International Union, United Automobile, Aerospace and Agricultural Implement Workers of America Local Union 1613 v. Energy Manufacturing Company Inc
Filing
21
ORDER denying 13 Motion for Summary Judgment. Signed by Chief Judge Linda R Reade on 3/26/2016. (skm)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF IOWA
CEDAR RAPIDS DIVISION
INTERNATIONAL UNION, UNITED
AUTOMOBILE, AEROSPACE AND
AGRICULTURAL IMPLEMENT
WORKERS OF AMERICA LOCAL
UNION 1613,
Plaintiff,
No. 15-CV-28-LRR
vs.
ORDER
ENERGY MANUFACTURING
COMPANY INC.,
Defendant.
____________________
TABLE OF CONTENTS
I.
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
II.
PROCEDURAL HISTORY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
III.
SUBJECT MATTER JURISDICTION . . . . . . . . . . . . . . . . . . . . . . . . . 2
IV.
SUMMARY JUDGMENT STANDARD . . . . . . . . . . . . . . . . . . . . . . . . 2
V.
RELEVANT FACTUAL BACKGROUND . . . . . . . . . . . . . . . . . . . . . . . 3
A.
B.
VI.
Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Overview of the Dispute . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.
Bankruptcy proceedings . . . . . . . . . . . . . . . . . . . . . . . . . .
2.
2012 termination and arbitration . . . . . . . . . . . . . . . . . . . .
3
4
4
5
ANALYSIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
A.
B.
Judicial Estoppel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.
Judicial estoppel of Chapman . . . . . . . . . . . . . . . . . . . . . 10
2.
Judicial estoppel of UAW . . . . . . . . . . . . . . . . . . . . . . . . 13
Entitlement to Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
VII. CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
I. INTRODUCTION
The matter before the court is Defendant Energy Manufacturing Company Inc.’s
(“EMC”) “Motion for Summary Judgment” (“Motion”) (docket no. 13).
II. PROCEDURAL HISTORY
On February 23, 2015, Plaintiff International Union, United Automobile, Aerospace
and Agricultural Implement Workers of America Local Union 1613 (“UAW”) filed a
Petition in the Iowa District Court for Jones County (“Complaint”) (docket no. 3) alleging
that EMC breached an agreement between the parties to arbitrate the issue of Grievant
Steve Chapman’s entitlement to back pay. Complaint ¶ 10. On March 30, 2015, EMC
removed the case to this court. See Notice of Removal (docket no. 2). On April 2, 2015,
EMC filed an Answer (docket no. 6). On January 13, 2016, EMC filed the Motion. On
January 29, 2016, UAW filed a Resistance (docket no. 15). On February 5, 2016, EMC
filed a Reply (docket no. 17). The Motion is fully submitted and ready for decision.
III. SUBJECT MATTER JURISDICTION
The court has jurisdiction pursuant to 29 U.S.C. § 185(a), which provides that
“[s]uits for violation of contracts between an employer and a labor organization
representing employees in an industry affecting commerce as defined in this
chapter . . . may be brought in any district court of the United States having jurisdiction
of the parties, without respect to the amount in controversy or without regard to the
citizenship of the parties.” 29 U.S.C. § 185(a).
IV. SUMMARY JUDGMENT STANDARD
Summary judgment is appropriate “if the movant shows 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). “A dispute is genuine if the evidence is such that it could cause a
reasonable jury to return a verdict for either party; a fact is material if its resolution affects
the outcome of the case.” Amini v. City of Minneapolis, 643 F.3d 1068, 1074 (8th Cir.
2
2011) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 252 (1986)), cert.
denied, 132 S. Ct. 1144 (2012). “[S]elf-serving allegations and denials are insufficient to
create a genuine issue of material fact.” Anuforo v. Comm’r, 614 F.3d 799, 807 (8th Cir.
2010).
