The opinion
STATE OF MAINE SUPERIOR COURT
KENNEBEC, SS. LOCATION: Augusta
Docket No. CV.:.15-31
)
CITY OF AUGUSTA, )
)
Plaintiff, ) ORDER ON THE CITY OF
) AUGUSTA'S APPLICATION FOR A
v. ) STAY OF ARBITRATION
) PROCEEDINGS
TEAMSTERS UNION LOCAL #340, )
)
Defendant. )
)
The City of Augusta ("City") applies for a stay of arbitration proceedings
pursuant to 14 M.R.S.A. § 5928(2) brought by defendant Teamsters Union Local #340
("Teamsters") on behalf of its retired employee, Keith Brann. The City argues that the
arbitration proceedings should be stayed because the City did not agree to arbitrate
grievances brought by the Teamsters on behalf of its retired members. This is because
retirees, such as 1\IIr. Brann, are not "eligible employees" under the terms of the
Collective Bargaining Agreement ("CBA"), or "public employees" within the meaning of
the Municipal Public Employees Labor Relations Act ("MPELRA"). The Teamsters
respond that the City's position is contrary to settled law and, if drawn to its logical
conclusion, would effectively render the grievance process meaningless.
For the reasons discussed below, the Court denies the City's application to stay
arbitration because it cannot be said with positive assurance that the arbitration clause in
Article 1 of the CBA is not susceptible of an interpretation that covers the asserted
dispute.
1
I. Factual Background
Keith Brann is a former member of the City of Augusta's Police Supervisor's
Unit, which is represented by Teamsters. (Affidavit ofKristina Gould ("Gould Aff.")
~4.) While Mr. Brann was still employed with the City, he filed a grievance with the City
based on its stated interpretation of Article 22, section 2 of the CBA defining retiree
health insurance benefits. (Affidavit ofKeith Brann ("Brann Aff.") ~ 3; Grievance
attached thereto). Mr. Brann filed his grievance through the Teamsters. (Id.) Mr. Brann
retired from active duty on July 11, 2014, shortly after filing his grievance. (Gould Aff. ~
5.) Arbitration proceedings regarding this grievance were scheduled to begin on March
5, 2015, but have been stayed pending the Court's decision on the present motion. (See
id. at~ 7.)
The CBA provides, in pertinent part, that:
The CITY recognizes the UNION as the sole and exclusive bargaining
agent for the purpose of negotiating salaries, wages, hours, and other
conditions of employment for all its eligible employees within the
bargaining unit of the supervisory police officers, except the Chief of
Police and Deputy Chief/Mayor, as determined in accordance with the
Municipal Public Employees Labor Relations Act.
(Ex. A to Gould Aff. the CBA, Article 1 (emphasis added).)
Article 11 of the CBA goes on to lay out the grievance procedure, explaining that
its purpose is "to secure at the lowest possible administrative level, equitable solutions to
grievances free from coercion, restraint, reprisal." (Id., Article 11, section 1.) Article 11
also defines an employee as "any person covered by this agreement as provided for under
Article 1 -Recognition." (Id., Article 11, section 2(a).) Furthermore, Article 11 explains
that "[g]rievance shall mean any claimed violation, misinterpretation or inequitable
application of this agreement. ... " (Id., Article 11, section 2(d).)
2
II. Discussion
The City contends that nothing in the CBA or the l\IIPELRA authorizes the
Teamsters to bring and pursue arbitration proceedings on behalf of its former employees.
In making this argument, the City first points out that Article 1 of the CBA provides,
"The CITY recognizes the UNION as the sole and exclusive bargaining agent for the
purpose of negotiating ... for all its eligible employees within the bargaining unit of the
supervisory police officers ... as determined in accordance with the [l\IIPELRA]." (Exhibit
A to Gould Aff. CBA, Article 1 (emphasis added).) The l\ll.PELRA, in tum, recognizes
the right of''public employees .. .to be represented by [labor] organizations in collective
bargaining for terms and conditions of employment." 26 M.R.S.A. § 961 (emphasis
added). Based on this language, the City argues that retirees are not "public employees"
within the meaning of the l\ll.PELRA.
