International Union of Operating Engineers, Local 139, AFL-CIO v. Wingra Stone Company

Filing 32

OPINION AND ORDER granting 27 Defendant's Motion to Supplement; granting 14 Plaintiff's Motion for Summary Judgment; denying 18 Defendant's Motion for Summary Judgment. Signed by District Judge William M. Conley on 9/29/16. (jat)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF WISCONSIN
INTERNATIONAL UNION OF
OPERATING ENGINEERS, LOCAL 139,
AFL-CIO,
Plaintiff/Counter-Defendant,

OPINION AND ORDER

v.
15-cv-236-wmc

WINGRA STONE COMPANY,
Defendant/Counter-Plaintiff.

In this action, plaintiff International Union of Operating Engineers, Local 319,
AFL-CIO (“Local 139”) seeks an order confirming the decision, award and supplemental
award of an arbitrator regarding a health care coverage dispute with defendant Wingra
Stone Company. Wingra seeks an order vacating the same decision and awards. Before
the court are the parties’ cross motions for summary judgment. (Dkt. ##14, 18.) For
the reasons that follow, the court will grant Local 139’s motion and deny Wingra’s
motion. Accordingly, the arbitration award is confirmed.

UNDISPUTED FACTS
A. The Parties and Principal Actors
Local 139 is a labor organization that represents heavy equipment operators and
other employees throughout Wisconsin for the purpose of collective bargaining. Local
139 maintains an office within this district, in Madison, Wisconsin. Ryan Oehlhof is an
officer and business representative of Local 139, who has worked with employees of

Wingra since 2004.

He is involved in handling disputes between Local 139 and

employers such as Wingra.
Wingra Stone Company is an employer based in southern Wisconsin, primarily
engaged in the business of road construction, as well as processing and supplying
aggregate material, including operating various quarries.

Wingra does business in

Wisconsin. It also maintains an office in Madison, Wisconsin. Robert Shea is an officer
and employee of Wingra. He has been actively involved in negotiations with Local 139
from the late 1990s through the present.
B. Collective Bargaining Agreements
The parties have had a bargaining relationship for the past 40 years. Beginning in
2004, they have been bound by a series of collective bargaining agreements covering
Wingra’s quarry operations. The first agreement governed the parties’ relationship for
five years (“the 2004 Agreement”).

In 2009, the parties entered into a Letter of

Understanding extending the 2004 Agreement through April 30, 2010.

The parties

entered into a new agreement effective May 1, 2010, through April 30, 2012 (“the 2010
Agreement”). Local 139 and Wingra were subject to the 2010 Agreement at the time
Local 139 filed the grievance at issue here.
In 2012, the parties entered into yet another Letter of Understanding extending
the 2010 Agreement through April 30, 2014.

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At the time the parties filed their

respective motions for summary judgment, they were still in the process of negotiating a
successor to this extended 2010 Agreement.1
All of the collective bargaining agreements between the parties contain the same
language regarding health insurance:
Employer agrees to maintain for all bargaining unit employees
who have been employed for more than thirty (30) days a
group health and hospitalization insurance plan that will
contain coverage equal to or better than the plan provided by
the International Union of Operating Engineers Local 139
Health Benefit Fund for the Term of the Agreement and pay
the full premium.
(See, e.g., Joint Stip., Ex. B-5 (2010 Agreement) (dkt. #17-6) Art. XV.)
The Local 139 Health Benefit Fund referenced in the language above (“Local 139
Plan”) is self-funded and provides health benefits to approximately 8,600 participants.
The Local 139 Plan was established in a Trust Agreement negotiated by Local 139 and
various employer associations. The Local 139 Plan sets out the benefits it provides to
participants in its Summary Plan Description (“SPD”), the most recent of which was
effective in 2010.
Finally, all of the parties’ collective bargaining agreements also contain the
following provision:
No grievance will be acted upon by either party unless such
grievance is filed in writing with the Employer within thirty
(30) day period after the alleged violation. Grievances should
be null and void if filed after such period.
Since filing their motions, however, defendant Wingra filed a motion to supplement the
summary judgment record to reflect that effective October 1, 2015, Local 139 informed Wingra
that it would no longer act as the Wingra employees’ bargaining unit. (Def.’s Mot. to Suppl.
Record (dkt. #27) ¶ 1; Zawadsky Decl., Ex. A (dkt. #28-1).) The court discusses any significance
of this development in the opinion below.
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(Joint Stip., Exs. B-2, B.5 (dkt. ##3, 6) Art. IV § 2.)
C. 2011 Change to Wingra’s Health Insurance Plan
Wingra’s employees covered by the series of collective bargaining agreements with
Local 139 receive coverage under the Wingra Stone Company Employee Health, Dental
and Vision Plan (the “Wingra Plan”), rather than the Local 139 Plan. Since at least
2004, however, Local 139 did not believe that the Wingra Plan was “equal to or better
than” the Local 139 Plan. During negotiations of the 2009 Letter of Understanding,
Local 139 took the position that the Wingra Plan was not equal to or better than the
Local 139 Plan, specifically identifying two areas that Local 139 did not view as
comparable:

