International Brotherhood of Electrical Workers Local 2150 v. Nextera Energy Point Beach, LLC

In the

United States Court of Appeals

For the Seventh Circuit

No. 13-3851

INTERNATIONAL BROTHERHOOD OF

ELECTRICAL WORKERS LOCAL 2150,

Plaintiff-Appellant,

v.

NEXTERA ENERGY POINT BEACH, LLC,

Defendant-Appellee.

Appeal from the United States District Court for the

Eastern District of Wisconsin.

No. 2:12-cv-00485 — C.N. Clevert, Jr., Judge.

ARGUED JUNE 5, 2014 — DECIDED AUGUST 11, 2014

Before WOOD, Chief Judge, and EASTERBROOK and KANNE,

Circuit Judges.

KANNE, Circuit Judge. The plaintiff, a union operating on

behalf of certain employees at a nuclear energy facility, sued

the facility to compel arbitration after a union employee was

discharged, in his opinion, without just cause. The facility

opposed arbitration on various grounds, and was successful in

the district court. Reviewing de novo, we find that the dispute

between the parties falls squarely within the coverage of the

2 No. 13-3851

arbitration clause, and we reverse. The relief sought by the

plaintiff is granted.

I. BACKGROUND

NextEra Energy Point Beach, LLC, owns and operates the

Point Beach Nuclear Power Plant, a two-unit commercial

nuclear energy generating facility in Two Rivers, Wisconsin.

Nuclear Registry Commission regulations governing nuclear

plants require that “unescorted access” to the Point Beach

facility be limited to those individuals who work within the

protected area of the plant and who meet and maintain

compliance with certain requirements. NextEra requires

employees to maintain unescorted access privileges as a

condition of their employment.

International Brotherhood of Electrical Workers Local 2150

(the “Union”) is a labor organization representing employees

of NextEra for collective bargaining purposes. The Union

represents four bargaining units at the Point Beach facility,

each of which is covered by a separate collective bargaining

agreement. Those agreements are color-coded, and the “White

Book” covers the dispute in this case.

Jonathan Hofstra was a full-time, union-affiliated employee

at the Point Beach facility from February 2004 through Febru-

ary 24, 2012. On February 13, 2012, Hofstra reported to his

supervisor that he had been arrested and criminally charged

with operating a motor vehicle while intoxicated. NextEra

revoked Hofstra’s unescorted access privileges effective

February 20, 2012. Because the maintenance of those privileges

was a necessary condition to continued employment at the

No. 13-3851 3

Point Beach facility, NextEra terminated Hofstra four days

later.

On April 5, 2012, the Union filed a written grievance on

behalf of Hofstra alleging that he was “discharged from

employment without just cause due to an inappropriate site

access denial determination” in violation of certain provisions

of the White Book. The Union requested that Hofstra’s unes-

corted access privileges be restored, that his employment be

reinstated, and that he be made whole. NextEra denied the

grievance and refused to arbitrate. After confirming NextEra’s

stance, the Union filed suit in federal court to compel arbitra-

tion. The district court denied the Union’s motion, and we

reverse. Our jurisdiction over the case stems from the federal

questions involved.

II. ANALYSIS

We review a district court’s decision to deny or compel

arbitration de novo. United Steel, Paper and Forestry, Rubber, Mfg.,

Energy, Allied Indus. and Serv. Workers Intern. Union v. TriMas

Corp., 531 F.3d 531, 535 (7th Cir. 2008). We must first determine

whether the Union is making a claim that is, “on its face,”

governed by the White Book arbitration clause. Id. (citing

United Steelworkers of America v. Am. Mfg. Co., 363 U.S. 564, 568

(1960)). In doing so, we are mindful that both the law and

public policy strongly favor arbitration, see, e.g., 29 U.S.C.

§ 173(d); Gateway Coal Co. v. Mine Workers, 414 U.S. 368, 378–79

(1974), and that the party seeking arbitration is entitled to the

benefit of the doubt. Where the arbitration clause is broad, we

presume arbitrability of disputes. AT&T Techs., Inc. v.

