773 F.3d 1100
10th Cir.2014Background
- Public Service Co. of Colorado (Company) and IBEW Local 111 (Union) had a collective-bargaining agreement (2009–2014) that referenced a separate retirees’ health plan (M/M) and contained a grievance and arbitration procedure for disputes "relating to hours, wages, or conditions of employment."
- In 2011 the Company increased retirees’ prescription-drug copayments; the Union filed grievances (steps 1–3) claiming this violated Article 11 § 3; the Company denied the grievances as outside the Agreement’s grievance/arbitration scope.
- The Union demanded arbitration for retirees’ claims; the Company refused to arbitrate retiree claims but offered to arbitrate claims of current employees; the Union sued under 29 U.S.C. § 185(a) and moved to stay proceedings and compel arbitration.
- The district court denied the Union’s motion, concluding the arbitration clause was not susceptible to covering disputes over retirees’ healthcare benefits (i.e., the dispute was not arbitrable).
- The Union filed an interlocutory appeal. The Tenth Circuit considered (1) whether FAA interlocutory jurisdiction applied and (2) whether the dispute was arbitrable; it affirmed the district court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the FAA provide interlocutory appellate jurisdiction over the denial of a motion to stay and compel arbitration under a CBA? | Union: Motion sought only stay and compel; FAA §16(a) permits interlocutory appeal. | Company: FAA exemption for "contracts of employment" and §1/§185 mean FAA doesn't apply to CBAs. | Held: FAA §16(a) provides jurisdiction; FAA applies to CBAs except for transportation workers per Circuit City; §185 does not preclude FAA procedures. |
| Is the arbitration clause "susceptible to an interpretation" covering retiree healthcare disputes (i.e., is the dispute arbitrable)? | Union: Clause covers "conditions of employment" and CBA addresses retiree benefits; presumption favors arbitration. | Company: "Hours, wages, or conditions of employment" refer to active employment only; retirees and retiree benefits fall outside arbitrable scope. | Held: Not arbitrable; court has "positive assurance" clause does not cover retiree healthcare benefits, so district court properly denied stay/compel. |
Key Cases Cited
- AT & T Techs., Inc. v. Commc’ns Workers, 475 U.S. 643 (presumption of arbitrability; clause must be clearly inapplicable to deny arbitration)
- Allied Chem. & Alkali Workers v. Pittsburgh Plate Glass Co., 404 U.S. 157 ("hours, wages, and working conditions" understood as terms of active employment; retirees not covered for NLRA mandatory-bargaining purposes)
- Circuit City Stores, Inc. v. Adams, 532 U.S. 105 (FAA §1 exemption applies only to transportation workers engaged in interstate commerce)
- Textile Workers Union v. Lincoln Mills, 353 U.S. 448 (federal enforcement of CBAs and federal common law under §185)
- Conrad v. Phone Directories Co., 585 F.3d 1376 (10th Cir.) (FAA interlocutory jurisdiction requires motion seeking only FAA remedies or clear articulation of same)
- McWilliams v. Logicon, Inc., 148 F.3d 573 (10th Cir.) (narrow construction of FAA §1 exemption)
- Commc’n Workers v. Avaya, Inc., 693 F.3d 1295 (10th Cir.) (where arbitrability is intertwined with merits, court may resolve arbitrability)
- Pryner v. Tractor Supply Co., 109 F.3d 354 (7th Cir.) (FAA §16 interlocutory appeal is procedural and compatible with §185 federal common law)
- Smart v. IBEW Local 702, 315 F.3d 721 (7th Cir.) (no conflict between §185 federal common law and FAA remedies; apply FAA when no tension)