AMERICAN FEDERATION OF STATE, COUNTY AND MUNICIPAL EMPLOYEES, LOCAL 77 v. DUKE UNIVERSITY

IN THE UNITED STATES DISTRICT COURT

FOR THE MIDDLE DISTRICT OF NORTH CAROLINA

AMERICAN FEDERATION OF STATE, )

COUNTY AND MUNICIPAL )

EMPLOYEES, LOCAL 77, )

)

Plaintiff, )

) 1:20CV180

v. )

)

DUKE UNIVERSITY, )

)

Defendant. )

MEMORANDUM OPINION AND ORDER

This case comes before the Court on (1) “Plaintiff’s Motion to

Compel Arbitration and for Attorneys’ Fees” (Docket Entry 9) (the

“Arbitration Motion”) and (2) the parties’ Rule 26(f) Reports

(Docket Entries 17, 18). For the reasons that follow, the Court

will grant in part and deny in part the Arbitration Motion1 and

stay discovery pending resolution of the arbitration proceedings.

BACKGROUND

Seeking to compel arbitration of a grievance, the American

Federation of State, County and Municipal Employees, Local 77 (“the

Union”), initiated this lawsuit against Duke University (“Duke”).

(See Docket Entry 1.) Duke filed an Answer, which asserted that

the Union had failed to timely file the grievance and had thus

1 For the reasons stated in Scales v. SSC Winston-Salem

Operating, Co., No. 1:17cv539, 2017 WL 4467278, at *1 n.1 (M.D.N.C.

Oct. 5, 2017), the undersigned United States Magistrate Judge will

enter an order rather than a recommendation regarding the

Arbitration Motion.

“substantively forfeited the ability to challenge the decisions and

actions by [Duke] that [the Union] wishes to arbitrate.” (Docket

Entry 12 at 4–5.)

The Union separately filed the Arbitration Motion, requesting

an order (1) compelling arbitration of the grievance and

(2) mandating that Duke pay the Union’s attorney’s fees and costs.

(Docket Entry 9 at 1.) According to the Union, an arbitrator must

resolve “dispute[s] over the timeliness of a grievance,” and

attorney’s fees are warranted because “Duke lacks any reasonable

justification for its refusal to arbitrate.” (Docket Entry 11 at

1–2.) In response, Duke maintains its position that the Union

forfeited the grievance by failing to timely file it and that the

parties had not agreed to arbitrate tardy grievances. (See Docket

Entry 15 at 2–3.) Duke further opposes the motion for attorney’s

fees, arguing that the request contravenes the Court’s Local Rules

as well as that both the facts and the law support its refusal to

submit to arbitration. (See id. at 19–20.)

The parties then tendered separate Rule 26(f) Reports wherein

they propose competing plans for discovery. (See Docket Entries 17

& 18.) The Union’s Rule 26(f) Report contends that “this case

presents a pure question of law and no discovery is required.”

(Docket Entry 17 at 1.) Duke’s 26(f) Report insists that

“[d]iscovery should not be postponed or limited pending

determination of [the Arbitration Motion]” and instead seeks “a

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limited discovery period.” (Docket Entry 18 at 1, 3 (emphasis in

original).)

As relevant to the Arbitration Motion and Rule 26(f) Reports,

the record reflects the following:

The Union and Duke maintain “a collective bargaining

relationship” (Docket Entry 1, ¶ 10), whereby the two have adopted

procedures for addressing grievances “between either the Union or

an employee and Duke” (id., ¶ 11; see also Docket Entry 1-1

(“Agreement” between Duke and Union dated July 1, 2017 (hereinafter

“CBA”))). Article 6 of the CBA defines a “grievance” as “a

complaint or dispute regarding the application and/or

interpretation of the express provisions of this agreement or,

other matters related to Union/Employer relations not removed by

law from the area of collective bargaining.” (Docket Entry 1-1 at

9.)

The CBA’s Article 10 provides that “[a] grievance shall be

submitted in writing within ten (10) working days following the day

on which the Union or employee first had knowledge of the facts

giving rise to the grievance.” (Id. at 14.) Article 10 further

describes a three-step process for resolving grievances, beginning

with a discussion between “the appropriate management

representative” and “[t]he employee and/or Union representative.”

(Id.) Management must reply in writing “within two (2) working

days of receipt of the grievance.” (Id.)

