Morgan v. Robinson et al
Filing
36
MEMORANDUM AND ORDER - THEREFORE, IT IS ORDERED THAT: Plaintiff's motion for a temporary restraining order or a permanent injunction, Filing No. 12 , is denied. Defendant's motion to stay or dismiss, Filing No. 15 , is granted as to the stay and denied as to the motion to dismiss. Defendant's motion to strike, Filing No. 19 , is denied as moot. Defendant's motion to compel arbitration, Filing No. 23 , is granted. Defendant's motion to strike, Filing No. 30 , is denied as moot. The parties are ordered to file a status report every 60 days from the date of this order updating the Court on the arbitration proceedings. The parties are further ordered to immediately notify this Court when the arbitration process is complete and indicate what further action, if any, needs to be taken in this case. This case is stayed until further notice by this Court. Ordered by Senior Judge Joseph F. Bataillon. (TCL )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEBRASKA
DONALD MORGAN,
Plaintiff,
8:14CV212
v.
MEMORANDUM AND ORDER
MICHAEL ROBINSON, Washington
County Sheriff, an individual; and
WASHINGTON COUNTY, NEBRASKA,
Defendants.
This matter is before the Court on plaintiff’s motion for a temporary restraining
order or a preliminary injunction, Filing No. 12. Defendants filed a motion to stay or
dismiss, contending this case should be submitted to federal mediation. Filing No. 15.
Defendants also filed a motion to compel arbitration.1 Filing No. 23. The plaintiff filed a
Complaint under 42 U.S.C. § 1983 against defendants Michael Robinson, Washington
County Sheriff, and Washington County, Nebraska. Filing No. 1. Plaintiff contends the
defendants violated his First and Fourteenth Amendment rights to the United States
Constitution. The Court conducted a hearing on these motions and received evidence
from the plaintiff and the defendants. See Filing Nos. 34 and 35.
BACKGROUND
The Complaint states that the defendants employed the plaintiff as a deputy for
the Washington County Sheriff’s Office for 13 years, and that defendant Michael
Robinson served as the Washington County Sheriff. Filing No. 1, at ¶¶ 4, 5. The
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Defendants advise the Court the parties have in fact submitted the dispute to federal mediation
for designation of potential arbitrators, although it appears plaintiff has done so under protest. Filing No.
23.
Complaint alleges that defendants terminated the plaintiff in retaliation for engaging in
protected speech Id. at ¶¶ 11-13, that defendant Robinson made stigmatizing remarks
against the plaintiff, and that the defendants have failed to follow proper arbitration
procedures and have denied the plaintiff an opportunity to clear his name before an
impartial tribunal. Id. at ¶¶ 15-16. The speech involved Donald Morgan’s campaign
against defendant Michael Robinson who both ran for election for the position of
Washington County Sheriff. Robinson won the primary election on May 13, 2014, and
on May 18, 2014, defendants terminated Morgan from the Washington County Sheriff’s
Department. Morgan claims defendants fired him, because of statements he made
during the election.
The plaintiff is a participant in the Local Collective Bargaining Agreement
(Agreement). Filing No. 14, Ex. A, at Page ID No. 37. There is a binding arbitration
clause in the Agreement. However, plaintiff contends it should not be enforced at this
time because (1) the Agreement does not contain the required statutory language near
the signature block noting that arbitration is required (Neb. Rev. Stat. § 25-2602.02);2
and (2) the Sheriff is both a supervisor as well as a member of the Local Union, creating
a conflict of interest for any arbitration. Plaintiff asks the Court to grant the injunction
staying enforcement of the arbitration clause. Plaintiff argues defendants violated his
right to due process, as the disciplinary action report made stigmatizing remarks so as
to defame his character. He further contends that he made a written demand for
arbitration which in accordance with Article 5, Section 7 of the 2012-2016 Labor
2
This section has been preempted by Aramark Uniform & Career Apparel, Inc. v. Hunan, Inc.,
757 N.W.2d 205, 211 (Neb. 2008), wherein the Nebraska Supreme Court determined that the Federal
Arbitration Act governs the contract, and not the notice requirement of § 25-2602.02.
2
Contract required arbitration within 10 days to the County and that never occurred.
Thus, argues plaintiff, defendants breached the contract.
Defendants, the sheriff
supervisor and the county, ask the Court to stay this case and order arbitration.
LAW
Arbitration is a matter of contract and a party cannot be required to submit to
arbitration any dispute to which he has not agreed to submit. Howsam v. Dean Witter
Reynolds, Inc., 537 U.S. 79, 83 (2002) (quoting Steelworkers v. Warrior & Gulf Nav.
Co., 363 U.S. 574, 582 (1960).
However, once parties have agreed to a contract
containing an arbitration clause, courts have Along recognized and enforced a >liberal
federal policy favoring arbitration agreements.=@
Id. (quoting Moses H. Cone Mem'l
Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25 (1983)).
