Mondelez Global LLC v. International Association of Machinists and Aerospace Workers District No. 8, AFL-CIO
MEMORANDUM OPINION Signed by the Honorable Samuel Der-Yeghiayan on 7/27/2017: Mailed notice(mw, )
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
MONDELEZ GLOBAL LLC,
INTERNATIONAL ASSOCIATION OF )
MACHINISTS AND AEROSPACE
WORKERS DISTRICT NO. 8, AFL-CIO, )
No. 17 C 840
SAMUEL DER-YEGHIAYAN, District Judge
This matter is before the court on Plaintiff Mondelez Global, LLC’s (MG)
motion for summary judgment and on Defendant International Association of
Machinists and Aerospace Workers, AFL-CIO, District 8’s (Union) motion for
summary judgment. For the reasons stated below, the Union’s motion for summary
judgment is granted and MG’s motion for summary judgment is denied.
MG contends that it entered into a collective bargaining agreement (CBA)
with the Union. Starting in March 2015, MG allegedly decided to prohibit Union
employees from working seven consecutive days without a 24-hour period of rest.
MG allegedly determined that such a prohibition was consistent with the One Day
Rest in Seven Act (ODRISA) 820 ILCS 140/1. Union employees then allegedly
filed a series of grievances protesting MG’s decision to limit their ability to work and
gain overtime. Article 15 of the CBA (Article 15) allegedly provides a mandatory
grievance resolution procedure. In March 2015, the Union allegedly consolidated the
grievances in a class grievance (Grievance) and the parties were unable to reach a
resolution. The parties also allegedly sought separate legal opinions from the Illinois
Department of Labor (IDOL), but the IDOL declined to issue such opinions. In
accordance with Article 15, the parties then allegedly submitted the Grievance to
binding arbitration. On November 23, 2016, the arbitrator (Arbitrator) in the
arbitration proceedings allegedly ruled in favor of the Union, finding that a binding
past practice had developed between the parties, which allowed employees to
volunteer to work seven consecutive days without a 24-hour period of rest. MG
brought the instant action and includes a claim in its complaint seeking to vacate the
arbitration award. The Union has also filed a counterclaim-seeking to confirm the
arbitration award. The parties have now filed cross motions for summary judgment.
Summary judgment is appropriate when the record, viewed in the light most
favorable to the non-moving party, reveals that there is no genuine issue as to any
material fact and that the moving party is entitled to judgment as a matter of law.
Fed. R. Civ. P. 56(c); Smith v. Hope School, 560 F.3d 694, 699 (7th Cir. 2009). A
“genuine issue” of material fact in the context of a motion for summary judgment is
not simply a “metaphysical doubt as to the material facts.” Matsushita Elec. Indus.
Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). Rather, a genuine issue
of material fact exists when “the evidence is such that a reasonable jury could return
a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
248 (1986); Insolia v. Philip Morris, Inc., 216 F.3d 596, 599 (7th Cir. 2000). In
ruling on a motion for summary judgment, the court must consider the record as a
whole, in the light most favorable to the non-moving party, and draw all reasonable
inferences in favor of the non-moving party. Anderson, 477 U.S. at 255; Bay v.
Cassens Transport Co., 212 F.3d 969, 972 (7th Cir. 2000). When there are cross
motions for summary judgment, the court should “construe the evidence and all
reasonable inferences in favor of the party against whom the motion under
consideration is made.” Premcor USA, Inc. v. American Home Assurance Co., 400
F.3d 523, 526-27 (7th Cir. 2005).
The Seventh Circuit has recognized that there is a “federal policy favoring
arbitrability” when disputants have agreed to arbitrate a dispute. Karl Schmidt
Unisia, Inc. v. International Union, United Auto., Aerospace, and Agr. Implement
Workers of America, UAW Local, 2357, 628 F.3d 909, 913 (7th Cir. 2010). In
addition, the Federal Arbitration Act “embodies both a liberal federal policy favoring
arbitration and the fundamental principle that arbitration is a matter of contract.”
