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Dayton Heidelberg Distributing Co. v. Local Union No. 957, International Brotherhood of Teamsters

United States District Court, S.D. Ohio, Western Division, Dayton

July 12, 2019

Dayton Heidelberg Distributing Co., Plaintiff,
v.
Local Union No. 957, International Brotherhood of Teamsters, Defendant.

         ENTRY AND ORDER DENYING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT, DOC 14, AND GRANTING IN PART DEFENDANT'S COUNTERCLAIM FOR SUMMARY JUDGMENT, DOC 17. THE ARBITRATION AWARD IN FAVOR OF THE UNION IS ENFORCED BUT DEFENDANT'S MOTION FOR ATTORNEY'S FEES IS DENIED. DEFENDANT IS GRANTED UNTIL AUGUST 2, 2019 TO SUBMIT A DRAFT JUDGMENT ENTRY IN CONFORMITY WITH THIS ORDER AND ENTRY TERMINATING THE CASE.

          THOMAS M. ROSE, UNITED STATES DISTRICT JUDGE.

         Before the Court is a Motion for Summary filed by Plaintiff Dayton Heidelberg Distributing Co. (Doc 14), and a Motion for Summary Judgment filed by Defendant Local Union No. 957, International Brotherhood of Teamsters. (Doc 17). Plaintiff seeks summary judgment to vacate an arbitration award granted to the Defendant. Defendant seeks summary judgment to enforce the arbitration award and further claims they are entitled to attorney's fees under Section 301 of the Labor Management Relations Act, 29 U.S.C. § 185. The parties are largely in agreement regarding the facts. Because Plaintiff's case fails to meet the Sixth Circuit standards to vacate an arbitration award set forth in Michigan Family Resources, Inc. v. SEIU Local 517M, 475 F.3d 746 (6th Cir. 2007), the Plaintiff's Motion for Summary Judgment to vacate the arbitration award is denied and the Defendant's motion will be granted in part.

         I. Background

         Plaintiff Dayton Heidelberg Distributing Co., hereinafter referred to as “Heidelberg” or “the Company”, operates seven wholesale beverage distribution facilities in Ohio and employs approximately 1, 500 employees. (Doc. 14, PageID 511). Defendant, Local Union No. 957, hereinafter referred to as “the Union” or “Local No. 957”, is a labor organization as defined under 29 U.S.C. § 152(5) affiliated with the International Brotherhood of Teamsters, which represents certain Heidelberg employees as their exclusive collective bargaining representative. (Doc. 6, PageID 167). In 2015, Heidelberg began negotiations with several local unions, including Local No. 957, on a new collective bargaining agreement. (Doc. 1, PageID 3). The final CBA, which became effective on June 21, 2015 and expired on March 2, 2019, included provisions governing healthcare benefits and grievance arbitration procedures. (Id. at PageID 2-4).

         Article XVII of the 2015 CBA, entitled “HEALTH AND WELFARE” memorialized the agreement between Heidelberg and the Union regarding the healthcare plans and benefits provided to Union-member employees. (Doc 13-1, PageID 292-93). Article XVII, Section 2 stipulated that Heidelberg will provide insurance for employees and their dependents, that employees will not be responsible for “any premium cost sharing amounts, ” with the caveat that Heidelberg, “reserves the unilateral right to modify or discontinue any and all such benefits, provided the Employer does so in the same manner as affects the non-represented employees, ” without a duty to bargain with the Union regarding those decisions. (Id. at PageID 293). Article VI of the 2015 CBA dictated the grievance procedures agreed upon by Heidelberg and the Union. (Id. at PageID 277). If a grievance was reported and could not be resolved through internal measures, the issue was to be referred to an arbitrator. Id. Under Article VI(e), the arbitrator had the authority to make a “final and binding decision” on the issue, provided the arbitrator's award did not “add to or modify the terms of this Agreement.” (Id. at PageID 278).

         On August 11, 2017, Heidelberg sent a letter to their employees informing them that beginning on September 1, 2017 the company would be assessing a spousal surcharge for any employee whose spouse chose to be covered through the Heidelberg insurance plan despite access to healthcare through their own employer. (Doc. 13-3, PageID 341). The Union filed a grievance in response claiming that the imposition of a working spouse surcharge violated Article XVII of the 2015 CBA, among other provisions. (Doc. 13-2). Ultimately the grievance was referred to Arbitrator Donald Cohen, in accordance with Article VI of the 2015 CBA. (Doc 1, PageID 6).

         After hearing testimony and reviewing evidence provided by both the Union and Heidelberg, Arbitrator Cohen issued a decision and award on May 31, 2018, hereinafter referred to as “the Award." (Id.; Doc 6, PageID 168). The issue, as articulated by Arbitrator Cohen in his award was, “Did the Company violate the 2015-19 collective-bargaining agreement when it implemented a spousal surcharge on September 1, 2017? If so, what is the appropriate remedy?” (Doc 13-13, PageID 502). Arbitrator Cohen's award sustained the Union's grievance, concluding that spouses are beneficiaries of the contract and the spousal surcharge is a premium cost sharing amount for which employees cannot be responsible under Article XVII of the 2015 CBA; thus, Heidelberg violated the 2015 CBA. (Doc 13-13, PageID 506-507). In reaching this conclusion, Arbitrator Cohen relied on the language of the 2015 CBA as well as Heidelberg's past practices by reviewing the 2011 CBA and the company's practice under the 2015 CBA prior to the implementation of the spousal surcharge. (Id. at PageID 505-506). Finally, the Award requires Heidelberg cease the assessment of the spousal surcharge and reimburse any payments made “for spousal coverage from the date of the institution of such charges.” (Id. at PageID 507).

         Following the issuance of the Award, on February 1, 2019, Heidelberg filed the Complaint now before this Court. Later that day, the Union filed its Counterclaim, which is also now before this Court.

         II. Standard

         A. Motions for Summary Judgment

         Rule 56 of the Federal Rules of Civil Procedure governs the standard for summary judgment, stating that summary judgment is proper when the moving party “show[s] that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). Genuine issues of material fact exist when the record “taken as a whole could not lead a rational trier of fact to find for the non-moving party.” Matsushita Elec. Indus., Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). Additionally, a court must determine “whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986). Finally, in motions for summary judgment, the evidence is construed and all reasonable inferences are drawn in favor of the nonmoving party. Hawkins v. Anheuser-Busch, Inc., 517 F.3d 321, 332 (6th Cir. 2008). Summary judgment is denied when “there are any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party.” Anderson, 477 U.S. at 250. Consequently, summary judgment is necessary “against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).

         B. Review of Arbitration Awards

         Federal courts view arbitration awards with an extremely deferential gaze. Judicial review of arbitration awards is limited to ensuring that the collective bargaining agreement commits the dispute to arbitration, that the decision was not procured through fraud or dishonesty, and that the award did not simply reflect the arbitrator's own notions of “industrial justice.” Michigan Family Resources, Inc. v. Service Employees International Union Local 517M, 475 F.3d 746, 752 (6th Cir. 2007) (citing United Paperworkers International Union, AFL-CIO v. Misco, Inc., 484 U.S. 29, 38 (1987)), en banc, cert. denied, 551 U.S. 1132 (2007). In situations where an agreement submits a dispute to arbitration, any questions of contract interpretation are for the arbitrator, not the courts. United Steelworkers of America v. American Manufacturing Co., 363 U.S. 564, 568 ...


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