United Steel, Paper and Forestry, Rubber Manufacturing, Energy, Allied Industrial and Service Workers International Union, et al v. Exxon Mobil Corporation
ORDER granting 17 Union's Motion for Summary Judgment; denying 20 ExxonMobil's Motion for Summary Judgment. ExxonMobil is required to proceed to arbritation of this dispute under the provisions of the CBA. Signed by Magistrate Judge Carolyn S Ostby on 12/15/2014. (JDH, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MONTANA
UNITED STEEL, PAPER AND
ALLIED INDUSTRIAL AND
INTERNATIONAL UNION, AFLCIO-CLC, and UNITED
STEELWORKERS LOCAL 11470,
CROSS MOTIONS FOR
EXXON MOBIL CORPORATION,
This is an action to compel arbitration. Plaintiffs United Steel,
Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial
and Service Workers International Union, AFL-CIO-CLC, and United
Steel Workers Local 11-470 (collectively “the Union”), proceeding under
Section 301 of the Labor Management Relations Act (“LMRA”), 29
U.S.C. § 185, seek to compel arbitration of a grievance with Defendant
Exxon Mobil Corporation (“ExxonMobil”) under the parties’ collective
bargaining agreement (“CBA”). Cmplt. to Compel Arbitration (ECF 1).
Before the Court are the parties’ cross motions for summary
judgment. Union’s Mtn. (ECF 17) and ExxonMobil’s Mtn. (ECF 20).
The Union represents certain employees at ExxonMobil’s oil
refinery in Billings, Montana. Stmt. of Stipulated Facts (ECF 12) at ¶¶
1, 3. The Union and ExxonMobil are parties to a CBA effective
February 1, 2012, through January 31, 2015. Id. at ¶ 6.
The CBA’s Article XIII sets forth a grievance procedure
[t]o provide an orderly method for adjusting disputes
involving the interpretation of the provisions of [the CBA],
or claims by either party of a violation of the terms of [the
CBA], or claims of unfair treatment involving either an
interpretation or violation of the terms of [the CBA] . . . .
ECF 12-1 at 30. The grievance procedure includes three steps,
including time limits and conditions within each step, for resolving
The background facts are undisputed unless otherwise noted.
The Court has taken them from the parties’ Statement of Stipulated
Facts. See ECF 12. Attached to the parties’ Statement of Stipulated
Facts are stipulated exhibits, including the parties’ CBA. See Exhibit A
The CBA also contains an arbitration provision in Article XIV,
which provides, in part, as follows:
Any question as to the interpretation of the terms of [the
CBA] or any question of fact arising out of an alleged
violation of the terms of [the CBA] which is not otherwise
settled, shall at the request of either party, be submitted to
Id. at 32. Article XIV includes provisions describing the arbitration
The CBA covers the position of “in-plant janitor.” ECF 1 at ¶ 8;
Answer (ECF 6) at ¶ 8. In February 2013, the employee in the in-plant
janitor position retired. Before his retirement, ExxonMobil announced
its intent to hire contractors to perform the work formerly done by the
in-plant janitor, rather than fill the position with a bargaining unit
employee. ECF 12 at ¶ 8.
On December 13, 2012, the Union filed a Request for First Step
Grievance Meeting. Id. at ¶ 9. It stated, in relevant part:
A contractor is performing the in-plant janitor work and the
in-plant janitor position is being left vacant. This very issue
was the subject of a previous grievance and arbitration. The
grievance was sustained by the arbitrator.
ECF 12-2. ExxonMobil denied the request on the same day. Id.; see
also ECF 12-2.
On December 18, 2012, the Union filed a Request for Second Step
(“Step 2") Grievance meeting accompanied by a Grievance Report
(“grievance”). ECF 12 at ¶ 10. It stated, in relevant part:
The in-plant janitor position is being left vacant and
contractors are performing the work of the in-plant janitor
position. This very issue was the subject of a previous
grievance and arbitration. The grievance was sustained by
On January 8, 2013, the Union and ExxonMobil had a Step 2
meeting. Id. at ¶ 11. On January 15, 2013, ExxonMobil provided the
Union with its Step 2 response to the grievance, stating:
In reviewing the arbitration referenced by the Union, the
dispute was over a letter agreement written during 1986
contract negotiations. This agreement is no longer in effect
and the 2012 Collective Bargaining agreement language
allows the Company to contract out this work, per Article
Therefore, I deny this grievance.
