On July 2, 2009, the United States Court of Appeals for the Third Circuit decided United Steel v. E.I. Dupont de Nemours and Company, No. 08-1911. In two consolidated cases, Plaintiffs are unions who were seeking to compel Defendants, employers of the unions’ members, to arbitrate Plaintiffs’ grievances about unilateral changes the Defendants made to employee benefit plans. In both cases, the lower court granted summary judgment in favor of the unions on the grounds that: (1) a collective bargaining agreement (“CBA”) between the parties provided for arbitration; and (2) there is no strong and forceful evidence that the parties intended to exclude these disputes from arbitration.
In appealing the lower courts’ determinations, Defendants contended that the Plaintiff’s grievances are disputes over benefit eligibility and, thus, should be resolved using the dispute resolution provisions of the Summary Plan Description rather than the CBA. Moreover, Defendants argued that ERISA, which governs the employee benefit plans maintained by Defendants, mandates that benefit eligibility disputes of this nature should be resolved by the designated ERISA fiduciary.
In affirming the determination of the lower courts, the Third Circuit noted that the arbitration clauses in the CBAs at issue were broadly worded. Specifically, the New Jersey CBAs provide for arbitration of grievances “relating to the interpretation or to any alleged violation” of those CBAs, while the Delaware CBA provides for arbitration of “[a]ny question as to the interpretation, or any alleged violation, of any provision of” that CBA. There was no express provision in any of the CBAs that excluded Plaintiffs’ grievances. Therefore, a presumption of arbitrability applied and Defendants could only overcome this presumption by showing forceful evidence of a purpose to exclude these claims from arbitration.
The Court determined that there was no forceful evidence that the parties did not intend to submit these disputes to arbitration. In rejecting Defendants’ argument which characterized the grievances as disputes about “benefit eligibility”, the Court found the disputed issue is not whether any particular employee was eligible under the terms of the plan, but rather whether Defendants violated the CBAs by unilaterally modifying its terms. Moreover, the Court noted that were it to accept Defendants’ characterization of the grievances, this would eliminate any opportunity for a meaningful challenge to Defendants’ unilateral plan amendments and thereby thwarting the CBAs’ arbitration clauses. As such, the Court affirmed the determination of the lower courts.
I read this article two times but I am sorry, I cannot understand English lawyer talk. There are a lot of blogs that deal with legal issues, but somehow I got friends with them :) I was curious to know if unions always win in America, as they do back in Romania, where I am writing from. I just had a training on the negotiation between employees and employers and the consultant who trained us said that the cases when the workers don’t win are extremely rare. The law helps them a lot here.