“To survive a motion for summary judgment, the nonmoving party must substantiate
[its] allegations with sufficient probative evidence [that] would permit a finding in [its]
favor based on more than mere speculation, conjecture, or fantasy.” Barber v. C1 Truck
Driver Training, LLC, 656 F.3d 782, 801 (8th Cir. 2011) (second alteration in original)
(quoting Putman v. Unity Health Sys., 348 F.3d 732, 733-34 (8th Cir. 2003)) (internal
quotation marks omitted). The court must view the record in the light most favorable to
the non-moving party and afford it all reasonable inferences. See Schmidt v. Des Moines
Pub. Sch., 655 F.3d 811, 819 (8th Cir. 2011). The non-moving party “has the obligation
to come forward with specific facts showing that there is a genuine issue for trial.” B.M.
ex rel. Miller v. S. Callaway R-II Sch. Dist., 732 F.3d 882, 886 (8th Cir. 2013) (quoting
Atkinson v. City of Mountain View, 709 F.3d 1201, 1207 (8th Cir. 2013)) (internal
quotation marks omitted). “A complete failure by the non-moving party ‘to make a
showing sufficient to establish the existence of an element essential to that party’s case .
. . necessarily renders all other facts immaterial.’” Id. (quoting Celotex Corp. v. Catrett,
477 U.S. 317, 322-23 (1986)) (alteration in original).
V. RELEVANT FACTUAL BACKGROUND
Viewing the evidence in the light most favorable to UAW and affording it all
reasonable inferences, the uncontested material facts are as follows.
A. Parties
UAW is a labor organization that represents employees in an industry affecting
commerce. UAW represented the bargaining unit employees of EMC. EMC is “a
3
corporation authorized to do business and doing business in” Monticello, Jones County,
Iowa. Complaint ¶ 2.
B. Overview of the Dispute
The relationship between EMC, UAW and the EMC employees is governed by a
Labor Agreement. See EMC Appendix (“EMC App’x”) (docket no. 13-3) at 62; see also
id. at 59. The Labor Agreement provides for a grievance procedure, “whereby UAW can
grieve and ultimately arbitrate disputes with EMC, on the behalf of EMC employees.”
EMC Statement of Material Facts (docket no. 13-1) at 1; see also EMC App’x at 76-78.
Article 13 of the Labor Agreement provides that “[i]n the event that any grievance cannot
be satisfactorily settled under the [grievance] procedure, the Union may submit such
grievance to arbitration for final and binding settlement . . . .” Id. at 77. The Labor
Agreement also sets forth deadlines and terms governing arbitration between UAW and
EMC. See id. at 76-78.
Chapman is an employee of EMC and a member of UAW. He has worked at EMC
for the past twenty-nine years. In 2008, EMC terminated Chapman from his position.
UAW grieved the termination on Chapman’s behalf under the just cause provision in the
Labor Agreement. Following an arbitration hearing, Chapman was reinstated to his
position with back pay, but put on a “last chance warning.” See id. at 102, 126.
Chapman received his back pay check directly from EMC, and it was made payable to
Chapman, with taxes and union dues removed. In May of 2012, EMC terminated
Chapman’s employment again.
1.
Bankruptcy proceeding
In August of 2012, following his termination from EMC, Chapman filed a petition
for Chapter 7 bankruptcy in the United States Bankruptcy Court for the Northern District
of Iowa. Chapman was represented by counsel in his bankruptcy proceeding. At the time
of filing “his bankruptcy petition, Chapman was aware that he had a grievance pending
4
regarding the termination of his employment. Chapman believed at the time that the
resolution of the grievance might result in him getting his job back and receiving back
pay.” EMC Statement of Material Facts at 2. Chapman’s bankruptcy petition did not
include the claim against EMC. During the bankruptcy hearing, the Chapman engaged in
the following exchange:1
[Question]: Do you have any claims against anyone, the
right to sue anybody for anything?
Chapman:
Um, well the union is fighting for my job back,
that’s the only thing.
[Question]: Okay. But nothing other than that?
Chapman:
No.
EMC App’x at 55. At the bankruptcy hearing, Wesley B. Huisinga was appointed as the
bankruptcy trustee. Huisinga “certified that the estate had been fully administered and that
$118,629.95 in claims were scheduled to be discharged without payment.”
EMC
Statement of Materials Facts at 3. On November 28, 2012, Chapman’s Chapter 7
bankruptcy was discharged.
2.
2012 termination and arbitration
Kevin Visser, a Cedar Rapids attorney, represented EMC in the 2008 and 2012
arbitration proceedings regarding Chapman’s employment. Timothy Schnell served as the
international representative for UAW from approximately 1999 through May of 2015.
