Sunday, February 1, 2015

Last chance agreement doesn't bar arbitration when union is not a party

An employee of Southwestern Bell Telephone Company represented by the Communication Workers of America filed a grievance over her termination. At the initial step of the grievance process the Company, in the presence of a local Union representative, presented the grievant with a last chance agreement. Pursuant to the terms of the LCA, grievant would be reinstated but, for a period of 24 months, should grievant be suspended or terminated for conduct contrary to the Agreement "any grievance relating in any way to such suspension or dismissal will not be subject to arbitration." The grievant signed the agreement, but the Union did not.

Approximately three months later the employee was dismissed for poor work performance. A grievance was filed and pursued without resolution.  CWA demanded arbitration and the parties selected an arbitrator and scheduled a hearing date. At the hearing the Company, for the first time, refused to arbitrate the dispute. It claimed that the right to arbitration had been waived by the LCA. CWA filed suit to compel arbitration, and the District Court for the Western District of Missouri has granted the Union's request.

The Court described the issue before it as:

 whether the LCA entered into between [grievant] and SWBT supersedes the rights of CWA under the CBA with regard to the arbitrability of grievances. Specifically, Plaintiff contends [grievant's] termination, for alleged just cause, should be subject to arbitration pursuant to Article IV. Defendant claims the right to arbitrate under the CBA was waived when [grievant] voluntarily signed the LCA.

Rejecting the Company's contention that the right to arbitrate the dispute had been waived by the LCA, the Court concluded that the Union's absence as a party to the agreement rendered the agreement essentially unenforceable. The Court noted that the Eighth Circuit had previously held (in Coca-Cola Bottling Company of St. Louis v. Teamsters Local Union No. 688) that a last chance agreement between a Company and Union could effectively modify a cba and bar arbitration of the just cause issue in a subsequent dispute. It noted further, however, that the Eighth Circuit had more recently cautioned against too broad a reading of its decision. In Associated Electric Coop. Inc v. IBEW Local No. 53 the Court refused to bar arbitration where the Union was not a party to the LCA. The District Court also observed that in both cases resolution of the impact of the LCA took place after the arbitrator had issued an award. 

The Court agreed with CWA that:

CWA cannot be estopped from pursuing its right to arbitrate under the terms of the CBA in a contract between only SWBT and an employee. The terms of the CBA covering arbitration are between SWBT and CWA. Article IV references the Union and the Company's right to arbitrate. The CBA contains no provision which empowers an individual employee to waive CWA's rights under the CBA.

The Court's decision in Communication Workers of America v. Southwestern Bell Telephone Co. can be found here. Other issues arising under last chance agreements are discussed here and here.

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