and “the assignment of work subject only to other provisions of [the Agreement].”
(Id. at 70 (emphasis added).) Thus, the CBAs are subject to the grievance and
arbitration process in their entirety, except for grievances “originating” under the
Management’s Rights Clause. Conoco refused the Union’s requests for
arbitration on the theory that each of the grievances filed by the Union
“originates” under the Management’s Rights Clause without implicating other
terms of the CBA.
In July 1997, the Union brought suit against Conoco, seeking to compel
arbitration of the grievances. In a Joint Statement as to Grievance Classifications,
the parties placed the grievances into four separate categories. The first three
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categories of grievances relate to Conoco’s use of contract workers at its Ponca
City, Oklahoma refinery, while the fourth category relates to the use of a non-
bargaining-unit member to perform certain clerical work. On May 20, 1999, the
district court issued an order sending all the grievances to arbitration without
determining arbitrability. Oil, Chem. & Atomic Workers Int’l Union v. Conoco,
Inc., No. 97-CV-682-H, slip op. at 2 (N.D. Okla. May 20, 1999). However, the
Tenth Circuit vacated and remanded this order, holding that Conoco was entitled
to a ruling on the arbitrability of the Union’s grievances before being compelled
to submit to arbitration. Oil, Chem. & Atomic Workers Int’l Union, 241 F.3d at
1301. On remand, the district court determined that: (1) grievances in Category
One and Category Two are arbitrable, and must be submitted to arbitration; (2)
the Category Three grievance is moot; and (3) the Category Four grievances are
not arbitrable as a matter of law. Conoco now appeals the district court’s
determination that grievances in Category One and Category Two are arbitrable;
the Union, on cross-appeal, argues that grievances in Category Three and
Category Four should also be sent to arbitration.
II
We review de novo the question of whether a dispute is arbitrable under a
collective-bargaining agreement. O’Connor v. R.F. Lafferty & Co., Inc., 965 F.2d
893, 901 (10th Cir. 1992). In determining whether the parties have agreed to
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arbitrate an issue, we are guided by certain well-established rules. First,
“arbitration is a matter of contract and a party cannot be required to submit to
arbitration any dispute which he has not agreed so to submit.” United
Steelworkers of Am. v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582
(1960). The second rule, “follow[ing] inexorably from the first,” AT&T Techs.,
Inc. v. Communications Workers of Am., 475 U.S. 643, 649 (1986), is that “the
question of arbitrability is an issue for judicial determination [u]nless the parties
clearly and unmistakably provide otherwise,” Howsam v. Dean Witter Reynolds,
Inc., 123 S. Ct. 588, 591 (2002) (alteration in original) (quotation omitted).
Third, in reviewing the parties’ grievances, the court is not to rule on the potential
merits of the underlying claims. AT&T, 475 U.S. at 649. As the Supreme Court
has noted, “[w]hether ‘arguable’ or not, indeed even if it appears to the court to
be frivolous, the union’s claim that the employer has violated the collective-
bargaining agreement is to be decided, not by the court asked to order arbitration,
but as the parties have agreed, by the arbitrator.” Id. at 649–50. Finally, there is
a presumption of arbitrability, meaning that an “order to arbitrate the particular
grievance should not be denied unless it may be said with positive assurance that
the arbitration clause is not susceptible of an interpretation that covers the
asserted dispute. Doubts should be resolved in favor of coverage.” Id. at 650(emphasis added) (quotation omitted). “[O]nly the most forceful evidence of a
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purpose to exclude the claim from arbitration can prevail.” Id. at 651 (quotation
omitted). This principle “recognizes the greater institutional competence of
arbitrators in interpreting collective-bargaining agreements.” Id. at 650.
With these principles in mind, we consider the four categories of
grievances.
III
The first two categories relate to Conoco’s use of contract workers at its
Ponca City, Oklahoma refinery. Conoco argues that its use of contract workers is
governed solely by Article 12 of the Refinery Agreement, the Management’s
Rights Clause of this particular CBA, which gives the Union the right to transfer
employees and to assign work. Because the dispute originates under the
Management’s Rights Clause, Conoco argues, this issue is not arbitrable as a
matter of law. In response, the Union emphasizes that under the Management’s
Rights Clause, Conoco’s rights are “subject . . . to other provisions [in the]
Agreement.” (Appellant’s App. at 70–71.) The question presented, therefore, is
whether Conoco’s right to transfer and assign work in this instance is indeed
limited by “other provisions [in the] Agreement.” (Id.)
