Jones Lang Lasalle Americas Inc. v. International Brotherhood of Electrical Workers Local Union No. 313

Filing 18

MEMORANDUM. Signed by Judge Sue L. Robinson on 7/11/2017. (nmfn)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE

JONES LANG LASALLE AMERICAS,
INC.,
Plaintiff,

)
)
)
)
)

) Civ. No. 16-190-SLR

v.

INTERNATIONAL BROTHERHOOD
OF ELECTRICAL WORKERS,
LOCAL 313,
Defendant.

)
)
)
)

)
)

MEMORANDUM
At Wilmington this \\\r'day of July, 2017, having reviewed the motion to dismiss
filed by defendant and the papers filed in connection therewith, the court issues its
decision based on the following reasoning:
1. Background. Jones Lang LaSalle Americas, Inc. ("plaintiff' or "JLLA")
operates office facilities on behalf of JP Morgan Chase at two locations in Delaware.
(D.I. 1, 1110) Defendant International Brotherhood of Electrical Workers Local Union
313 ("defendant" or "Local 313") is the exclusive bargaining unit for certain JLLA
employees at these locations. (Id., 1111) The employment relationship between JLLA
and Local 313's members is governed by a collective bargaining agreement ("the
CBA"), which sets out a three-step process for the settlement of disputes regarding the
interpretation or application of the CBA. (Id., 111112-13) Specifically, Section 26 of the

CBA provides that: 1
(A) Should a difference or dispute arise between the parties hereto as to
the interpretation or application of this contract, it shall be resolved in
accordance with the following procedure:
Step 1: In the first instance, the grievance shall be submitted in
writing by the employee, with the shop steward of the Union, to
the Company's Account Manager or other manager designated
by the Company ("Designee"). The grievance must be submitted
within 0 [sic] working days of the action giving rise to the grievance.
A meeting with the employee, shop steward, the Critical Sites
Operation Manager and/or Designee or other individuals as
determined by the Company will be held to resolve the grievance.
Step 2: If the grievance is not resolved within 5 business days
after the above meeting, the business representative may present
the grievance to the Company's Account Manager.
Step 3: If the grievance is not settled within 10 business days
following Step 2, either party may submit the grievance to the
American Arbitration Association in accordance with its rules.
The decision of the arbitrator shall be binding on both parties and
the cost of the arbitrator will be borne equally by both parties. Each
party shall be responsible for its, his or her counsel fees.
(B) Any grievance that has not [been] referred to arbitration within 30 days
after the aggrieved party knew of the existence of the facts or circumstances
giving rise to the grievance shall be deemed to have been waived, unless
the parties have agreed that the grievance is [a] continuing grievance. In
this case only the claims for damages or relief for events occurring more
than 30 days prior to the presentation to the written grievance shall be
deemed to have been waived. The time frame of 30 days may be extended
upon mutual consent of the Union and the Company.
(C) If the grievance concerns a decision by the Company that directly
affects the entire bargaining unit, the parties agree to attempt to select
an acceptable arbitrator through the American Arbitration Association
who will be able to hold an arbitration hearing between 30 days of the
1

Neither party provided the court with an actual copy of the CBA. Indeed,
defendant hardly referred to the actual language of the relevant section of the CBA. As
a result, the court has had to rely on plaintiff's recitation of Section 26 of the CBA, and
has tried to make sense of such by inserting what appears to be missing language.

2

arbitrator's selection from the panel, and shall notify the American
Arbitration Association of this request at the time of the filing of the demand
for arbitration.
(Id.,

~

13) (emphasis added)
2. Members of the United Association of Journeyman and Apprentice Plumbers

and Pipefitters of the United States and Canada, Local 74 ("Local 74") also perform
work at JLLA's Delaware sites. On or about April 7, 2015, the business manager for
Local 313 ("Drummond") sent a letter to JLLA's managing director ("Prodan"). In that
letter, Drummond informed JLLA that Local 74 members were obligated to pay regular
dues or agency shop fees to Local 313, and that failure to do so may result in efforts by
Local 313 to terminate the employment of such Local 74 members by JLLA.

(Id.,~~

22-23) After a failed attempt on the part of Local 74 and Local 313 to resolve the dues
dispute through mediation, Drummond sent a second letter in September 2015 to
Prodan, notifying JLLA of its "continuing obligation to terminate all employees [of Local
74] that have not paid such fees and are in violation with [the CBA's Agency Shop
clause]."

(Id.,~~

24-26) Attached to this second letter was a list of 16 employees who

were identified by Drummond as being subject to termination, none of whom have been
terminated by JLLA. (Id.,

,m 27-28)

3. On January 27, 2016, counsel for Local 313 sent a letter to the American
Arbitration Association ("AAA") stating that Local 313 and JLLA had an "unresolved
dispute relating to Agency Fees." JLLA then filed a complaint for declaratory relief,
seeking a determination that the parties' dispute is not arbitrable. In response, Local
313 has filed a motion to dismiss. The court has jurisdiction pursuant to 28 U.S.C. §
1331, based on§ 301 of the Labor Management Relations Act, 29 U.S.C. § 185.