The CBA’s Article XX, titled “Contract Work”, provides:
[The CBA] shall not limit the right of [ExxonMobil] to
contract out work so long as such contracting does not cause
a layoff of employees covered by [the CBA].
ECF 12-1 at 38.
On January 16, 2013, the Union appealed the grievance to Step 3.
ECF 12 at ¶ 13; ECF 12-5. On January 23, 2013, the Union and
ExxonMobil had a Step 3 meeting. ECF 12 at ¶ 14; ECF 12-6.
On January 30, 2013, ExxonMobil provided the Union with its
Step 3 response to the grievance. ECF 12 at ¶ 15. ExxonMobil denied
the grievance, stating:
The 1994 arbitration referenced during the Step 3 meeting,
was based on the language on a 1986 letter agreement and
the 1988 CBA. Since then, the contract was renegotiated in
2012 and specifically Article XX, at which time, the parties
agreed to the language “The agreement shall not limit the
right of the Company to contract out work so long as such
contracting out does not cause a layoff of employees covered
by this agreement.” At the time the arbitrator based his
decision on the letter agreement. The 1986 letter agreement
does not exist today. Therefore, in this situation Article XX
is applicable and the Company has complied with it.
On April 24, 2013, the Union requested that the grievance be
submitted to arbitration and proposed the questions to be submitted to
the arbitrator. ECF 12 at ¶ 16; ECF 12-7.
On May 22, 2013, ExxonMobil proposed a different question be
submitted to the arbitrator. ECF 12 at ¶ 17; ECF 12-8.
On June 27, 2013, the Union proposed a different question be
submitted to the arbitrator. ECF 12 at ¶ 18; ECF 12-9.
On July 10, 2013, ExxonMobil proposed that the arbitrator decide
the question. ECF 12 at ¶ 19; ECF 12-10.
On July 24, 2013, the Union stated that it would let the arbitrator
decide the question for arbitration and that it would contact the
Federal Mediation and Conciliation Service. ECF 12 at ¶ 20; ECF 1211.
On December 19, 2013, ExxonMobil informed the Union that it
did not believe the Union’s grievance was arbitrable. ECF 12 at ¶ 21;
ECF 12-12. The Union did not agree with ExxonMobil’s position and,
on March 18, 2014, filed this action to compel arbitration of the
grievance. ECF 12 at ¶ 22; ECF 1 at 1.
The parties jointly represent that: (1) the Union is comprised of
labor organizations representing employees in an industry affecting
commerce; (2) ExxonMobil is engaged in an industry affecting
commerce and is an employer of employees at an oil refinery in Billings,
Montana; and (3) the CBA to which the Union and ExxonMobil are
parties is a contract between a labor organization and an employer.
ECF 12 at ¶¶ 1-3, 6-7.
Thus, this Court has jurisdiction under Section 301 of the LMRA,
29 U.S.C. § 185, which permits “[s]uits for violation of contracts
between an employer and a labor organization representing employees
in an industry affecting commerce ....” This Court also has jurisdiction
under 28 U.S.C. §§ 1331 and 1337. By Notice filed May 8, 2014, upon
the parties’ written consent, this matter was assigned to the
undersigned for all proceedings. Notice of Assignment (ECF 10).
III. PARTIES’ ARGUMENTS
The Union argues that the Court should compel arbitration. It
maintains that the CBA contains a broad arbitration provision that
creates a strong presumption that the Union’s grievance with
ExxonMobil is arbitrable. Union’s Opening Br. (ECF 19) at 11-15.
The Union advances two specific arguments. First, the Union
argues that the CBA’s arbitration provision grants the arbitrator the
power to resolve any question as to the interpretation of the terms of
the CBA. To avoid arbitration, the Union argues, ExxonMobil must
establish, by “positive assurance,” that the grievance and arbitration
clauses cannot be interpreted to cover the dispute by identifying “an
express exclusion” or “the most forceful evidence” that the dispute is to
be excluded from arbitration. Id. at 12. The Union further argues that
the Court, in considering whether ExxonMobil has satisfied this
burden, must confine its inquiry to whether the Union’s claim, on its
face, is covered by the CBA. Id. In doing so, the Union argues, the
Court need not consider the claim’s merits nor even look to the CBA’s
substantive provisions except as necessary to consider exclusions to the
arbitration clause. Id. at 12-13. Rather, the Union argues, this case
presents a procedural question not for the Court but for an arbitrator to
decide. Id. at 14-15.