Schnell represented EMC’s union employees from approximately 2012 though May of
2015. Visser and Schnell represented EMC and UAW, respectively, with respect to the
2012 Chapman arbitration.
1
EMC states that Chapman’s exchange was with Chief United States Bankruptcy
Judge Thad Collins. See EMC App’x at 3, 55. However, UAW states that Chapman’s
statements were made at the Section 341 Meeting of Creditor’s Hearing to Trustee
Huisinga, not to Judge Collins. See Brief in Support of Resistance (docket no. 15-1) at 1.
The court will analyze the statements as being made generally to the bankruptcy court.
5
Upon UAW’s filing of the Chapman grievance, “a dispute arose between EMC and
UAW as to the scope of the issue to be arbitrated.” Id. at 4. The dispute concerned
whether the arbitration award in 2008 “had the authority to impose a last chance letter that
would extend beyond the period when discipline typically dropped off of an employee’s
record under the Collective Bargaining Agreement.” Id. Visser and Schnell engaged in
back and forth communications regarding the scope of the question to be presented to the
arbitrator. On March 4, 2013, Visser sent a letter to Schnell regarding Chapman’s
bankruptcy proceeding and the fact that Chapman did not disclose the claim against EMC
to the bankruptcy court.
In the letter, “Visser proposed limiting the scope of the
arbitration to exclude the back pay issue in order to avoid potentially complicated litigation
in which EMC would seek to reopen Chapman’s bankruptcy estate . . . .” Id. at 5.
Schnell agreed that the bankruptcy ruling was beyond the scope of the arbitration “and
would be a matter for . . . Chapman and his attorney to resolve.” Id. Visser agreed to
defining the scope of the arbitration to include “[w]hether Chapman was subject to a ‘last
chance’ letter and violated that last chance . . .” and “[if] he was not subject to the last
chance,” whether EMC had just cause for terminating him.
EMC App’x at 114.
However, Visser then stated that UAW and EMC “must agree that Chapman may not, in
any event, recover any remedy other than reinstatement through this limited arbitration.
Specifically, we must agree that Chapman has no right to recover backpay in any amount.”
Id. On May 22, 2013, Schnell stated that “[UAW] does not agree to waive any claim to
back pay under the arbitration remedy.” UAW Appendix (“UAW App’x”) (docket no.
15-2) at 4. In June of 2013, the parties had not yet reached an agreement on how to
proceed with the issue of back pay. Schnell then brought in Matthew Petrzelka, an
attorney, to represent UAW with respect to the arbitration. On August 1, 2013, Visser
and Petrzelka sent a letter to Arbitrator Jeffrey Winton regarding the scope of the
arbitration and stating that “the parties are agreed that the remedy of back pay is beyond
6
the scope of arbitration, but the arbitrator is empowered to order reinstatement.” EMC
App’x at 118.
In late August of 2013, the parties discussed selecting a new arbitrator and
eventually settled on Arbitrator James O’Brien. In February of 2014, the parties informed
Arbitrator O’Brien that “the remedy of backpay is beyond the scope of arbitration.” EMC
Statement of Facts at 7. On June 17, 2014, the arbitration hearing was held. Prior to the
start of the hearing, Visser and Petrzelka discussed the back pay issue. At the opening of
the arbitration hearing, Arbitrator O’Brien stated: “[o]n the issue of back pay, the parties
have agreed that any award of back pay is beyond the scope of this arbitration and will be
considered at another time and place, if necessary.” UAW App’x at 7. Neither Visser nor
Petrzelka made any comment on the record regarding this statement. The parties continue
to dispute whether UAW waived the issue of back pay or whether EMC understood that
UAW wanted to “bifurcate the issue for arbitration.” See EMC Response to UAW
Statement of Facts (docket no. 17-2) at 3. On July 25, 2015, Arbitrator O’Brien issued
his Grievance Arbitration Award, finding in favor of Chapman and reinstating him to his
position at EMC. See EMC App’x at 132.
Following the arbitration, Visser sent a letter to Petrzelka restating EMC’s position
that Chapman could not seek back pay. In the letter, Visser stated the following:
I understand that . . . Chapman may be inquiring of the union
about making a claim for back pay against [EMC]. He filed
bankruptcy in August of 2012. As of that date, he swore
under oath in his bankruptcy filings that he did not have any
claims or causes of action against any entity. In other words,
at no point did he disclose to the bankruptcy court or the
bankruptcy trustee that he might have a claim for back pay
against [EMC]. It was on the basis of his sworn verification
of his schedules, and testimony at the section 341 hearing, that
he was granted a bankruptcy discharge. For . . . Chapman to
now claim an entitlement of back pay would raise issues
relative to his truthfulness on his bankruptcy schedules and
7
whether he was, in fact, entitled to his bankruptcy discharge.
