Warehouse Production and Maint v. Zenith Logistics, Inc. ( 2008 )

RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206
File Name: 08a0455p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
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WAREHOUSE, PRODUCTION, MAINTENANCE
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AND MISCELLANEOUS EMPLOYEES,
FURNITURE, PIANO AND EXPRESS DRIVERS -
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No. 08-3267
AND HELPERS LOCAL UNION NO. 661,
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>
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affiliated with the International Brotherhood
Plaintiff-Appellant, -
of Teamsters,
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v.
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Defendant, -
ZENITH LOGISTICS, INC.,
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THE KROGER COMPANY, KROGER LIMITED
Defendants-Appellees. -
PARTNERSHIP I,
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Appeal from the United States District Court
for the Southern District of Ohio at Cincinnati.
No. 06-00846—Michael R. Barrett, District Judge.
Argued: December 9, 2008
Decided and Filed: December 23, 2008
Before: GILMAN, SUTTON, and KETHLEDGE, Circuit Judges.
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COUNSEL
ARGUED: Julie C. Ford, DOLL, JANSEN & FORD, Dayton, Ohio, for Appellant.
Timothy P. Reilly, TAFT, STETTINIUS & HOLLISTER, Cincinnati, Ohio, John W.
Fischer, DENLINGER, ROSENTHAL & GREENBERG, Cincinnati, Ohio, for Appellees.
ON BRIEF: Julie C. Ford, DOLL, JANSEN & FORD, Dayton, Ohio, for Appellant.
Timothy P. Reilly, Daniel Joseph Hoying, TAFT, STETTINIUS & HOLLISTER, Cincinnati,
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No. 08-3267 Warehouse, Production v. The Kroger Company, et al. Page 2
Ohio, John W. Fischer, DENLINGER, ROSENTHAL & GREENBERG, Cincinnati, Ohio,
for Appellees.
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OPINION
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KETHLEDGE, Circuit Judge. Warehouse, Production, Maintenance and
Miscellaneous Employees, Furniture, Piano and Express Drivers and Helpers Local Union
661 (“Union”) appeals the dismissal of its complaint against The Kroger Company and
Kroger Limited Partnership I (collectively, “Kroger”). The complaint sought to compel
Kroger’s participation in an arbitration conducted pursuant to the Union’s collective
bargaining agreement with another company, Zenith Logistics, Inc. (“Zenith”). The district
court determined the complaint was filed outside the applicable statute of limitations. We
agree, and affirm.
I.
Kroger owns a warehouse in Woodlawn, Ohio. In November 1998, it leased the
warehouse to Zenith, which began providing Kroger with various storage and transportation
services from the warehouse. Zenith hired virtually all of Kroger’s warehouse employees.
Zenith also negotiated and implemented a new collective bargaining agreement between
itself and the Union. Kroger was not a signatory to the agreement.
Zenith thereafter hired an outside company to do “freight dock” and salvage work
at the warehouse. That work had previously been done by Union employees. In response,
the Union sent grievances to both Zenith and Kroger on January 21, February 2, and April
7, 2006. The International Brotherhood of Teamsters (“Teamsters”) also sent a letter to
Kroger on January 30, and itself filed grievances with both Zenith and Kroger on February
21, February 23, and April 3, 2006.
On February 3, 2006, John Wagner, Kroger’s Vice President of Labor Relations, sent
a letter to the Teamsters with a copy to the Union, responding to both the Union’s January
21 grievance and the Teamsters’ January 30 letter. Wagner stated that “[i]t appears that both
of these letters are addressed to the wrong party.” He continued, “[m]y understanding is that
No. 08-3267 Warehouse, Production v. The Kroger Company, et al. Page 3
the hourly employees are employed by Zenith Logistics, and that Zenith and the Teamsters
have entered into a collective bargaining agreement. Kroger is not a party to such
agreement; therefore, Local 661 should direct its grievance to Zenith and not Kroger.”
In response, the Teamsters acknowledged Kroger’s position but requested that
Kroger become involved anyway, under the terms of a separate agreement between Kroger
and the Teamsters. Kroger wrote back to the Teamsters on March 2, 2006, stating that “any
grievances or disputes Local 135 and 661 have with Zenith Logistics are for those unions
and that employer to resolve and not for [Kroger] . . . . Kroger will not intrude in the labor
relations of Zenith Logistics or any other employer[.]”