3

Venue is appropriate pursuant to 28 U.S.C. § 1391 (b)(2).
4. Standard of review. Local 313's motion to dismiss is based on multiple
grounds for relief, including Fed. R. Civ. P. 12(b)(1) (lack of subject matter jurisdiction),
Fed. R. Civ. P. 12(b)(3) (improper venue), and Fed. R. Civ. P. 12(b)(6) (failure to state a
claim). The Third Circuit, however, has indicated that "motions seeking the dismissal of
a declaratory judgment action on the basis that arbitration is required are not
jurisdictional as they raise a defense to the merits of an action." Liberty Mutual Fire Ins.
Co. v. Yoder, 112 Fed. App'x 826, 828 (3d Cir. 2004) (citation omitted). See also

Nationwide Ins. Co. of Columbus v. Patterson, 953 F.3d 44, 45 n.1 (3d Cir. 1991);
Compucom Systems, Inc. v. Getronics Finance Holdings B. V., 635 F. Supp. 2d 371,
377 (D. Del. 2009).
5. A motion filed under Rule 12(b)(6) tests the sufficiency of a complaint's
factual allegations. Bell At/. Corp. v. Twombly, 550 U.S. 544, 555 (2007); Kost v.

Kozakiewicz, 1 F.3d 176, 183 (3d Cir. 1993). A complaint must contain "a short and
plain statement of the claim showing that the pleader is entitled to relief, in order to give
the defendant fair notice of what the ... claim is and the grounds upon which it rests."

Twombly, 550 U.S. at 545 (internal quotation marks omitted) (interpreting Fed. R. Civ.
P. 8(a)). Consistent with the Supreme Court's rulings in Twombly and Ashcroft v. Iqbal,
556 U.S. 662 (2009), the Third Circuit requires a three-part analysis when reviewing a
Rule 12(b)(6) motion. Connelly v. Lane Const. Corp., 809 F.3d 780, 787 (3d. Cir.
2016). In the first step, the court "must tak[e] note of the elements a plaintiff must plead
to state a claim." Next, the court "should identify allegations that, because they are no

4

more than conclusions, are not entitled to the assumption of truth." Lastly, "[w]hen
there are well-pleaded factual allegations, a court should assume their veracity and
then determine whether they plausibly give rise to an entitlement for relief." Id.
(citations omitted).
6. Under Twombly and Iqbal, the complaint must sufficiently show that the
pleader has a plausible claim. McDermott v. Clondalkin Grp., Inc., 2016 WL 2893844,
at *3 (3d Cir. May 18, 2016). Although "an exposition of [the] legal argument" is
unnecessary, Skinner v. Switzer, 562 U.S. 521 (2011 ), a complaint should provide
reasonable notice under the circumstances. Id. at 530. A filed pleading must be "to the
best of the person's knowledge, information, and belief, formed after an inquiry
reasonable under the circumstances," such that "the factual contents have evidentiary
support, or if so identified, will likely have evidentiary support after a reasonable
opportunity for further investigation or discovery." Anderson v. Bd. of Sch. Directors of
Millcreek Twp. Sch. Dist., 574 F. App'x 169, 174 (3d Cir. 2014) (quoting Fed. R. Civ. P.

11 (b)). So long as plaintiffs do not use "boilerplate and conclusory allegations" and
"accompany their legal theory with factual allegations that make their theoretically viable
claim plausible," the Third Circuit has held "pleading upon information and belief [to be]
permissible where it can be shown that the requisite factual information is peculiarly
within the defendant's knowledge or control." McDermott, 2016 WL 2893844, at *4
(quotation marks, citation, and emphasis omitted).
7. As part of the analysis, a court must accept all well-pleaded factual
allegations in the complaint as true, and view them in the light most favorable to the

5

plaintiff. See Erickson v. Pardus, 551 U.S. 89, 94 (2007); Christopher v. Harbury, 536
U.S. 403, 406 (2002); Phillips v. Cnty. of Allegheny, 515 F.3d 224, 231 (3d Cir. 2008).
In this regard, a court may consider the pleadings, public record, orders, exhibits
attached to the complaint, and documents incorporated into the complaint by reference.
Tellabs, Inc. v. Makar Issues & Rights, Ltd., 551 U.S. 308, 322 (2007); Oshiver v. Levin,
Fishbein, Sedran & Berman, 38 F.3d 1380, 1384-85 n.2 (3d Cir. 1994). The court's