“The Federal Arbitration Act, 9 U.S.C. § 4, states that a party aggrieved by the
failure of another to arbitrate under a written agreement may petition the district court for
an order compelling arbitration.” Art Etc. LLC v. Angel Gifts, Inc., 686 F.3d 654, 656
(8th Cir. 2012). “[A]rbitration is simply a matter of contract between the parties; it is a
way to resolve those disputes-but only those disputes-that the parties have agreed to
submit to arbitration.”
First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 943
(1995). If a valid arbitration agreement exists and the dispute falls within the scope of
that agreement, a dispute must be submitted to arbitration. See Lyster v. Ryan’s Family
Steak Houses, Inc., 239 F.3d 943, 946 (8th Cir. 2001).
The issue of whether the parties have a valid arbitration agreement at all is a
“gateway matter” that requires judicial resolution. Green Tree Fin. Corp. v. Bazzle, 539
U.S. 444, 452 (2003) (plurality opinion); see Howsam v. Dean Witter Reynolds, Inc., 537
3
U.S. 79, 83 (2002) (“[W]hether the parties have agreed to submit a particular dispute to
arbitration is typically an issue for judicial determination.”) (internal citation omitted); see
also Barker v. Golf U.S.A., Inc., 154 F.3d 788, 791 (8th Cir. 1998) (stating a court must
decide whether [an] agreement to arbitrate is valid). The Supreme Court noted the
arbitrability determination depends on whether the parties “agree[d] to submit the
arbitrability question itself to arbitration.” Kaplan, 514 U.S. at 943. “[W]hen courts decide
whether a party has agreed that arbitrators should decide arbitrability: Courts should not
assume that the parties agreed to arbitrate arbitrability unless there is ‘clea[r] and
unmistakabl[e]’ evidence that they did so.” Kaplan, 514 U.S. at 944 (alterations in
original) (citing AT & T Techs., Inc. v. Comm’s Workers of Am., 475 U.S. 643, 649
(1986)). “Unless the parties clearly and unmistakably provide otherwise, the question of
whether the parties agreed to arbitrate is to be decided by the court, not the arbitrator.”
AT & T Techs., 475 U.S. at 649.
“The Federal Arbitration Act create[s] a body of federal substantive law of
arbitrability, applicable to any arbitration agreement within the coverage of the Act.”
Donaldson Co., Inc. v. Burroughs Diesel, Inc., 581 F.3d 726, 731 (8th Cir. 2009)
(internal citation omitted). However “[w]hen deciding whether the parties agreed to
arbitrate a certain matter . . . courts generally . . . should apply ordinary state-law
principles that govern the formation of contracts.” Hudson v. ConAgra Poultry Co., 484
F.3d 496, 500 (8th Cir. 2007) (citing Kaplan, 514 U.S. at 944). “Thus, state contract law
governs the threshold question of whether an enforceable arbitration agreement exists
between litigants; if an enforceable agreement exists, the federal substantive law of
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arbitrability governs whether the litigants’ dispute falls within the scope of the arbitration
agreement.” Donaldson Co., 581 F.3d at 731.
“To create a contract, there must be both an offer and an acceptance; there must
also be a meeting of the minds or a binding mutual understanding between the parties
to the contract.” Gerhold Concrete Co., Inc. v. St. Paul Fire & Marine Ins. Co., 695
N.W.2d 665, 672 (Neb. 2005); “A fundamental and indispensable basis of any
enforceable agreement is that there be a meeting of the minds of the parties as to the
essential terms and conditions of the proposed contract.”
Peters v. Halligan, 152
N.W.2d 103, 106 (Neb. 1967).
If an agreement to arbitrate is present, courts, not arbitrators, determine the
question of arbitrability, unless the parties unambiguously provide otherwise in their
contract.
Howsam, 537 U.S. at 83; International Bhd. of Elec. Workers v. GKN
Aerospace N. Am., Inc., 431 F.3d 624, 627 (8th Cir. 2005); John Wiley & Sons v.
Livingston, 376 U.S. 543, 547 (1964) (A[t]he duty to arbitrate being of contractual origin,
a compulsory submission to arbitration cannot precede judicial determination that the
collective bargaining agreement does in fact create such a duty@); AT & T Techs., Inc. v.
Comm’s Workers, 475 U.S. 643, 649 (1986).
The court applies the principles derived from a series of cases known as the
Steelworkers Trilogy to determine whether a dispute is arbitrable.
See United
Steelworkers v. Am. Mfg. Co., 363 U.S. 564 (1960); United Steelworkers of America v.
Warrior & Gulf Navigation Co., 363 U.S. 574 (1960); United Steelworkers v. Enterprise
Wheel & Car Corp., 363 U.S. 593 (1960).
