Teamsters Local Union No. 783 v. Anheuser-Busch, Inc.

RECOMMENDED FOR FULL-TEXT PUBLICATION

Pursuant to Sixth Circuit Rule 206

File Name: 10a0337p.06

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

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Plaintiff-Appellant, -

TEAMSTERS LOCAL UNION NO. 783,

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No. 09-6065

v.

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Defendant-Appellee. -

ANHEUSER-BUSCH, INC.,

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Appeal from the United States District Court

for the Western District of Kentucky at Louisville.

No. 07-00650—Charles R. Simpson III, District Judge.

Argued: June 18, 2010

Decided and Filed: November 1, 2010

Before: NORRIS, MOORE, and McKEAGUE, Circuit Judges.

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COUNSEL

ARGUED: Thomas J. Schulz, PRIDDY, CUTLER, MILLER & MEADE PLLC,

Louisville, Kentucky, for Appellant. Raymond C. Haley III, DINSMORE & SHOHL,

LLP, Louisville, Kentucky, for Appellee. ON BRIEF: Thomas J. Schulz, Scott M.

Miller, PRIDDY, CUTLER, MILLER & MEADE PLLC, Louisville, Kentucky, for

Appellant. Raymond C. Haley III, Loren T. Prizant, DINSMORE & SHOHL, LLP,

Louisville, Kentucky, for Appellee.

McKEAGUE, J., delivered the opinion of the court, in which NORRIS, J., joined.

MOORE, J. (p. 12), delivered a separate opinion concurring in part and dissenting in

part.

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OPINION

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McKEAGUE, Circuit Judge. Teamsters Local Union No. 783 (“Local 783”)

filed suit against Anheuser-Busch seeking to compel Anheuser-Busch to arbitrate a

1

No. 09-6065 Teamsters Local Union No.783 v. Anheuser-Busch, Inc. Page 2

“grievance over Section 11 of the collective bargaining agreement and its effect on

pension rights and benefits.” The parties filed cross-motions for summary judgment.

Local 783 argued that the grievance arose under the collective bargaining agreement and

therefore should be subject to arbitration, while Anheuser-Busch asserted that (1) Local

783’s complaint was time-barred and (2) that the grievance was expressly excluded from

the parties’ arbitration agreement. Local 783 now appeals the district court’s grant of

summary judgment in favor of Anheuser-Busch. Although we find that Local 783’s

claim is not time-barred because Anheuser-Busch failed to unequivocally refuse to

arbitrate, we AFFIRM the decision of the district court and find that Local 783’s

complaint is not subject to arbitration to the extent that the complaint seeks to determine

claimant Jerry T. Vincent’s pension rights and benefits.

I. Background

The material facts of this matter are not in dispute. The relationship between

Local 783 and Anheuser-Busch was governed by a Collective Bargaining Agreement

(“CBA”). Section 21 of the CBA authorizes all grievances “arising under or relating to

the interpretation of” the CBA to be subject to arbitration, provided that “a mutually

satisfactory adjustment is not arrived at” between the Union agent and the employer’s

representative. The CBA also governs union activity, and states in Section 11(b) that

“[w]hen a member of the Union leaves the Employer to take full time employment with

the Local Union, he shall after the completion of such employment with the Local Union

return to his former position and his seniority shall continue uninterrupted.”

Although the CBA governs a variety of employee benefits, it does not cover the

employees’ pension plan. Instead, the CBA explains in Section 24 that a qualified

pension plan would be provided by Anheuser-Busch and would be covered by a separate

document, which was entitled “Retirement Plan for Certain Hourly Employees of

Anheuser-Busch, Inc.” (“Pension Plan”). The Pension Plan not only details the

administration of pension benefits, but also establishes an alternate mechanism for

resolving grievances related to pension rights. Section 14.3 of the Pension Plan provides

a comprehensive procedure by which claims of eligibility for participation in the Pension

No. 09-6065 Teamsters Local Union No.783 v. Anheuser-Busch, Inc. Page 3

Plan or receipt of benefits are to be submitted to and resolved first by the plan director

and, in the event of a denial, by an appeals committee. The section also states that the

director and the appeals committee both have “full and exclusive authority and discretion

to apply, interpret and construe the provisions of the Plan . . . .”

