Serv. Emp. Int'l Union Healthcare 1199NW v. Snohomish Cty. Pub. Hosp. Dist. No. 1

553 P.3d 1172

SERVICE EMPLOYEES INTERNATIONAL UNION HEALTHCARE 1199NW, Appellant,

v.SNOHOMISH COUNTY PUBLIC HOSPITAL DISTRICT NO. 1, d/b/a EvergreenHealth Monroe, Respondent.

No. 85477-1-I

Court of Appeals of Washington, Division 1.

Filed August 19, 2024

Appeal from Snohomish Superior Court, Docket No: 23-2-00432-7, Honorable Millie Judge, Judge.

Carson Flora, Attorney at Law, 19823 58th Pl. S Ste. 200, Kent, WA, 98032-2183, Elizabeth Dedrick, SEIU Healthcare 1199NW, 19823 58th Pl. S Ste. 200, Kent, WA, 98032-2183, for Appellant.

Richard J. Birmingham, Attorney at Law, 920 5th Ave. Ste. 3300, Seattle, WA, 98104-1610, Christine Hawkins, Davis Wright Tremaine LLP, 929 108th Ave. Ne Ste. 1500, Bellevue, WA, 98004-4786, for Respondent.

PUBLISHED OPINION

Birk, J.

¶1 We are asked to determine whether materially identical arbitration provisions in two collective bargaining agreements (CBAs) cover the claims asserted in the action. Service Employees International Union Healthcare 1199NW (Union), relying on associational standing on behalf of its members, sued Snohomish County Public Hospital District No. 1 (Evergreen), asserting Evergreen breached the terms of a 401(a) retirement plan (Plan). Evergreen contends that because it agreed in the CBAs to abide by the terms of the Plan, a claim that it breached the Plan amounts also to a claim that it breached the CBAs, and therefore is subject to the CBAs’ arbitration clauses. Because this rationale is insufficient to extend the reach of the arbitration clauses to the Union’s claims, we reverse the trial court’s ruling requiring arbitration and remand.

I

¶2 In 2019, Evergreen and the Union entered into two CBAs: one for support services and one for registered and licensed practical nurses. The purpose of the agreements was to set forth the understanding reached between the parties "with respect to wages, hours of work and conditions of employment" for Evergreen employees represented by the Union. The CBAs include grievance procedures, requiring an employee pursuing a grievance to go through a four-step procedure, culminating with the option of arbitration. The CBAs define an arbitrable grievance as "an alleged breach" of "the terms and conditions" of the Agreement.

¶3 In the CBAs, Evergreen agreed to provide a retirement plan, make matching contributions up to specified limits, and "make a good faith effort" to make its matching contributions "no less than twice per year." Article 14 of the support services CBA stated,

During the term of this Agreement, [Evergreen] shall continue in full force and effect its Employee Retirement Plan. [Evergreen] will make a matching contribution equal to two dollars ($2.00) for each one dollar ($1.00) of compensation the employee contributes, up to [an Evergreen] contribution of five percent (5%) of the employee’s eligible compensation in accordance with the terms of the retirement plan.… Beginning November 1, 2018, the Employer shall make a good faith effort to make its matching contributions to employees’ retirement accounts no less than twice per year.

Article 14.5 of the registered nurse CBA stated,

[Evergreen] shall provide during the term of this Agreement a retirement plan. Eligibility and benefits will be determined by the plan’s terms. [Evergreen] will make a matching contribution equal to two dollars ($2.00) for each one dollar ($1.00) of compensation the employee contributes, up to [an Evergreen] contribution of five percent (5%) of the employee’s eligible compensation in accordance with the terms of the retirement plan.… Beginning November 1, 2018, the Employer shall make a good faith effort to make its matching contributions to employees’ retirement accounts no less than twice per year.

The 2019 CBAs were in effect from December 2018 through August 2020.

¶4 Evergreen adopted a plan document establishing the "Snohomish County Public Hospital District No. 1 401(a) Plan."¹ Under Article III of the Plan, all Evergreen em- ployees are eligible to participate except temporary employees, on-call employees, and non-benefitted employees. Article IV of the Plan stated that "[w]ithin a reasonable time following the end of each calendar month, [Evergreen] will contribute on behalf of each Active Participant."

¶5 On January 19, 2023, the Union sued Evergreen alleging it failed "to contribute within a reasonable time following the end of each calendar month to [Union] members’ 401(a) retirement plan accounts, despite its promise to do so in the plan document."² In addition to breach of the Plan, the Union asserted common law and statutory claims based on Evergreen’s alleged failure to follow the Plan. Evergreen moved for summary judgment asking the court to dismiss the Union’s claims and to compel exhaustion of the grievance and arbitration provisions of the CBAs. Evergreen argued if the Union "establishes a breach of the Plan, [Evergreen] would have also breached the contribution requirements of Section 14.5 and Article 14 of the CBAs," and any breach of the CBAs is subject to arbitration. The trial court granted Evergreen’s motion, ruling "the Union’s claims are encompassed by Section 14.5 and Article 14 of the CBAs, as the Union’s claim of breach of the [Plan] would be a breach of the express provisions of the CBAs." The Union appeals.