Granting . . . Chapman the benefit of the doubt, the omission
of the claim from his bankruptcy schedules was confirmation
of the parties’ previous understanding that [he] was entitled to
either back pay or reinstatement, but not both.
Having sought and been awarded reinstatement, he cannot now
seek back pay as well. Should he attempt to do so, we will be
left with no choice but to seek to reopen his bankruptcy case,
seek revocation of his bankruptcy discharge, and raise our
defenses to the back pay request, including estoppel and
waiver of the same, to the bankruptcy court.
UAW App’x at 10. In response, Petrzelka stated that UAW was the possessor of the claim
against EMC and held the property rights to it. Petrzelka stated that UAW would “decide
how to allocate any future award of back pay or benefits,” and that because Chapman did
not have an ownership interest in or property right to such award, “he had no obligation
to list any such claim in his bankruptcy schedules.” EMC App’x at 133. Petrzelka also
stated that “there was never any understanding on any of our part that . . . Chapman was
required to elect his remedies by choosing either back pay or reinstatement, but not both.”
Id. at 133-34.
VI. ANALYSIS
EMC asks that the court grant the Motion because “UAW should be judicially
estopped from pursuing its claim on behalf of Chapman” and because “the undisputed facts
show that UAW is not entitled to arbitration.” Motion at 1-2 (formatting omitted). UAW
argues that the court should deny the Motion because “judicial estoppel does not apply”
and “the undisputed facts establish that . . . UAW never waived its right to back pay and
benefits, and that the right to seek such benefits was specifically preserved on the record.”
Resistance at 1-2 (formatting omitted).
8
A. Judicial Estoppel
EMC argues that UAW is judicially estopped from pursuing Chapman’s claim
because Chapman did not disclose the claim in his bankruptcy proceeding. See Brief in
Support of Motion at 4. UAW argues that it is not judicially estopped because Chapman
disclosed the fact that UAW was seeking to have his job reinstated “which, by obvious
implication, would include an effort to obtain back pay and benefits”; UAW, not
Chapman, was the property holder of the grievance; and even if the court finds that
judicial estoppel is appropriate, it only applies to Chapman’s back pay and benefits that
accrued prior to August 17, 2012, the date that Chapman filed his Chapter 7 bankruptcy
petition. Resistance at 1-2.
“[T]he doctrine of judicial estoppel ‘generally prevents a party from prevailing in
one phase of a case on an argument and then relying on a contradictory argument to prevail
in another phase.’” E.E.O.C. v. CRST Van Expedited, Inc., 679 F.3d 657, 679 (8th Cir.
2012) (quoting New Hampshire v. Maine, 532 U.S. 742, 749 (2001)) (quotation marks
omitted). “This doctrine ‘protects the integrity of the judicial process.’” Id. (quoting
Stallings v. Hussmann Corp., 447 F.3d 1041, 1047 (8th Cir. 2006)). “Judicial estoppel
prevents a person who states facts under oath during the course of a trial from denying
those facts in a second suit, even though the parties in the second suit may not be the same
as those in the first.” Stallings, 447 F.3d at 1047 (quoting Monterey Dev. Corp. v.
Lawyer’s Title Ins. Corp., 4 F.3d 605, 609 (8th Cir. 1993)). “Although the circumstances
under which judicial estoppel may appropriately be invoked are probably not reducible to
any general formulation of principle, the Supreme Court, in New Hampshire v. Maine,
articulated a non-exhaustive list of three factors to aid a court in determining whether to
apply the doctrine.” CRST Van Expedited, Inc., 679 F.3d at 679 (quoting Stallings, 447
F.3d at 1047) (quotation marks, citations and alterations omitted).
First, a party’s later position must be clearly inconsistent with
its earlier position. Second, courts regularly inquire whether
9
the party has succeeded in persuading a court to accept that
party’s earlier position, so that judicial acceptance of an
inconsistent position in a later proceeding would create the
perception that either the first or the second court was misled.
