# Teamsters Local 206 v. Mondelez Global LLC

> District Court, D. Oregon · November 27, 2023

URL: https://www.frixlaw.com/law-library/cases/10396781

## Case

- **Court:** District Court, D. Oregon
- **Decided:** November 27, 2023
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
PORTLAND DIVISION

TEAMSTERS LOCAL 206,
No. 3:23-cv-01131-MO
Petitioner,
v. OPINION AND ORDER
MONDELEZ GLOBAL LLC,
Respondent.

MOSMAN, J.,
This matter comes before me on Respondent’s Motion to Dismiss for Lack of Subject Matter
Jurisdiction and Failure to State a Claim [ECF 12], filed in response to Petitioner’s Petition to
Compel Arbitration [ECF 1]. Petitioner responded [ECF 13], to which Respondent replied [ECF
14]. For the following reasons, I DENY Respondent’s Motion to Dismiss.
BACKGROUND
Teamsters Local 206 (“Teamsters”) represents employees of Mondelez Global LLC
(“Mondelez’”) who handle finished snack foods at Mondelez’s Portland bakery. Pet. [ECF 1] at 3.
The employees palletize, load, and prepare snack food products for shipment. Jd. The parties have
a Collective Bargaining Agreement (“CBA”). Jd. In 2022, Mondelez opened a new fulfillment
center in Portland. When Teamsters learned about this fulfillment center, it filed a grievance

1 — OPINION AND ORDER

alleging that Mondelez violated the CBA by opening a new facility “to perform bargaining unit
work.” Id.
On May 19, 2023, Teamsters informed Mondelez of its grievance, stating that “the work
being performed at this fulfillment center is, in actuality, bargaining unit work under the
representational jurisdiction of Teamsters Local 206 and the existing [CBA].” See Pet. [ECF 1-2]
Ex. B, at 1. Teamsters asserted that Mondelez “failed to notify, discuss or bargain the
implementation of the fulfillment center” and alleged violations of several provisions of the CBA
under Articles 1 (Union Security), 8 (Seniority), 16 (Employment Agency Fees), and 20
(Individual Agreements). /d.; Pet. [ECF 1-1] Ex. A.
Mondelez replied to Teamsters on May 26, 2023. Pet. [ECF 1-2] Ex. B, at 4. It denied
Teamsters’ grievance, explaining that it was untimely, the CBA “applies only to work performed
by certain .. . employees at the Portland bakery,” and the workers at the fulfillment center are not
Mondelez employees. Jd. On May 31, 2023, Mondelez declined to answer most of Teamsters’
information requests and explained that the work performed at the fulfillment center has never
been performed by bargaining unit members and the fulfillment center “is separate and distinct”
from the bargaining unit work done at the Portland bakery. /d. at 5. Rather, the fulfillment center
is operated by a third party. Jd. According to Mondelez, the fulfillment center receives products
from production facilities all over North America and puts them together into specific orders, then
ships the orders to distribution branches. Jd. Products made at the Portland bakery were shipped to
similar fulfillment centers elsewhere in the United States before this fulfillment center was opened.
Id.
Teamsters informed Mondelez of its intent to arbitrate the matter on June 16, 2023. Pet.
[ECF 1-2] Ex. B, at 7. Mondelez replied that the grievance is not arbitrable pursuant to their CBA

2 OPINION AND ORDER

because the CBA “applies only to work performed by certain . . . employees at the Portland
bakery,” and workers at the fulfillment center are not Mondelez employees. Jd. at 8. Teamsters
filed its Petition to Compel Arbitration on August 3, 2023 [ECF 1]. Mondelez responded with the
Motion to Dismiss at issue here [ECF 12].
LEGAL STANDARD
Federal Rule of Civil Procedure 12(b)(1) provides for dismissal of a complaint for lack of
subject matter jurisdiction. Fed. R. Civ. P. 12(b)(1). Once a party has moved to dismiss for lack of
subject matter jurisdiction, the plaintiff “bears the burden to establish subject matter jurisdiction
by a preponderance of the evidence.” United States ex rel. Mateski v. Raytheon Co., 816 F.3d 565,
569 (9th Cir. 2016).
To survive a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) for failure
to state a claim, “a complaint must contain sufficient factual matter, accepted as true, to ‘state a
claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A pleading that offers only “labels and
conclusions” or “‘naked assertion[s|’ devoid of ‘further factual enhancement’” will not suffice.
Id, (quoting Twombly, 550 U.S. at 555, 557). While the plaintiff does not need to make detailed
factual allegations at the pleading stage, the allegations must be sufficiently specific to give the
respondent fair notice of the claim and the grounds on which it rests. Id.
Review on a motion to dismiss is normally limited to the complaint itself. If the court relies
on materials outside the pleadings to make its ruling, it must treat the motion as one for summary
judgment. Fed. R. Civ. P. 12(d); Carstarphen v. Milsner, 594 F. Supp. 2d 1201, 1207 (D. Nev.
2009) (citing United States v. Ritchie, 342 F.3d 903, 907 (9th Cir. 2003)). But the court may
“consider certain materials—documents attached to the complaint, documents incorporated by