Jerry T. Vincent had been an employee of Anheuser-Busch for many years before

leaving his employment with the company to serve as an elected official of Local 783.

After serving an uninterrupted period of employment with Local 783, Vincent returned

to employment with Anheuser-Busch for one day, was paid for five weeks of vacation,

and voluntarily terminated his employment the next day. During his last few months of

employment with Local 783, Vincent had initiated the process to obtain his retirement

benefits, seeking “full entitlement of benefits” upon notice of retirement. He asserted

that his return to Anheuser-Busch following his term with Local 783 “restored [his] full

seniority rights under the collective bargaining agreement.”

After his claim was denied, Vincent filed an appeal with the appeals committee,

which also was unsuccessful. Vincent then filed a written grievance alleging that

Anheuser-Busch violated his rights “under Section 11 of its current collective bargaining

agreement with Local 783, IBT by refusing to permit [him] uninterrupted seniority for

all purposes, including pension.” After an unsuccessful meeting with a Local 783

official and the local director of operations to resolve the matter, an arbitrator was

selected to hear and decide Vincent’s grievance. However, following review of the file,

Anheuser-Busch’s attorney sent a letter to Local 783 asserting that to the extent

Vincent’s grievance raised a claim for pension benefits, the grievance was “not

arbitrable under the labor contract because pension eligibility and benefits are controlled

by the terms of the separate Pension Plan and, therefore, is subject exclusively to the

claims procedures established in the Pension Plan.” In a series of letters following this

communication, Anheuser-Busch’s attorney sought clarification of the exact nature of

Vincent’s grievance and informed Local 783 that Anheuser-Busch did not agree to

submit any question related to Vincent’s pension benefits to the arbitrator. Counsel also

informed the union that if it planned to pursue the pension claim in arbitration, it would

No. 09-6065 Teamsters Local Union No.783 v. Anheuser-Busch, Inc. Page 4

need to file a claim in federal court to compel arbitration of the pension claims. The

parties then agreed to suspend the planned hearing before the arbitrator.

A few months later, counsel for Local 783 sent a letter to counsel for Anheuser-

Busch that it was “prepared to arbitrate [the] matter.” Anheuser-Busch’s attorney

responded, denying arbitrability of any pension claim contained within the grievance and

noting that Vincent’s pension claims had been conclusively decided by the appeals

committee. Local 783 filed the underlying complaint, arguing that Anheuser-Busch’s

refusal to arbitrate the grievance violated the CBA and seeking to compel Anheuser-

Busch to arbitrate. The district court concluded that Vincent’s grievance was not

arbitrable and granted summary judgment in favor of Anheuser-Busch. Local 783 timely

filed this appeal, seeking reversal of the district court’s order and entry of an order

directing Anheuser-Busch to arbitrate Vincent’s grievance.

II. Analysis

A. Statute of Limitations

We first address Anheuser-Busch’s contention that Local 783’s suit is time-

barred. Although Anheuser-Busch challenged the timeliness of the complaint filed by

Local 783, the district court stated in a footnote only that it “would be disinclined to find

the complaint time-barred, especially in light of” the postponement of the planned

arbitration hearing. Teamsters Local Union No. 783 v. Anheuser-Busch, Inc., Case No.

3:07-cv-00650-CRS, at *1 n.1 (W.D. Ky. Aug. 13, 2009). The court did not

conclusively make a timeliness determination. Rather, the court “presume[d], for the

purposes of [its] opinion, that the complaint [was] timely.” Id. Before we reach the

merits of the underlying dispute, we first determine whether the complaint was, in fact,

time-barred.

This court has determined that the six-month statute of limitations in Section

10(b) of the National Labor Relations Act “is the most appropriate statute of limitations

to be applied in a union suit against a company to compel arbitration . . . .” McCreedy

v. Local Union No. 971, UAW, et al., 809 F.2d 1232, 1237 (6th Cir. 1987). That statute

No. 09-6065 Teamsters Local Union No.783 v. Anheuser-Busch, Inc. Page 5

begins to run “when the employer takes an unequivocal position that it will not

arbitrate.” Int’l Union v. Cummins, Inc., 434 F.3d 478, 483 (6th Cir. 2006) (quoting

McCreedy, 809 F.2d at 1237). “[T]he employer must essentially determine that

negotiation or persuasion is not feasible before the statute of limitations will begin to

run.” Id. at 484. A statement that a grievance is not arbitrable, which simultaneously

requests additional information, does not amount to an unequivocal position that the

employer will not arbitrate. Id.