analysis is a context-specific task requiring the court "to draw on its judicial experience
and common sense." Iqbal, 556 U.S. at 663-64.
8. Generally, the "question of arbitrability ... is undeniably an issue for judicial
determination." AT&T Techs., Inc. v. Commc'ns Workers of Am., 475 U.S. 643, 649
(1986). However, "[j]ust as the arbitrability of the merits of a dispute depends upon
whether the parties agreed to arbitrate that dispute, so the question 'who has the
primary power to decide arbitrability' turns upon what the parties agreed about that
matter." First Options of Chi., Inc. v. Kaplan, 514 U.S. 938, 943 (1995) (internal
citations omitted) (emphasis in original). "Courts should not find that parties agreed to
arbitrate the question of arbitrability '[u]nless the parties clearly and unmistakably
provide otherwise.'" Fallo v. High-Tech Inst., 559 F.3d 874, 877 (81h Cir. 2009). See
also Quilfoin v. Tenet HealthSystem Phi/a., Inc., 673 F.3d 221, 228 (3d Cir. 2012);
Qualcomm Inc. v. Nokia Corp., 466 F.3d 1366, 1372 (Fed. Cir. 2006); Contee Corp. v.
Remote Solution Co., Ltd., 398 F.3d 205, 208 (2d Cir. 2005); James & Jackson, LLC v.
Willie Gary, LLC, 906 A.2d 76, 78 (Del. 2006). Although the Third Circuit is in general

agreement with the majority view expressed above, it has explained the standard in a

6

more rigorous fashion: '"The burden of overcoming the presumption [of judicial
determination] is onerous, as it requires express contractual language unambiguously
delegating the question of arbitrability to the arbitrator." Chesapeake Appalachia, LLC
v. Scout Petroleum, LLC, 809 F.3d 746, 753 (3d Cir. 2016) (citation omitted). The

question before the court, then, is whether Section 26 of the CBA constitutes clear and
unmistakable evidence that the parties intended that the question of arbitrability shall be
decided by an arbitrator rather than the court.
9. Analysis. Not surprisingly, despite the almost universal agreement about the
standard to apply, the answer to the above question depends on the language of each
contract under review. For example, the contracts at issue in Fallo and Contee Corp.
provided that disputes arising out of the contracts "shall be" settled/determined by
arbitration "in accordance with the Commercial Rules of the American Arbitration
Association." In both cases, the courts held that "[t]he act of incorporating ... the AAA
Rules" provided clear evidence of the parties' intent to leave the question of arbitrability
to the arbitrator. Fallo, 559 F.3d at 878; Contee Corp., 398 F.3d at 211. Accord
Qualcomm, Inc., 466 F.3d at 1372-73 (any claim or controversy arising out of the

contract "shall be settled by arbitration in accordance with the arbitration rules of the
American Arbitration Association.").
10. In contrast, the Third Circuit in Qui/loin found that, despite the employee's
agreement to arbitrate employment disputes "under the Federal Arbitration Act and the
procedural rules of the American Arbitration Association," the employee had not agreed
to arbitrate the substantive issue of arbitrability. 673 F.3d at 226, 229-30. Likewise, in

7

Chesapeake Appalachia, the Third Circuit determined that the arbitration provision at
issue did not clearly and unmistakably delegate the question of class arbitrability2 to the
arbitrators, despite language in the relevant contract that "the resolution of all such
disputes shall be determined by arbitration in accordance with the rules of the American
Arbitration Association." 809 F.3d at 749. Similarly, the Delaware Supreme Court in
James & Jackson concluded that, "[b]ecause the parties' operative agreement
expressly authorize[d] courts to provide" the relief sought in the complaint, the
arbitration clause at issue did not constitute "clear and unmistakable evidence of the
parties' intent to have an arbitrator determine substantive arbitrability." 966 A.2d at 78.
11. The court finds that the CBA, under the specific circumstances at bar, does
not present clear and unmistakable evidence of the parties' intent to have an arbitrator
determine substantive arbitrability. In the first instance, given that the fee dispute
between the parties is more appropriately governed by Section 26(C) rather than
Section 26(A), the relevant contractual language only provides that the parties "agree to
attempt to select an acceptable arbitrator." Even if Section 26(A), Step 3 were
applicable, 3 the language of such is clearly distinguishable from the mandatory
language found in the cases cited above. To wit, the CBA merely provides that either
party "may submit the grievance to the American Arbitration Association in accordance
with its rules." Parsing the language, it is just as reasonable to interpret such to mean

2

The Court noted in this regard that "the whole notion of class arbitration
implicates a particular set of concerns that are absent in the bilateral context." Id. at
764.
3

And assuming that defendant actually complied with Steps 1 and 2 of Section

26(A).

8

that the "submission" of the grievance be in accordance with the AAA rules (procedural
arbitrability) as opposed to the grievance itself being substantively resolved in
accordance with the AAA rules.
12. Conclusion. Given the presumption in favor of a judicial determination as
to substantive arbitrability, considered in conjunction with the fact that Section 26 of the
CBA is susceptible to more than one reasonable interpretation, the court cannot
conclude that Section 26 constitutes clear and unmistakable evidence of the parties'
intent to have the issue of arbitrability be decided by an arbitrator. Defendant's motion
to dismiss (D.I. 7) is denied. An order shall issue.

Senior United

9

tates District Judge