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Under the Steelworkers Trilogy, (1) arbitration is a matter of contract and may not
be ordered unless the parties agreed to submit the dispute to arbitration; (2) unless the
parties provide otherwise, courts decide the issue of whether the parties agreed to
arbitrate; (3) courts cannot weigh the merits of the grievance in determining whether the
claim is subject to arbitration; and (4) when an arbitration clause exists in a contract,
there is a presumption of arbitrability unless it is clear that the arbitration clause is not
susceptible of an interpretation that covers the dispute. GKN Aerospace, 431 F.3d at
627; Teamsters Local Union No. 688 v. Indus. Wire Prods., Inc., 186 F.3d 878, 881 (8th
Cir. 1999).
Thus, when deciding whether to compel arbitration, this court applies a two-part
test. See United Steelworkers v. Duluth Clinic, Ltd., 413 F.3d 786, 788 (8th Cir. 2005).
First, the court must determine whether a valid agreement to arbitrate exists.
Id.
Assuming such an agreement exists, A[t]he only question is whether it covers this
dispute.@ Id.
DISCUSSION
a. Arbitration Clause
Plaintiff first contends that the clause in this Agreement is not enforceable, as the
defendants failed to follow the procedural requirements set forth in the Agreement. The
arbitration clause states that the arbitrator “shall conduct the arbitration proceeding
within (10) calendar days after the submission of the written demand for arbitration.”
Plaintiff filed his request on June 26, 2014, and the time to respond expired on July 6,
2014, contends plaintiff. Second, plaintiff argues that Sheriff Robinson is a supervisor in
accordance with Neb. Rev. Stat. § 48-801(14), as well as a member of the FOP Lodge
6
36. Plaintiff states the sheriff is not listed as part of the bargaining unit of FOP Lodge
36, but that he does in fact participate and interfere with said unit. Under Nebraska law,
supervisors are not “included in a single bargaining unit with any other public employee
who is not a supervisor.” Neb. Rev. Stat. § 48-816(3)(a).3 Third, plaintiff contends that
the arbitration agreement does not contain the required language “THIS CONTRACT
CONTAINS AN ARBITRATION PROVISION WHICH MAY BE ENFORCED BY THE
PARTIES.” Neb. Rev. Stat. § 25-2602.02 near the signature block. Defendants contend
that plaintiff’s claims are subject to the grievance procedure and must be submitted to
arbitration.
The Federal Arbitration Act, 9 U.S.C. §§1-16 (1994), applies to arbitration
agreements involving employment-related claims. The Eighth Circuit has stated:
Congress enacted the Federal Arbitration Act (FAA), “to reverse the
longstanding judicial hostility to arbitration agreements ... and to place
arbitration agreements upon the same footing as other contracts.” Gilmer
v. Interstate/Johnson Lane Corp., 500 U.S. 20, 24, 111 S.Ct. 1647, 114
L.Ed.2d 26 (1991). The FAA declares that written agreements to resolve
disputes through arbitration are “valid, irrevocable, and enforceable, save
upon such grounds as exist at law or in equity for the revocation of any
contract.” 9 U.S.C. § 2 (1994). The effect of the FAA was to “create a
body of federal substantive law of arbitrability, applicable to any arbitration
agreement within the coverage of the Act.” Moses H. Cone Mem'l Hosp.
v. Mercury Constr. Corp., 460 U.S. 1, 24, 103 S.Ct. 927, 74 L.Ed.2d 765
(1983). In Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 121 S.Ct.
1302, 149 L.Ed.2d 234 (2001), the Supreme Court held that the FAA's
provisions apply to arbitration agreements covering employment-related
claims. Id. at 1311, 121 S.Ct. 1302 (holding that in the employment
context “only contracts of employment of transportation workers” are
exempted from the FAA's coverage). The FAA therefore governs
Gannon's arbitration agreement with Circuit City and we undertake our
review keeping in mind that the FAA evinces a “liberal federal policy
favoring arbitration agreements.” Moses H. Cone Mem'l Hosp., 460 U.S.
at 24, 103 S.Ct. 927.
3
Because the Court concludes that this case shall be arbitrated, it need not address this issue.
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Gannon v. Circuit City Stores, Inc., 262 F.3d 677, 679-80 (2001).
The Agreement provides that the FOP is the bargaining representative for its
employees, and in particular the plaintiff in this case. See Filing No. 14. The arbitration
agreement permits the aggrieved party to submit the grievance regarding his claims. Id.
at Article 5. If plaintiff did not believe the internal grievance process resulted in settling
his claim, he can also submit it to arbitration. Id. Art. 5, Section 7. The arbitration is
final and binding. The Agreement also sets forth a procedure for selecting an arbitrator.
