Sunday, October 21, 2012

Third Circuit affirms Rite Aid card check arbitration

In November of 1999, Rite Aid and UFCW Local 1360 entered into a cba that contained a provision that Rite Aid would recognize the Union as exclusive representative of employees in its stores in the Union's geographic jurisdiction when majority status was demonstrated by an NLRB election "or other demonstration of the Union status" acceptable to Rite Aid. CBA's executed in 2002 and 2005 contained essentially the same language.

Before entering into the 1999 agreement, the parties also entered into an oral agreement providing that Rite Aid would recognize the Union without the need for an NLRB election when the Union could present authorization cards from a majority of  a store's employees. Pursuant to this agreement the Union was recognized  based on a card check in 63 New Jersey stores.

In 2003, Rite Aid replaced its Director of Labor Relations and between 2003 and 2005 it refused to recognize the Union in five New Jersey stores based on card checks.

The Union grieved this refusal and the dispute ultimately went to arbitration. The arbitrator concluded that Rite Aid had violated the card check agreement. While noting that the language of the cba, standing alone, might support the Company's actions, the arbitrator found that the parties had "amended and modified" the agreement by their oral card check agreement. The arbitrator further noted that Rite Aid received a direct benefit from the card check agreement, including an ability to become a participating provider for the union benefit fund.

Rite Aid sought to set aside the award , but the District Court rejected this effort.
Affirming the lower court, the Third Circuit concluded:

Despite Rite Aid's arguments to the contrary, there is sufficient evidence in the record from which the arbitrator's interpretation could "in any rational way be derived from" the CBAs. Brentwood Med. Assocs., 396 F.3d at 241 (emphasis in original). At least three pieces of evidence support the arbitrator's conclusion that Rite Aid agreed to accept the card check process in return for provider status under the Fund.
First, Rite Aid accepted card checks for the unionization of approximately sixty-three Rite Aid stores from November 1999 to December 2002. ...
Second, Rite Aid continued to enjoy the economic benefit of its agreement to accept card checks when it signed the 2002 and 2005 CBAs because it continued to be a participating pharmacy services provider for the Fund. ...
Third, the record can be read to reject the premise that when Rite Aid executed the Card Check Agreement and distributed the 1999 memorandum to its non-union employees it only intended for the agreement to govern the parties' collective bargaining arrangements until the expiration of the 1999 CBA. during the pendency of the 1999 CBA. ...
Thus, we are satisfied that the arbitrator's award "draws its essence" from the CBAs, viewed in the context of both the Card Check Agreement and the parties' course of dealing, and we are without jurisdiction to consider the award further. ...
The court's decision can be found here.

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