The Union next sent a letter to Kroger on April 15, 2006, enclosing a copy of its
April 7 grievance, and acknowledging that “[s]o far Kroger has not participated in the
grievance process with Zenith on the subcontracting grievances.” The letter gave notice,
however, that “[t]he Union intends to proceed with these grievances, including with regard
to the joint employer issue, with or without Kroger’s participation. It is the Union’s position
that Kroger is a party to these grievances and that it is bound by the outcome even if it
chooses not to participate[.]”
Nine days later, on April 24, 2006, Kroger Vice-President Wagner responded:
“Please be advised that I have already responded . . . regarding Kroger’s positions of [sic]
your grievances with Zenith Logistics. I am inclosing [sic] copies of both letters for you to
review. Kroger’s position has not changed[.]” Wagner enclosed Kroger’s letters of
February and March. The Union did not write back to Kroger. It later sent a formal request
for arbitration only to Zenith.
On June 14, 2006, the Union filed for arbitration—the last step in the grievance
process—naming both Zenith and Kroger as parties. The next day, the American Arbitration
Association (“AAA”) sent Kroger a letter identifying potential arbitrators for the grievance.
Kroger responded by sending a letter to the Union on June 22, 2006, with a copy to the
AAA. The letter stated that “since Kroger does not employ the Zenith employees and is not
a party to the collective bargaining agreement at issue in this grievance, Kroger is not a
proper party to the arbitration and will not participate in the arbitration.”
No. 08-3267 Warehouse, Production v. The Kroger Company, et al. Page 4
The Union filed its complaint to compel arbitration on December 13, 2006. Kroger
moved to dismiss the complaint pursuant to Fed. R. Civ. P. 12(b)(6), on limitations grounds.
The district court granted the motion. This appeal followed.
II.
Although the district court viewed Kroger’s motion as one seeking dismissal under
Rule 12(b)(6), we construe it as a motion for summary judgment under Rule 56(c) because
its resolution depends on matters neither included in nor referred to in the complaint. See
Yeary v. Goodwill Indus.-Knoxville, Inc., 107 F.3d 443, 445 (6th Cir. 1997). In either event,
“[w]e review de novo a district court’s determination that a complaint was filed outside the
applicable statute of limitations.” Cook v. Comm’r of Soc. Sec., 480 F.3d 432, 435 (6th Cir.
2007).
The parties agree that the Union’s complaint to compel arbitration is subject to a six-
month statute of limitations. This period is borrowed from section 10(b) of the National
Labor Relations Act, 29 U.S.C. § 160(b), and rests in part on our assumption that a union,
more so than an individual employee, “should be . . . capable of discerning when an
agreement has been breached and litigation is necessary.” McCreedy v. Local Union No.
971, UAW, 809 F.2d 1232, 1239 (6th Cir. 1987). The six-month period begins to run “when
the employer takes an unequivocal position that it will not arbitrate.” Id. at 1237.
The issue here is when, exactly, Kroger took such a position. The district court held
that Kroger did so on April 24, 2006—the date on which Kroger responded to the Union’s
April 15, 2006 letter. The Union presents several arguments in response. The first is that
Kroger’s April 24 letter did not refer specifically to arbitration, and thus cannot be
understood as an unequivocal refusal to arbitrate.
The context of that letter refutes the Union’s argument. By April 24, Kroger had
already twice told the Teamsters and the Union—in letters dated February 3 and March
2—that it was not a party to the operative agreement and would not participate in any aspect
of the grievances, presumably including arbitration. We specifically do not hold that the
February and March letters themselves amounted to an unequivocal refusal to arbitrate; that
bar is placed high, and we mean to keep it there. But those letters were at most only mildly
No. 08-3267 Warehouse, Production v. The Kroger Company, et al. Page 5
equivocal on the subject, if only because they dealt with the grievance process generally,
rather than arbitration specifically. The letters are thus one relevant circumstance in
determining what the Union should have understood Kroger’s later correspondence to have
meant.
It was the Union’s own April 15 letter that dealt specifically with arbitration. That
letter declared the Union’s intention to “proceed with these grievances . . . with or without
Kroger’s participation.” It also stated the Union’s belief that “the evidence will show that
Kroger is a joint employer with Zenith,” even though “[s]o far Kroger has not participated
in the grievance process[.]” (Emphasis added.) Unlike arbitration, none of the other
grievance procedures, as described in the collective bargaining agreement, mention the
submission of evidence.
More importantly, the letter stated “the Union’s position that Kroger is a party to
these grievances and that it is bound by the outcome even if it chooses not to participate[.]”