According to the Union, Article 36 of the Refinery Agreement limits
Conoco’s right to contract out work in two important ways, rendering the dispute
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concerning Conoco’s use of contract workers arbitrable. First, Article 36
provides:
The Company agrees that it will not bring contractors into the plant to
perform production or maintenance work if it will result in the lay-off of
regular, full-time employees.
(Id. at 97.) In the instant case, employees were not separated from service, but
transferred into the general labor pool. Concluding that the term “lay-off,” as
used in the Agreement, “unequivocally requires a separation from service,” the
district court found that the first limitation in Article 36 was not implicated. 2 Oil,
2
Article 8 provides:
TERMINATION OF REGULAR, FULL-TIME EMPLOYEES DUE TO
FORCE REDUCTION
The Company shall give the Union 90 days’ written notice
prior to the termination of regular, full-time employees due to a force
reduction. During the 90-day period, the Company will discuss this
matter with the Union for the purpose of determining ways and
means of avoiding the force reduction or lessening the effect on the
employees involved.
The Ponca City Refinery bargaining unit employee with the
most recent date of regular, full-time status will be the first employee
laid-off.
(Appellant’s App. at 69.)
Article 34 explains the procedure by which layoffs and recalls are to be
accomplished:
LAYOFF AND RECALL
34-1 In the event of a force reduction in the Ponca City Refinery,
casual, temporary, and probationary employees in the
bargaining unit will be laid off first. After all the casual,
temporary, and probationary employees are laid off, the
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Chem. & Atomic Workers Int’l Union v. Conoco, Inc., No. 97-CV-682-H, slip op.
at 6 (N.D. Okla. Nov. 19, 2001). While the Union does not contend that there
have been separations from service, it nevertheless maintains that because Union
employees were given lower-paying jobs, there have been constructive lay-offs
implicating Article 36. We disagree. Insofar as the term “lay-off” is clearly used
in the Refinery Agreement to indicate a separation from service, a condition not
present in any of the grievances, there is no need to send this issue to arbitration.
We conclude that interpretation of the first limitation in Article 36 is unnecessary
and, thus, the grievances in question are not arbitrable under this provision as a
matter of law.
A second limitation contained in Article 36 provides:
In addition, maintenance craft work will not be contracted as long as there
are employees holding numbers in the crafts in which work is contracted
working as laborers. 3
employee with the most recent date of regular, full-time status
who is a bargaining unit employee in the Ponca, City Refinery
at the time of the force reduction will be the first employee
laid off. . . .
(Id. at 96.)
3
A person “holds a number” if he is assigned to a position in a recognized
department or craft, which is referred to at the Conoco refinery as a “progression
unit.” (Appellant’s App. at 51.) Each progression unit consists of two kinds of
employees: “full numbers” who are full-time workers in the progression, and
“replacement numbers” who are people who fill in when the full numbers are not
available. (Id. at 21.) “Holding numbers” refers to full numbers and replacement
numbers. (Id.)
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(Appellant’s App. at 97.) According to Conoco’s interpretation of this provision,
when a Union-represented employee is removed from his craft and transferred to a
different position (including the position of laborer), that employee loses his
number. If Conoco subsequently hires a contract worker to fill the slot in the
craft from which the Union employee was just transferred, Article 36 is not
implicated because that Union-represented employee no longer holds a number in
the craft. Because Article 36 is not implicated, agues Conoco, there is no
limitation on management’s rights under Article 12 and the matter is not
arbitrable as a matter of law.
In response, the Union argues that this interpretation would render nugatory
the second limitation on the use of contract workers in Article 36 because it
would effectively allow Conoco to destroy the Union by replacing all Union-
represented employees holding a number in a craft with contract workers. A more
reasonable interpretation of Article 36, the Union argues, is that “so long as there
are employees holding numbers in a particular craft, no contractor will work in
that craft.” (Id. at 21.)