Absent success in a prior proceeding, a party’s later
inconsistent position introduces no risk of inconsistent court
determinations, and thus poses little threat to judicial integrity.
A third consideration is whether the party seeking to assert an
inconsistent position would derive an unfair advantage or
impose an unfair detriment on the opposing party if not
estopped.
Id. (quoting Stallings, 447 F.3d at 1047). Therefore, under the doctrine of judicial
estoppel, “a party that takes a certain position in a legal proceeding, ‘and succeeds in
maintaining that position,’ is prohibited from thereafter assuming a contrary position
‘simply because his interests have changed,’ especially if doing so prejudices the party
‘who acquiesced in the position formerly taken by him.’” Stallings, 447 F.3d at 1047
(quoting New Hampshire, 532 U.S. at 748).
Because Chapman was the party in the bankruptcy action, the court will first
consider whether Chapman would be judicially estopped from pursuing this claim and then
whether UAW should be judicially estopped.
1.
Judicial estoppel of Chapman
“In the bankruptcy context, a party may be judicially estopped from asserting a
cause of action not raised in a reorganization plan or otherwise mentioned in the debtor’s
schedules or disclosure statements.” Stallings, 447 F.3d at 1047. “A debtor’s failure to
list a claim in the ‘mandatory bankruptcy filings is tantamount to a representation that no
such claim existed.’” Id. (quoting In re Superior Crewboats, Inc., 374 F.3d 330, 335 (5th
Cir. 2004)).
10
Here, Chapman did not list any pending claims on his debtor’s schedule and told
the bankruptcy court,2 in response to the question of whether he had the right to sue
anybody for anything, that UAW “is fighting for my job back, that is the only thing.”
UAW App’x at 3. Chapman testified in a deposition that he believed this statement
included the fact that UAW was seeking both reinstatement and back pay. See ECM
App’x at 4-5 (“It’s about the whole thing. It’s the whole package . . . [M]y opinion of it
is, it’s my job and back pay. Because, otherwise, if it would have just been about my job,
I would have never said anything, because I would never have had to. . . . It’s including
my back pay in the way I said it.”). UAW argues that Chapman’s disclosure encompassed
both back pay and reinstatement and, furthermore, that Chapman was under no duty to
disclose his claim because the claim belonged to UAW and it would have been improper
for him to include such claim on his bankruptcy debtor’s schedule. See Brief in Support
of Resistance at 1-3.
EMC argues that Chapman’s disclosure “is insufficient to thwart a finding of a
clearly inconsistent position.” Brief in Support of the Motion at 6 (citing Barger v. City
of Cartersville, Ga., 348 F.3d 1289 (11th Cir. 2003)). In Barger, the Eleventh Circuit
Court of Appeals found that the plaintiff was judicially estopped from pursuing an
employment discrimination claim that she was pursuing at the time she filed her
bankruptcy petition, but that she failed to list as an asset. Barger, 348 F.3d at 1294-96.
However, the plaintiff in Barger was specifically asked by the bankruptcy trustee about
“the monetary value of the lawsuit” and stated “that she only sought reinstatement of her
previous position,” not that she was also seeking back pay and other damages, even though
she added claims for damages only two days prior to her meeting with the bankruptcy
trustee. See id. at 1296.
2
The bankruptcy court as represented by either Judge Collins or Trustee Huisinga.
11
Here, Chapman was not directly asked about the monetary value of his suit.
Chapman stated that he viewed the phrase “fighting for my job back” as including both
reinstatement and back pay, despite the fact that UAW eventually only ended up seeking
reinstatement at that time. Complicating the issue further is the fact that Chapman and his
attorney believed he did not have to disclose the grievance to the bankruptcy court because
“the grievance was the property of . . . UAW,” not Chapman. See UAW App’x at 1.
“A basic tenet of bankruptcy law is that all assets of the debtor, including all prepetition causes of action belonging to the debtor, are assets of the bankruptcy estate that
must be scheduled for the benefit of creditors.” Kunica v. St. Jean Fin., Inc., 233 B.R.
46, 52 (S.D.N.Y. 1999) (citing Seward v. Devine, 888 F.2d 957, 963 (2d Cir. 1989))
(emphasis added). “A debtor has an uncompromising duty to disclose whatever ownership
interests are held in property.” In re Tripp, 224 B.R. 95, 98 (N.D. Iowa 1998).