II

¶6 The Union argues the trial court erred in compelling arbitration because its claims derive from Evergreen’s obligation to make matching retirement contributions in accordance with the Plan, not the CBAs. We agree.

[1–3] ¶7 We review de novo an order granting summary judgment. Khung Thi Lam v. Glob. Med. Sys., Inc., 127 Wash. App. 657, 661 n.4, 111 P.3d 1258 (2005). We also would engage in de novo review if the trial court’s decision had been entered on a motion strictly framed to compel or deny arbitration. Zuver v. Airtouch Commc’ns, Inc., 153 Wash.2d 293, 302, 103 P.3d 753 (2004). Our review is limited to determining whether the Union’s claims are arbitrable, without weighing the potential merits of the underlying claims. See Hanford Guards Union of Am. Local 21 v. Gen. Elec. Co., 57 Wash.2d 491, 494, 358 P.2d 307 (1961); AT&T Techs., Inc. v. Commc’ns Workers of Am., 475 U.S. 643, 649-50, 106 S. Ct. 1415, 89 L. Ed. 2d 648 (1986).

¶8 "The principles governing arbitration of public sector labor disputes arising under a [CBA] are set forth by the United States Supreme Court in the ‘Steelworkers Trilogy.’ "³ Mount Adams Sch. Dist. v. Cook, 150 Wash.2d 716, 723, 81 P.3d 111 (2003) (quoting Peninsula Sch. Dist. No. 401 v. Pub. Sch. Emps. of Peninsula, 130 Wash.2d 401, 413, 924 P.2d 13 (1996)). In Washington, those principles have been framed as follows:

"(1) Although it is the court’s duty to determine whether the parties have agreedto arbitrate a particular dispute, the court cannot decide the merits of the controversy, but may determine only whether the grievant has made a claim which on its face is governed by the contract. (2) An order to arbitrate should not be denied unless it may be said with positive assurance the arbitration clause is not susceptible of an interpretation that covers the asserted dispute. Doubts should be resolved in favor of coverage. (3) There is a strong presumption in favor of arbitrability; all questions upon which the parties disagree are presumed to be within the arbitration provisions unless negated expressly or by clear implication."

Peninsula Sch. Dist., 130 Wash.2d at 413-14, 924 P.2d 13 (quoting Council of County & CityEmps. v. Spokane County, 32 Wash. App. 422, 424-25, 647 P.2d 1058 (1982)).⁴

[4–7] ¶9 In Granite Rock Co. v. International Brotherhood of Teamsters, 561 U.S. 287, 301, 130 S. Ct. 2847, 177 L. Ed. 2d 567 (2010), the Court clarified that courts determine arbitrability by "(1) applying the pre-sumption of arbitrability only where a validly formed and enforceable arbitration agreement is ambiguous about whether it covers the dispute at hand; and (2) adhering to the presumption and ordering arbitration only where the presumption is not rebutted." The presumption of arbitrability reflects federal policy to place arbitration agreements on the same footing as other contracts, but does not override "the principle that a court may submit to arbitration ‘only those disputes … that the parties have agreed to submit.’ "⁵ Id. at 302, 130 S. Ct. 2847 (alteration in original) (quoting First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 943, 115 S. Ct. 1920, 131 L. Ed. 2d 985 (1995)).

A

¶10 Evergreen agrees the Union’s "essential allegation" is that Evergreen breached the Plan. But Evergreen argues the issue is "simply whether this allegation would also be a breach of the CBA[s]," because, Evergreen says, it would "therefore" fall into the grievance and arbitration provisions of the CBAs.

¶11 Evergreen cites no case adopting this theory: that because it agreed in the CBA to follow the Plan, a claim that it breached the Plan is equivalent to a claim it breached the CBA and therefore falls within an arbitration clause covering alleged breaches of the CBA.⁶ Evergreen points to cases discussing whether a claim is arbitrable because it would require interpretation of the terms of a CBA. In Meat Cutters Local No. 494 v. Roseauer’s Super Markets, Inc., 29 Wash. App. 150, 159, 627 P.2d 1330 (1981), the union sought to arbitrate whether a change in the company’s appearance standards implemented a month after the CBA was executed violated the CBA because it was not a proper exercise of management powers. The employer resisted arbitration, arguing the CBA contained "no express provision" covering its new policy. Id. at 156, 627 P.2d 1330. We concluded the claim was arbitrable, first because past practices were an implied part of the bargaining process and whether employees’ past appearances practices should continue was a question for the arbitrator, and second because determining whether the new policy fell within the CBA’s "management function clause" required interpretation of...