Because our inquiry is limited to deciding arbitrability, we do not decide
which interpretation is the stronger. Under Article 31 of the Refinery Agreement,
differences arising between the Union and Conoco relating to the interpretation or
performance of the Agreement (except for those disputes that “originate” under
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Article 12) are arbitrable. Given these competing interpretations of the second
limitation in Article 36, and keeping in mind the presumption of arbitrability,
AT&T, 475 U.S. at 650, we are unable to say “with positive assurance that the
arbitration clause is not susceptible of an interpretation that covers the asserted
dispute,” id. Thus, we conclude that the district court was correct to find that an
interpretation of the second limitation in Article 36 is necessary to resolve the
grievances at issue.
IV
The Category Three grievance presents precisely the same issue we
considered in Categories One and Two above, with one difference: the individual
involved, Virgil Palmer, is no longer employed by Conoco. This fact, coupled
with the fact that the only remedy sought for Palmer was that Conoco “recognize
Mr. Palmer’s seniority ranking and keep him in the transportation progression,”
led the district court to conclude that the grievance is moot and therefore not
arbitrable as a matter of law. Oil, Chem. & Atomic Workers Int’l Union, slip op.
at 7 (N.D. Okla. Nov. 19, 2001).
On appeal, the Union argues that the issue of mootness is itself a question
that should be resolved by an arbitrator. In considering whether the question of
mootness is a “question of arbitrability,” Howsam, 123 S. Ct. at 591, we note that
although “one might call any potentially dispositive gateway question a ‘question
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of arbitrability,’ . . . for purposes of applying the interpretive rule, the phrase
‘question of arbitrability’ has a far more limited scope.” Id. at 592. For
example, in Howsam, the Supreme Court held that the issue of whether the statute
of limitations has run is a question for the arbitrator, notwithstanding the fact that
an Article III court could have easily interpreted and applied the NASD rule in
the circumstances of that case. In inventorying the issues that are not “questions
of arbitrability” subject to review by the courts, i.e., time limits, notice, laches,
and estoppel, the Supreme Court did not address mootness. Nevertheless, it is
evident that the inquiry involved in assessing whether a statute of limitations has
run (when a cause of action has accrued or expired) is akin to a mootness inquiry
(when a cause of action is no longer viable) for purposes of determining questions
of arbitrability. 4
Furthermore, in Howsam, the Court noted that the phrase “question of
arbitrability” is limited to “the kind of narrow circumstance where contracting
parties would likely have expected a court to decide the gateway matter.” Id.While the Refinery Agreement does not specifically address who should decide
questions of mootness, the Supreme Court has held that when faced with a broad
4
In Howsam, the particular statute of limitations involved was a NASD
time-limit rule. While this fact had some bearing on the Court’s determination,
the Court’s references to time-limit rules generally suggest that the Court’s
holding is not limited to only those time-limit rules belonging to a particular
arbitral body.
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arbitration clause, as we are in the instant case, “only the most forceful evidence
of a purpose to exclude the claim from arbitration can prevail.” AT&T, 745 U.S.
at 650. We can find no evidence to suggest that the parties intended, in agreeing
to send nearly all grievances to arbitration, that the question of whether those
grievances were moot should not also be sent to arbitration.
Given the tightly circumscribed role that the courts are assigned in
determining arbitrability, and considering that arbitrators have broad equitable
powers to fashion remedies, it is not for us to decide that a remedy will not be
available for a particular grievance. As discussed herein, the underlying dispute
regarding Article 36 presents an issue of interpretation for the arbitrator and must
be sent to arbitration. While our fealty to Supreme Court precedent may stand us
accused of hyper-technicality, nonetheless, we conclude that the issue of
mootness is also a question for the arbitrator, and reverse the judgment of the
district court on this issue.
V
Category Four contains two grievances arising under the Clerical
Agreement. In the first instance, the Union challenges the posting of the position
of “Yields Analyst” in the company’s Candidate Generation system on the
grounds that “[t]he responsibilities listed for this position are currently performed
by the represented employees in the Yields Department” and therefore must
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“continue to be filled by represented personnel.” (Appellant’s App. at 251.)