Undisclosed claims “do not revert to the debtor free of the claims of creditors.” Kunica,
233 B.R. at 53. UAW argues that the claim did not belong to Chapman, because UAW
“was the property holder of the grievance.” Brief in Support of Resistance at 3. EMC
argues that Chapman had a “clear statutory duty to disclose in his bankruptcy any potential
assets to which he might be entitled.” Brief in Support of Reply (docket no. 17-1) at 3.
Neither party has pointed the court to any authority regarding whether a union member has
a duty to disclose a grievance to a bankruptcy court when the union is the entity pursuing
such grievance.
The court finds that the Eighth Circuit’s discussion of union grievances in Sheet
Metal Workers Local No. 2 v. Silgan Containers Manufacturing Corporation is instructive.
In determining that a union could proceed to arbitration on a deceased worker’s claim, the
Eighth Circuit noted the fact that “employees do not have standing to bring an action
against the employers . . . .” Sheet Metal Workers Local No. 2 v. Silgan Containers Mfg.
Corp., 690 F.3d 963, 969 (8th Cir. 2012).
12
An employee . . . lacks the power to bring or arbitrate his or
her own grievance, and instead must rely entirely on the
[u]nion to do so.
The [collective bargaining
agreement] . . . empowers the [u]nion to exert significant and
often exclusive control over the grievance process. Under the
[collective bargaining agreement], if the employee and his
immediate supervisors cannot satisfactorily resolve the
employee’s grievance, the [u]nion not only has discretion over
whether to proceed further, but also takes control of the
grievance process going forward.
Id. at 968-69. The court finds that this discussion of grievances supports finding that
Chapman did not have to disclose the pending union grievance on his bankruptcy schedules
because it was not his claim to pursue. Under the Labor Agreement and 29 U.S.C. § 185,
UAW is empowered to “submit [a] grievance to arbitration for final and binding
settlement” and “[t]he decision of the arbitrator shall be final and binding upon both parties
to this [Labor] Agreement and upon any employee or employees involved in the dispute.”
EMC App’x at 77. It does not appear, and the parties have not argued, that Chapman
would have been able to bring an independent claim if UAW had decided not to pursue
arbitration or even decided to abandon its claim for back pay. Because the Labor
Agreement did not permit him to bring a claim against EMC, the court finds that Chapman
would not be judicially estopped in this action, even if he had been a named party in this
suit.3
2.
Judicial estoppel of UAW
In the alternative, even assuming judicial estoppel would prevent Chapman from
seeking back pay, the question remains as to whether UAW is prevented from seeking
3
EMC argues that past back pay awards have been paid directly to union members
and UAW cannot, therefore, assert that it owns the claim. See EMC Brief at 12-13.
However, the court does not have enough information to determine the process governing
the distribution of back pay. Therefore, the court cannot determine ownership on this
ground.
13
arbitration on the issue of back pay. To determine whether to invoke judicial estoppel
against UAW in the instant action, the court looks to the statute governing suits by labor
organizations and relevant case law. 29 U.S.C. § 185 provides that a labor organization
may bring suit “for violation of contracts between an employer and a labor organization
representing employees” and that “[a]ny such labor organization may sue or be sued as an
entity and in behalf of employees whom it represents.” 29 U.S.C. § 185. The Eighth
Circuit has analyzed the issue of judicial estoppel in the context of the Equal Employment
Opportunity Commission’s (“EEOC”) ability to bring suit when an individual plaintiff
would be barred by judicial estoppel. The Eighth Circuit found that the EEOC could not
be judicially estopped “from suing in its own name to correct . . . discriminatory
employment practices . . . .” CRST Van Expedited, Inc., 679 F.3d at 681 (emphasis
omitted).
EMC argues that the EEOC’s position is different from UAW’s because “the EEOC
has been charged by Congress with the task of correcting the discriminatory policies of
employers and combat[]ing discrimination on the national level through its pursuit of
individual claims. UAW has no such goal of vindicating the public interest or eliminating
discrimination.” Brief in Support of the Motion at 11-12. Although the court agrees that
there are differences between UAW’s position and the goals of the EEOC, the court finds
that the Eighth Circuit’s reliance on E.E.O.C. v. Waffle House, Inc. is instructive:
If it were true that the EEOC could prosecute its claim only
with [the employee’s] consent, or if its prayer for relief could
be dictated by [the employee], the [lower] court’s analysis
might be persuasive. But once a charge is filed, the exact
opposite is true under the statute—the EEOC is in command of
the process . . . . If . . . the EEOC files suit on its own, the
employee has no independent cause of action, although the
employee may intervene in the EEOC’s suit . . . . The statute
clearly makes the EEOC the master of its own case and
confers on the agency the authority to evaluate the strength of
the public interest at stake.