3

Upon referral “within three (3) working days following receipt

of [this reply],” a second step grievance hearing must occur within

three working days. (Id.) The second step hearing involves more

participants — “the manager or his/her designee of the department,

supervisor, a Labor Relations representative from the Employer, the

employee, and two (2) representatives from the Union” — and must

result in a written reply from “[t]he manager or his/her designee

of the employer” within two working days of the hearing. (Id.) A

referral to a third step procedure may follow “within five (5)

working days following the receipt of the manager’s reply.” (Id.)

The third step hearing must take place within three working

days of the referral and must include attendance of still more

individuals: “the Director of Labor Relations and/or his/her

designated representative, three (3) representatives from

management, three (3) representatives from the Union and the

nonemployee union representative.” (Id. at 15.) At this stage,

the Director of Labor Relations must furnish the reply within three

working days of the hearing. (Id.)

Pursuant to Article 11 of the CBA, “[a] grievance, as defined

in this Agreement, which is properly submitted to Step 3 of the

grievance procedure may be submitted to arbitration by the Union if

no satisfactory written answer is received within fifteen (15)

working days following the date of the third step answer.” (Id.)

Article 11 also details how and by when the parties must select an

4

arbitrator, as well as the terms and conditions that apply to every

arbitration. (See id.)

The subject grievance relates to the May 2019 termination of

Shawn Easterling (“Easterling”), “a member of the bargaining unit

represented by the Union,” who had worked for 13 years in the

housekeeping department at Duke. (Docket Entry 1, ¶ 14.) Prior to

Easterling’s termination, Duke had suspended him “with pay pending

investigation of alleged absenteeism.” (Id., ¶ 15.) By letter

dated May 20, 2019, Duke notified Easterling that “his employment

with Duke was being terminated.” (Id., ¶ 16; see also Docket Entry

1-2 (letter from Duke to Easterling dated May 20, 2019).) The

Union alleges that it did not, in accordance with Article 6 of the

CBA, receive prior notice of Duke’s intent to end Easterling’s

employment. (Docket Entry 1, ¶¶ 16, 18 (discussing provision that

“required Duke to provide advance notice to the Union before it

mailed the termination notice to [Easterling]”).)2

“On June 14, 2019, the Union filed a grievance regarding

[Easterling’s] termination (the ‘Easterling Grievance’).” (Id.,

¶ 17; see also Docket Entry 1-3 (Easterling Grievance form).) The

Easterling Grievance form identifies the sole issue as “[w]hether

[Easterling] was disciplined for just cause — did [Easterling]

2 Article 6 provides, in part: “The Union and Staff and Labor

will be notified prior to the mailing of any disciplinary action.”

(Docket Entry 1-1 at 10 (bold text and underlining omitted).)

5

violate Duke University Work Rule #162?” (Docket Entry 1-3 at 1.)°

The parties met on August 27, 2019, for the third step hearing on

the Easterling Grievance. (See Docket Entry 1, 9 19.)* The Union

thereafter notified Duke that it would submit the Easterling

Grievance to arbitration in accordance with Article 11 of the CBA.

(See id., FT 20.) “Duke then indicated to the Union that it would

not agree to arbitrate the Easterling Grievance based on its

contention that the [Easterling Grievance] was not timely filed.”

The Union maintains that an arbitrator must decide any

dispute regarding the timeliness of the Easterling Grievance and

that untimeliness does not constitute a defense to arbitration.

(See id.)

DISCUSSION

I. Arbitration Motion

A. Legal Framework

i. Preliminary Matters

At the threshold, the Union and Duke disagree about whether

the Federal Arbitration Act (“FAA”) applies to this matter. The

3 According to the termination letter sent by Duke to

Easterling, Work Rule 16 prohibits “[c]onsecutive absences of three

(3) workdays without notifying the supervisor if, by the end of the

employee’s third regular scheduled workday, such notification is

not provided in accordance with departmental procedures.” (Docket

Entry 15-1 at 16.)

4 The record does not reveal when, if ever, steps one and two

took place or whether the Union and Duke complied with the other

Article 10 requirements (including who must attend the hearings,

who must author the reply, and by when the referrals must occur).

Complaint purports to seek relief under both Section 185 of the

Labor Management Relations Act (“LMRA”) and Section 4 of the FAA.

(Docket Entry 1 at 1.) However, neither the Arbitration Motion nor

the Union’s supporting brief mentions the statutory basis for

compelled arbitration. (See Docket Entry 9 at 1; Docket Entry 11

at 1–8.)5 Duke’s response asserts that the FAA excludes CBAs,

leaving the LMRA as the sole grounds for the Union’s request to

compel arbitration. (See Docket Entry 15 at 9.) In reply, the

Union contends that “[t]he FAA applies to all employment contracts,

except those for transportation workers” (Docket Entry 16 at 2

(citing Circuit City Stores, Inc., v. Adams, 532 U.S. 105, 119

(2001))), observes that “the Union’s bargaining unit members are

not transportation workers” (id.), and concludes that the FAA

therefore applies here (see id.).