In this case, Local 783 filed the complaint on November 26, 2007. Anheuser-

Busch contends that the six-month statute of limitations began to run with a series of

letters it sent in February and March of 2007. While all of the letters stated that

Anheuser-Busch did not agree to arbitrate issues related to pension benefits, all of the

letters also requested that Local 783 clarify the exact nature of its grievance. Further,

a March 19 letter from Anheuser-Busch to the arbitrator stated that the parties “agreed

to postpone” the arbitration hearing date. Because all of these communications seek

additional information, and none indicate a position that Anheuser-Busch believed

negotiation or settlement was not feasible, Local 783’s claim is not barred by the statute

of limitations.

B. Arbitrability of Grievance

Although Local 783’s suit is not time-barred, we nonetheless find that Local

783’s claim is not arbitrable. In deciding whether a particular dispute is arbitrable, the

court “begin[s] with the presumption that national labor policy favors arbitration.”

United Steelworkers v. Cooper Tire & Rubber Co., 474 F.3d 271, 277 (6th Cir. 2007).

Under this strong policy favoring arbitration, the court uses four guiding principles:

1) a party cannot be forced to arbitrate any dispute that it has not

obligated itself by contract to submit to arbitration; 2) unless the parties

clearly and unmistakably provide otherwise, whether a collective

bargaining agreement creates a duty for the parties to arbitrate a

particular grievance is a question for judicial determination; 3) in making

this determination, a court is not to consider the merits of the underlying

claim; and 4) where the agreement contains an arbitration clause, the

court should apply a presumption of arbitrability, resolve any doubts in

No. 09-6065 Teamsters Local Union No.783 v. Anheuser-Busch, Inc. Page 6

favor of arbitration, and should not deny an order to arbitrate unless it

may be said with positive assurance that the arbitration clause is not

susceptible of an interpretation that covers the asserted dispute.

Id. at 277–78 (citing AT & T Techs. Inc. v. Commc’ns Workers, 475 U.S. 643 (1986)).

The presumption of arbitrability is particularly applicable in cases involving broad

arbitration clauses. Cummins, 434 F.3d at 485–86. In such cases, arbitration will be

denied only where the parties have expressly excluded the grievance from arbitration.

Id. at 486.

The arbitration clause in the case at bar provides that “[a]ll other grievances,

claims, disputes or controversies arising under or relating to the interpretation of this

Agreement . . . may be submitted upon written request of either party . . . to arbitration.”

This arbitration clause is therefore a broadly written clause, and arbitration should be

denied in this case only if the parties have expressly excluded the grievance from

arbitration. See Cummins, 434 F.3d at 485–86.

Local 783’s complaint seeks an order compelling Anheuser-Busch “to arbitrate

the Jerry T. Vincent grievance over Section 11 of the collective bargaining agreement

and its effect on pension rights and benefits.” Section 11(b) of the CBA provides in

relevant part that a member of Local 783 who leaves Anheuser-Busch to take a position

of full-time employment with Local 783 shall be allowed to “return to his former

position and his seniority shall continue uninterrupted.” In addition to Section 11, Local

783’s complaint also implicates Section 24 of the CBA by specifically seeking a

determination of Jerry Vincent’s “pension rights and benefits.” Section 24 provides that

Anheuser-Busch “agrees to provide a qualified Pension Plan (see Pension Plan

previously submitted by the Employer). Each employee may obtain a copy of the

Summary Plan Description.”

In granting summary judgment in favor of Anheuser-Busch, the district court

held that “[t]o the extent that Vincent seeks to challenge the administrator’s

determination of his right to benefits under the applicable pension plan, he has not stated

a grievance arising under or relating to the interpretation of the CBA, and therefore has

No. 09-6065 Teamsters Local Union No.783 v. Anheuser-Busch, Inc. Page 7

not presented an arbitrable grievance.” Teamsters Local Union No. 783, at *6.