In support, the City points to Interpretive Ruling, Millinocket Sch. Comm., No.
92-IR.-01 (July 13, 1992) ( ''Nfillinockef'), which, it argues, concluded that retirees are not
"public employees" under section 962(6) of the J\IIPELRA. As a result, the City contends
Millinocket found that employers subject to the l\IIPELRA are not obligated to bargain
over benefits for persons who have already retired. The City also points to Allied
Chemical and Alkali Workers ofAmerica, Local Union No. 1 v. Pittsburgh Plate Glass
Co., 404 U.S. 157 (1971) (Pittsburgh Plate Glass"), in which the City contends the
United States Supreme Court found it was not an unfair labor practice for employers to
deal directly with retirees concerning their insurance benefits because retirees were not
"employees." From these decisions the City argues that Mr. Brann is not a "public
.employee" protected under the l\ll.PELRA, cannot be an. employee within the bargaining
3
unit represented by the Teamsters, and therefore does not have an agreement with the
City to arbitrate grievances.
The City also argues that while Pittsburgh Plate Glass suggests that a union may,
in certain cases, bargain for retiree health insurance, that possibility is foreclosed under
Maine public sector law, which does not provide bargaining units the authority to
negotiate on behalf of retirees. In support, the city points out that Maine law specifically
authorizes bargaining agents in the private sector to negotiate on behalf of retired
employees, but is silent with respect to bargaining agents in the public sector. Finally,
the City points out that if the court stays arbitration, :Nlr. Brann is not left without a
remedy. The City contends that Mr. Brann can pursue his grievance in court based on
ordinary principles of contract law.
The Teamsters respond that the cases cited by the City are distinguishable because
they involve bargaining being sought for retirees after their retirement. In the present
case, the dispute arose during Mr. Brann's employment. The Teamsters further argue
that the City's argument is contrary to settled law, which strongly favors arbitrating
disputes as explained in Cape Elizabeth School Bd. v. Cape Elizabeth Teachers Ass 'n,
459 A.2d 166 (Nle. 1983). The Teamsters also argue that the logic of the City's argument
effectively renders the grievance process meaningless. In particular, the Teamsters
explain that under the City's logic, a unit member who was discharged without just cause
in violation of the CBA could not pursue his grievance through the CBA because his
discharge would render him no longer an employee or member of the bargaining unit.
This "fallacious" result, the Teamsters contend was implicitly rejected by the Law Court
in Cape Elizabeth School Bd. Finally, the Teamsters argue that the City raised a similar
4
argument in City ofAugusta v. IAFF Locall650, conceding that retirement benefits
provided to employees were mandatory subjects of bargaining and therefore enforceable
in an expired contract, but claiming that the provision was only enforceable as to
employees who retired during the term of the contract and not those who retired after the
CBA expired.
In reply, the City argues that the Teamsters do not dispute that the union is not
entitled to bring a grievance on behalf of its retired members. Instead, the Teamsters
allegedly oppose the City's application on the grounds that Mr. Brann filed his grievance
while he was an active employee of the City. In response to this perceived argument, the
City contends that at the time of the grievance, Mr. Brann had nothing to grieve because
he was not receiving retirement benefits and the City's letter announcing its interpretation
of Article 22 section 2 did not give rise to an actionable grievance at the time. In
addition, the City argues that the Teamsters' hypothetical regarding the City's
interpretation of the grievance process is distinguishable because the employee in the
hypothetical is in a different position.