(1) Health Reimbursement Account (“HRA”) pre-funding of retiree

benefits, and (2) so-called “loss-of-time benefits.” At one point, Local 139 agent Oehlhof
stated, “The last contract compared health & now our Insurance [under the Local 139
Plan] has surpassed your coverage.” (Joint Stip., Ex. 24 (dkt. #17-25) 8.)
Despite this concern, Local 139’s membership approved the 2009 decision to
extend the 2004 contract one more year. Local 139 did not file a grievance on coverage
at that time, nor during negotiations of the 2010 Agreement, challenging the Wingra
Plan as not being “equal to or better than” the Local 139 Plan.
In January 2011, Wingra notified its employees of changes to its Plan, including a
change to spousal coverage. Specifically, the Plan would no longer provide secondary
coverage to spouses eligible for health coverage through the spouse’s own employer.
After learning of the change to spousal coverage, a Local 139 agent spoke to one of
Wingra’s owners about how the change was not “equal to or better than” the benefits
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provided by the Local 139 Plan. The parties, however, were unable to resolve this issue.
Local 139 did not file a grievance at that time.
With the assistance of the Local 139 Plan Administrator, Local 139 prepared a
chart summarizing the ways in which the Local 139 Plan differed from the Wingra Plan.
At a meeting to discuss the differences between the two plans held in the summer of
2011, Local 139 provided a copy of the chart to Wingra. Believing that the Wingra Plan
was nevertheless comparable to the Local 139 Plan overall, Wingra remained unwilling to
change its Plan.
D. 2011 Grievance and 2012 Negotiation
On September 23, 2011, Local 139 filed a grievance against Wingra over its
claimed failure to provide a health insurance plan that was equal to or better than the
Local 139 Plan as required by Section XV of the 2010 Agreement. The grievance sought
“[i]mprove[d] coverage to the Wingra Health Benefit Plan, including but not limited to
coordinat[ion] of benefits for all aggrieved employees.” (Joint Stip., Ex. B-7 (dkt. #17-8)
4.)

While the grievance itself simply claimed that Wingra “failed to provide Health

Insurance coverage equal to or better than that provided by” the Local 139 Plan (id.),
plaintiff now claims that the Wingra Plan contained several, specific differences -- listing
15 in its proposed findings of facts -- when compared to the Local 139 Plan, including
the spousal coverage issue described above.

(Pl.’s PFOFs (dkt. #15) ¶ 23.)

Wingra

disputes the list to the extent it differs from those found by the arbitrator. (Def.’s Resp.
to Pl.’s PFOFs (dkt. #26) ¶ 23.)

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After Local 139 filed its grievance, the parties met for another discussion. Plaintiff
represents, and Wingra does not dispute, that Local 139 expected Wingra to address the
spousal coverage issue after the meeting. In fact, the parties continued having phone
conversations and exchanged letters. Then in the course of negotiating the successor
agreement in 2012, Wingra proposed a change eliminating the “equal to or better than”
language from the health coverage provision.

Despite this proposal, Wingra

simultaneously maintained that the Wingra Plan was still equal to or better than the
Local 139 Plan.
In August 2012, Local 139 again asserted that the Wingra Plan was not equal to
the Local 139 Plan and it needed to be improved.

Still, Local 139 agreed to take

Wingra’s proposed language change to the bargaining unit for a vote.