Communc'ns Workers of America, 475 U.S. 643, 649 (1986). And

4 No. 13-3851

where any ambiguity as to the scope of the clause exists, we

will construe it in favor of the party seeking arbitration. Volt

Info. Sci., Inc. v. Bd. of Trs. of Leland Stanford, Jr. Univ., 489 U.S.

468, 475–76 (1989). Ultimately, we will compel arbitration

“unless it may be said with positive assurance that the

arbitration clause is not susceptible of an interpretation that

covers the asserted dispute.” United Steel, 531 F.3d at 535

(quoting United Steelworkers of America v. Warrior & Gulf, 363

U.S. 574, 582–83 (1960)).

Pursuant to those standards, we find that the Union’s

grievance, on its face, clearly falls within the scope of the White

Book arbitration clause. That means this dispute will be

arbitrable—at least to the extent it goes to Hoftsra’s

discharge—unless we can say otherwise with “positive

assurance.” NextEra has provided nothing to us that comes

close to meeting that standard, and so we must reverse the

decision of the district court and grant the relief the Union

seeks.

A. Facial Arbitrability

We begin our discussion with the White Book arbitration

clause. Article 16 of the White Book sets out grievance

procedures. A “grievance” is defined as “any complaint or

dispute … concerning the interpretation or application of [the

White Book] or concerning any claim of disciplinary action or

discharge taken against an employee without just cause.” The

Union is required to carry any grievance through a series of

steps. If, after moving through the first three steps (each of

which involves some level of review by NextEra), a grievance

which “involves compliance with the terms and conditions of

No. 13-3851 5

[the White Book]” is not “satisfactorily resolved,” the Union

“may … submit the dispute to a Board of Arbitration.”

The Union rightly notes that this language is of a type that

we have referred to, in the past, as broad enough to trigger the

presumption of arbitrability. See Intern. Union of Operating

Eng’rs Local Union 103 v. Indiana Constr. Corp., 13 F.3d 253, 254,

257 (7th Cir. 1994) (clause required arbitration of “any dispute

… concerning the interpretation or application of the terms of

this contract.”); Certified Grocers of Illinois, Inc. v. Local 703, 816

F.2d 329, 329–30 (7th Cir. 1987) (clause required the arbitration

of “any difference … between the Employer and the Union

concerning any interpretation or application of any of the

provisions of this Agreement.”). NextEra responds that the

language is in fact quite narrow and does not trigger a

presumption. At the same time, however, NextEra

acknowledges that we have recently grown more reluctant to

wade into the waters of a breadth-or-narrowness dispute. See

Intern. Bhd. of Elec. Workers Local 21 v. Illinois Bell Tel. Co., 491

F.3d 685, 688 (7th Cir. 2007). This case provides a great

illustration of the basis for our reticence: The entire dispute is

irrelevant. We need not rely on the “broad language

presumption,” here. The White Book specifically contemplates

arbitration of this kind of dispute.

The grievance the Union filed on Hofstra’s behalf claimed

that Hofstra “was discharged from employment without just

cause due to an inappropriate site access denial

determination.” Employee discharge is specifically listed in

Article 16 as an appropriate subject for a grievance. More

importantly, a “just cause” requirement and certain procedural

6 No. 13-3851

conditions are attached to discharge by Article 12, meaning

that a grievance concerning Hofstra’s discharge goes to “terms

and conditions” set out in the White Book. The Article 16

arbitration clause, in turn, covers grievances related to the

“terms and conditions” of the White Book. Thus, Hofstra’s

grievance is arbitrable “on its face.” United Steel, 531 F.3d at

535. That means we will compel arbitration “unless it may be

said with positive assurance that the arbitration clause is not

susceptible of an interpretation that covers the asserted

dispute.” Id.

B. NextEra’s Arguments

Although NextEra concedes that a disciplinary discharge is

generally arbitrable, it protests arbitration of this particular

dispute. First, it argues that Hofstra’s was not, in fact, a

disciplinary discharge, and that only disciplinary discharges

are subject to arbitration. Second, NextEra argues that the

Hofstra “discharge” grievance in fact goes to the unescorted

access termination, which is a non-arbitrable issue, and that the

entire discharge is therefore excluded from arbitration. Third,

NextEra argues that other “forceful evidence” of intent exists

which supports excluding this dispute from arbitration. None

of NextEra’s arguments holds water.