In general, parties "cannot be compelled to submit their controversy to arbitration
unless they have manifested in writing a contractual intent to be bound to do so." State of
the Arts v. Congress Prop. Mgmt. Corp., 1997l\t1E 18, ~ 4, 688 A.2d 926 (quoting Nisbet
v. Faunce, 432 A.2d 779, 782 (Me. 1981). In determining whether a dispute is subject to
arbitration, however, "there is a broad presumption under Maine law favoring substantive
arbitrability[.]" Cape Elizabeth School Ed. v. Cape Elizabeth Teachers Ass 'n, 459 A.2d
166, 169 (Me. 1983). Indeed:
The Maine legislature.'s strong policy favoring arbitration dictates a
conclusion that the dispute has been subjected to arbitration if the parties
5 .
have generally agreed to arbitrate disputes and if 'the party seeking
arbitration is making a claim which, on its face, is governed by the
collective bargaining contract.' ... By an alternative formulation it has
been held that a court will find a dispute arbitrable 'unless it may be said
with positive assurance that the arbitration clause is not susceptible of an
interpretation that covers the asserted dispute. Doubts should be resolved
in favor of coverage.'
Id. at 168-169 (footnotes and citations omitted, emphasis in original).
Here, the Court denies the City's application for a stay because it cannot be said
with positive assurance that the arbitration clause in Article 1 of the CBA is not
susceptible of an interpretation that covers the asserted dispute. This is because Article 1
of the CBA could be read as including individuals who were employees at the time the
CBA was negotiated, but have since retired, as "eligible employees within the bargaining
unit of the supervisory police officers ... as determined in accordance with the
[NIPELRA]." Indeed, numerous courts presented with similar questions have determined
that retirees are not exempt from the arbitration provision of a collective bargaining
agreement. 1
1 E.g. United Steelworkers ofAmerica v. Canron, Inc., 580 F.2d 77, 81 (3d Cir. 1978)
(holding that the union had standing to represent retirees in seeking arbitration
under its labor contract and explaining that"[e]ven though retirement benefits of
former employees already retired are not a mandatory subject of collective
bargaining, it does not naturally follow ... that a union loses all interest in the fate of
its members once they retire") (quotation omitted); Cleveland Elec. Illuminating Co.
v. Utility Workers Union of America, 440 F.3d 809, 816 (6th Cir. 2006) (rejecting
argument that the union's grievance was not arbitrable with respect to retirees
because they were not employees covered by the CBA and explaining that "the
presumption of arbitrability applies to disputes over retirees' benefits if the parties
have contracted for such benefits in their collective bargaining agreement and if
there is nothing in the agreement that specifically excludes the dispute from
arbitration. Thus, unless there is 'forceful evidence of a purpose to exclude the
claim from arbitration,' the arbitrator's determination in this case that the dispute is
arbitrable must stand"); U.nited Steelworkers ofAmerica v. Ret. Income Plan for.
Hourly-Rated Employees ofASARCO, Inc., 512 F.3d 555, 560-61 (9th Cir. 2008)
(affirming order compelling arbitration and rejecting argument that the
6
Furthermore, Millinocket, IAFF Locall650 v. City ofAugusta, and Pittsburgh
Plate Glass, upon which the City relies, do not provide otherwise. None of these case
issued a general pronouncement that retirees cannot be treated as employees in any
instance. Instead, Millinocket and Pittsburgh Plate Glass determined that individuals
who retired before a new collective bargaining agreement was negotiated were not
"employees" for the purpose of the new collective bargaining agreement.