Additionally, the district court held that Vincent’s claim “is not governed by the ‘05-‘10

CBA.” Id. This second determination appears to be an improper evaluation of the

merits of Vincent’s claim. See Cooper Tire & Rubber Co., 474 F.3d at 277 (noting that

the court should not weigh the merits underlying the claim); Cummins, Inc., 434 F.3d at

486. Nothing in the CBA indicates that the arbitrability of a grievance is limited to

employees who took full-time employment with Local 783 during 2005 to 2010.

However, we find that the district court’s first conclusion—determining that Vincent’s

grievance for pension rights and benefits is not an arbitrable grievance—is correct.

In its complaint, Local 783 sought a determination of rights under the Pension

Plan document as dictated by Section 11 of the CBA, and asserted that Vincent was

entitled to arbitrate his grievance in order to make such a determination.1 However,

Vincent’s grievance is expressly excluded from the arbitration clause by the Pension

Plan document itself. Terms are incorporated by reference into a CBA “where the

underlying contract makes clear reference to a separate document, the identity of the

separate document may be ascertained, and incorporation of the document will not result

in surprise or hardship.” Int’l Ass’n of Machinists & Aerospace Workers v. ISP Chems.,

Inc., 261 F. App’x 841, 848 (6th Cir. 2008) (quoting Standard Bent Glass Corp. v.

Glassrobots Oy, 333 F.3d 440, 447 (3d Cir. 2007)); see also United Steelworkers of Am.

v. Commonwealth Aluminum Corp., 162 F.3d 447, 449 (6th Cir. 1998) (noting that

insurance benefits booklets were incorporated by reference into CBA where CBA

referred to booklets by name); Rinard v. Eastern Co., 978 F.2d 265, 269 n.3 (6th Cir.

1992) (stating that for terms to be incorporated by reference, “the reference must be

clear and unequivocal, and must be called to the attention of the other party, he must

consent thereto, and the terms of the incorporated document must be known or easily

1

Local 783’s complaint was vague, and despite Anheuser-Busch’s repeated requests, Local 783

refused to clarify the complaint. On appeal, it still remained unclear whether Local 783 was seeking a

determination of rights under the Pension Plan, general rights under Section 11 without reference to any

specific pension plan, or some other pension plan rights outside of those dictated by the existing Pension

Plan. However, when questioned at oral argument, counsel for Local 783 admitted that the only benefits

in dispute were pension rights, and that those rights specifically came from the Pension Plan referenced

in Section 24 of the CBA, and no other source.

No. 09-6065 Teamsters Local Union No.783 v. Anheuser-Busch, Inc. Page 8

available to the contracting parties”). Moreover, a grievance is not subject to a broadly

worded arbitration clause where the particular grievance has been expressly excluded

from the arbitration clause. Cummins, Inc., 434 F.3d at 486.

In its brief to this court, Anheuser-Busch argues that Vincent’s grievance is

expressly excluded from the arbitration clause because Section 24 of the CBA references

the Pension Plan and the Pension Plan explicitly provides an alternate procedural

framework for resolving pension disputes. We agree. CBA Section 24 clearly

references and identifies the Pension Plan document, and Local 783 has given no

indication that it would be surprised or suffer undue hardship by the incorporation.

Thus, Section 24 incorporates the Pension Plan by reference into the CBA. See ISP

Chems., Inc., 261 F. App’x at 848.

Furthermore, the Pension Plan clearly provides a specific mechanism for

resolving all grievances related to pension rights. Specifically, Section 14.3 provides a

detailed framework by which an individual can make a claim for pension benefits to the

plan director and appeal the denial of a claim to an appeal committee. This same section

also states that the appeal committee “shall have full and exclusive authority and

discretion to apply, interpret and construe the provisions of the Plan.” Further, the

Pension Plan provides a mechanism for a claimant to file a lawsuit if the claimant

disagrees with the committee’s determination, and it also expressly states that the

claimant consents to limited judicial review, based on a rational basis standard, over any

decision of the appeal committee. Based on these alternative dispute resolution

provisions set forth in the Pension Plan, a grievance under Section 11 of the CBA

seeking a determination of rights under the Pension Plan would be expressly excluded

from the arbitration clause. See Commonwealth Aluminum Corp., 162 F.3d at 451–52.