The FAA renders enforceable written arbitration contracts,

“save upon such grounds as exist at law or in equity for the

revocation of any contract.” 9 U.S.C. § 2. In relevant part, the

statute excludes from its coverage “contracts of employment of

seamen, railroad employees, or any other class of workers engaged

in foreign or interstate commerce.” Id., § 1. Previously, a

circuit split existed as to the breadth of this exemption; in

particular, the Ninth Circuit once “construe[d] the exemption so

5 As further discussed below, the brief grounds the request

for attorneys’ fees in the LMRA. (See Docket Entry 11 at 9–10.)

7

that all contracts of employment [were] beyond the FAA’s reach,

whether or not the worker [was] engaged in transportation.”

Circuit City, 532 U.S. at 109. This interpretation depended on the

scope of the phrase “any other class of workers engaged in foreign

or interstate commerce,” 9 U.S.C. § 1. See Circuit City, 523 U.S.

at 114-19 (discussing, before rejecting, “sweeping, open-ended

construction” of this language). After analyzing Section 1’s text,

Circuit City held that the provision “exempts from the FAA only

contracts of employment of transportation workers.” Id. at 119.

The parties advocate competing understandings of Circuit City.

The Union relies on out-of-Circuit cases interpreting the FAA

exclusion, in the collective bargaining context, to apply only to

such agreements that cover transportation workers. (See Docket

Entry 16 at 2 (citing IBEW, Local 111 v. Public Serv. Co. of Colo.,

773 F.3d 1100, 1106 (10th Cir. 2014), and International Bhd. of

Teamsters Local Union No. 50 v. Kienstra Precast, LLC, 702 F.3d

954, 955-56 (7th Cir. 2012)).) In contrast, Duke invokes authority

from the United States Court of Appeals for the Fourth Circuit

(predating Circuit City) and argues that, because Circuit City did

not explicitly address whether the FAA applies to CBAs, the Fourth

Circuit authority remains good law. (See Docket Entry 18 at 2-3

(citing United Elec. Radio & Mach. Workers of Am. v. Miller Metal

Prods., 215 F.2d 221 (4th Cir. 1954)).)

Duke’s contentions cannot withstand scrutiny. In Miller

Metal, the Fourth Circuit affirmed the denial of a stay to the

defendant unions, after an employer sued under the LMRA “to recover

damages for breach of a no-strike clause in a CBA,” and the unions,

pursuant to the FAA, sought to stay the judicial proceedings.

Miller Metal, 215 F.2d at 222. As grounds for the denial of the

stay, the district court relied upon International Union United

Furniture Workers v. Colonial Hardwood Flooring Co., 168 F.2d 33

(4th Cir. 1948). See Miller Metal, 215 F.2d at 222. That earlier

case had presented the same question under like circumstances, and

the Fourth Circuit there concluded that “the provisions of the

[FAA] may not be applied to th[e] contract, because it [wa]s a

contract relating to the employment of workers engaged in

interstate commerce, within the clear meaning of the exclusion

clause contained in [Section 1 of the FAA].” Colonial Hardwood,

168 F.2d at 34-35 (emphasis added). The Fourth Circuit resolved

Miller Metal on identical grounds, holding that “the provisions of

the [FAA] may not be relied on to stay proceedings in a suit

brought on a [CBA] entered into by workers engaged in interstate

commerce as those here were engaged.” Miller Metal, 215 F.2d at

224 (emphasis added).

Importantly, although Miller Metal and Colonial Hardwood both

involved CBAs (whereas Circuit City did not), those two Fourth

Circuit holdings depended on an interpretation of language in

Section 1 of the FAA that Circuit City no longer permits. In other

words, neither Miller Metal nor Colonial Hardwood involved

transportation workers, which Circuit City has since identified as

the only category of employee excluded from the FAA. The Fourth

Circuit has not explicitly overruled Miller Metal, but it has

acknowledged intervening Supreme Court authority that calls Miller

Metal into question. See American Gen. Life & Acc. Ins. Co. v.

Wood, 429 F.3d 83, 91 n.4 (4th Cir. 2005) (describing case that

excluded CBAs from the FAA and characterizing Circuit City as

having overruled that holding); O’Neil v. Hilton Head Hosp., 115

F.3d 272, 274 n.1 (4th Cir. 1997) (assuming without deciding that

Miller Metal “ha[s] any remaining vitality” and noting that the

“case predates the substantial body of Supreme Court precedent

supporting utilization of the arbitration process”); see also

O'Neil, 115 F.3d at 274 (“The circuit courts have uniformly

reasoned that the strong federal policy in favor of arbitration

requires a narrow reading of this section 1 exemption.”).

