United States District Court, W.D. Pennsylvania
PITTSBURGH METRO AREA POSTAL WORKERS UNION, AFL-CIO, a LABOR ORGANIZATION, and AMERICAN POSTAL WORKERS' UNION, AFL-CIO, a LABOR ORGANIZATION, Plaintiffs,
UNITED STATES POSTAL SERVICE, Defendant
For PITTSBURGH METRO AREA POSTAL WORKERS UNION, AFL-CIO, A LABOR ORGANIZATION, AMERICAN POSTAL WORKERS' UNION, AFL-CIO, A LABOR ORGANIZATION, Plaintiffs: Paul R. Yagelski, LEAD ATTORNEY, Rothman, Gordon, Foreman & Groudine, Pittsburgh, PA.
For UNITED STATES POSTAL SERVICE, Defendant: Michael C. Colville, LEAD ATTORNEY, United States Attorney's Office (PGH), Pittsburgh, PA; Syeda H. Maghrabi, PRO HAC VICE, United States Postal Service, Washington, DC.
Mark R. Hornak, United States District Judge.
This case turns a page in the latest chapter in a decades-long litigation saga between the American Postal Workers' Union (" APWU" ) and the United States Postal Service (" USPS" ) regarding the payments to be afforded once-terminated USPS employees who have benefitted from arbitration awards of reinstatement and full back pay. The Pittsburgh Metro Area Postal Workers' Union and the APWU (collectively, " Union" ) brought this case on behalf of two employees, seeking enforcement of their arbitration awards. Pending before the Court are the USPS's Motion to Dismiss Plaintiffs' Amended Complaint for lack of subject matter jurisdiction, ECF No. 11, and the Union's Motion for Summary Judgment, ECF No. 23. The Court heard oral argument on November 20, 2012, and requested supplemental briefing. The Court having considered the parties' motions and briefs in support and in opposition, ECF Nos. 12, 15, 16, 24, 25, 28, 29, and 32, those motions are ripe for disposition.
I. FACTS AND BACKGROUND
The major relevant facts are not in dispute. The USPS and the APWU are parties to a national collective bargaining agreement, at present effective from November 21, 2010 to May 20, 2015 (" CBA" ). Pl.'s Concise Stmt. Mat. Facts, ECF No. 25 ¶ 7; Am. Compl., ECF No. 8, ¶ 7. Plaintiff Pittsburgh Metro Area Postal Workers' Union is a local affiliate of the APWU, and is authorized by the APWU to bring the present action, Am. Compl. ¶ ¶ 8, 18. Pursuant to Article 15 of the CBA, the parties have agreed to resolve through their contractual grievance procedure any " dispute, difference, disagreement or complaint between the parties related to wages, hours, and conditions of employment,"
including " the interpretation, application of, or compliance with the provisions of this Agreement." ECF No. 12-1 Art. 15.1. Section 5 of the CBA's grievance procedure provides for arbitration of grievances which have not been resolved by the parties. Am. Compl. ¶ 10. At issue here is how that arbitration process played out with regards to two employees.
The first employee, David Kello, was discharged by the USPS on November 24, 2010. ECF No. 8-3 at 3. The Union challenged this action on his behalf, and an arbitration hearing was held on February 23, 2011. Id. at 2. The issues before the arbitrator were " Did the Postal Service have just cause to issue the Notice of Removal? If not, what shall be the remedy?" Id. Arbitrator Jacquelin F. Drucker ruled that the USPS did not demonstrate that it had just cause for the removal, and that Mr. Kello was " to be returned to duty with full back pay, seniority, and benefits." Id. at 10. The issue of mitigation of damages was not raised at the arbitration hearing. ECF No. 25 ¶ 20; see generally ECF No. 8-3.
The second employee, Mary Brosovich, was discharged by the USPS on May 31, 2011. ECF No. 8-4 at 7. The Union challenged this action on her behalf, and an arbitration hearing was held on January 20, 2012. Id. at 1. The issues before the arbitrator were " whether or not the Postal Service had just cause to remove the Grievant, and if not, what shall the remedy be[?]" Id. at 2. Arbitrator Kathleen Jones Spilker ruled that the USPS did not demonstrate that it had just cause for the removal, and that the USPS was " directed to reinstate [Ms. Brosovich] and to make her whole for lost wages and benefits, less the time of the suspension." Id. at 11. The issue of mitigation of damages was not raised at the arbitration hearing. ECF No. 25 ¶ 23; see generally ECF No. 8-4.
The arbitration awards, however, were not the end of the story for either Mr. Kello or Ms. Brosovich. Instead of compensating either employee " full back pay" for the entire time between their discharge and reinstatement, the USPS paid Ms. Brosovich for forty-five (45) days, and also paid Mr. Kello for less than the full time of his absence. ECF No. 25 ¶ ¶ 25, 26; ECF No. 8-4; Am. Compl. ¶ ¶ 16, 23.