It appears that plaintiff sent an arbitration request on June 26, 2014, and on July
23, 2014, counsel for the defendants sent a response listing four proposed individuals to
serve as arbitrator. On July 25, 2014, plaintiff filed this complaint. On August 22, 2014,
plaintiff agreed to arbitrate under protest, disagreed with all four suggested arbitrators,
and requested that the arbitrators be chosen from the federal mediation list as provided
in the Agreement.
In addressing a motion to compel arbitration then, courts generally “ask only (1)
whether there is a valid arbitration agreement and (2) whether the particular dispute falls
within the terms of that agreement.” Faber v. Menard, Inc. 367 F.3d 1048, 1052 (8th
Cir. 2004).
speech.
In this case, plaintiff claims he was terminated for exercising his free
Discharge of an employee is a matter subject to grievance under the
Agreement. Filing No. 14, § 7, at 9. The Court finds this is a valid agreement, and the
dispute clearly falls under the confines of the agreement. Thus, the Court is required
under Gannon to enforce the arbitration clause. Gannon, 262 F.3d at 680.
8
With regard to the 10 day requirement, the evidence shows that the parties did
work towards an arbitration agreement, sometime between 10 and 30 days of the
request. The Court notes that the precise timing of 10 days was arguably not met in this
case. However, a party has not waived his right to arbitration unless he:
“(1) knew of an existing right to arbitration; (2) acted inconsistently
with that right; and (3) prejudiced the other party by these inconsistent
acts.” Ritzel Communications, Inc. v. Mid-American Cellular Tel. Co., 989
F.2d 966, 969 (8th Cir.1993); Barker v. Golf U.S.A., Inc., 154 F.3d 788,
793 (8th Cir.1998).
The actions must result in prejudice to the other party for waiver
to have occurred. Stifel, Nicolaus & Co. v. Freeman, 924 F.2d 157, 158–
59 (8th Cir.1991) (holding there was no prejudice and therefore no waiver,
even though the moving party acted inconsistently by initiating the suit).
Prejudice results when, inter alia, parties use discovery not available in
arbitration, when they litigate substantial issues on the merits, or when
compelling arbitration would require a duplication of efforts. Stifel, 924
F.2d at 159.
Kelly v. Golden, 352 F.3d 344, 349 (2003). The Court agrees with the defendants that
there is no waiver of the right to arbitrate by the defendants, and that in any event, no
prejudice has resulted by the filing of this suit. The parties have not yet litigated this
case nor conducted any discovery. The delay in this case was minimal and defendants
clearly tried to arbitrate this case.
Lastly, with respect to plaintiff’s argument that the labor contract is void because
it violates § 25-2602.02 for failing to have the capitalized notice language near the
signature line, the court rejects this argument. See Affiliated Foods Midwest Coop., Inc.
v. Integrated Distribution Solutions, LLC, 460 F.Supp.2d 1068, 1071-72 (D.Neb. 2006)
(Court rejected argument that opposing party had waived the right to arbitrate the
dispute citing Kelly v. Golden, supra, and found preemption applied); see also, footnote
9
2, supra. As the Court stated, “[b]ased on the reasoning of Casarotto, the Court finds
that Neb. Rev. Stat. § 25-2602.02 does not void the agreement’s arbitration provision,
and that the agreement is valid.” Id. at 1073, citing Doctor's Associates, Inc. v.
Casarotto, 517 U.S. 681, 683, (1996).
b. Motions to Strike
The Court notes that the defendants filed a motion to strike, Filing No. 19.
Defendants contend that paragraphs 5, 6, and 7, contain allegations that are
conclusions of law and not based on facts. In view of the fact that the Court finds this
case is going to be arbitrated, the Court finds that the motion is moot.
Likewise, the defendants also filed a motion to strike, Filing No. 30, plaintiff’s
supplemental index of evidence, Filing No. 29. However, the magistrate judge allowed
plaintiff to file his affidavit, Filing Nos. 32 and 33. Consequently, this motion is also
moot.
THEREFORE, IT IS ORDERED THAT:
1. Plaintiff’s motion for a temporary restraining order or a permanent injunction,
Filing No. 12, is denied;
2. Defendant’s motion to stay or dismiss, Filing No. 15, is granted as to the stay
and denied as to the motion to dismiss;
3. Defendant’s motion to strike, Filing No. 19, is denied as moot;
4. Defendant’s motion to compel arbitration, Filing No. 23, is granted;
5. Defendant’s motion to strike, Filing No. 30, is denied as moot; and
6. The parties are ordered to file a status report every 60 days from the date of
this order updating the Court on the arbitration proceedings. The parties are further
10
ordered to immediately notify this Court when the arbitration process is complete and
indicate what further action, if any, needs to be taken in this case.
7. This case is stayed until further notice by this Court.
Dated this 20th day of November, 2014.
BY THE COURT:
s/ Joseph F. Bataillon
Senior United States District Judge
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