1. “Disciplinary Discharge”

NextEra attempts to bring Hofstra's discharge out from

under the plain language of the arbitration clause by asserting

that it was not a "disciplinary" discharge. Instead, according to

NextEra, it was a discharge for failing to meet the terms and

conditions of Hofstra's employment, because his conduct was

such that his unescorted access had to be revoked. But a

No. 13-3851 7

discharge for failing to meet the terms and conditions of

employment is a disciplinary discharge, according to any

remotely sensible understanding of that term. Thus, even if

NextEra is correct to read the arbitration clause to cover only

“disciplinary” discharges, this one would qualify. NextEra’s

first theory is therefore a non-starter.

2. Reclassifying the Grievance

NextEra’s second argument focuses on the fact that an

arbitrator’s consideration of whether or not Hofstra was

discharged with just cause will necessarily hinge on the

propriety of the unescorted access termination, a management

decision which NextEra believes is not arbitrable. NextEra

relies on our decision in Intern. Ass’n of Machinists Lodge No.

1777 v. Fansteel, Inc., 900 F.2d 1005, 1011 (7th Cir. 1990), for the

proposition that the court must examine the language of a

grievance to determine the “true nature” of the dispute, and

whether that true nature is “substantively arbitrable.”

The Union admits that it does hope to gain arbitrator

review of the access decision as the motivation behind

Hofstra’s termination. But NextEra overestimates the effect of

that admission on the arbitrability of the discharge dispute as

a whole. Fansteel’s discussion of “substantive arbitrability”

goes to the rule—a common one, which we have invoked

already—that a dispute which falls within the arbitration

clause on its face will nevertheless be excluded if “we can say

with positive assurance that the parties intended to exclude the

involved dispute from arbitration.” 900 F.2d at 1010–11.

Pursuant to the White Book, discharge disputes fall within the

arbitration clause on its face. We therefore will not preclude

8 No. 13-3851

arbitrator review of this grievance entirely unless we can say

with positive assurance that certain kinds of

discharges—particularly, ones based on the revocation of

unescorted access privileges—are nonetheless excluded from

arbitration.

NextEra has provided no evidence or legal argument which

leaves us so “positively assured.” This case is nothing like

Fansteel, on the facts. There, although the subject matter of the

parties’ dispute was facially arbitrable, a separate written

settlement agreement specifically committed the dispute to

resolution in a court of law. Id. Predictably, we concluded that

arbitration was not the method of dispute resolution to which

the parties had agreed. NextEra’s argument against

arbitrability in this case is not based on any such express

agreement. It is based on the lack thereof. The White Book does

not expressly commit unescorted access decisions to either

arbitration or to management’s sole discretion, so NextEra

argues that the matter is implicitly committed to management

discretion by a residual authority clause in the agreement

stating that “all management functions … not modified or

restricted by [the White Book] are retained and invested

exclusively in [NextEra].”

That argument may or may not be a good one for

precluding an arbitrator from second-guessing the unescorted

access decision itself. That is not for us to decide. It is certainly

not a good argument, however, for precluding arbitration of

the discharge decision. “[A]ny exclusion of particular parties or

issues from coverage by an agreement’s arbitration provisions

should not be inferred from the language of the agreement, but

No. 13-3851 9

must be stated explicitly in the agreement.” Ceres Marine Terminals,

Inc. v. Intern. Longshoremen’s Ass’n, Local 1969, AFL-CIO, 683

F.2d 242, 247 (7th Cir. 1982) (emphasis added). On its face, the

arbitration clause covers any grievance that a discharge did not

meet the requirements laid out in Article 12. Without an

explicit exclusion of discharges based on unescorted access

revocations, we will not contravene the language of the

agreement.

We note, however, that we do not hold that the arbitrator

may, in fact, review and overturn NextEra’s revocation of

Hofstra’s unescorted access privileges. We express no opinion

on the subject. NextEra is entitled to present its arguments on

that issue to the arbitrator, and the arbitrator may well find the

decision unreviewable. If so, the entire matter of the propriety

of the discharge might be very quickly resolved. But the

potential weakness of the Union’s claim on the merits is no

defense to the arbitrability of this dispute, as a threshold

question.