After the

membership voted to reject Wingra’s proposal, Local 139 proposed the two-year
extension from 2012 to 2014, with no changes to the health benefits provision. Wingra
accepted Local 139’s proposal with one small change relating to training, which is not
material to the present dispute. The parties dispute whether as part of this negotiation,
Local 139 withdrew its previously-filed grievance.
E. Arbitration
Local 139 did not demand arbitration on the pending grievance until almost six
months after the parties executed the 2012 Letter of Understanding extending the 2010
Agreement, and more than 27 months after Wingra had eliminated the spousal coverage
provision. Nevertheless, in May of 2013, Local 139 did demand arbitration.

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In October of 2013, the parties selected James A. Cox to act as arbitrator. The
parties stipulated to bifurcating the arbitration, with the initial hearing concerning
liability, and remedies to be addressed only if the grievance was sustained. Arbitrator
Cox held the initial arbitration hearing on April 15, 2014, in Madison, Wisconsin, with
both parties represented by counsel. Both sides then submitted post-hearing briefs.
On July 11, 2014, Arbitrator Cox issued a written decision and award sustaining
Local 139’s grievance, explaining in part that:
While benefit coverage equilibrium between the two Plans
had been and remains a continuing subject of controversy[,]
there is one given--the 139 Health Benefit Plan is the
standard against which the Wingra Stone Health Plan
coverage is to be measured. Overall coverage in that Plan
must be “equal to or better” than provided in the Local 139
Plan. There was no evidence introduced that established
Wingra has met this requirement, only comparative
documentation that shows they have not.
(Joint Stip., Ex. F (dkt. #17-36) 4.)2
After the decision sustaining Local 139’s grievance, the parties attempted to
resolve the matter, but were unable to do so. Accordingly, Arbitrator Cox held a second
hearing on November 18, 2014, concerning the appropriate remedy. At the hearing,
Local 139 presented evidence regarding the hourly contribution rate paid by other
employers to the Local 139 Plan, as well as the hours worked by covered Wingra

In ruling in Local 139’s favor, Arbitrator Cox also addressed Wingra’s various procedural
challenges, including that Local 139: failed to pursue timely arbitration of the September 23,
2011, grievance; failed to timely file a grievance; or otherwise waived its right to arbitration. (Id.
at 11-12, 15.) The court will also address Arbitrator Cox’s reasoning with respect to Wingra’s
procedural challenges below in the opinion.
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employees from the date of the grievance through November 15, 2014.

From this

evidence, Local 139 sought gross total damages of $202,049.25.
Based on the evidence presented, Arbitrator Cox ultimately awarded Local 139 its
requested damages and ordered Wingra to comply with his interpretation of Article XV.
In addition, Local 139 presented an explanation of benefits from eleven Wingra
employees and sought out-of-pocket expenses paid by specific bargaining unit employees.
Because Wingra did not dispute the validity nor accuracy of this information at the
hearing, or in its post-hearing brief. Arbitrator Cox also awarded a total of $94,980.90 in
damages for these eleven employees reimbursing them for payments Wingra would have
been required to make if the Wingra Plan was, in fact, “equal to or better than” the Local
139 Plan.
The February 14, 2015, Supplemental Award also addressed arguments raised by
Wingra. To date, Wingra has not modified its Plan or otherwise taken any steps to
comply with the agreement, or made any payments towards the damages award.

OPINION
Under Section 301 of the Labor Management Relations Act, a federal court has
authority to review an arbitration award made pursuant to a collective bargaining
agreement.3 Gen. Drivers, Warehousemen & Helpers, Local Union No. 89 v. Riss & Co., 372
U.S. 517, 519 (1963) (citing Textile Workers Union of Am. v. Lincoln Mills of Ala., 353 U.S.
448 (1957)). However, “[j]udicial review of arbitration awards is extremely limited.”
This court has jurisdiction over this action under Section 301(c) of the Labor Management
Relations Act, 29 U.S.C. § 185.
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Prate Installations, Inc. v. Chi. Reg’l Council of Carpenters, 607 F.3d 467, 470 (7th Cir.
2010).