According to the USPS, this action was proper because it was in accordance with its own Employee and Labor Relations Manual (" ELM" ). The parties agree that the ELM is referenced by the CBA at its Article 19, which states that " Those parts of . . . manuals . . . of the Postal Service, that directly relate to wages, hours or working conditions, as they apply to employees covered by this Agreement, shall contain nothing that conflicts with this Agreement." ECF No. 25 ¶ 10; ECF No. 12-1 at 122.  Section 436.2 of the ELM states as a " [l]imitation to corrective entitlement" that " [b]ack pay is allowed, unless otherwise specified in the appropriate award or decision, provided the employee has made reasonable efforts to obtain other employment. . . . [employees] are allowed 45 days before they must make reasonable efforts to obtain other employment." ECF No. 12-4 at 5.
Additionally, the USPS notes that the Notices of Removal sent to Mr. Kello and Ms. Brosovich stated that " [i]f this action is overturned on appeal, back pay will be allowed . . . ONLY IF YOU HAVE MADE REASONABLE EFFORTS TO OBTAIN OTHER EMPLOYMENT DURING THE RELEVANT NON-WORK PERIOD." ECF No. 12-2 at 3 (capitalization
in original). For this reason, according to the USPS, because Mr. Kello and Ms. Brosovich did not demonstrate evidence of reasonable efforts to obtain other employment, it was entirely appropriate for the USPS to only pay them back pay following the arbitration awards for 45 days, rather than for the full period they were not working for the USPS due to their discharge. See ECF No. 8-5.
The USPS has also set forth a number of facts relating to a national dispute process between the APWU and the USPS that occurred in 2000-2001 (" National Dispute" ), which the USPS has argued definitively conferred on it the right to apply the ELM after an arbitration award has been rendered. The facts that relate to that National Dispute are discussed in infra Part IV.B.2.
Plaintiffs brought suit in this Court on June 14, 2012 under § 301 of the Labor Management Relations Act, as amended, 29 U.S.C. § 185, and under the Postal Reorganization Act, 39 U.S.C. § § 101, et seq. (§ § 409 and § 1208(b) in particular), asking this Court to enforce the arbitrators' awards by ordering the USPS to give Mr. Kello and Ms. Brosovich the " full back pay" to which they are entitled. The USPS moved to dismiss the Union's suit under Fed.R.Civ.P. 12(b)(1), asserting that this Court lacks subject matter jurisdiction over the dispute, because the dispute may only be decided by an arbitrator. ECF No. 12. The Court held oral argument on that motion on November 20, 2012, after placing the parties on notice that it might consider the motion under either Rule 12(b)(1) or Rule 12(b)(6). ECF Order dated Oct. 31, 2012. At the end of the hearing, the Court ordered the parties to submit supplemental briefing on the issue of res judicata/preclusion by this Court's decision in Pittsburgh Metro Area Postal Workers' Union v. USPS, No. 95-1706, (W.D. Pa. May 12, 1997) (" Pittsburgh Metro I " ). ECF Order dated Nov. 20, 2012.  Plaintiffs then filed a Motion for Summary Judgment, ECF No. 23. All motions are fully briefed, and the Court now turns to the parties' arguments.
II. SUBJECT MATTER JURISDICTION
As a threshold matter, USPS asserts that this Court lacks subject matter jurisdiction. Under § 15(b) of the Postal Reorganization Act, 39 U.S.C. § 1208(b), this Court has jurisdiction over " [s]uits for violation of contracts between the Postal Service and a labor organization representing Postal employees." Section 15(b) has been interpreted uniformly with the nearly-identical § 301 of the Labor Management Relations Act, 29 U.S.C. § 185(a), which confers on federal district courts the jurisdiction to enforce arbitration awards that are not inconsistent with the terms of a collective bargaining agreement between parties, and to direct those parties to undertake an arbitration process they have contracted to follow. See Union Switch & Signal Div. Am. Std. Inc. v. United Elec., Radio & Mach. Workers of Am., Local 610, 900 F.2d 608, 612 (3d Cir. 1990); APWU of Los Angeles v. USPS, 861 F.2d 211, 215 (9th Cir. 1988);  Podobnik v. USPS, 409 F.3d 584, 586 n.1 (3d Cir. 2005).