3. “Forceful Evidence”

NextEra’s final argument is premised on the rule that, even

where an arbitration agreement covers the dispute on its face,

the opposing party can avoid arbitration by presenting

“forceful evidence of a purpose to exclude the claim from

arbitration.” Printing Specialties and Paper Prods. Union Local 680

v. Nabisco Brands, Inc., 833 F.2d 102, 104 (7th Cir. 1987). NextEra

relies on two types of evidence which it believes are “forceful”:

bargaining history and established practice.

10 No. 13-3851

a. Bargaining History

NextEra believes the bargaining history between the parties

shows that they agreed to exclude unescorted access decisions

from arbitration. NextEra begins by noting a 2006 arbitration

decision—involving different parties,1 a different collective

bargaining agreement, and different facts—in which the

arbitrator concluded that access decisions were non-

reviewable. That decision, of course, has no effect on anything

outside of its specific, limited context:

It is black letter law that arbitration awards are not

entitled to the precedential effect accorded to judicial

decisions. Indeed, an arbitration award is not

considered conclusive or binding in subsequent cases

involving the same contract language but different

incidents or grievances.

El Dorado Tech. Servs., Inc. v. Union Gen. De Trabajadores de

Puerto Rico, 961 F.2d 317, 321 (1st Cir. 1992) (citations omitted).

Nonetheless, NextEra believes that the Union’s failure to

push for language rebutting the 2006 arbitrator’s

decision—which applied only to different parties and a

different agreement—in negotiations between these parties, for

this agreement, shows that the Union intended the exclusion of

disputes like the present one from arbitration. Furthermore,

NextEra believes the Union’s failure to object to its removal of

a clause from an early draft of the White Book mandating that

1

The Union was a party to the 2006 arbitration, but at that time the Point

Beach facility was owned by Wisconsin Electric Power Company, and,

obviously, Hofstra was not the employee involved.

No. 13-3851 11

an unescorted access revocation not be “arbitrary and

capricious” demonstrates the Union’s accession to NextEra’s

intent to remove the issue from arbitration.

There is a significant problem with all of this: None of it

suggests in any way that the parties intended to remove

discharge decisions from coverage under the arbitration clause,

and the Union is asking for review of a discharge decision.

Moreover, we are not persuaded that NextEra’s evidence is

“forceful.” A party’s failure to center future negotiations

around a non-binding prior arbitration decision to which its

negotiating partner was not even a party is relatively

unremarkable, in our eyes. It is certainly not forceful evidence

of an intent to exclude. As for NextEra’s push to remove

conditional language concerning unescorted access decisions,

it is not even clear whether the Union knew of NextEra’s

motives, much less agreed to them.

b. Established Practice

NextEra’s second line of purported “forceful evidence” of

a mutual intent to exclude access decisions from arbitrator

review is that it developed its own “Access and Fitness

Program” to monitor and ensure its employees’ compliance.

The program was unilaterally established, and it no more

forcefully establishes a mutual intent to exclude covered

material from arbitration than the fact that NextEra employed

its own internal disciplinary procedures establishes a joint

intent to exclude disciplinary actions from arbitration. The

existence of internal review procedures and an agreement to

arbitrate disputes concerning the results of those procedures

are not in any way mutually exclusive. Moreover, again, does

12 No. 13-3851

not go to show that discharge decisions founded on access

revocations were intentionally excluded from the facially

applicable arbitration clause.

III. CONCLUSION

In summary, the Union’s grievance falls within the scope of

the arbitration clause on its face. As a result, we must compel

arbitration “unless it may be said with positive assurance that

the arbitration clause is not susceptible of an interpretation that

covers the asserted dispute.” United Steel, 531 F.3d at 535. We

cannot say so with positive assurance in this case, either on the

basis of explicit exclusion, forceful evidence of intent, or any of

the other possibilities offered by NextEra. This grievance must

be sent to arbitration. There, NextEra may raise many of the

same defenses it used in this lawsuit, including its theory that

the arbitrator may not review or overturn the unescorted

access revocation undergirding Hofstra’s discharge. It is not for

us to determine how successful those arguments will prove to

be on the merits, but we can say with certainty that they do

nothing to defeat the plain language of the White Book within

the context of this case. The judgment of the district court is

REVERSED.