Conoco refused to arbitrate the grievance on the grounds that the Management’s
Rights portion of the Clerical Agreement, Article 16, makes clear that the deletion
and creation of jobs, including the right to discontinue any part or all of the office
and clerical activities, is within Conoco’s management’s rights, a fact that the
Union does not contest. Thus, Conoco argues that this grievance originates solely
under the Management’s Rights Clause and is not subject to arbitration.
As in the other CBAs previously discussed, the Management’s Rights
provision in the Clerical Agreement is “subject . . . to other provisions of this
Agreement.” The Union argues that Articles 1 and 5 constitute such “other
provisions” and limit Conoco’s ability to delete and create jobs under Article 16.
Article 5 of the Clerical Agreement is entitled “Job Classifications and Rates and
Pay,” incorporating appendices listing various job classifications with
corresponding rates of pay. Article 1 of the Clerical Agreement is entitled
“Recognition,” and provides:
The Company hereby recognizes the Union as the sole and exclusive
representative for the purposes of collective bargaining with respect to rates
of pay, wages, hours of employment, and other conditions of employment,
for the employees . . . UNIT: INCLUDED: All offices and clerical
employees in Conoco Inc.’s Ponca City, Oklahoma, refinery . . . .
(Id. at 137.) Concluding that there is nothing in Articles 1 or 5 that requires
interpretation such that an arbitrator is necessary to decide whether this grievance
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falls within the Management’s Rights article of the Clerical Agreement, the district
court refused to send the Category Four grievances to arbitration. We agree with
this conclusion. There is simply nothing in Articles 1 or 5 that places any
limitation on Conoco’s right to create and define the Yields Analyst position.
Thus, because Articles 1 and 5 are not even arguably implicated, there is nothing
to interpret and the grievance cannot be submitted to arbitration as a matter of law.
The second grievance in Category Four involves an incident in which a non-
Union employee prepared and distributed retirement books, a function the Union
maintains is strictly clerical and can only be performed by a represented employee.
The Union concedes, however, that distribution of retirement books has been
performed by management-level employees in the past, and that, under Article 16,
Conoco has the right to assign work unless other provisions in the CBA place a
limitation on Conoco’s management’s rights in this context. According to the
Union, however, Articles 5 and 7 represent such “other provisions” and limit
Conoco’s power under Article 16 in this situation. Article 5 lists job
classifications and Article 7 allows vacancies to be filled by seniority. After
careful review of the parties’ arguments and the relevant articles in the CBA, we
conclude that Articles 5 and 7 place no limitations on Conoco’s Management’s
Rights relevant to the challenged conduct, and no interpretation by an arbitrator is
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required. Thus, we affirm the district court’s refusal to send this grievance to
arbitration.
VI
For the foregoing reasons, the judgment of the district court is AFFIRMED
in part and REVERSED in part.
ENTERED FOR THE COURT
Carlos F. Lucero
Circuit Judge
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01-5222/02-5000, Oil, Chemical & Atomic Workers v. Conoco
TACHA, Chief Circuit Judge, dissenting in part.
I join the court’s opinion as to Parts I, II, IV, and V. I respectfully dissent
as to Part III.
The Union argues that the grievances in Categories 1 and 2 originate under
Article 36, which states:
[Paragraph 1] The Company agrees that it will not bring contractors
into the plant to perform production or maintenance work if it will
result in the lay-off of regular, full-time employees.
[Paragraph 2] In addition, maintenance craft work will not be
contracted as long as there are employees holding numbers in the
crafts in which work is contracted working as laborers.
I agree with the majority that Paragraph 1 is not implicated on the facts of
this case because, contrary to the Union’s contention, none of the employees
involved in the grievances at issue was laid off. In the Refinery Agreement, the
term “lay-off” refers to a separation from service. Because the Union did not even
contend that any of the employees at issue were separated from service, the district
court properly held that those grievances did not arise under Paragraph 1.
Accordingly, the Category 1 and 2 grievances are not arbitrable as a matter of law.
Contrary to the majority’s holding, however, Paragraph 2 does not apply
either. First, it is not clear to me why an ostensible difference of interpretation as
to the literal, unglossed meaning of Paragraph 2 is sufficient to force the parties to
arbitration, while an ostensible difference of interpretation as to the meaning of
“lay-off” in Paragraph 1 is not. The majority relies on the plain meaning of
Article 36 (Paragraph 1), Article 8, and Article 34 to hold as a matter of law that
none of the grievances arises under Paragraph 1; so, presumably the distinction
lies in the degree of certainty with which we may establish that the plain language
of each provision does or does not support a grievance. But the plain meaning of
Paragraph 2 is just as clear, to me, as that of Paragraph 1; indeed, we need not
look beyond Paragraph 2 itself to hold as a matter of law that none of the
grievances before us arises under it.