Moreover, another Fourth Circuit case that cited Miller Metal with

approval and read the FAA to exclude CBAs also relied upon Section

1’s “interstate commerce” language as the basis for the exclusion,

see Domino Sugar Corp. v. Sugar Workers Local Union 392, 10 F.3d

1064, 1067-68 (4th Cir. 1993); after Circuit City, such a holding

cannot stand (at least as to non-transportation workers), see

Circuit City, 532 U.S. at 119.

10

Here, applying Circuit City, a narrow reading of Section 1

does not exclude Easterling from FAA coverage by virtue of his

employment in the housekeeping department. Duke does not argue

otherwise but insists that the CBA, rather than the nature of

Easterling’s employment, renders the FAA inapplicable; however,

Duke fails to identify any textual support for such a categorical

exclusion. (See Docket Entry 18 at 2–3.) The Fourth Circuit’s

discussion of a rationale for excluding CBAs from the FAA, see

Miller Metal, 215 F.2d at 224 (“It appears that the exclusion

clause of the [FAA] was introduced into the statute to meet an

objection of the Seafarers International Union; and certainly such

objection was directed at including [CBAs] rather than individual

contracts of employment under the provisions of the statute.”),

cannot overcome the Supreme Court’s subsequent clear declaration

that Section 1’s exclusion reaches only contracts of employment of

transportation workers, see Circuit City, 532 U.S. at 119. The

Court thus need not resolve whether the CBA constitutes a contract

of employment because Easterling plainly does not qualify as a

transportation worker; the FAA therefore applies to this matter.

ii. Standard for Motions to Compel Arbitration

“A court may compel arbitration of a particular dispute only

when the parties have agreed to arbitrate their disputes and the

scope of the parties’ agreement permits resolution of the dispute

at issue.” Muriithi v. Shuttle Express, Inc., 712 F.3d 173, 179

11

(4th Cir. 2013). When such an agreement exists, “[a]n 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.” United Steelworkers of Am. v. Warrior & Gulf Navigation

Co., 363 U.S. 574, 582–83 (1960). “The issue whether a dispute is

arbitrable presents primarily a question of contract

interpretation . . . .” Muriithi, 712 F.3d at 179.

“Under . . . the [LMRA], district courts, applying federal law

fashioned from national labor policy, can order specific

performance of an agreement to arbitrate.” H.K. Porter Co. v.

United Steelworkers of Am., 400 F.2d 691, 693 (4th Cir. 1968). In

that regard:

[T]he federal courts have often looked to the [FAA] for

guidance in labor arbitration cases, especially in the

wake of the holding that [the LMRA] . . . empowers the

federal courts to fashion rules of federal common law to

govern suits for violation of contracts between an

employer and a labor organization under the federal labor

laws.

United Paperworkers Int’l Union v. Misco, Inc., 484 U.S. 29, 40 n.9

(1987) (internal brackets and quotation marks omitted).

Under the FAA, “[a] party aggrieved by the alleged failure,

neglect, or refusal of another to arbitrate under a written

agreement for arbitration may petition . . . for an order directing

that such arbitration proceed in the manner provided for in such

agreement.” 9 U.S.C. § 4. “To state a claim to compel arbitration

12

under the FAA, the plaintiff must allege (1) the existence of a

dispute between the parties, (2) a written agreement that includes

an arbitration provision which purports to cover the dispute,

(3) the relationship of the transaction, which is evidenced by the

agreement, to interstate or foreign commerce, and (4) the failure,

neglect or refusal of the defendant to arbitrate the dispute.”

Whiteside v. Teltech Corp., 940 F.2d 99, 102 (4th Cir. 1991). If

the party seeking to compel arbitration establishes the existence

of “an arbitration provision that purports to cover the dispute,”

the party opposing arbitration “must make an unequivocal denial

that an arbitration agreement exists — and must also show

sufficient facts in support.” Chorley Enters., Inc. v. Dickey’s

Barbecue Rests., Inc., 807 F.3d 553, 564 (4th Cir. 2015). “This

standard is akin to the burden on summary judgment.” Id.

“[S]tate law determines questions concerning the validity,

revocability, or enforceability of contracts generally, but the FAA

creates a body of federal substantive law of arbitrability,

applicable to any arbitration agreement within the coverage of the

Act.” Hill v. PeopleSoft USA, Inc., 412 F.3d 540, 543 (4th Cir.