Second, in noting that its grievance contests ExxonMobil’s
contracting out of bargaining-unit work, the Union argues that two
CBA clauses concern work preservation: (1) Article XVI, Section 6,
which provides that ExxonMobil “will not erode the bargaining unit by
job reduction ...[,]”; and (2) Article XX, which provides that the CBA
“shall not limit the right of [ExxonMobil] to contract out work so long
as such contracting does not cause a layoff of employees covered by [the
CBA].” Id. at 13 (referring to ECF 12-1 at 36 and 38).
The Union argues that neither of these provisions limits the reach
of the CBA’s grievance and arbitration clauses. Thus, the Union
argues, “the subject matter of the grievance is covered by the CBA and
neither the arbitration clause nor any other clause of the [CBA] limits
the extent of the broad arbitration provision to exclude from arbitration
a grievance contesting the contracting-out of bargaining-unit work.” Id.
ExxonMobil agrees that the CBA contains a broadly-worded
arbitration clause. It further agrees that, under such circumstances,
courts normally apply a presumption that a dispute is subject to
arbitration. But, ExxonMobil maintains, in deciding whether to invoke
the presumption, the Court must be mindful that arbitration is “strictly
a matter of consent.” ExxonMobil’s Opening Br. (ECF 21) at 9. Thus,
the Court may order arbitration of a dispute “only where the court is
satisfied that the parties agreed to arbitrate that dispute.” Id.
(emphasis omitted). And, ExxonMobil argues, a party contesting
arbitration can prevail by either: (1) pointing to an express provision in
the CBA excluding a particular grievance from arbitration; or (2)
introducing “most forceful evidence of a purpose to exclude the claim
from arbitration.” Id. at 10-11. ExxonMobil argues that it can satisfy
First, ExxonMobil argues that the CBA’s plain language precludes
arbitration of the Union’s grievance. Id. at 11. It argues that the
CBA’s arbitration provision covers only two types of disputes: (1) those
concerning interpretation of the CBA’s terms; and (2) questions of fact
stemming from an alleged violation of the CBA’s terms. Id. at 11-12.
Because this case involves neither type of dispute, ExxonMobil argues,
the dispute is not arbitrable. Specifically, it argues, Article XX
unambiguously provides that the CBA “shall not limit” ExxonMobil’s
right to contract out work that does not result in layoffs – including not
limiting it by forcing it to arbitrate when its act of contracting out work
indisputably did not result in layoffs. Id. at 12-13. In other words,
ExxonMobil argues, “when it is undisputed that [its] contracting-out
decision does not result in layoffs, the analysis is over.” Id. at 13-14.
The merits of the underlying dispute, it argues, are irrelevant because
Article XX forecloses the Union’s claim for arbitration. Id. at 14-15.
Second, ExxonMobil argues that the parties’ bargaining history
precludes arbitration of the Union’s grievance. Id. at 15-17. It argues
that in negotiating the CBA, modifying Article XX to avoid disputes
was of paramount importance to ExxonMobil. The Union was “well
aware of ExxonMobil’s intent and extracted significant benefits in
exchange[ ]” for agreeing to Article XX’s language. Id. at 16. The
parties’ bargaining history, therefore, evidences “a clear purpose to
avoid arbitration over contracting-out decisions that do not result in
layoffs[.]” Id. at 17. Thus, ExxonMobil argues, it did not consent to
arbitration of the instant dispute. Id.
Summary Judgment Standard
“The court shall grant summary judgment 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).
Material facts are those which may affect the outcome of the case.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute as
to a material fact is genuine if there is sufficient evidence for a
reasonable fact-finder to return a verdict for the nonmoving party. Id.
The party moving for summary judgment bears the initial burden
of identifying those portions of the pleadings, discovery, and affidavits
that demonstrate the absence of a genuine issue of material fact.
Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Where the opposing
party will have the burden of proof at trial, the moving party need only
point out that there is an absence of evidence to support the nonmoving
party's case. Id.