Courts should not “review the arbitrator’s decision on the merits despite

allegations that the decision rests on factual errors or misinterprets the parties’
agreement.” Major League Baseball Players Ass’n v. Garvey, 532 U.S. 504, 509 (2001) (per
curiam).
As such, “[a] reviewing court will enforce the arbitrator’s award so long as it ‘draws
its essence from the contract,’ even if the court believes that the arbitrator misconstrued
its provisions.” United Food & Comm’l Workers, Local 1546 v. Ill.-Am. Water Co., 569 F.3d
750, 754 (7th Cir. 2009) (quoting United Paperworkers Int’l Union v. Misco, Inc., 484 U.S.
29, 36, 38 (1987)). “It is only when the arbitrator must have based his award on some
body of thought, or feeling, or policy, or law that is outside the contract . . . that the
award can be said not to draw its essence from the [parties’ agreement].” Id. at 755
(quoting Ethyl Corp. v. United Steelworkers of Am., 768 F.2d 180, 184-85 (7th Cir. 1985)).
An arbitrator is authorized to resolve questions of procedural arbitrability, such as
whether the grievance was properly filed. See Merryman Excavation, Inc. v. Int’l Union of
Operating Eng’rs, Local 150, 639 F.3d 286, 291 (7th Cir. 2011).

The arbitrator’s

resolution of those issues is also entitled to great deference. Id.
Here, Wingra asserts three, basic challenges to the arbitrator’s award. Although
insufficient to overturn the arbitrator’s decision given this deferential standard, whether
individually or collectively, the court addresses the merits of each challenge below.

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I. Timeliness Challenge
First, Wingra contends that the grievance itself was untimely, having been filed
more than thirty days after an announced change to the spousal coverage provision of the
Wingra Plan, rendering it “null and void” under Article IV, § 2 of the 2010 Agreement. 4
After considering Wingra’s timeliness challenge, Arbitrator Cox found that Local 139 had
actually raised a continuing violation, explaining:
The violations alleged here are different in kind from discrete
acts like a discharge since, by their nature, they have repeated
adverse effects each time a claim is filed.
In such
circumstances, violations are construed by Arbitrators to be
repeated from day to day with each considered a separate
violation.
(Joint Stip., Ex. F (dkt. #17-36) 11 (emphasis in original).)
In opposition, Wingra directs the court to cases in which an arbitration award was
vacated because the grievance was untimely. In those cases, however, the arbitrator’s
decision was found to “conflict[] with the express terms of the Agreement, and thus fails
to draw from the essence of the Agreement.” (Def.’s Opening Br. (dkt. #19) 6 (quoting
Wyandot, Inc. v. Local 227, United Food & Comm’l Workers Union, 205 F.3d 922, 930 (6th
Cir. 2000)).) The circumstances in Wyandot and the other cases cited by Wingra are
During the arbitration, Wingra also argued that Local 139 had either withdrawn its grievance
through the negotiation process or had otherwise waived its right to arbitration by its delay in
seeking to arbitrate its grievance. While Wingra asserted proposed findings of facts in support of
these theories, it did not advance these arguments in support of its motion to vacate the
arbitration award. As such, the court need not consider waiver or related arguments. Even if
properly raised, the court notes that it would have viewed the arbitrator’s treatment of waiver
deferentially, similar to the court’s treatment of the arbitrator’s rejection of any challenge to the
timeliness of the grievance, and likely have found Local 139’s regular reminder of an ongoing
failure to live up to the parties’ collectively bargained health insurance plan was never waived. If
anything, Wingra’s repeated concession that its plan needs to be equal to or better than Local
139’s Plan amounted to confirmation of the ongoing commitment to honor this clause.
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readily distinguishable for the same reason explained in Arbitrator Cox’s decision: the
events underlying the grievances in those cases were discrete. See Wyandlot, 205 F.3d at
924 (reinstatement of discharged union member); Paper, Allied-Indus., Chemical & Energy
Workers, Local Union No. 5-998 v. LWD, Inc., 99 F. App’x 683, 684 (6th Cir. 2004)
(“promotion of three individuals who were members of the bargaining unit to salaried,
supervisory positions outside the bargaining unit”); R.H. Cochran & Associates, Inc. v. Sheet
Metal Workers Int’l Ass’n Local Union No. 33, No. 1:07CV772, 2008 WL 408462, at *1
(N.D. Ohio Feb. 12, 2008) (policy change in travel reimbursement); Sunbeam Appliance
Co. v. Int’l Ass’n of Machinists & Aerospace Workers, Dist. No. 8, AFL-CIO, 511 F. Supp.
505, 506-07 (N.D. Ill. 1981) (vacation pay dispute).
Here, the grievance was not limited to the discrete 2011 change cover of an
employee’s spouse if eligible under another employer’s plan.