2005) (internal citations and quotation marks omitted). “[I]n

applying general state-law principles of contract interpretation to

the interpretation of an arbitration agreement within the scope of

the Act, . . . due regard must be given to the federal policy

favoring arbitration, and ambiguities as to the scope of the

13

arbitration clause itself [must be] resolved in favor of

arbitration.” Volt Info. Scis. v. Board of Trs., 489 U.S. 468, 475

(1989). Under North Carolina law, “[a] valid contract requires

[1] offer, [2] acceptance, [3] consideration and [4] no defenses to

formation.” Koltis v. North Carolina Dep’t of Human Res., 125 N.C.

App. 268, 271, 480 S.E.2d 702, 704 (1997) (citing Copy Prods., Inc.

v. Randolph, 62 N.C. App. 553, 555, 303 S.E.2d 87, 88 (1983)).

“North Carolina has a strong public policy favoring the settlement

of disputes by arbitration. [Said] strong public policy requires

that the courts resolve any doubts concerning the scope of

arbitrable issues in favor of arbitration.” Johnston Cnty. v. R.N.

Rouse & Co., Inc., 331 N.C. 88, 91, 414 S.E.2d 30, 32 (1992).

Moreover, the Supreme Court has limited the judicial inquiry

into “whether the parties have submitted a particular dispute to

arbitration.” Howsam v. Dean Witter Reynolds, 537 U.S. 79, 83

(2002). In John Wiley & Sons, Inc. v. Livingston, 376 U.S. 543

(1964), the Supreme Court considered whether a court or an

arbitrator should decide “whether ‘procedural’ conditions to

arbitration have been met.” Id. at 555-56. In that case, the

relevant agreement provided for a three-step grievance procedure

and stated that a party’s failure to file a grievance within four

weeks after its occurrence would constitute abandonment of the

grievance. See id. at 555-56 & n.11l. The Supreme Court cautioned

against the “separation of the ‘procedural’ and ‘substantive’

14

elements of a dispute” and contemplated “cases in which

arbitrability of the subject matter is unquestioned but a dispute

arises over the procedures to be followed.” Id. at 557-58. The

Supreme Court affirmed the order directing arbitration, deciding

that “it best accords with the usual purposes of an arbitration

clause and with the policy behind federal labor law to regard

procedural disagreements not as separate disputes but as aspects of

the dispute which called the grievance procedures into play.” Id.

at 559.

More recently, the Supreme Court arrived at a similar result

in a case involving proposed arbitration before the National

Association of Securities Dealers. See Howsam, 537 U.S. at 81. In

Howsam, the applicable provision stated that “no dispute ‘shall be

eligible for submission [to arbitration] . . . where six (6) years

have elapsed from the occurrence or event giving rise to the...

dispute.’” Id. at 82. After discussing “the presumption .. □

that the arbitrator should decide ‘allegations of waiver, delay, or

a like defense to arbitrability,” id. at 84 (quoting Moses H. Cone

Mem’ 1 Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25 (1983)},

the Supreme Court held that the time limit rule constituted “an

‘aspect of the [controversy] which called the grievance procedures

into play,’” id. at 85 (quoting John Wiley, 376 U.S. at 559). The

party opposing arbitration failed to persuade the Supreme Court

that the use of the word “‘eligible’ . . . indicate[d] the parties’

15

intent for the time limit rule to be resolved by the court prior to

arbitration.” Id. at 86. In light of Howsam, the Fourth Circuit

has concluded that “arbitrators — not courts — must decide whether

a condition precedent to arbitrability has been fulfilled.”

Chorley Enters., 807 F.3d at 565.

B. Analysis

The Union’s brief in support of the Arbitration Motion —

citing John Wiley and Howsam, among others — asserts that an

arbitrator must resolve issues regarding the timeliness of

grievances. (See Docket Entry 11 at 5–8.) The Union emphasizes

the breadth of the CBA’s “grievance” definition — insofar as it

includes “‘the application and/or interpretation of the express

provisions of [the CBA].’” (Id. at 6 (quoting Docket Entry 1-1 at

9).) Duke’s response argues that no presumption of arbitrability

should attach in light of the arbitration clause’s narrow scope,

that the dispute here implicates substantive arbitrability, and

that (even if deemed procedural) the Court should resolve the

timeliness issue and should deny arbitration because any rational

arbitrator would dismiss the grievance as untimely. (See Docket

Entry 15 at 11–18.) The Union’s reply maintains that the

presumption of arbitrability does apply here, that timeliness

remains a procedural issue, that the Court should not consider the

facts underlying Duke’s timeliness argument, and that Duke’s

16

failure to notify the Union (in accordance with Article 6) could

excuse any untimeliness. (See Docket Entry 16 at 3–11.)