When parties file cross-motions for summary judgment, as here,
the Court must consider each motion on its own merits. Fair Housing
Council of Riverside County, Inc. v. Riverside Two, 249 F.3d 1132, 1136
(9th Cir. 2001). The fact that both parties have moved for summary
judgment does not vitiate the Court’s responsibility to determine
whether disputed issues of material fact are present. Id.
Standard for Determining Arbitrability
“[A]rbitration is a matter of contract[.]” Goldman, Sachs & Co. v.
City of Reno, 747 F.3d 733, 739 (9th Cir. 2014) (quoting Rent–A–Center,
W., Inc. v. Jackson, 561 U.S. 63, 67 (2010)). Courts must place
arbitration agreements on an equal footing with other contracts, and
enforce them according to their terms. Id. (quoting AT & T Mobility
LLC v. Concepcion, ___ U.S. ___, 131 S.Ct. 1740, 1745 (2011)).
The Supreme Court’s arbitration decisions have emphasized as
their “first principle” that “[a]rbitration is strictly a matter of consent
and thus is a way to resolve those disputes – but only those disputes –
that the parties have agreed to submit to arbitration.” Id. (quoting
Granite Rock Co. v. Int’l Bhd. of Teamsters, 561 U.S. 287, 299 (2010)
(emphasis in original) (internal quotation marks and citations
omitted)). In determining whether parties have agreed to submit to
arbitration, courts are to “apply general state-law principles of contract
interpretation, while giving due regard to the federal policy in favor of
arbitration by resolving ambiguities as to the scope of arbitration in
favor of arbitration.” Id. (quoting Mundi v. Union Sec. Life Ins. Co.,
555 F.3d 1042, 1044 (9th Cir. 2009) (internal quotation marks and
Where, as here, the CBA contains a very broad arbitration
provision, ExxonMobil agrees that it can prevail in either of two ways.
ECF 21 at 10-11. First, it may point to an express provision excluding
a particular grievance from arbitration. See United Steel Workers of
Am. v. Warrior & Gulf Navigation Co., 363 U.S. at 584-85. And,
ExxonMobil “bears the burden of demonstrating how the language in
the collective bargaining agreement excludes a particular dispute from
arbitration.” Std. Concrete Prods. Inc. v. Gen. Truck Drivers, Office,
Food and Warehouse Union, Local 952, 353 F.3d 668, 674 (9th Cir.
2003). Alternatively, ExxonMobil may introduce “forceful evidence” of
a purpose to exclude the claim from arbitration. Warrior & Gulf, 363
U.S. at 584-85.
First, there is no dispute about the valid formation of the CBA
which includes the broadly written arbitration clause. The parties
agree that the CBA has been in effect during the relevant time frame.
ECF 12 at ¶ 6.
Second, the arbitration provision requires that, at the request of
either party, “[a]ny question as to the interpretation of the terms of this
Agreement ... [shall] be submitted to an arbitrator....” ECF 12-1 at 32.
Where there is such a broad arbitration clause in a CBA, the
presumption of arbitrability is “particularly potent.” Dennis L.
Christensen General Bldg. Contractor, Inc. v. General Bldg. Contractor,
Inc., 952 F.2d 1073, 1077 (9th Cir. 1991). The dispute here does raise
questions as to the interpretation of the terms of the CBA. The Union
contends that the CBA’s Art. XVI, section 6 governs to resolve the
dispute, whereas ExxonMobil contends that the CBA’s Art. XX governs
to resolve the dispute. “A case is most clearly arbitrable under the
terms of an agreement ... when the union alleges a concrete violation of
the agreement and interpretation or application of the agreement is
required to resolve the dispute.” Aluminum Co. of America v.
International Union, United Auto, Aerospace and Agr. Implement
Workers of America, 630 F.2d 1340, 1343 (9th Cir. 1980).
Third, the Court thus must determine whether there is an express
provision that limits the arbitration agreement’s applicability to this
dispute. As noted, ExxonMobil seeks to rebut the presumption of
arbitrability with the argument that the CBA’s Article XX
unambiguously provides that the CBA “shall not limit” – including by
compelling arbitration – ExxonMobil’s right to contract out work
provided doing so does not result in layoffs, ECF 21 at 11-15. But the
Court concludes that Article XX does not contain, as ExxonMobil
argues, an express provision limiting the scope of the arbitration
clause. Arbitrability is not mentioned in Article XX. As a sophisticated
party, ExxonMobil presumably would know how to craft an express
provision clearly limiting the scope of the arbitration clause. See, e.g.,
Contra Costa Legal Assistance Workers v. Contra Costa Legal Services
Foundation, 878 F.2d 329, 330 (9th Cir. 1989) (holding that grievance
was excluded from arbitration where CBA provided “such action may
not be raised as a grievance under this Agreement”).
