Carpenters Union Local No. 2236 v. McGuire Furniture Company, The

Filing 38

ORDER GRANTING MOTION TO COMPEL ARBITRATION AND SETTING FURTHER CASE MANAGEMENT CONFERENCE by Judge William Alsup [granting 32 Motion to Compel]. (whasec, COURT STAFF) (Filed on 12/6/2013)

1
2
3
4
5
6

IN THE UNITED STATES DISTRICT COURT

7
FOR THE NORTHERN DISTRICT OF CALIFORNIA
8
9

11
For the Northern District of California

United States District Court

10

12

CARPENTERS UNION LOCAL NO. 2236,
affiliated with the Norther California
Carpenters Regional Council, and the United
Brotherhood of Carpenters and Joiners of
America,
Plaintiff,

13
14
15
16

v.
THE MCGUIRE FURNITURE COMPANY,
a North Carolina Corporation,
/

18

20
21

ORDER GRANTING MOTION
TO COMPEL ARBITRATION
AND SETTING FURTHER
CASE MANAGEMENT
CONFERENCE

Defendant.

17

19

No. C 13-02877 WHA

INTRODUCTION
In this labor dispute, plaintiff union moves to compel arbitration. To the extent stated
below, the motion is GRANTED.
STATEMENT

22

This action boils down to an attempt by the employer to avoid a provision in the

23

collective bargaining agreement (“CBA”) in favor of a slightly different provision in the Kohler

24

Co. 401(k) Savings Plan (the “plan”). Plaintiff union wants compliance with the CBA 401(k)

25

employer-matching provision. Defendant employer’s opposition argues that the plan provision

26

is inextricably involved in the dispute but not subject to the CBA arbitration clause.

27
28

1
2

Both plaintiff and defendant agree they are parties to the CBA. Section 14 governs
arbitration under the CBA:

3

In the event the parties are unable to resolve a grievance or dispute
arising under this agreement, such grievance or dispute shall be
referred to an Arbitration Committee . . . The decision of a
majority of the Arbitration Committee shall be final and binding
upon the parties hereto. Such decision shall be within the scope
and terms of this Agreement, but shall not change any of its terms
or conditions . . . Any arbitration under this Agreement shall be
limited to its interpretation and application, and shall not include
any new terms, additions to, or modifications of the provisions
hereof.

4
5
6
7
8

(Dkt. No. 12-1 at 11). The 401(k) matching provision is governed by Section 22:
9
The Company agrees to match twenty-five ($0.25) cents per one
dollar ($1.00) employee contribution, up to two percent (2%) of the
employee’s gross earnings, into the 401(k) Plan for the duration of
this agreement.

11
For the Northern District of California

United States District Court

10

12

(Dkt. No. 12-1 at 14). The Kohler Co. 401(k) Savings Plan contains similar language:

13

Effective September 1, 1998, the Employer shall make
contributions to the Plan with respect to each payroll period on
behalf of each Participant in an amount equal to 25 percent of that
portion of the Participant’s Elective Contributions which does not
exceed 2 percent of his Compensation in such payroll period.

14
15
16
17

(Dkt. No. 34-1 at B.3-1).
In February 2013, plaintiff filed its grievance that defendant’s “contributions to 401K

18

Plan [sic] are not in accordance with Section 22.” They were unable to resolve the dispute.

19

Plaintiff subsequently filed a motion to compel arbitration in state court. Defendant removed

20

here. Plaintiff union now moves to compel arbitration under the CBA pursuant to Section 301

21

of the Labor Management Relations Act (“LMRA”). This order follows full briefing and oral

22

argument.

23

ANALYSIS

24

Section 301 of the LMRA confers jurisdiction on the federal courts to enforce collective

25

bargaining agreements and other agreements between employers and employee representatives.

26

29 U.S.C. 185. This jurisdiction includes the enforcement of agreements requiring resolution of

27

disputes through arbitration. E.g., Textile Workers Union v. Lincoln Mills, 353 U.S. 448, 455

28
2

1

(1957); Gen. Teamsters Union Local No. 174 v. Trick & Murray, Inc., 828 F.2d 1418, 1420

2

(9th Cir. 1987).

3

Arbitration “is a matter of contract,” and a party cannot be required to submit a dispute

America, 475 U.S. 643, 648–49 (1986). The question of whether the parties have agreed to

6

arbitration is to be decided by the court and not the arbitrator, unless the parties have clearly and

7

unmistakably provided otherwise. Ibid. If a contract between the parties contains an arbitration

8

clause, the court should enforce that clause “unless it may be said with positive assurance that

9

the arbitration clause is not susceptible of an interpretation that covers the asserted dispute.” Id.

10

at 650. Any “[d]oubts should be resolved in favor of coverage.” Ibid (internal quotation marks

11
For the Northern District of California

to arbitration unless it has consented to do so. AT & T Techs. Inc. v. Commc'ns Workers of

5

United States District Court

4

and citations omitted).

12

Both parties agree that a valid agreement to arbitrate exists, but disagree on whether the

13

agreement encompasses the dispute at issue and thus whether they both consented to arbitrate

14

this dispute. Defendant argues that it has not consented to arbitrate this issue because “this

15

matter falls outside of the scope of the limited arbitration clause in the CBA” (Opp. 1).

