Case Study 10-1. Are These Grievances Arbitrable?

Case Study Questions (Based on case study below):

1. Assess the union’s argument that the parties in the past have agreed to extend time limits.
2. Should the arbitrator be influenced by any evidence over the reasons for the termination of those two employees?
3. What are the company’s best evidence and arguments?
4. What are the union’s best evidence and arguments?
5. You be the arbitrator. How will you rule? Are these grievances arbitrable?

Case Study Background:

Background

Manchester T & E is a company which produces propane cylinders. The International Workers represents the bargaining unit employees at the Blue Ridge, Georgia plant.

Grievance No. 27–97 which is subject of this arbitration was filed on December 18, 2007, on behalf of Bob Boyce. Mr. Goode wrote:

Nature of Complaint:

The Union contends that on 12/16/07 the Company violated Article VII not to exclude any other Articles or Sections pertaining to the contract.

To satisfy this grievance the Union will accept that Bob Boyce be placed back to work with all pay that he has lost which would be all straight pay and overtime pay. 

On December 22, 2007, Mr. Sam Smallwood, personnel manager, denied the grievance.

Grievance No. 27–97 was appealed to the third step, and Mr. Smallwood denied the grievance on January 13, 2008.

The union appealed Grievance No. 27–97 to the third step, and Mr. Smallwood denied the grievance on January 13, 2008.

On January 21, 2008, Mr. Goode wrote the following note:

The Union wishes that Grievance number 27–97 be appealed to Arbitration.

 On March 25, 2008, Mr. George H. Mason, business representative, wrote the following letter to Mr. Smallwood.

The Company’s answer to the above mentioned grievance(s) has been deemed unsatisfactory to the Union. Pursuant to Article V, Section 5, of the current Collective Agreement, the Union will proceed to arbitration.

Issue

 Is Grievance No. 27–97 arbitrable? That is, can the arbitrator consider the Grievance on its merits? Or is an arbitrator precluded from hearing the case–in this instance because of alleged procedural irregularities?

Relevant Provisions of the Collective Bargaining Agreement 

Article V: Grievance Procedure and Arbitration 

Section 2. Time Limits. If an appeal is not made in the prescribed time limit following the company’s answer at any step of the foregoing procedure, the grievance shall be considered settled on the basis of the company’s answer, and not subject to further action of any kind. If the company does not answer the grievance in accordance with the foregoing procedure, the grievance shall be settled on the basis of the union’s request in said grievance.

The time limits for presentation, answer, and appeal on a grievance at any step are absolute and binding upon both parties, unless such time limits are extended by mutual agreement.

Section 5. Arbitration. If the director of human resources’ written answer in Step 3 is deemed unsatisfactory, the union may elect to submit the grievance to arbitration. A grievance not settled in Step 3 must be appealed to arbitration by written notice to the director of human resources, or his representative. Such notice shall be mailed by certified mail, return receipt requested, and must be postmarked no later than ten (10) normal working days after the date of the 3 answer.

Both parties shall have the opportunity to present evidence and to argue that grievance orally and/or in writing. The arbitrator shall make a written decision and award, in accordance with the evidence, which shall not alter, add to, or subtract from the terms of this agreement. The arbitrator shall have no power to substitute his discretion for that of the company in any matter where the company has not expressly contracted away its right allowing an arbitrator to exercise such discretion. Such written decision shall be binding upon the company, the union, and the aggrieved employee

Positions of the Parties

The Company

The company argued that, under the terms of this agreement, the union may proceed to arbitration when it is dissatisfied with the company’s resolution of a grievance in its Step 3 answer. As a prerequisite, the union must provide the company with timely and proper notice of its intent to proceed to arbitration. To be considered timely and proper, the notice must comply with the simple and straightforward provisions set forth in Article V, Section 5, of the agreement. Article V, Section 5, provides: “A grievance not settled in Step 3 must be appealed to arbitration by written notice to the Director of Human Resources, or his representative. Such notice shall be mailed by Certified Mail, Return Receipt Requested, and must be postmarked no later than ten (10) normal working days after the date of the Step 3 Answer.” The straightforward language clearly and unambiguously states that a notice of intent to arbitrate must meet three requirements. First, the notice must be in writing. Second, it must be delivered to the company personally within ten days of the Step 3 answer. In addition, Article V, Section 5, states that time limits are absolute and binding upon both parties unless extended by mutual agreement.

The company claimed that the union is seeking to persuade the arbitrator that the company should be forced to arbitrate Grievance No. 27–97 despite the union’s failure to provide the company with timely and proper notice of its intent to arbitrate this Grievance. Mr. George Mason provided the company with written notice; however, this notice was clearly untimely, because it was well beyond ten working days after the company’s Step 3 denial.

Since the union failed to provide timely notice of its intent to arbitrate the grievances at issue, the union has attempted to characterize a handwritten note from its chief steward Goode to the company’s representative, Sam Smallwood, as a request for an extension of the time limits. The union’s attempt to characterize a handwritten note as a request for an extension of time for Grievance No. 27–97 is wholly without merit.

The union has failed to either request arbitration in accordance with the mutually agreed upon terms of the agreement or to obtain a mutually agreed upon extension of the time. Therefore, this grievance is not procedurally arbitrable. The express terms of Article 5, Section 2, state that, as a result of the union’s failure to appeal the company’s Step 3 answers to arbitration within the prescribed time limit, “the grievance[s] shall be considered settled on the basis of the company’s answer[s], and not subject to further action of any kind.” According to this straightforward contractual language, this grievance was rendered settled on the basis of the company’s Step 3 answer.