Courts recently have continued to make clear that “any exclusion
from coverage by an agreement’s arbitration provisions should not be
inferred from the language of the agreement, but must be stated
explicitly in the agreement.” International Broth. of Elec. Workers Local
2150 v. Nextera Energy Point Beach, LLC, 762 F.3d 592 (7th Cir. 2014)
(emphasis in original) (quoting Ceres Marine Terminals, Inc. v. Intern.
Longshoremen’s Ass’n, Local 1969, AFL_CIO, 683 F.2d 242, 247 (7th
Additionally, ExxonMobil’s argument would involve this Court in
the merits of the dispute. Even where the Court may agree with
ExxonMobil on the merits, or where the Court may agree that the
Union’s position is frivolous, the Court may not circumvent the initial
question whether ExxonMobil has breached its promise to arbitrate
such disputes. Courts are not to determine the merits of a grievance
under the guise of deciding questions of arbitrability, but have the duty
only to determine whether a party has breached its promise to
arbitrate. United Food and Commercial Workers Union, Local 770 v.
Geldin Meat Co., 13 F.3d 1365, 1368 (9th Cir. 1994). In United
Steelworkers of America v. Warrior & Gulf Nav. Co., the Supreme Court
was presented with a similar dispute involving the contracting out of
work. The Court wrote:
A specific collective bargaining agreement may exclude
contracting from the grievance procedure. Or a written collateral
agreement may make clear that contracting out was not a matter
for arbitration. In such a case a grievance based solely on
contracting out would not be arbitrable. Here, however, there is
no such provision. ... In the absence of any express provision
excluding a particular grievance from arbitration, we think only
the most forceful evidence of a purpose to exclude the claim from
arbitration can prevail where, as here, the exclusion clause is
vague and the arbitration clause quite broad. Since any attempt
by a court to infer such a purpose necessarily comprehends the
merits, the court should view with suspicion an attempt to
persuade it to become entangled in the construction of the
substantive provision of a labor agreement....
Id. 363 U.S. 574, at 584-85 (1960).
Finally, ExxonMobil argues that the parties’ bargaining history
demonstrates ExxonMobil’s intent to have the right to contract out
work without having to face arbitration each time it does so, id. at 1517. The Court is not persuaded.
The bargaining history offered by ExxonMobil reveals no
discussion regarding exclusion of the present dispute from the
arbitration clause. For example, although it is clear from Jill Quade’s
affidavit that there was substantial negotiation regarding the question
of ExxonMobil’s contracting out work, the affidavit is silent as to any
specific discussion of excluding such issues from arbitration. ECF 23 at
2-6. And, although ExxonMobil now argues that this bargaining
history conveys a “clear intent” to grant ExxonMobil the right to
contract out work without having to face an arbitration each time it
does so (ECF 21 at 15), this “clear intent” was not sufficiently clear to
ExxonMobil itself. ExxonMobil engaged in the CBA’s grievance
process for several months beginning in December 2012, and for
approximately seven months thereafter it exchanged correspondence
with the Union as to how the question regarding this dispute should be
submitted to the arbitrator – all without objecting until December 2013
that the dispute was excluded from the scope of the CBA’s arbitration
provision. ECF 12 at 4 ¶16 to 5 ¶ 21.
Thus, the Court concludes that ExxonMobil has not borne its
burden to show that there is an express provision excluding the dispute
from the broadly worded arbitration clause, nor has it demonstrated
“forceful evidence” of a purpose to exclude the claim from arbitration.
Based on the foregoing, IT IS ORDERED that the Union’s
summary judgment motion (ECF 17) is GRANTED and ExxonMobil’s
summary judgment motion (ECF 20) is DENIED. ExxonMobil is
required to proceed to arbitration of this dispute under the provisions of
The Clerk of Court is directed to enter Judgment accordingly.
DATED this 15th day of December, 2014.
/s/ Carolyn S. Ostby
United States Magistrate Judge
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