16

Defendant argues that this is so because, according to defendant, “[i]n order to determine the

17

meaning of the CBA’s 401(k) contribution language, the arbitrator would be required to

18

interpret and apply the 401(k) contribution terms in the distinct and separate 401(k) Plan.”

19

Defendant stresses that the arbitration provision is limited to the interpretation and application

20

of the CBA” (Opp. 5).

21

Defendant cannot explain why the plan provision is vital to the meaning of the CBA

22

provision. Defendant merely argues that “the controlling 401(k) Plan . . . already occupies the

23

field relating to Plan contributions,” and notes that the dispute “may affect the application of

24

[the plan’s rival] term in the administration of the separate” plan (Opp. 5)

25

These arguments are speculative and further assume that plaintiff’s grievance is

26

ultimately based on the plan rather than the CBA. Defendant has made no showing in support of

27

this assumption. Defendant simply argues: “the dispute between the parties does not arise under

28

the CBA alone, but also under the ERISA-regulated 401(k) Plan” (Opp. 5–6). Not so. The terms
3

1

of the employer contribution are detailed in the CBA. Defendant has not shown that the CBA

2

provision is incomplete. Further, defendant has failed to show that plaintiff’s grievance

3

ultimately requires interpretation of the plan provision. Defendant’s argument seems to suggest

4

that the provision in the CBA is merely an inaccurate placeholder for the plan provision. Such a

5

finding would render the language in the CBA powerless. This order does not so find.

the arbitrator to reform the plan, which is barred (Opp. 1–2). Defendant’s argument is based on

8

the same assumptions as detailed above, but defendant relies on CIGNA Corp. v. Amara, __ U.S.

9

__, 131 S. Ct. 1866 (2011), to argue that even if this motion was granted, the arbitrator would be

10

barred from reforming the plan. In that decision, the Supreme Court found that the district court

11
For the Northern District of California

Defendant also argues that plaintiff’s motion must fail because granting it would require

7

United States District Court

6

had no authority under ERISA Section 502(a)(1)(B) to reform CIGNA’s pension plan. In so

12

ruling, the Court rejected an argument that documents summarizing CIGNA’s pension plan were

13

not “terms” of the plan. Id. at 1877-78.

14

Defendant’s reliance on CIGNA is inapposite. First, CIGNA is an ERISA action.

15

As such, the Court specifically evaluated Section 502. Such an analysis is not applicable to this

16

action despite defendant’s attempts to argue that this ought to be an ERISA action. Breach of a

17

CBA benefits provision “violates both LMRA § 301 and ERISA.” Alday v. Raytheon Co., 693

18

F.3d 772, 782 (9th Cir. 2012). It may be true that plaintiff also has an action under ERISA, but

19

defendant provides no authority to show that plaintiff cannot bring this action under the LMRA.

20

Instead, defendant cites vaguely to the ERISA statute (Opp. 6). This is inadequate.

21
22
23

Second, the CIGNA decision evaluates a district court’s power under the ERISA statute.
This order evaluates an arbitrator’s power under a CBA arbitration provision.
Third, the Supreme Court in CIGNA found that summaries of the pension plan were not

24

terms of the pension plan itself. The CBA in this action is not a summary of the plan. Rather,

25

the CBA is a contract between McGuire Furniture Company and Carpenters Union Local No.

26

2236 and both parties are bound by its terms.

27

Fourth, defendant has not shown that an arbitrator would have to rely on the plan

28

provision. The union seeks to enforce the CBA contribution clause and any need to resort to the
4

1

plan document will not require more than ancillary examination of the plan. Defendant has

2

failed to make an adequate showing. The Supreme Court has instructed that any “[d]oubts

3

should be resolved in favor of coverage.” AT & T Techs. Inc., 475 U.S. at 650. This order so

4

finds.

5

At oral argument, defendant referred to Santa Monica Culinary Welfare Fund v. Miramar

6

Hotel Corp., 920 F.2d 1491 (9th Cir. 1990). Defendant did not cite this decision in its

7

opposition. Regardless, Miramar is not helpful to defendant. Defendant referred to Miramar by

8

reading the following passage:

9

11
Miramar, 920 F.2d at 1495. First, defendant’s reliance on Miramar once again assumes that
For the Northern District of California

United States District Court

10

neither an employer nor a union, singly or together, can alter the
terms of a trust instrument such as the one involved in this case
unless the power to do so was reserved when the trust was created
or properly amended.

12
plaintiff’s grievance relies on the plan provision rather than the CBA. In Miramar, the dispute
13
was expressly based on terms outside the CBA. In this action, the claim is based on a provision
14
in the CBA. Second, as in CIGNA, Miramar was an ERISA action. Third, no breach of the
15
CBA was alleged in Miramar. Fourth, the rule defendant quoted at oral argument was not
16
dispositive in the case and our court of appeals ruled against the employer.
17
CONCLUSION
18
The motion to compel arbitration is GRANTED. The arbitration must be completed by
19
JUNE 30, 2014. A case management conference will be held on JULY 17, 2014, AT 11:00 A.M.,
20
to verify that all has been done.
21
22
IT IS SO ORDERED.
23
24
Dated: December 6, 2013.

WILLIAM ALSUP
UNITED STATES DISTRICT JUDGE

25
26
27
28
5