The company never explicitly or implicitly agreed to extend the time limits on this grievance. In response to the union’s untimely request, the company immediately raised the timeliness issue. The company has insisted on strict compliance with procedural requirements throughout its bargaining relationship with the union and has never waived compliance with the procedural provisions of the grievance and arbitration process, even when the result was detrimental to the company.

The company reviewed its version of the facts. On December 16, 2007, the company discharged Bob Boyce for fighting in the plant. On December 18, 2007, a timely grievance was filed. On December 22, 2007, Mr. Smallwood issued step 2 denial on the grievance. The grievance proceeded to the Step 3 of the grievance procedure on January 13, 2008, and the company denied the grievance on this same date.

On January 21, 2008, Mr. Goode, submitted a handwritten note to Mr. Smallwood, which stated: “The Union wishes that Grievance numbers 22-97, 23-97, 24-97, 25-97 be put on hold until the next 3rd Step meeting, and that Grievance number 27-97 be appealed to arbitration.” Mr. Smallwood interpreted the note exactly as it was written. Grievance Nos. 22-97, 23-97, 24-97, and 25-97 were put on hold. Mr. Goode’s note, however, was not treated by the company as a formal demand for the arbitration of Grievance Nos. 27-97 because it was clearly not provided in accordance with the agreement. Mr. Smallwood expected the union to follow up with a formal request.

Mr. George Mason, the union’s business representative, eventually provided the company with a formal written request, as required by the agreement. However, this request was postmarked March 25, 2008, many weeks beyond the time requirements set out in Article V, Section 5, which expressly requires the union to make a formal demand for arbitration within ten working days after the company’s Step 3 denial. The company’s Step 3 denials were issued on January 13, 2008, and the union’s formal request for arbitration was received on March 26, 2008, well over two months later. Upon receipt of the union’s untimely request, the company immediately responded by letter to Mr. Mason and denied the union’s request for the arbitration of Grievance No. 27-97 as untimely and not in compliance with the agreement.

The company stated that it has maintained a longstanding policy of requiring strict compliance with time limitations of the grievance procedure throughout the bargaining relationship with the union. The evidence established this practice and illustrated that the company has uniformly denied untimely requests for arbitration and has enforced contractual time limits even when detrimental to its own position.

The company claimed that it uniformly honors timely requests for arbitration. The evidence established that in the past the union has consistently provided its requests for arbitration in a timely manner. In response to the union’s timely requests, the company has complied in good faith with the agreement and proceeded to arbitration. When the union complies with the time limitations set forth in the contract, the company upholds its part of the bargain and proceeds to arbitration.

The company argued that the agreement does not permit the arbitrator to modify the contract. Therefore, the arbitrator should enforce the contract in accordance with its plain and unambiguous language. Article V, Section 5, specifically states that the arbitrator “shall not alter, add to, or subtract from the terms of this agreement.” This is the intent of the parties as expressed by clear contractual language, which governs resolution of contract disputes rather than the preference of the arbitrator.

In this case, the contract clearly sets forth the procedural requirements for requesting arbitration. The evidence firmly established that the union failed to request arbitration of Grievance No. 27–97 in accordance with these clear and unambiguous requirements.

The company concluded:

Based on the reasons set forth above, grievance No. 27–97 is not procedurally arbitrable and should be denied.

The Union:

The union stated that on or about December 11, 2007, the company terminated the employment of Bob Boyce, and the union filed grievances on his behalf. This grievance was appealed through the grievance procedure, and the company’s final answer, dated January 13, 2008, was “no violation, grievance denied.” Subsequent to the company’s final grievance answer, the company took the position that the grievance had become untimely and therefore not arbitrable.

The union presented testimony and documentation by the local lodge chief Steward, Mr. Ralph Goode. Mr. Goode has worked for the company for 17 years and has been chief steward of the local union for six of those years. Mr. Sam Smallwood, personnel manager, is Mr. Goode’s counterpart in management. Mr. Goode pointed out that both the union and the company from time to time have reasons for extending the grievance time limits, and Mr. Goode presented to Mr. Smallwood a document extending the time limits on Grievance No. 27–97.

The union claimed that the company did not object to the above mentioned document’s request. Mr. Goode recalled that neither party has ever rejected the other’s request for time extensions. At the time of this arbitration, there were seven grievances with time deferrals and the oldest was 11 months. The union deferred the time limits of Grievance No. 27–97 because the parties were in contract negotiations. On some occasions, issues could be resolved around those negotiations meetings without formal proposals being made. However, the union and company could not resolve Grievances No. 27–97 in negotiations, and the union sent a letter to the company appealing the grievances to arbitration.

The union argued that Article V, Section (2), Grievance Procedure and Arbitration, provides that the parties through mutual agreement may extend the time limits of grievances in process. For the past six years the parties have honored each other’s request to defer time limits. Mr. Goode testified that he requested time limit deferrals on all grievances mentioned in his correspondence of January 21, 2008, and that the company did not object to his request. During the contract negotiations, the company and the union were attempting to resolve Grievance No. 27–97. The union argued: “It flies in the face of reason that the company would discuss a grievance during negotiations and then later decide the grievance was untimely.” When the company and the union exhausted their attempts to resolve Grievance No. 27–97, during their bargaining sessions, the union properly appealed the grievance to arbitration.

The union concluded:

For all the foregoing reasons, the union requests that Grievances No. 27–97 be ruled arbitrable and the company be directed to arbitration.