(Emphasis added.) The only grievance procedure that could “bind” Kroger is arbitration.
See Agreement between Truck Drivers, Chauffeurs and Helpers Local Union No. 661 and
Zenith Logistics, Inc., Article 25 (“[t]he decision of the arbitrator shall be binding on the
Employer, the Union, and the grievant”).
The Union’s April 15 letter thus narrowed the Union’s focus from grievance
procedures generally, to arbitration specifically. And Kroger’s April 24 letter in
response—which was nothing if not unequivocal—made clear that Kroger would have
nothing to do with it. At that point, there remained no equivocation as to Kroger’s position
with respect to arbitration. That Kroger did not use the word “arbitration” in its April 25
letter is—under the circumstances of this case—immaterial. See In re Diamond D Constr.
Corp., 15 F. Supp. 2d 274, 289 (W.D.N.Y. 1998) (“the unequivocal refusal standard does
not turn on whether the party resisting arbitration has . . . uttered the magic words ‘we refuse
to arbitrate this dispute’”). What matters is that, by any reasonable measure, the Union
should have understood Kroger’s April 24 response to be an unequivocal refusal to arbitrate.
The Union next argues that Kroger could not have unequivocally refused arbitration
before May 19, 2006, because the Union did not formally request arbitration until then. Our
published caselaw, however, does not make a formal request to arbitrate a prerequisite to the
No. 08-3267 Warehouse, Production v. The Kroger Company, et al. Page 6
commencement of the limitations period. In McCreedy, for example, we held that the
limitations period began when the employer unequivocally denied the employees’
grievances, even though the union had never sent the employer a formal request for
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arbitration. 809 F.2d at 1237.
The focus is thus on the employer’s position, not the Union’s conduct. There are
good reasons for that focus. Theoretically, under the Union’s approach, even if the
employer states that, “under no circumstances, ever, will we arbitrate this dispute,” the
Union could still prevent the commencement of the limitations period, and thus prolong
the dispute, merely by withholding a formal request. See Aluminum, Brick & Glass
Workers Int’l Union, AFL-CIO, CLC v. General Refractories Co., No. 94-6139, 1995
WL 283771, at *3 (6th Cir. May 10, 1995) (“a limitations period could be extended
indefinitely simply by making an untimely request for arbitration”). That would only
stultify the statute. This case illustrates the point: the Union sent its formal request for
arbitration only to Zenith, without even a copy to Kroger; so by the Union’s reasoning,
the limitations period for its claim against Kroger would not have commenced even now.
Thus, what is required is not “rejection” of a union’s formal request, but refusal
to arbitrate. See Int’l Union v. Cummins, Inc., 434 F.3d 478, 483 (6th Cir. 2006) (the
limitations period commences when the employer “unequivocally communicate[s] its
refusal to arbitrate”). And an employer can make such a refusal clear enough even in
advance of a formal request.
Finally, the Union contends that Kroger’s refusal to arbitrate was unclear because
certain of Kroger’s communications, including its letter of February 3, were directed to
the Teamsters, with only a copy to the Union. Whether the Union was identified on the
“to” or the “cc” line of the relevant correspondence, however, is immaterial under the
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Our unpublished decision in Pace Int’l Union AFL-CIO v. Vacumet Paper Metalizing Corp., 91
F. App’x 380, 382 (6th. Cir. 2004), is not to the contrary. There, an employer’s refusal to arbitrate could
not have been unequivocal, and in context was premature, because it depended on a premise that was still
in doubt (namely, whether the employee had waived his right to arbitration). Id. Absent some clearer
statement by the employer as to the basis for its argument, the employer’s refusal was not unequivocal.
Here, nothing further was needed for the Union to know that Kroger had no intention of arbitrating the
Union’s claim, since there was no question that the claim arose under an agreement to which Kroger
asserted it was not a party and under which Kroger insisted it had no direct or indirect obligations.
Whether or not Kroger was correct in its assertion, its position was unequivocal.
No. 08-3267 Warehouse, Production v. The Kroger Company, et al. Page 7
circumstances of this case. What counts is that the Union received Kroger’s letters, and
that the letters made clear, no later than April 24, 2006, that Kroger would not participate
in arbitration.
Consequently, the limitations period for the Union’s claim to compel arbitration
began to run on that date. The Union filed its complaint more than six months later, on
December 13, 2006. The complaint was therefore untimely.
III.
For these reasons, we affirm the judgment of the district court.