Under either the LMRA (which may borrow FAA principles) or the

FAA itself, the Union has demonstrated the existence of “an

arbitration provision which purports to cover the dispute.”

Whiteside, 940 F.2d at 102. The record indisputably establishes

that a dispute has arisen between the Union and Duke and that Duke

has refused to arbitrate. Nor has Duke raised a defense to

formation going to the CBA’s validity, such that an enforceable

contract exists. Accordingly, the Court considers only the issue

of whether the agreement to arbitrate excludes untimely claims or,

put another way, whether the parties intended for a court to

resolve disputes over the meaning of the term “properly submitted”

(Docket Entry 1-1 at 15).

As an initial matter, the presumption of arbitrability applies

to this issue because the CBA undeniably contains an arbitration

clause governing grievances in general. See AT&T Techs. v.

Communications Workers of Am., 475 U.S. 643, 650 (1986) (“[W]here

the contract contains an arbitration clause, there is a presumption

of arbitrability in the sense 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.’” (quoting Warrior & Gulf, 363 U.S. at 582-83)).

17

Notwithstanding Duke’s opposition to application of the presumption

favoring arbitration because the CBA differs from the clause at

issue in AT&T Techs. (see Docket Entry 15 at 10–11), the Supreme

Court there merely observed that “[s]uch a presumption is

particularly applicable where the clause is as broad as the one

employed in [that] case,” AT&T Techs., 475 U.S. at 650 (emphasis

added). In this case, the clause reasonably bears an

interpretation rendering the Easterling Grievance arbitrable: the

CBA does not define “properly submitted” (Docket Entry 1-1 at 15),

and the term could signify that the parties simply must proceed to

the third step hearing before a party may demand arbitration (as

apparently happened here).6 The CBA neither defines what

constitutes an improperly submitted grievance nor expressly

excludes such grievances from arbitration. (See id.)

Furthermore, the clause expresses no clear position on whether

a court or an arbitrator should decide a grievance’s eligibility

for arbitration. On the one hand, the CBA defines “grievance”

broadly and appears to contemplate review by an arbitrator of many

of the CBA’s provisions. (See id. at 9.)7 On the other hand, the

6 The Complaint alleges that “[t]he parties did not resolve

the Easterling Grievance [through the Article 10] process” and that

“[t]he parties’ meeting for the third and final step of the

grievance process was on August 27, 2019.” (Docket Entry 1, ¶ 19.)

Duke’s Answer “admits that the parties met on August 27, 2019.”

(Docket Entry 12, ¶ 19.)

7 The Union relies on the breadth of the grievance definition

but does not suggest that the parties engaged in or even

18

CBA never directly addresses who should resolve disputes about

whether a grievance qualifies as “properly submitted.” (See id. at

2-73.) Simply stated, the CBA favors arbitration but falls short

of explicitly committing any and all conflicts to an arbitrator.

When a matter involves an asserted time bar, which may represent a

sort of grievance within a grievance, courts sometimes look to

other parts of the contract that reveal the parties’ preference for

arbitration. See Howsam, 537 U.S. at 81; John Wiley, 376 U.S. at

553, 588.°

Given that the (concededly valid) CBA contains a clause that

plausibly mandates arbitration under the circumstances and that the

parties, at the time of contracting, indicated no explicit

preference, the presumption favoring arbitrability carries the day.

contemplated the Article 10 procedure (which seems to apply to all

“grievances”) to settle their apparent disagreement over the

meaning of “properly submitted.” (See Docket Entry 11 at 5-8;

Docket Entry 16 at 3-8.)

8 For comparison, the clause in Howsam provided that “all

controversies . . . concerning or arising from . . . any account

. «, any transaction . . ., or . . . the construction,

performance or breach of ...any.. . agreement between us...

shall be determined by arbitration before any self-regulatory

organization or exchange of which Dean Witter is a member.”

Howsam, 537 U.S. at 81. In John Wiley, the parties had agreed that

“‘[t]he arbitration procedure herein set forth is the sole and

exclusive remedy of the parties hereto and the employees covered

hereby, for any claimed violations of this contract, and for any

and all acts or omissions claimed to have been committed by either

party during the term of this agreement, and such arbitration

procedure shall be (except to enforce, vacate, or modify awards) in

lieu of any and all other remedies, forums at law, in equity or

otherwise which will or may be available to either of the

parties.’” John Wiley, 376 U.S. at 552 (ellipsis omitted).