14
CRST Van Expedited, Inc., 679 F.3d at 682 (quoting Waffle House, Inc., 534 U.S. 279,
291 (2002)). Additionally, the Eighth Circuit has found that a “[u]nion does not consider
only the interests of the individual employee it represents . . . . In deciding whether to
bring a grievance, for instance, the [u]nion considers not only whether the individual
employee wishes to pursue that grievance, but also whether such a grievance is in the
interests of the represented employees as a whole.” Sheet Metal Workers Local No. 2, 690
F.3d at 969. Although not a perfect parallel, the similarities between the EEOC’s function
in representing an aggrieved employee is similar enough to a union’s function in
representing its members for the court to rely on such cases when determining whether to
invoke judicial estoppel.
Here, UAW is authorized by statute to bring suit on behalf of its members. See 29
U.S.C. § 185. The Labor Agreement that governs the relationship between the parties
provides for grievance and arbitration proceedings between UAW and EMC. See EMC
App’x at 77 (“In the event that any grievance cannot be satisfactorily settled under the
[grievance] procedure, the Union may submit such grievance to arbitration for final and
binding settlement . . . .”). Judicial estoppel is meant to “protect the integrity of the
judicial process” and is appropriate when a party takes inconsistent positions in judicial
proceedings. CRST Van Expedited Inc., 679 F.3d at 681. Here, UAW did not participate
in Chapman’s bankruptcy proceedings and did not make any representations to the
bankruptcy court. The Labor Agreement provides that UAW has the right to pursue
arbitration, irrespective of the actions of the union member. Conversely, UAW may
choose to settle a claim on Chapman’s behalf or abandon such claim without Chapman’s
input. These facts lead the court to conclude that judicial estoppel against UAW is
unwarranted in the instant action because the factors for judicial estoppel are not present.
UAW has not taken inconsistent positions, nor has it persuaded a court to adopt its
15
position. Finally, UAW does not stand to gain an unfair advantage should it prevail in the
instant action.4
In light of the above discussion, the court is unconvinced that UAW should be
judicially estopped from seeking back pay through arbitration due to Chapman’s failure to
disclose the claim to the bankruptcy court. Accordingly, the court shall deny the Motion
with respect to EMC’s judicial estoppel arguments.
B. Entitlement to Arbitration
EMC argues that UAW is not entitled to arbitration because “EMC has already
fulfilled its duty under the Labor Agreement to arbitrate Chapman’s May 2012 discharge
and that neither Chapman nor UAW on Chapman’s behalf are entitled to any additional
proceedings on the matter.” Brief in Support of Motion at 13. EMC argues that the
Labor Agreement . . . provides no avenue for a bifurcated
arbitration proceeding or for subsequent arbitrations on the
same matter after an initial arbitration has occurred. . . . .
Moreover, even if (without admitting) an oral agreement was
made between Visser and Petrzelka for bifurcation of the
arbitration proceedings, such an agreement would be outside
of and separate from the Labor Agreement, rendering it
unenforceable under 29 U.S.C. § 185. As such, any claim
under any oral agreement would be devoid of
jurisdiction . . . .
Id. at 14. UAW argues that it “never waived its right to back pay and benefits, and that
the right to seek such benefits was specifically preserved on the record.” Brief in Support
of Resistance at 4 (formatting omitted).
The Labor Agreement provides that:
4
The instant action concerns UAW’s petition to compel arbitration. Although the
eventual result of arbitration could result in back pay and benefits for Chapman, this fact
does not alter the court’s determination that judicial estoppel of UAW would be
inappropriate. The court does not address the propriety of any potential proceeding
regarding Chapman’s now-closed bankruptcy estate.
16
In the event that any grievance cannot be satisfactorily
settled . . . [UAW] may submit such grievance to arbitration
for final and binding settlement within fifteen (15) workdays
from receipt of [EMC’s] . . . answer . . . .