Local 783 nonetheless argues that the grievance falls within the scope of the

arbitration clause because the Pension Plan administrators could not consider how CBA

Section 11(b) affected Vincent’s pension rights. In other words, Local 783 seems to be

arguing that because the Pension Plan administrators could not consider the terms of the

CBA, this court should compel Anheuser-Busch to allow an arbitrator to interpret the

No. 09-6065 Teamsters Local Union No.783 v. Anheuser-Busch, Inc. Page 9

terms of the Pension Plan. Aside from the obvious tension this ruling would create with

the express terms of the Pension Plan, the argument also lacks merit. The Pension Plan

states that “[c]ertain benefits described in the Plan reflect provisions agreed to in

Collective Bargaining Agreements between certain Participating Employers and

applicable Unions.” And numerous provisions within the Pension Plan provide special

benefits and programs for members of certain local unions. Thus, Local 783’s complaint

that Pension Plan administrators could not consider CBA Section 11 has more to do with

its own bargained-for terms under the Pension Plan, and not the arbitrability of its

grievance.

Our conclusion that a grievance for rights under the Pension Plan is not arbitrable

finds support in the case law of both this circuit and our sister circuits. Compare

Commonwealth Aluminum, 162 F.3d at 451–52 (holding that dispute was not subject to

arbitration where insurance booklets incorporated by reference into CBA provided for

alternate dispute resolution mechanism) and Int’l Ass’n of Machinists & Aerospace

Workers, Dist. No. 10 v. Waukesha Engine Div., Dresser Indus., Inc., 17 F.3d 196,

198–99 (7th Cir. 1994) (holding that dispute over medical benefits was not subject to

arbitration where the medical plan provided an alternative review procedure), with

Cooper Tire & Rubber Co., 474 F.3d at 279–80 (holding that dispute over side

agreement within the scope of the CBA was subject to arbitration where side agreement

did not provide for alternative dispute resolution procedure) and United Steelworkers of

Am. v. Mead Corp., Fine Paper Div., 21 F.3d 128, 132 (6th Cir. 1994) (holding dispute

over retirement plan was subject to arbitration where CBA required company to provide

retirement plan and no evidence indicated that grievance was excluded from arbitration).

Thus, any grievance related to Pension Plan rights and benefits is explicitly excluded

from arbitration.

In its briefs, Local 783 also argues that its grievance solely involves

interpretation of CBA Section 11(b) and, therefore, comes within the scope of the

arbitration clause. It further argues that whether an interpretation of Section 11(b)

implicates pension benefits is inconsequential to the issue of arbitrability and that to hold

No. 09-6065 Teamsters Local Union No.783 v. Anheuser-Busch, Inc. Page 10

otherwise would be an improper evaluation on the merits of its grievance. This

argument lacks merit for several reasons.

First, Local 783’s complaint states that it seeks a determination of Vincent’s

“pension rights and benefits,” which inextricably links the complaint to CBA Section 24

and the Pension Plan. Moreover, the parties have expressly agreed that interpretation

of pension rights and benefits under the Pension Plan is exclusively the authority of

Pension Plan administrators. Local 783’s argument that its grievance only involves

interpretation of CBA Section 11(b) reads out the next clause of its complaint, which

seeks a determination on pension rights and benefits. Moreover, Local 783’s attempt to

compel arbitration based on the term “seniority,” as it relates to pension rights and

benefits, does not change the underlying subject of the grievance: pension rights under

the Pension Plan. Arbitrability principles dictate that “a party cannot be forced to

arbitrate any dispute that it has not obligated itself by contract to submit to arbitration.”

Cooper Tire & Rubber Co., 474 F.3d at 277. Anheuser-Busch has not obligated itself

to arbitrate disputes over pension rights and benefits, and Local 783’s attempt to have

us ignore the correct provision of the CBA that provides pension rights—Section

24—does not allow it to compel arbitration. Furthermore, if we agreed with Local 783’s

logic, a party seeking arbitration could always sidestep exclusions to arbitration clauses

simply by claiming that the right it seeks to enforce exists under a portion of the CBA

not covered by the exclusion.