In particular, the l'v1LRB, in .Nlillinocket, issued an interpretive ruling that
addressed, in pertinent part, whether the subject of school board payment of health
insurance for retirees is an illegal or non-mandatory subject of collective bargaining
under section 9651(1)(C) of the :MPELRA. No. 92-IR-01. In resolving this issue, the
l'v1LRB explained that "[r]etirees are not 'public employees' under section 962(6) of the
MPELRA" and that, consequently, "employers subject to the MPELRA are not obligated
to bargain over benefits for persons who have already retired from employment." Id. at
*8. Millinocket went on to explain that this did not end the inquiry because the "parties
to a contract may, if they choose to do so, agree to the accrual of rights during the term of
presumption in favor of arbitrability did not apply because the named parties are
retired); Kop-Flex Emerson Power Transmission Corp. v. Int'l Ass'n of Machinists &
Aerospace Workers Local Lodge No.1784, 840 F. Supp. 2d 885,891-92 (D. Md. 2012)
(rejecting argument that the retirees in question are not employees under the
current CBA and have no rights under that document, and noting that after
Pittsburgh Plate Glass, "nearly every court to consider the issue has relied on the
presumption in favor of arbitrability in finding that disputes regarding retiree
benefits are generally subject to arbitration-so long as the collective bargaining
agreements in question include terms regarding retiree health benefits"); Van Pamel
v. TRW Vehicle Safety Systems, Inc., 2012 WL 3134224 (E.D. Mich. Aug. 1, 2012)
("[t]his court has maintained that the presumption of arbitrability applies to
disputes over retirees' benefits in the past, and continues to do so here); see also
Frontier Commc'n. of N.Y., Inc. v. IBEW, Local Union 503,2008 U.S. Dist. LEXIS 37213,
7-8 (S.D.N.Y. May 6, 2008) ("It is 'axiomatic' that a party to an agreement has
standing to sue a counter-party who breaches that agreement, even where some or
all of the benefits of that contract accrue to a third party").
7
an agreement and their realization after the agreement has expired." Id. (quotation and
citations omitted). "More specifically, they may agree to the accrual of rights during the
term of an agreement and their realization upon or after retirement ... [by] persons who
eventually will retire from employment, but have not yet done so." Id. Accordingly, "if
an employer and a bargaining agent bargain over retiree health insurance so as to make it
clear that they are doing so on behalf of (for the benefit of) bargaining unit members,
[Pittsburgh Plate Glass, 404 U.S. 157] is inapplicable." Id.
IAFF Local1650 summarizedMillinocket and confirmed that Millinocket's ruling
was "still valid" as was its conclusion that "future retirement benefits for current
employees is a mandatory subject of bargaining." IAFF Local1650 v. City of Augusta,
Status Quo Determination, No. 11-03SQ at *18 (Dec. 15, 2011). In particular, IAFF
Local1650 explained that Millinocket "concluded that because retirees are not 'public
employees' under the [N.IPELRA], employers are not obligated to bargain over benefits
for those who have already retired from employment." Id.
Pittsburgh Plate Glass, in turn, involved a union attempting to stop an employer
from going directly to individuals who were already retired and offering them pension
options other than those they were entitled to under contracts negotiated while they were
employees. See 404 U.S. at 161-62; see also Millinocket, No. 92-IR.-01, *8 (discussing
Pittsburgh Plate Glass). In determining that this practice did not constitute an unfair
labor practice under the National Labor Relations Act, the Court explained that retirees
were not "employees" because they did not share a community of interests broad enough
to justify including retirees in the bargaining unit. I d. at 173. The Court clarified,
however, that "there is no anomaly in the conclusion that retired workers are 'employees'
8
within [29 U.S.C.A. § 186(c)(5), regarding restrictions on financial transactions, and
thus] entitled to the benefits negotiated while they were active employees, but are not
'employees' whose ongoing benefits are embraced by the bargaining obligation of [29
U.S.C.A. § 158(a)(5), regarding unfair labor practices]." Id. at 170. Similarly, the Court
explained that "[t]o be sure, the future retirement benefits of active workers are part and
parcel of their overall compensation and hence a well-established statutory subject of
bargaining." Id. at 180. In addition, the Court clarified that it was not clear whether the
collective bargaining agreement in Pittsburgh Plate Glass "provided for arbitration that
would have been applicable to this dispute. We express no opinion, therefore, on the
relevance of such a provision to the question before us." Id. at 188 n. 24
Accordingly, Pittsburgh Plate Glass, Millinocket, and IAFF Locall650 's
assertion that retirees are not employees was focused on the determination of whether
individuals who have already retired can form part of the bargaining unit negotiating a
new collective bargaining agreement. Those decisions did not directly address whether
retirees, who were active employees at the time the collective bargaining agreement was
negotiated, constitute employees under said agreement. In any event, while not directly
confronted, Pittsburgh Plate Glass indicated that retirees are employees for purposes of
pursuing a grievance under a bargaining agreement they entered into while active
employees. See 404 U.S. at 180; see also cases cited supra, footnote 1.