Gore v. Alltel Communications, LLC, 666 F.3d 1027, 1032 (7th Cir. 2012)(internal
quotations omitted)(quoting AT&T Mobility LLC v. Concepcion, 131 S.Ct. 1740,
1745 (2011)). In furtherance of the federal policy favoring arbitration, the Seventh
Circuit has broadly construed arbitration clauses, presuming that the parties have
agreed to arbitrate disputes, and has extremely limited the scope of judicial review of
arbitrators’ decisions. See, e.g., Prate Installations, Inc. v. Chicago Regional
Council of Carpenters, 607 F.3d 467, 470 (7th Cir. 2010)(stating that “[j]udicial
review of arbitration awards is extremely limited, and the merits of the arbitrator’s
decision will not be reviewed”)
The Seventh Circuit has also made clear that “only if the arbitrator’s decision
fails to draw[ ] its essence from the collective bargaining agreement will a court
refuse to enforce that decision.” Carpenter Local No. 1027, Mill Cabinet-Industrial
Div. v. Lee Lumber and Bldg. Material Corp., 2 F.3d 796, 797 (7th Cir.
1993)(internal quotations omitted)(quoting United Steelworkers v. Enterprise Wheel
& Car Corp., 363 U.S. 593, 597 (1960))(stating, in addition, that “[a]n arbitration
award draws its essence from the contract so long as that award is based on the
arbitrator’s interpretation of the contract-even if the court is convinced that
interpretation is unsound or based on a factual or legal error”). In addition, the
Seventh Circuit has created a limited exception to reverse an arbitration award when
“the arbitrator deliberately disregards what he knows to be the law.” Eljer Mfg., Inc.
v. Kowin Development Corp., 14 F.3d 1250, 1254 (7th Cir. 1994)(stating that
“[e]rrors in the arbitrator’s interpretation of law or findings of fact do not merit
reversal under this standard”). In the instant action, MG contends that the
Arbitrator’s ruling is contrary to public policy and is incorrect as a matter of law.
The Union asserts that this court should enforce the arbitration award pursuant to the
Federal Arbitration Act, 9 U.S.C. § 1 et seq., and the federal policy favoring the
enforcement of arbitration awards.
It is undisputed: (1) that MG and the Union are parties to the CBA, (2) that the
CBA provides for the ultimate resolution of grievances in binding arbitration, and (3)
that the Grievance was properly submitted to binding arbitration in accordance with
Article 15, and (4) that the Arbitrator ruled in favor of the Union and sustained the
Grievance finding that MG had violated Article 2 of the CBA relating to overtime
scheduling. (R USF Par. 9, 11, 22, 27, 30, 35). During the arbitration, the Arbitrator
found that ODRISA was preempted, but he found that even if state law applied the
Union should prevail. (11/23/16 Arb. 16). As explained below, MG waived its
arguments as to a violation of public policy and even if the court finds that MG had
not waived such arguments, they lack any merit.
I. Waiver of Argument
The Union contends that MG has waived its public policy argument. It is
undisputed that MG’s defense to the Grievance was that MG’s decision was
mandated by ODRISA. Instead, MG chose to pursue arbitration and after the Union
prevailed MG has initiated litigation to challenge the arbitrator’s rulings. The
economic benefits that stem from the efficiency of arbitration will be lost if a party is
able to sit on its rights and wait and see to raise arguments in subsequent litigation.