More specifically, when an arbitration award has already been entered, a Court may only enforce it if it is a " final and binding award." Union Switch, 900 F.2d at 613. However, our Court of Appeals has held that the requirement that an arbitration award be " final and binding" before it can be enforced -- the so-called " complete arbitration rule" -- is not one that determines this Court's subject matter jurisdiction over the matter. See id. at 612. The complete arbitration rule " while a cardinal and salutary rule of judicial administration, it is not a limitation on a district court's jurisdiction," which is conferred by Congress in § 15(b) and § 301. Id. Therefore, while the ambiguity of the arbitrator's award vel non may be entirely relevant to determine whether the Union has stated a claim for relief, it is not relevant to this Court's subject matter jurisdiction, which has already been conferred by Congress. See Bensalem Park Maint., Ltd. v. Metro. Reg'l Council of Carpenters, CIV.A. 11-2233, 2011 WL 2633154, at *4 (E.D. Pa. July 5, 2011) (applying Union Switch to hold subject matter jurisdiction proper before determining arbitrability); Pittsburgh Metro Area Postal Workers' Union, AFL-CIO v. USPS, CIV.A. 07-00781, 2008 WL 1775502, at *3-4 (W.D. Pa. Apr. 16, 2008) (" Pittsburgh Metro II " ) (same); see also Morrison v. Nat'l Australia Bank Ltd., 130 S.Ct. 2869, 2876-77, 177 L.Ed.2d 535 (2010) (" subject-matter jurisdiction, by contrast, 'refers to a tribunal's power to hear a case.' It presents an issue quite separate from the question whether the allegations the plaintiff makes entitle him to relief." ) (internal citations omitted).
Even so, the USPS argues that under the Steelworkers Trilogy of cases, this Court lacks subject matter jurisdiction over the present dispute, and filed its motion to dismiss under Fed.R.Civ.P. 12(b)(1). See Def.'s Mot. Dismiss at 11 n.4. The Steelworkers Trilogy is a line of Supreme Court cases which established the principles for determining when a grievance is arbitrable, in particular in the setting of a collective bargaining agreement. See United Steelworkers of Am. v. Am. Mfg. Co., 363 U.S. 564, 80 S.Ct. 1343, 4 L.Ed.2d 1403 (1960); United Steelworkers of Am. v. Warrior & Gulf Navigation Co., 363 U.S. 574, 80 S.Ct. 1347, 4 L.Ed.2d 1409 (1960); United Steelworkers of Am. v. Enter. Wheel & Car Corp., 363 U.S. 593, 80 S.Ct. 1358, 4 L.Ed.2d 1424 (1960). Together, these cases stand for " a strong national policy favoring the resolution of disputes by arbitration," Union Switch, 900 F.2d at 615, and a presumption that when an arbitration clause in a contract is present, a grievance is arbitrable " unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute," United Steel, Paper & Forestry, Rubber, Mfg., Energy, Allied-Indus. & Serv. Workers Local Union 943 v. E.I. DuPont de Nemours & Co., 338 F. App'x 209, 213 (3d Cir. 2009) (internal citation omitted); see also Rite Aid of Pa., Inc. v. United Food & Commercial Workers Union, Local 1776, 595 F.3d 128, 139 (3d Cir. 2010) (Ambro, J., dissenting) (discussing four principles of the Steelworkers Trilogy); Nat'l Ass'n of Letter Carriers, AFL-CIO v. USPS, 272 F.3d 182, 185 (3d Cir. 2001) (" Letter Carriers " ).
The Court does not in any way doubt the continued the vitality of the policy embodied in the Steelworkers Trilogy. The trouble with the USPS's argument, no matter vehemently made, is that that policy, at least as applied to disputes over the meaning of an arbitration award that has been entered, is not " jurisdictional" in its scope. It is instructive that the court in Union Switch discussed the " strong national policy favoring arbitration" embodied in the Steelworkers Trilogy, at the
same time it upheld the propriety of subject matter jurisdiction. See 900 F.2d at 615; see also Bensalem, 2011 WL 2633154, at *7 (discussing Steelworkers Trilogy, yet upholding subject matter jurisdiction); Pittsburgh Metro II (citing Steelworkers Trilogy; same); Nationwide Ins. Co. of Columbus, Ohio v. Patterson, 953 F.2d 44, 45 n.1 (3d Cir. 1991) (arbitrability does not go to subject matter jurisdiction).
Therefore, while the precepts of the Steelworkers Trilogy undergird this Court's analysis of the arbitrability of this dispute, they are not jurisdictional, at least as applied here.  USPS's motion to dismiss under Rule 12(b)(1) for lack of subject matter jurisdiction must be denied, and this Court has the power to decide the issues before it.
Just because the USPS may have relied on the incorrect provision of Fed.R.Civ.P. 12 in its motion to dismiss, however, does not mean that the arguments contained therein may not be considered at all. This Court may consider a Rule 12(b)(1) motion under Rule 12(b)(6) instead if it is more properly viewed in that light, and the Court does so here. See Petruska v. Gannon Univ., 462 F.3d 294, 302 (3d Cir. 2006).  Because the arguments asserted in the USPS's Motion to Dismiss are in many ways the mirror image of those asserted in the ...