3 — OPINION AND ORDER

reference in the complaint, or matters of judicial notice—without converting the motion to dismiss
into a motion for summary judgment.” Ritchie, 342 F.3d at 908; see also Durning y. First Boston
Corp., 815 F.2d 1265, 1267 (9th Cir. 1987).
DISCUSSION
I. 12(b)(1) Motion to Dismiss for Lack of Subject Matter Jurisdiction
Mondelez first argues that this Court lacks subject matter jurisdiction over Teamsters’
Petition because the underlying grievance raises a representational issue, not one arising under the
CBA. Resp’t’s Mot. [ECF 12] at 2. Mondelez argues that Teamsters is trying to do an end run
around the National Labor Relations Board’s jurisdiction of representational issues “under the
guise of a contract interpretation dispute.” Jd. I deny this motion because Teamsters’ Petition does
not raise a representational issue.
The National Labor Relations Board (“NLRB”) and federal courts have concurrent
jurisdiction over cases arising under Section 301 of the Labor Management Relations Act,
including suits for violation of a CBA. See 29 U.S.C. § 185. Federal courts also have jurisdiction
over motions to compel arbitration under the Federal Arbitration Act. 9 U.S.C. § 4. At the same
time, the NLRB has primary jurisdiction over certain labor law questions, including
representational issues. United Ass’n Loc. 342 v. Valley Eng’rs, 975 F.2d 613 (9th Cir. 1992); 29
U.S.C. § 159. Federal courts must refuse to exercise their jurisdiction when a Section 301 case
primarily concerns representational issues. United Ass’n Local 342, 975 F.2d at 613-14.
I find that Mondelez mischaracterizes Teamsters’ grievance and Teamsters does not seek
to accrete the fulfillment center workers into its Portland bakery bargaining unit. First, Teamsters
makes no direct argument for why the fulfillment center workers should be in its bargaining unit.
See Pet. [ECF 1-3] Ex. C (Memorandum in Support of Petition). Instead, Teamsters argues that
Mondelez outsourced bargaining unit work to the fulfillment center. Jd at 2 (“Respondent
OPINION AND ORDER

outsourced bargaining unit work ....”). Second, the CBA provisions cited by Teamsters all have
some relation to contracting issues. Pet. [ECF 1-3] Ex. C, at 4. At the same time, Teamsters does
not cite other CBA provisions which may be violated if the fulfillment center workers were in the
bargaining unit, such as the provision regarding wage rates in Article 7. Pet. [ECF 1-1] Ex. A, at
7. Teamsters’ grievance primarily concerns the issues of outsourcing and failure to bargain; this
court has jurisdiction over these issues both under Section 301 and under the Federal Arbitration
Act. 29 U.S.C. § 185; 9 U.S.C. § 4.
I. 12(b)(6) Motion to Dismiss for Failure to State a Claim
Mondelez argues that Teamsters’ grievance is not arbitrable because the CBA does not
apply to the fulfillment center workers and because the CBA does not prohibit subcontracting.
Resp’t’s Mot. [ECF 12] at 2; Résp’t’s Reply [ECF 14] at 4. I deny this motion because Teamsters’
Petition presents questions that are arbitrable under the CBA.
Questions of arbitrability are for the court to decide. AT&T Techs., Inc. v. Commc’ns
Workers of Am., 475 U.S. 643, 649 (1986). In deciding whether the parties have agreed to arbitrate
a particular issue, a court must not rule on the potential merits of the underlying claims. Jd. at 649—
50. When a contract contains an arbitration clause, there is a presumption of arbitrability. Jd at
650. This means that an order to compel arbitration should generally not be denied absent an
express provision excluding a particular issue from arbitration. Jd.
Article 17 of the CBA describes the grievance procedure and contains an arbitration clause:
I) All grievances must be filed within ten (10) days after the occurrence or
knowledge of the dispute and will be handled as follows:
a) Between the aggrieved employee’s immediate Supervisor and the
aggrieved employee. The employee may request a representative from the Union,
if desired.
b) If not satisfactorily adjusted, the aggrieved employee will reduce the
grievance to writing and it shall be taken up between the Manager and a properly
designated Union Representative.

