Applicability of Neutrality Agreement not subject to arbitration

The Tenth Circuit has reversed a district court decision that had required Avaya to arbitrate a dispute concerning the scope of its Neutrality agreement and its application to certain management employees. Communications Workers of America v. Avaya, Inc. The district court's opinion is discussed here.

Avaya and CWA were parties to a Neutrality Agreement governing the process by which the Union could organize non management employees. Pursuant to that Agreement, CWA gave notice of its intent to organize certain "backbone engineers", a position categorized by Avaya as management. Avaya maintained that the Neutrality Agreement by its terms applied only to non management employees and asserted that the only process by which these employees could be organized was through the NLRB. CWA asserted its belief that the backbone engineers were properly considered non management employees and sought to submit this issue to the dispute resolution process (a "Third Party Neutral") of the Neutrality Agreement. After Avaya refused to submit the dispute to the TPN the Union the filed a grievance under its cba, seeking a determination that the TPN should resolve the status of the backbone engineers. Avaya similarly refused to arbitrate this dispute and CWA filed suit seeking an order compelling arbitration. The District Court granted the Union's request and Avaya appealed.

 Reversing the district court, the Tenth Circuit noted:

This case requires reconciling two competing principles governing judicial review in this area. First, courts (rather than arbitrators) must evaluate the threshold question of whether the parties consented to submit a particular dispute to arbitration. ... Second, courts making this determination are not to rule on the potential merits of the underlying claims... These rules clash in cases where the merits of the claim are bound up with the question of arbitrability. ... On those occasions, the Supreme Court tells us, the court's duty to determine whether the party intended the dispute to be arbitrable trumps its duty to avoid reaching the merits

Reviewing the matter de novo, the Circuit found "compelling evidence" that the parties did not agree to submit the dispute over backbone engineers to arbitration. The court determined that the Neutrality Agreement provides for a process for resolving disputes from organizing drives directed at "non-management" employees, and the evidence was clear that this referred to individuals categorized by Avaya as "occupational" employees. Despite the Union's "belief" that the backbone engineers were non-management, the evidence was undisputed that they had been consistently categorized as management by Avaya, were covered by the management pension plan, and the Union had referred to them as management in several grievances concerning the claimed improper assignment of work. The court concluded that "the parties understood the term 'management' to denote non-occupational employees; and if there is no real dispute about the classification of backbone engineers as non-occupational; there can be only one conclusion to draw from the record: the parties did not consent to submit the underlying dispute to arbitration."

According to the court "In the end, the district court had its presumptions backwards: instead of applying the presumption in favor of arbitration, it should have applied the presumption in favor of judicial resolution."