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Frontier Communications of New York, Inc. v. International Brotherhood of Electrical Workers

May 6, 2008

FRONTIER COMMUNICATIONS OF NEW YORK, INC., PLAINTIFF,
v.
INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, AFL-CIO, LOCAL UNION 503, DEFENDANT.



The opinion of the court was delivered by: Gerard E. Lynch, District Judge

OPINION AND ORDER

In this action, plaintiff seeks a declaratory judgment that defendant lacks standing to arbitrate a grievance with plaintiff pursuant to an agreement between the two parties, and for an injunction preventing such an arbitration from proceeding. Defendant now moves to dismiss plaintiff's claims for relief pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. The motion will be granted.

BACKGROUND

This case concerns a collective bargaining agreement between plaintiff Frontier Communications of New York, Inc. ("Frontier"), a telecommunications company, and defendant International Brotherhood of Electrical Workers, AFL-CIO, Local Union 503 ("Local 503"), the labor union representing Frontier employees. (Compl. ¶¶ 4-6.) The collective bargaining agreement ("CBA") at issue was effective from February 1, 2004, to January 31, 2007, and provides for the rates of pay, hours of work, and other conditions of employment for Frontier employees. (Compl. ¶ 6; CBA*fn1 Article 1.)

One condition of employment provided by the CBA is that "for any employee who retires and receives a Defined Services Pension, [Frontier] will contribute toward the basic Health Care coverage (Medical) at the rate of $250 for single and $375 for family coverage." (CBA § 28.3.) In the spring of 2005, Local 503 accused Frontier of violating this provision by unilaterally making changes to retiree medical benefits. (Compl. ¶ 18.) The CBA sets forth a procedure for resolving "[a]ny grievance which may arise between the Union or any employee in the Bargaining Unit and the Company." (CBA § 29.2.) According to this procedure, Local 503 must seek an informal resolution by presenting the grievance to company management, and if that fails, Local 503 may submit the grievance to arbitration. (CBA §§ 29.2, 30.1.) Local 503 presented its grievance regarding retirement benefits to company management, but Frontier denied the grievance on the grounds that Local 503 is an agent only of Frontier employees, that Local 503 was seeking to represent retirees, and that "retirees do not qualify as employees" under the CBA. (Compl. ¶ 21.) Local 503 thereafter filed a demand for arbitration. (Id. ¶ 22.)

Frontier filed suit in this Court to prevent that arbitration. Frontier argues that Local 503 lacks standing to arbitrate the grievance with Frontier, and it seeks a declaratory judgment to that effect, and an injunction preventing the union from seeking to arbitrate or otherwise pursuing the grievance without the "explicit consent from any and all retirees whose interests it seeks to represent." (Compl. ¶ 32.) Local 503 moves to dismiss the action.

DISCUSSION

I. Motion to Dismiss Standard

A motion to dismiss may be granted for a plaintiff's "failure to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). Upon such a motion, "[t]he issue is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims." Scheuer v. Rhodes, 416 U.S. 232, 236 (1974), abrogated on other grounds, Harlow v. Fitzgerald, 457 U.S. 800, 815 (1982). A complaint may be dismissed only where the complaint fails to plead "enough facts to state a claim to relief that is plausible on its face." Bell Atlantic Corp. v. Twombly, ___ U.S. ___, 127 S.Ct. 1955, 1974 (2007). When deciding a 12(b)(6) motion, the Court must take as true the facts as alleged in plaintiff's complaint. Cleveland v. Caplaw Enters., 448 F.3d 518, 521 (2d Cir. 2006). All reasonable inferences must be drawn in the plaintiff's favor. Freedom Holdings, Inc. v. Spitzer, 357 F.3d 205, 216 (2d Cir. 2004).

Here, the parties' dispute involves pure questions of law. Frontier seeks a declaratory judgment that Local 503 is not entitled to compel arbitration with Frontier regarding the retirement benefits in the CBA, and an injunction to prevent it from trying to do so. Whether Frontier is entitled to that relief turns on whether Local 503 would be entitled to compel arbitration with Frontier pursuant to the CBA. If Local 503 would be entitled to compel such arbitration, taking the facts as pleaded by Frontier as true, then Frontier has failed to state a claim, and the motion to dismiss must be granted.

II. Standing Under The Labor Management Relations Act

Local 503's statutory basis to compel arbitration in federal court is Section 301 of the Labor Management Relations Act ("LMRA"). Section 301(b) provides that a "labor organization may sue or be sued as an entity and in behalf of the employees whom it represents in the courts of the United States." 29 U.S.C. § 185(b). In such a suit, a district court has jurisdiction to compel arbitration under a collective bargaining agreement. United Steelworkers of America v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582 (1960). In doing so, however, a court's role is limited to determining the "question of arbitrability," meaning the "gateway dispute about whether the parties are bound by a given arbitration clause." Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 84 (2002). In determining arbitrability, a court must give effect to the congressional policy in favor of arbitration by granting an order to compel "unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute." Warrior & Gulf Navigation, 363 U.S. at 582-83. Any "doubts should be resolved in favor of coverage." Id. at 583.

Frontier concedes that the dispute is "admittedly arbitrable" (Pl. Opp'n 5), but argues that the question of arbitrability may not reached by this Court because Local 503 lacks standing to enforce the arbitration clause. The question of standing is jurisdictional, concerned with "whether the litigant is entitled to have the court decide the merits of the dispute or of particular issues." Warth v. Seldin, 422 U.S. 490, 498 (1975). It is a requirement of Article III of the Constitution, and in order to satisfy it, a plaintiff must allege (1) a concrete, personal injury in fact (2) that is "fairly traceable to the challenged action of the defendant" and (3) likely to be redressed by the relief sought from the court. Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 181-82 (2000), citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992).*fn2

Frontier argues that Local 503 lacks standing because it seeks to enforce a provision of the CBA that affects retirees, and that it may not "represent the legal interests of retirees" without their consent. (Pl. Opp'n 5.) The question of whether a union may enforce a provision of a collective bargaining agreement affecting retirees has not been decided in this Circuit. American Federation of Grain Millers, AFL-CIO v. International Multifoods Corp., 116 F.3d 976, 978 n.2 (2d Cir. 1997) ("It is unclear whether a '[u]nion has standing under [a] CBA to assert the rights of individual retirees in a dispute with a former employer.'"), quoting Schweizer Aircraft Corp. v. Local 1752, UAW, 29 F.3d 83, 87 (2d Cir. 1994). Frontier cites several authorities from other circuits in support of the proposition that unions must "obtain retirees' consent before seeking to arbitrate claims on their behalf." (Pl. Opp'n 3, citing Cleveland Elec. Illuminating Co. v. Utility Workers Union, 440 F.3d 809, 817-18 (6th Cir. 2006); Int'l Ass'n of Machinists & Aerospace Workers v. Goodrich Corp., 410 F.3d 204, 206 (5th Cir. 2005); ...


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