19

Duke’s contrary arguments miss the mark. The CBA’s reference to

“properly submitted” grievances suggests that certain requirements

precede arbitration but not necessarily that a court (rather than

an arbitrator) would decide the meaning of the phrase. Had the

parties intended to exclude procedural matters from arbitration

altogether, they could have drafted the CBA to reflect this

understanding. See generally John Wiley, 376 U.S. at 553 & n.6

(quoting clauses “expressly deny[ing] arbitration to specific

events, situations or contract provisions”).

Finally, the CBA’s contemplation of forfeiture of untimely

grievances fails to tip the balance in Duke’s favor. In both John

Wiley and Howsam, the relevant provisions effectively penalized

untimeliness by barring tardy grievances from arbitration. see

Howsam, 537 U.S. at 82; John Wiley, 376 U.S. at 555-56 & n.1l.

Yet the Supreme Court nonetheless concluded that compliance with

procedural requirements normally presents a question for an

arbitrator, not a court. Howsam, 537 U.S. at 85-86; John Wiley,

376 U.S. at 556-59. The same holds true here.

II. Rule 26(f£) Reports

The parties’ dueling Rule 26(f) Reports propose two different

approaches to discovery. According to the Union, the purely legal

questions presented necessitate no discovery. (See Docket Entry

17 at 1.) Per Duke, the FAA does not apply here, and the usual

practice under the LMRA resolves disputes at summary judgment

20

(which traditionally follows discovery). (See Docket Entry 18 at

1-3.) Under either statutory scheme — the FAA or the LMRA — this

matter warrants no discovery for the following reasons.

The FAA authorizes courts to compel arbitration and describes

the procedure for summarily determining entitlement to arbitration

or resolving disputes at trial. See Chorley Enters., 807 F.3d

563-64 (“[T]he party seeking a jury trial must make an unequivocal

denial that an arbitration agreement exists — and must also show

sufficient facts in support.”). Through the FAA, Congress has

expressed its “clear intent .. . to move the parties to an

arbitrable dispute out of court and into arbitration as quickly and

easily as possible.” Moses H. Cone Mem’l Hosp., 460 U.S. at 22.

To that end, Section 4 “call[s] for an expeditious and summary

hearing, with only restricted inquiry into factual issues.” Id.

In contrast, the LMRA covers a broader range of potential

disputes and includes no specific provision governing summary

resolution. See 29 U.S.C. $ 185 (entitled “[sJuits by and against

labor organizations). Further, although the LMRA does not

explicitly contemplate an order compelling arbitration, the Fourth

Circuit has interpreted it to authorize such relief. see H.K.

Porter Co., 400 F.2d at 693. As explained above, courts hearing

disputes under the LMRA may borrow principles from the FAA or look

to the latter for guidance as they fashion rules of federal common

law. See Misco, Inc., 484 U.S. at 40 n.9.

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“The purpose of discovery is to provide a mechanism for making

relevant information available to the litigants.” Dillon v. BMO

Harris Bank, N.A., No. 1:13CV897, 2015 WL 6619972, at *2 (M.D.N.C.

Oct. 30, 2015) (quoting Fed. R. Civ. P. 26 advisory committee’s

notes, 1983 Amend.). When a party seeks to compel arbitration,

whether and to what extent the parties should engage in discovery

depends in part on the range of disputed subjects. “Only discovery

tailored to matters pertinent to the disposition of the petition to

compel arbitration . . . may occur.” Id. at *3. For example, “if

a party challenges the enforceability of an arbitration agreement,

courts generally permit discovery regarding the formation and

performance of the arbitration provision.” Id. (collecting cases);

see also Livingston v. Assocs. Fin., Inc., No. 01C1659, 2001 WL

709465, at *2 (N.D. Ill. June 25, 2001) (observing, in analyzing

request to conduct discovery in response to motion to compel

arbitration, that a “party must be given an opportunity to pursue

discovery related to the issue that it has the burden to prove”),

report and recommendation adopted, No. 01C1659, 2002 WL 424352

(N.D. Ill. Mar. 6, 2002). Courts outside the Fourth Circuit have

recognized that “the [party opposing compelled arbitration] ‘must

be given the opportunity to conduct limited discovery on the narrow

issue concerning the validity’ of the arbitration agreement.”