5 —- OPINION AND ORDER

c) In the event that the grievance or dispute is not satisfactorily settled
within two (2) weeks under the above procedure, either party may, within thirty
(30) days, give written notice to the other party of its desire to arbitrate the dispute.
Such notice shall state clearly the issues proposed to be arbitrated and the party to
whom the notice is given shall have the right, within one (1) week after receipt of
said notice, to serve on the other party its statement in the matter to be arbitrated.
If the parties fail to agree on a mutually acceptable arbitrator, the parties shall
request the Mediation and Conciliation Service to submit a list of five (5) arbitrators
from which the parties shall select a mutually satisfactory arbitrator who shall
properly arbitrate the dispute. The arbitrator shall have no power to add to, subtract
from or modify any of the terms of this Agreement. The decision of the arbitrator
shall be final and binding upon the parties hereto. The compensation of the
arbitrator shall be borne equally by the Employer and the Union.
Pet. [ECF 1-1] Ex. A, at 13. This provision does not specify or limit the types of disputes that are
subject to arbitration.
The issue Teamsters seeks to submit to arbitration is whether Mondelez violated various
provisions of the CBA when it opened its fulfillment center because bargaining unit work is done
at the center. Pet. [ECF 1] at 3. This question requires interpretation of the CBA. For its part,
Teamsters plausibly argues that the CBA requires Mondelez “to assign bargaining unit work to
bargaining unit members,” and that Mondelez outsourced bargaining unit work to the fulfillment
center. See Pet’r’s Resp. [ECF 13] at 6. Therefore, I find that Teamsters’ grievance is arbitrable.
Mondelez argues that this dispute is not arbitrable because the CBA does not apply to
workers at the fulfillment center who are not doing bargaining unit work.! If the CBA does not
apply, Mondelez argues, the grievance and arbitration provisions do not apply, and this Court
cannot require Mondelez to arbitrate the dispute. Resp’t’s Mot. [ECF 12] at 2. Mondelez again
mischaracterizes the relevant issue. Teamsters’ Petition does not rely on the fact that the CBA
applies in full to the fulfillment center workers because it is possible to grieve an outsourcing
complaint without accreting the new workers into an existing bargaining unit. See, □□□□

' The CBA does not define bargaining unit work aside from Article 7, which provides wage rates for two
classifications, “Shipping & Rec. Clerk,” and “Fork Lift Truck Operator.” Pet. [ECF 1-1] Ex. A, at 8.
6 — OPINION AND ORDER

Amalgamated Clothing & Textile Workers Union, AFL-CIO-CLC y. Ratner Corp., 602 F.2d 1363
(9th Cir. 1979). Whether the fulfillment center workers are doing bargaining unit work and
whether this violates the CBA are both arbitrable issues.
In its Reply, Mondelez argues that the grievance is not arbitrable because the CBA does
not prohibit outsourcing or subcontracting. Resp’t’s Reply [ECF 14] at 4. This argument is not
persuasive because Teamsters plausibly argues that Article 1 of the CBA prevents assigning
bargaining unit work to other parties. Pet. [ECF 1-1] Ex. A, at 2 “Only bargaining unit employees
will do bargaining unit work, except as provided herein.’’). This is sufficient to survive the motion
to dismiss. See Ashcroft, 556 U.S. 662.
CONCLUSION
For the reasons given above, I DENY the Motion to Dismiss [ECF 12].

IT IS SO ORDERED.
DATED this xy of November, 2023.
mae W. Wa
Senior United States District Judge

7 OPINION AND ORDER

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10396781. Public record. Not legal advice.