Rather, Local 139’s

grievance is more broadly worded, and the arbitrator interpreted it as a comprehensive
challenge to whether the Wingra Plan was equal to or better than the Local 139 Plan:
“In their September 2011 Grievance, Local 139 seeks not only that Wingra’s unilateral
withdrawal of COB coverage be remedied but reasserts the continuing claims of
inadequate coverage they had been pursuing since at least 2004.” (Joint Stip., Ex. F (dkt.
#17-36) 7.)5 As such, Wingra’s contention that the January 2011 announcement of a
change to spousal coverage triggered the 30-day period by which Local 139 must file a
The date of the grievance is material. As the arbitrator explained, Local 139 “seek[s] a remedy
prospectively from the date the Grievance was filed, a request consistent with remedies in
continuing violation cases where a present violation exists as in this case. In such cases, Grievants
may challenge the present and prospective validity of the coverage but are proscribed from
seeking retroactive compensation.” (Joint Stip., Ex. F (dkt. #17-36) 7 (emphasis in original).)
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grievance is premised on a flawed, overly narrow view of the grievance, or at least the
arbitrator could reasonably find given the broad, contractual coverage commitment that
Wingra repeatedly signed off on in each new collective bargaining agreement.
In its reply in support of its motion for summary judgment, Wingra also argues
that Local 139 should have filed a grievance as early as 2004 when it first viewed the
Wingra Plan as not comparable to the Local 139 Plan, and by failing to do so, Wingra
was deprived of its “rights to have issues settled promptly.” (Def.’s Reply (dkt. #29) 4.)
On the facts here, Local 139 perhaps could have filed a grievance earlier, but the
arbitrator found that Local 139 was not obligated to do so because the violations were
“repeated from day to day.”

(Joint Stip., Ex. F (dkt. #17-36) 10.)

Indeed, the

bargaining history of the parties demonstrated that the parties were attempting to
negotiate this issue without having to go through a formal arbitration process, and would
both simply punt the dispute down the road by again adopting the sweeping coverage
guarantee without resolving arguable, ongoing shortfalls in the coverage available under
the Wingra Plan.
Regardless, the arbitrator interpreted Article IV § 2 to allow for the filing of a
grievance based on a continuing violation, and the court’s review of an arbitrator’s award
does not include consideration of whether the arbitrator’s interpretation was in error. See
United Food & Comm’l Workers, Local 1546, 569 F.3d at 754 (“[O]nce we conclude that
the arbitrator did in fact interpret the contract, our review is concluded.”); Bhd. of
Locomotive Engineers & Trainmen Gen. Comm. of Adjustment, Cent. Region v. Union Pac. R. Co.,
522 F.3d 746, 757 (7th Cir. 2008) (“[T]he question before a federal court is not whether
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the arbitrator or arbitrators erred in interpreting the contract; it is not whether they
clearly erred in interpreting the contract; it is not whether they grossly erred in
interpreting the contract; it is whether they interpreted the contract.” (internal citation
and quotation marks omitted)).6 Accordingly, the court finds no basis to vacate the
award based on the arbitrator’s treatment of Wingra’s procedural challenge to the
timeliness of the grievance.
II. Scope of Awards
Alternatively, Wingra argues that the arbitrator at least erred in not limiting his
review of the comparability of the two health plans to the issue of spousal coverage,
because the parties’ bargaining history reveals that “Local 139 viewed the plans as
comparable (or, at the very least, acquiesced to their comparability) until January 2011
when Wingra eliminated” the spousal coverage benefit. (Def.’s Opening Br. (dkt. #19)
8.) This alternative argument is even more flawed, since it essentially asks this court to
overturn a factual finding by the arbitrator that Local 139 did not waive or otherwise
acquiesce to other purported disparities between the Wingra Plan and the Local 139
Plan, which he justified by reference to the parties’ bargaining history. (See Joint Stip.,
Ex. F (dkt. #17-36) 3-5 (discussing bargaining history dating back to 1999, including
Local 139’s repeated complaints about the Wingra Plan and the fact that “there were no