MG also contends that IDOL failed to respond to requests for an advisory opinion
and dismissed a complaint filed by the Union. However, the record shows that the
precise issue presented in this case was not before the IDOL and nothing prevented
MG from seeking a pre-arbitral declaration. Thus, MG has waived its public policy
II. Public Policy
The Union argues that even if MG had not waived its public policy argument,
the argument lacks any merit. A district court “should vacate an arbitration award if
the arbitrator's interpretation of the collective bargaining agreement was contrary to
public policy.” Titan Tire Corp. of Freeport v. United Steel, Paper & Forestry,
Rubber, Mfg., Energy, Allied Indus. & Serv. Workers Int'l Union, 734 F.3d 708, 71617 (7th Cir. 2013)(internal quotations omitted)(quoting E. Associated Coal Corp. v.
United Mine Workers of Am., 531 U.S. 57, 62 (2000)). However, this is a limited
exception to the limited scope of review of an arbitrator’s ruling and “[t]he public
policy must be well defined and dominant, and is to be ascertained ‘by reference to
the laws and legal precedents and not from general consideration of supposed public
interests.” Titan Tire Corp., 734 F.3d at 716-17 (internal quotations
omitted)(quoting W.R. Grace & Co. v. Local Union 759, Int'l Union of United
Rubber, 461 U.S. 757, 766 (1983)); see also Univ. of Chicago Med. Ctr. v. Int'l Bhd.
of Teamsters, Local 743, 2016 WL 3671465, at *2 (N.D. Ill. 2016)(explaining that
the public-policy exception is limited to instances of a clearly defined policy).
In the instant action, as the Arbitrator properly concluded, there is no clear
mandate in state law regarding the administration of ODRISA that would prohibit
MG from allowing employees with limitations to voluntarily decide to work seven
consecutive days without a 24-hour period of rest. (11/23/16 Arb. 17-19). As the
Arbitrator pointed out, the former IDOL General Counsel issued an advisory opinion
in 2013 that actually supported the Union’s position that employees could voluntarily
choose to work without the 24-hour period of rest and waive their rights under
ODRISA. (11/23/16 Arb. 17, 19). The Arbitrator properly concluded that there was
no well defined and dominant public policy that would supersede the CBA and the
past practice relating to the assignment of work and overtime.
MG points to ODRISA as evidence of a public policy. However, ODRISA
itself merely contains permissive language and expressly mandates that an employer
“allow” employees the 24-hour period of rest. 820 ILCS 140/2. MG has not shown
that the Arbitrator erred in his assessment of state law when considering ODRISA.
Nothing in ODRISA prohibits an employee from voluntarily choosing to forego the
24-hour period of rest. As MG itself also concedes, the ODRISA and regulations
specifically contemplate exceptions, allowing the IDOL to issue permits to
employees authorizing them to disregard the 24-hour period of rest requirement.
(MG SJ 5)(MG SF Par. 5). Nothing in the Arbitrator’s award directed MG to allow
employees to work certain days without seeking the necessary permits, consistent
with ODRISA. MG also cites to an arbitration ruling in Jewel Food Stores, Inc. And
Teamsters Local 710, 2009 WL 9419862 (Kossoff, March 18, 2009), (PSJ 7), but
such a decision falls far short of creating a clear public policy that would justify
MG’s actions in this case.
MG has failed to show that the Arbitrator erred or that his ruling should be
vacated. The Arbitrator ensured that the ODRISA rights of employees were properly
protected and even put forth a waiver form that could be utilized by MG to alleviate
any concerns as to ODRISA. (11/23/16 Arb. 20-21). The Union employees have a
right to determine themselves whether they will freely and voluntarily, without
duress or compulsion, choose not to avail themselves of the 24-hour period of rest
that is made available in ODRISA. MG cannot dictate to such employees their
choice in order to limit work hours and MG cannot undue a proper arbitration award.
The Union has shown that based on the undisputed facts that the Arbitrator’s award
should be confirmed as a matter of law. Based on the above, the Union’s motion for
summary judgment is granted and MG’s motion for summary judgment is denied.
Based on the foregoing analysis, the Union’s motion for summary judgment is
granted and MG’s motion for summary judgment is denied.
United States District Court Judge
Dated: July 27, 2017
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?