Of course, if the complaint sought to arbitrate a grievance over CBA Section 11

and its effect on something other than pension benefits, this grievance would be subject

to arbitration. But this is not what the complaint seeks, nor is it what Local 783 argues

to this court. Contrary to Local 783’s contention, this court would not have to evaluate

the merits of its claim to hold that the grievance is excluded from the arbitration clause.

Rather, the court would merely be evaluating the nature of the complaint and how it

relates to the arbitration clause, which is unquestionably within the purview of the court.

See Cooper Tire & Rubber Co., 474 F.3d at 277–78 (stating that the question of

arbitrability is one for judicial determination).

No. 09-6065 Teamsters Local Union No.783 v. Anheuser-Busch, Inc. Page 11

Finally, the cases that Local 783 cites do not support its position that its

grievance—however it may be construed—is subject to arbitration. Local 783’s reliance

on Int’l Union, United Auto. Aerospace and Agric. Implement Workers of Am. v.

Federal-Mogul Corp., No. 06-CV-15363-DT, 2007 WL 1888802 (E.D. Mich. June 29,

2007), is misplaced because in that case the complaint sought to compel arbitration on

the employees’ termination status under the CBA and did not make any reference to how

the termination status effected benefits, which was covered by a different dispute

resolution provision. Id. at *1. In this case, Local 783 seeks arbitration over Section 11

of the CBA and “its effect upon pension rights and benefits,” which makes it impossible

to divorce its grievance from the provisions of the Pension Plan document. Unlike the

facts in Federal-Mogul, where the arbitration decision could impact a determination of

benefits, Local 783 is explicitly seeking a determination on pension rights and benefits.

Further, none of the other cases relied on by Local 783 involves the situation where a

party attempts to arbitrate an issue expressly excluded from the arbitration clause. See,

e.g., Local 589, Int’l Ladies’ Garment Workers’ Union, AFL-CIO, v. Kellwood Co.,

592 F.2d 1008, 1012 (8th Cir. 1979) (holding arbitrable dispute over pension benefits

where dispute concerned former employees’ rights and company’s obligations under

CBA); Bressette v. Int’l Talc Co., 527 F.2d 211, 215 (2d Cir. 1975) (holding arbitrable

a dispute over whether company’s termination of business violated the CBA where

arbitration clause did not exclude this dispute); United Steelworkers of Am., AFl-CIO-

CLC v. Gen. Steel Indus., 499 F.2d 215, 219 (8th Cir. 1974) (holding arbitrable dispute

over benefits where benefits plan specifically made eligibility for benefits dependent on

term in CBA). Thus, regardless of how the grievance is construed, it is not subject to

compelled arbitration.

III. Conclusion

For the foregoing reasons, we AFFIRM the decision of the district court.

No. 09-6065 Teamsters Local Union No.783 v. Anheuser-Busch, Inc. Page 12

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CONCURRING IN PART AND DISSENTING IN PART

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KAREN NELSON MOORE, Circuit Judge, concurring in part and dissenting in

part. I join Part II.A. of the majority opinion, concluding that the statute of limitations

does not bar Local 783’s claim because Anheuser-Busch did not unequivocably refuse

to arbitrate more than six months before Local 783 filed the complaint. I dissent from

Part II.B. of the majority opinion regarding the arbitrability of the grievance. Although

the majority properly holds that the arbitration clause is “broadly written” and that

“arbitration should be denied in this case only if the parties have expressly excluded the

grievance from arbitration,” the majority incorrectly fails to require arbitration of the

grievance concerning the implications of the collective bargaining agreement’s provision

in Section 11(b) regarding seniority rights. The interrelationship between CBA § 11(b)

on seniority rights and the Pension Plan is a matter that comes within the scope of the

broad arbitration clause, irrespective of the facts that CBA § 24 references the Pension

Plan and that the Pension Plan has its own dispute-resolution mechanism. Whether there

is a relationship between CBA § 11(b) and the pension claim at issue here and what the

exact nature of that relationship may be are quintessentially issues for the arbitrator to

decide. For this reason, I respectfully dissent from Part II.B. of the majority’s opinion.