In contrast to Wingra’s argument generally that the continuing violation doctrine does not apply
in the arbitration context (Def.’s Opp’n (dkt. #25) 6-7), the Seventh Circuit has treated favorably
an arbitrator’s interpretation of a collective bargaining agreement to include a continuing
violation. See Prate Installations, Inc. v. Chi. Reg’l Council of Carpenters, 607 F.3d 467, 472-73 (7th
Cir. 2010).
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relevant changes in Insurance coverage in response” to Local 139’s complaints and that
the “disparity was [ex]acerbated” in 2011).)
As previously described in the fact and argument sections above, the grievance at
issue generally challenged the lack of comparability of the Wingra Plan as compared to
the Local 139 Plan. Given the ongoing nature of the parties’ dispute on that subject and
Wingra’s reupping on that issue in each new agreement or extension of agreement, the
arbitrator acted within his discretion to consider the full array of evidence in determining
that the Wingra Plan was not comparable, and then crafting a remedy based on his
factual findings.7 See Major League, 532 U.S. at 509 (“factual errors or misinterpretations
of the parties’ agreement” do not justify “review of the arbitrator’s decision on the
merits”).
III. Post-Expiration Damages
Finally, Wingra challenges Arbitrator Cox’s decision to award damages through
November 15, 2014, despite the last of the parties’ collective bargaining agreement
expiring on April 30, 2014. At the time Arbitrator Cox issued his award, the parties were
still in negotiations, and it appears Arbitrator Cox assumed that the contractual
relationship between Wingra and Local 139 would continue, including in particular the
contractual term requiring the Wingra Plan to be better than or equal to the Local 139
Plan that is in dispute here. Likely for this reason, Wingra does not point to anything in

To the extent Wingra is challenging the arbitrator’s consideration of Wingra’s treatment of
health reimbursement accounts, the court defers to the arbitrator’s interpretation of what falls
within the scope of the Wingra Plan. (Joint Stip., Ex. K (dkt. #17-52) 3, 5.)
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the record demonstrating that during the arbitration, it challenged Arbitrator Cox’s
award based on the fact that the agreement governing the parties’ arbitration expired on
April 30, 2014.
Wingra is correct that an arbitrator may lack authority to award damages for a
period of time outside of the period covered by the pertinent collective bargaining
agreement. See Prate Installations, Inc. v. Chi. Reg’l Council of Carpenters, 607 F.3d 467, 472
(7th Cir. 2010).

On the other hand, as Local 139 argues, during negotiations, “an

employer commits an unfair labor practice if, without bargaining to impasse, it effects a
unilateral change of an existing term or condition of employment. (Pl.’s Opp’n (dkt.
#23) 7 (quoting Litton Fin. Printing Div. v. NLRB, 501 U.S. 190, 205-06 (1991)).)
Unlike the situation in Prate Installations, no new contract then existed that limited the
arbitrator’s authority to extend the remedy period past the time period of the collective
bargaining agreement governing the arbitration, nor does it appear that Wingra ever
raised, much less preserved, an objection based on this possibility.
In light of the presumption of enforcement of an arbitration award, the court will
not vacate or modify the award based on this unexpressed challenge, although Wingra is
free to seek clarification from Arbitrator Cox. If it opts to do so, Arbitrator Cox may also
consider the fact that as of October 2015, Local 139 is no longer the bargaining unit for
Wingra employees. If not, the Arbitrator’s original ruling stands.

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ORDER
IT IS ORDERED that:
1) plaintiff International Union of Operating Engineers, Local 319, AFL-CIO’s
motion for summary judgment (dkt. #14) is GRANTED;
2) defendant Wingra Stone Company’s motion for summary judgment (dkt. #18)
is DENIED;
3) defendant’s motion to supplement summary judgment record (dkt. #27) is
GRANTED; and
4) the clerk of the court is directed to enter judgment in favor of plaintiff and
close this case.
Entered this 29th day of September, 2016.
BY THE COURT:
/s/
__________________________________
WILLIAM M. CONLEY
District Judge

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