Paragraph 2 applies only to “employees holding numbers in the crafts in
which work is contracted” who are “working as laborers.” In other words, unless
(1) an employee holding a number in a particular craft is (2) working as a laborer
elsewhere in the refinery when (3) contractors are hired to do work in that craft,
Paragraph 2 is not implicated and, as a matter of law, no grievance arises
thereunder. Because the Union has failed to point to a single employee who was
(1) holding a number while (2) working as a laborer when (3) Conoco hired
contractors in the relevant craft, Paragraph 2 is not implicated on the facts of this
case.
By declining to give any effect to the words “working as laborers” the
district court and the majority impermissibly broaden Paragraph 2 beyond its plain
meaning. The district court stated that
Conoco’s reading of [Paragraph 2] in effect allows the company to
transfer Union-represented employees to the position of laborer, and
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immediately replace them with contract workers because, from the
moment of transfer and thereafter, there was no Union-represented
employees with a number in the craft. Under this interpretation, the
limitation imposed by [Paragraph 2] is rendered meaningless.
Oil, Chem. & Atomic Workers Int’l Union v. Conoco, Inc., No. 97-CV-682-H, slip
op. at 6-7 (N.D. Okla. Nov. 19, 2001) (emphasis added). It is not, however,
Conoco’s “reading” of the provision that allows it to do so; it is the plain language
of the contract. I can discern no interpretive gloss whatsoever in Conoco’s
supposed “interpretation.” Conoco merely reiterates the plain language of the
contract, which requires that employees holding numbers in a craft be working as
laborers when Conoco contracts work in that craft.
Nor is it accurate to say that the provision is entirely meaningless. It is
almost meaningless. In situations where a represented employee holding a number
in a craft is working elsewhere in the refinery as a laborer, and work in that craft
is available, Paragraph 2 of Article 36 prohibits Conoco from hiring contractors to
do it. But that is the only restriction Paragraph 2 imposes. I believe, therefore,
that the district court erred in stating that “since an interpretation of Article 36 is
necessary to resolve this dispute, under the express provisions of Article 31 of the
Refinery Agreement the issue is for an arbitrator to decide.” Id. at 7. The only
question presented is whether the grievance arises under the plain language of
Article 36. Because it clearly does not, there is no reason to remove the issue
from the ambit of Article 12. Indeed, if all that is necessary for the Union to force
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Conoco to arbitration is the bare allegation that a grievance arises outside of
Article 12 – i.e., that it requires an “interpretation” of some other Article – there
would never be any call for us to examine the contractual language, and every
grievance would be de facto arbitrable. Whatever we may think of Paragraph 2,
we simply cannot rewrite the CBA to suit ourselves.
By repeating the Union’s claim that Conoco’s interpretation will permit
Conoco to destroy the Union by attrition, the majority appears to have made the
same error as the district court. Maj. op. at 9. The Union’s ostensibly more
reasonable interpretation of Paragraph 2 (“so long as there are employees holding
numbers in a particular craft, no contractor will work in that craft”) omits any
consideration whatsoever of the final three words of Paragraph 2 (“working as
laborers”). These words impose a significant and unambiguous limitation on the
scope of Paragraph 2, one that removes the grievances at issue from its ambit.
They require no interpretation, and removing them from consideration drastically
alters the plain meaning of Paragraph 2. For this reason, I disagree with the
majority’s statement that “competing interpretations of the second limitation in
Article 36” render the relevant grievances arbitrable.
The record amply demonstrates that, from the outset, the substance of the
Union’s grievances under Paragraph 2 has been that Article 36 prohibits Conoco
from hiring contractors to work “side by side” with Union members. However
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one-sided the provision as agreed to by the parties may be, such an interpretation
is impossible without pruning the final three words from Paragraph 2. This we
may not do.
For these reasons, I respectfully dissent.
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