Finally, as to the City's argument that Mr. Bann's grievance was not ripe at the
time it was lodged, the Court notes that the City raised this argument for the first time in
· its reply brief. E.g. Bayview Loan Servicing v. Bartlett, 2014 :ME 37, ~ 24, 87 A.3d 741.
.Therefore, the Court would be justified in ignoring this argument. Nevertheless, the
9
Court will address this argument in the interests of efficiency. The Court finds that in
light of the City's letter announcing its interpretation of Article 22, section 2 of the CBA,
the Teamsters clearly had an actionable grievance within the terms of the CBA, which
includes, "any claimed ... misinterpretation ... ofthis agreement .... " (Ex. A to Gould Mf.,
the CBA, Article 1 (emphasis added).) Furthermore, even if the grievance was not ripe at
the time it was filed-which it was-it undoubtedly ripened when Mr. Brann retired
shortly after the grievance was submitted. See Berry Huff McDonald Milligan v.
lvfcCallum, 2013 Me. Super. LEXIS 40, *19 (March 26, 2013) (recognizing that a
counterclaim that ripens during the pendency of a suit would be a permissive, not
compulsory counterclaim). Accordingly, the Court finds that the Teamsters grievance
was ripe because it embraced a "genuine controversy and a concrete, certain, and
immediate legal problem." Marquis v. Town ofKennebunk, 2011 ME 126, ~ 18,36 A.3d
861.
III. Conclusion
The Court denies the City's application to stay arbitration because it cannot be
said with positive assurance that the arbitration clause in Article 1 of the CBA is not
susceptible of an interpretation that covers the asserted dispute. In addition, the Court
rejects the City's argument that the grievance was not ripe because it was raised for the
first time in the City's reply brief and addresses a genuine controversy that is concrete,
certain, and immediate.
Dated: July 21, 2015
Michaela Murphy, Ju ·
Maine Superior Court
10
CITY OF AUGUSTA - PLAINTIFF SUPERIOR COURT
KENNEBEC s s .
I
Attorney for: CITY OF AUGUSTA Docket No AUGSC-CV-2015-00031
STEPHEN E F LANGSDORF - RETAINED
PRETI FLAHERTY ET AL
45 MEMORIAL CIRCLE DOCKET RECORD
PO BOX 1058
AUGUSTA ME 04332-1058
VS
TEAMSTERS UNION LOCAL 340 - DEFENDANT
144 THADEUS STREET
SOUTH PORTLAND ME 04106
Attorney for: TEAMSTERS UNION LOCAL 340
HOWARD REBEN - RETAINED
REBEN 1 BENJAMIN & MARCH
97 INDIA STREET
PO BOX 7060
PORTLAND ME 04112-7060
Filing Document: PETITION Minor Case Type: OTHER STATUTORY ACTIONS
Filing Date: 03/02/2015
Docket Events:
03/05/2015 FILING DOCUMENT - PETITION FILED ON 03/02/2015
Plaintiff's Attorney: STEPHEN E F LANGSDORF
APPLICATION TO STAY ARBITRATION PROCEEDINGS
03/06/2015 Party(s): CITY OF AUGUSTA
ATTORNEY - RETAINED ENTERED ON 03/02/2015
Plaintiff's Attorney: STEPHEN E F LANGSDORF
