Sixth Circuit: Claimed breach of settlement agreement must be pursued through grievance process, not litigation

UPS and Teamsters Local 480 entered into a settlement agreement resolving a dispute about the assignment of work to employees in the category of "shifters". Thereafter, the Union alleged that UPS had failed to abide by the settlement and brought suit in District Court to enforce the agreement. UPS moved to dismiss the complaint, arguing that the dispute must first be pursued through the parties' grievance and arbitration procedures. The District Court agreed with UPS and dismissed the complaint. A panel of the Sixth Circuit, with one dissent, has now affirmed that decision.

Pointing to the broad definition of "grievance" contained in the parties' cba, the Court concluded that:

The Union and UPS entered into a CBA that provides that "any controversy, complaint, misunderstanding or dispute" that concerns "interpretation, application or observance" of the CBA "shall be handled" in accordance with the CBA's grievance procedures. The parties agree that UPS's alleged breach of the Settlement Agreement constitutes a violation of the CBA. Accordingly, the Union must use the CBA's grievance procedure before seeking judicial relief. Because the Union failed to state a claim under the CBA, we AFFIRM the district court's judgment dismissing the complaint.

The dissent would have overturned the lower court's decision, based on its conclusion that whether UPS breached the settlement agreement did not constitute a dispute as to the interpretation, application or observance of the cba.

The Court's decision can be found here.