Guidotti v. Legal Helpers Debt Resolution, L.L.C., 716 F.3d 764,

774–76 (3d Cir. 2013) (quoting Deputy v. Lehman Bros., Inc., 345

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F.3d 494, 511 (7th Cir. 2003)); see also id. at 774 n.5 (explaining

that pre-arbitration discovery also should occur when a party

claims that arbitration would impose prohibitive costs or that

unconscionability voids the arbitration clause).

Here, given that the FAA applies, Section 4 permits an order

compelling arbitration without discovery. Duke’s response focuses

on its preferred interpretation of the arbitration clause but stops

short of characterizing the entire CBA as invalid and

unenforceable. Additionally, Duke never “ma[d]e an unequivocal

denial that an arbitration agreement exists.” Chorley Enters., 807

F.3d 563–64. Alternatively, the LMRA supports the same result in

light of the purposes of discovery and the nature of this dispute.

Because Duke does not contest the validity of the CBA, contract

defenses bear no relevance here; discovery on those topics appears

pointless. The parties dispute only the scope of their agreement

to arbitrate, which constitutes “a question of contract

interpretation,” Muriithi, 712 F.3d at 179. The Union attached to

the Complaint the CBA containing the arbitration clause, the focal

point of the inquiry. Given the legal issue presented, discovery

would serve no useful purpose. Therefore, the Court decides the

issue on the present record and stays discovery pending

arbitration.

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III. Motion for Attorney’s Fees

The Arbitration Motion includes a request for an order

directing “Duke to pay the Union’s attorneys’ fees and costs for

prosecuting this action” on the grounds that “Duke’s refusal to

arbitrate has no reasonable legal justification.” (Docket Entry 9

at 1.) The Union’s brief in support of the Arbitration Motion

explains that, “[u]nder the [LMRA], attorneys’ fees may be awarded

against a party whose challenge to arbitrability was pursued

‘without justification.’” (Docket Entry 11 at 9 (quoting United

Food & Commercial Workers, Local 400 v. Marval Poultry Co., 876

F.2d 346, 350 (4th Cir. 1989)).) In opposition, Duke’s response

asserts that the Union violated Local Rule 7.3(a) by failing to

seek such fees via separate motion. (Docket Entry 15 at 19.) On

the merits, Duke contends that no controlling authority requires

arbitration under the circumstances. (Id. at 20.) The Union’s

reply maintains that the fee request complied with Rule 7.3(a), but

alternatively proposes a denial without prejudice to renewal after

entry of judgment. (Docket Entry 16 at 11 & n.3; see also id. at

12 (insisting that Duke baselessly refused arbitration).)

“A request for a court order must be made by motion.” Fed. R.

Civ. P. 7(b)(1). Duke correctly notes that this Court’s Local Rule

7.3(a) further requires “[e]ach motion [to] be set out in a

separate pleading.” M.D.N.C. LR 7.3(a). This Rule ensures that

parties have an adequate opportunity to brief each motion. See

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Phillips v. Umass Corr. Health, No. 1:18CV974, 2020 WL 128463, at

*12 (M.D.N.C. Jan. 10, 2020) (explaining that proper filing of

motion for leave to amend allows for necessary briefing). This

practice makes good sense because a neighboring provision limits

the length of briefs. See M.D.N.C. LR 7.3(d). Motions that seek

distinct forms of relief in a single filing may hinder the parties’

ability to adequately develop their arguments in support of their

respective positions.

Here, Rule 7.3(a) requires that the Union file a separate

motion and brief in support of its request for attorney’s fees.

Although the Arbitration Motion did not “tuck[] away [the fee]

request in a lengthy response brief,” Phillips, 2020 WL 128463, at

*12, neither did the Motion allow for separate treatment and full

briefing as required by this Court’s Local Rules. Accordingly, the

Court denies this aspect of the Arbitration Motion without

prejudice to timely resubsmission in accordance with applicable

rules. See, e.g., Fed. R. Civ. P. 54(d)(2) (providing that, within

14 days of judgment entry, prevailing party may seek attorney’s

fees if entitled by “statute, rule, or other grounds” to such

award).

CONCLUSION

Duke has not overcome the presumption favoring arbitration of

an issue like the one here: a dispute over a procedural requirement

preceding arbitration; however, the Court exercises its discretion

25

to decline consideration of an award of attorney’s fees pending the

filing of a proper motion.

IT IS THEREFORE ORDERED that the Arbitration Motion (Docket

Entry 9) is GRANTED as to the request to compel arbitration and

DENIED WITHOUT PREJUDICE as to the request to award attorney’s

fees.

IT IS FURTHER ORDERED that discovery is stayed pending

arbitration.

This 2nd day of March, 2021.

/s/ L. Patrick Auld

L. Patrick Auld

United States Magistrate Judge

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