03/17/2015 Party(s): TEAMSTERS UNION LOCAL 340
SUMMONS/SERVICE - ACK OF RECEIPT OF SUMM/COMP SERVED ON 03/10/2015
ACCEPTED BY HOWARD REBEN
03/17/2015 Party(s): TEAMSTERS UNION LOCAL 340
ATTORNEY - RETAINED ENTERED ON 03/17/2015
Defendant's Attorney: HOWARD REBEN
04/02/2015 Party{s) : TEAMSTERS UNION LOCAL 340
OTHER FILING - OPPOSING MEMORANDUM FILED ON 03/27/2015
Defendant's Attorney: HOWARD REBEN
W/ AFFIDAIT OF KEITH BRANN
04/08/2015 Party(s): CITY OF AUGUSTA
OTHER FILING - REPLY MEMORANDUM FILED ON 04/06/2015
Plaintiff's Attorney: STEPHEN E F LANGSDORF
REPLY TO DEFT'S OPPOSTION TO APPLICATION TO STAY ARBITRATION PROCEEDINGS
04/08/2015 ASSIGNMENT - SINGLE JUDGE/JUSTICE ASSIGNED TO JUSTICE ON 04/08/2015
M MICHAELA MURPHY IJUSTICE
04/14/2015 HEARING - OTHER MOTION SCHEDULED FOR 06/02/2015 at 02:30 p.m. in Room No. 4
Page 1 of 2 Printed on: 07/21/2015
AUGSC-CV-2015-00031
DOCKET RECORD
M MICHAELA MURPHY , JUSTICE
MOTION TO STAY ARBITRATION PROCEEDINGS
04/14/2015 HEARING - OTHER MOTION NOTICE SENT ON 04/14/2015
MOTION TO STAY ARBITRATION PROCEEDINGS
06/02/2015 HEARING - OTHER MOTION HELD ON 06/02/2015
M MICHAELA MURPHY , JUSTICE
Defendant's Attorney: HOWARD REBEN
Plaintiff's Attorney: STEPHEN E F LANGSDORF
MOTION TO STAY ARBITRATION PROCEEDINGS COURTROOM 3,
2:25:40 TO 2:44:32
06/03/2015 CASE STATUS - DECISION UNDER ADVISEMENT ON 06/02/2015
M MICHAELA MURPHY , JUSTICE
MOTION TO STAY ARBITRATION PROCEEDINGS
07/21/2015 ORDER - COURT ORDER ENTERED ON 07/21/2015
M MICHAELA MURPHY , JUSTICE
ORDERED INCORPORATED BY REFERENCE AT THE SPECIFIC DIRECTION OF THE COURT. COPIES TO
PARTIES/COUNSEL AND REPOSITORIES ORDER ON THE CITY OF
AUGUSTA'S APPLICATION FOR A STAY OF ARBITRATION PROCEEDINGS
SEE NOTE AT JUDGMENT
07/21/2015 FINDING - JUDGMENT DETERMINATION ENTERED ON 07/21/2015
M MICHAELA MURPHY , JUSTICE
ORDERED INCORPORATED BY REFERENCE AT THE SPECIFIC DIRECTION OF THE COURT. COPIES TO
PARTIES/COUNSEL
ORDER - COURT JUDGMENT ENTERED ON 07/21/2015
M MICHAELA MURPHY , JUSTICE
ORDERED INCORPORATED BY REFERENCE AT THE SPECIFIC DIRECTION OF THE COURT. COPIES TO
PARTIES/COUNSEL
Judgment entered for TEAMSTERS UNION LOCAL 340 and against CITY OF AUGUSTA. THE COURT DENIES
THE CITY'S APPLICATION TO STAY ARBITRATION BECAUSE IT CANNOT BE SAID WITH POSITIVE ASSURANCE
THAT THE ARBITRATION CLAUSE IN ARTICLE 1 OF THE CBA IS NOT SUSCEPTIBLE OF AN INTERPRETATION
THAT COVERS THE ASSERTED DISPUTE. IN ADDITION, THE COURT REJECTS THE CITY'S ARGUMENT THAT THE
GRIEVANCE WAS NOT RIPE BECAUSE IT WAS RAISED FOR THE FIRST TIME IN THE CITY'S REPLY BRIEF AND
ADDRESSES A GENUINE CONTROVERSY THAT IS CONCRETE, CERTAIN, AND IMMEDIATE.
07/21/2015 FINDING - FINAL JUDGMENT CASE CLOSED ON 07/21/2015
A TRUE COPY
ATTEST:
Clerk
Page 2 of 2 Printed on: 07/21/2015