...
The arbitrator shall have authority only to interpret and apply
the terms and provisions of this Agreement and to decide the
particular grievance submitted to him. . . . In the awarding of
any back pay the arbitrator shall be required to offset any
earning or benefits received by the employee during the
interval covered by such award.
...
The decision of the arbitrator shall be final and binding upon
both parties to this Agreement and upon any employee or
employees involved in the dispute.
EMC App’x at 77. The parties engaged in arbitration regarding Chapman’s termination,
but the issue of back pay was not addressed at that time. Arbitrator O’Brien stated that
“[o]n the issue of back pay, the parties have agreed that any award of back pay is beyond
the scope of this arbitration and will be considered at another time and place, if
necessary.” UAW App’x at 7. EMC and UAW disagree over whether they entered into
any oral agreement regarding how to address back pay, but EMC argues that UAW is not
entitled to further arbitration regardless of any such agreement.
Although the court recognizes that the Labor Agreement does not expressly
contemplate multiple arbitrations for a single grievance, the Labor Agreement also does
not foreclose the possibility. The Labor Agreement authorizes arbitration for both
reinstatement and back pay, and states only that “[t]he decision of the arbitrator shall be
final and binding . . . .” EMC App’x at 77. The fact that Arbitrator O’Brien specifically
noted that the issue of back pay “will be considered at another time and place, if
necessary” and EMC did not object to such statement suggests that the parties may have
agreed that further proceedings may be necessary to determine the issue. Accordingly,
17
Arbitrator O’Brien’s decision was not “final and binding” with respect to the issue of back
pay.
Neither party has identified any case law suggesting whether it was permissible to
enter into an agreement to bifurcate arbitration proceedings under the Labor Agreement.
The Eighth Circuit has recognized the use of bifurcated arbitration when the parties agree
to such a process. See Manion v. Nagin, 392 F.3d 294, 299-300 (8th Cir. 2004); see also
Providence Journal Co. v. Providence Newspaper Guild, 271 F.3d 16 (1st Cir. 2001)
(upholding an arbitration decision where “the parties informally agreed to bifurcate the
issues of liability and damages”); see also McGregor Van De Moere, Inc. v. Paychex,
Inc., 927 F. Supp. 616, 618 (W.D.N.Y. 1996) (addressing a scenario in which parties
asked an arbitration panel to decide only the issue of liability and leaving the calculation
of damages for a separate proceeding). Under the Labor Agreement, nothing prevented
the parties from agreeing to bifurcate arbitration proceedings.5 However, the court finds
that there is a genuine issue of fact with respect to whether the parties entered into such
an agreement.
Visser stated that “[t]here was never an agreement nor a
discussion . . . about bifurcating any proceedings.” EMC App’x at 107, 109. Visser’s
May 8, 2013 Letter also reflected an understanding that UAW and EMC “must agree that
Chapman may not, in any event, recover any remedy other than reinstatement through this
limited arbitration.” Id. at 114. However, Schnell’s May 22, 2013 letter stated that UAW
“does not agree to waive any claim to back pay under the arbitration remedy.” UAW
App’x at 4. Given Arbitrator O’Brien’s statement that “[o]n the issue of back pay, the
5
EMC argues that the court does not have jurisdiction under 29 U.S.C. § 185 to
decide the issue. See Brief in Support of Motion at 14; Brief in Support of Reply at 4.
Given that the issues of back pay and reinstatement arise under the Labor Agreement, the
court fails to see how it lacks jurisdiction to determine whether the parties agreed to
bifurcate arbitration proceedings. See 29 U.S.C. § 185 (granting jurisdiction for “[s]uits
for violation of contracts between an employer and a labor organization . . . .”).
18
parties have agreed that any award of back pay is beyond the scope of this arbitration and
will be considered at another time and place, if necessary,” the court finds that there is
a genuine issue of material fact with respect to whether the parties informally agreed to
bifurcate arbitration proceedings or whether UAW waived the issue of back pay. See id.
at 7. Accordingly, the court shall deny summary judgment with respect to whether UAW
is entitled to additional arbitration.
VII. CONCLUSION
In light of the foregoing, EMC’s Motion for Summary Judgment (docket no. 13)
is DENIED.
IT IS SO ORDERED.
DATED this 26th day of March, 2016.
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