Transitional Health Servs. of Fremont v. Serv. Emps. Int'l Union, File No. 1:18-CV-450

418 F.Supp.3d 196

TRANSITIONAL HEALTH SERVICES OF FREMONT, Plaintiff,

v.SERVICE EMPLOYEES INTERNATIONAL UNION, HEALTHCARE MICHIGAN, Defendant.

File No. 1:18-CV-450

United States District Court, W.D. Michigan, Southern Division.

Signed November 14, 2019

Gregory N. Longworth, Clark Hill PLC, Grand Rapids, MI, for Plaintiff.

Darcie R. Brault, McKnight Canzano Smith Radtke & Brault PC, Royal Oak, MI, Richard G. Mack, Jr., Keith Dewain Flynn, Miller Cohen PLC, Detroit, MI, for Defendant.

Janet T. Neff, United States District Judge

OPINION

This is an action to vacate an arbitration award. Plaintiff Transitional Health Services of Fremont ("Fremont") employed Kenneth Span as a Certified Nurse Aid (CNA) at its facility in Fremont, Michigan, for over 14 years. Fremont terminated Span in December 2016 following an investigation into possible employee misconduct at the facility. Span filed a grievance about his termination in accordance with the grievance procedure in a collective bargaining agreement (CBA) between Fremont and Defendant Service Employees International Union, Healthcare Michigan ("SEIU"). SEIU represented, and continues to represent, Span in connection with that grievance. The CBA calls for arbitration of grievances that are not resolved through the initial grievance process. The parties submitted the grievance to an arbitrator, who found in favor of Span.

Fremont now seeks to undo the arbitrator's decision. In a counterclaim, SEIU seeks enforcement of the arbitration award. Before the Court is Fremont's motion to vacate the arbitration award (ECF No. 8) and SEIU's motion for summary judgment (ECF No. 28). For the reasons herein, the Court finds in favor of SEIU. Its motion for summary judgment will be granted and Fremont's motion to vacate the arbitration award will be denied.

I. Background

Span worked the night shift on December 4-5, 2016, at Fremont's long-term care and rehabilitation facility in Fremont, Michigan. As his shift ended, several nurses reporting to work noticed that a number of residents were lying in urine-soaked bedsheets. They reported these conditions to Fremont. Fremont suspended Span from work a few days later, pending an investigation. Fremont terminated Span on December 12, 2016.

Span filed a grievance, claiming that Fremont suspended and terminated him without just cause, in violation of the CBA. In cases involving "resident/patient neglect or abuse," "just cause" means that the employer "has a reasonable belief that the employee engaged in the acts or omissions that led to the discipline related to resident/patient care." (CBA ¶ 12.10, ECF No. 32-2, PageID.639.)

Span also claimed that Fremont committed an "unfair labor practice" under the National Labor Relations Act, 29 U.S.C. § 158(a), because it terminated him due to his involvement in union activities.

The CBA provides a grievance procedure to resolve disputes about "disciplinary actions taken by the Employer," "contract interpretations," and "conditions of employment." (CBA ¶ 12.1.) If the grievance is not resolved through the preliminary steps of the process, the parties can submit the grievance to an arbitrator. (Id. ¶ 12.3.) The arbitrator's decision is "final and binding on all parties," and the arbitrator's award is "enforceable as the agreement of the parties[.]" (Id. ¶ 12.5.)

Fremont and SEIU submitted Span's grievance to an arbitrator, who conducted a hearing over three days, on June 15, August 31, and September 27, 2017. Following the hearing, the arbitrator issued a 21-page opinion deciding the issues in Span's favor. The arbitrator determined that Fremont terminated Span without just cause because it did not have a reasonable belief that he had neglected or abused residents. (Arbitration Op. & Award, ECF No. 32-1, PageID.620.) The arbitrator also determined that Fremont had engaged in an unfair labor practice because Span's union activities were a motivating factor in his termination. (Id. , PageID.624.) The arbitrator decided that the appropriate remedy is to reinstate Span and "make him whole." (Id. )

Fremont filed this action in state court to vacate the arbitration award. SEIU removed the action to this Court, invoking Section 301 of the Labor Management Relations Act (LMRA), 29 U.S.C. § 185, and filed a counterclaim for enforcement of the arbitration award.

II. Summary Judgment Standard

Summary judgment is proper "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). The court must consider the evidence and all reasonable inferences in favor of the nonmoving party. Burgess v. Fischer , 735 F.3d 462, 471 (6th Cir. 2013). The moving party has the initial burden of showing the absence of a genuine issue of material fact. Jakubowski v. Christ Hosp., Inc. , 627 F.3d 195, 200 (6th Cir. 2010). The burden then "shifts to the nonmoving party, who must present some ‘specific facts showing that there is a genuine issue for trial.’ " Id. (quoting Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) ).

The function of the Court is "not...to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial." Anderson , 477 U.S. at 249, 106 S.Ct. 2505.

"A dispute is genuine if there is evidence ‘upon which a reasonable jury could return a verdict in favor of the non-moving party.’ A factual dispute is material only if it could affect the outcome of the suit under the governing law." Smith v. Erie Cty. Sheriff's Dep't , 603 F. App'x 414, 418 (6th Cir. 2015) (quoting Tysinger v. Police Dep't of City of Zanesville , 463 F.3d 569, 572 (6th Cir. 2006) ). "The ultimate question is ‘whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.’ " Back v. Nestlé USA, Inc. , 694 F.3d 571, 575 (6th Cir. 2012) (quoting Anderson , 477 U.S. at 251-52, 106 S.Ct. 2505 ).

III. Standard for Review of Labor Arbitration Awards

The Court of Appeals recently summarized the federal courts' standard for review of labor arbitration decisions as follows:

Federal courts review arbitration decisions with a deferential gaze. We ensure that the arbitrator (1) did not commit fraud or other dishonesty, (2) resolved a dispute fairly committed to arbitration, and (3) at least arguably construed the collective bargaining agreement. Mich. Family Res., Inc. v. Serv. Emps. Int'l Union Local 517M , 475 F.3d 746, 753 (6th Cir. 2007) (en banc). Just as important is what we do not do. We do not ask whether the arbitrator interpreted the contract correctly. We thus may not overturn an arbitration decision on the ground that the arbitrator made mistakes, whether "serious" errors, id. at 756, or "improvident, even silly," mistakes, United Paperworkers Int'l Union, AFL-CIO v. Misco, Inc. , 484 U.S. 29, 38-39, 108 S.Ct. 364, 98 L.Ed.2d 286 (1987)....

Econ. Linen & Towel Serv., Inc. v. Int'l Bhd. of Teamsters, Teamsters Local Union 637 , 917 F.3d 512, 513 (6th Cir. 2019). This is " ‘one of the narrowest standards of judicial review in all of American jurisprudence.’ " DBM Techs., Inc. v. Local 227, United Food & Commercial Workers Int'l Union , 257 F.3d 651, 656 (6th Cir. 2001) (quoting Lattimer-Stevens Co. v. United Steelworkers of Am., AFL-CIO, Dist. 27, Sub-Dist. 5 , 913 F.2d 1166, 1169 (6th Cir. 1990) ).

III. Analysis

A. Fremont's Motion to Vacate

In its motion to vacate the arbitration award, Fremont raises two objections to the arbitrator's decision. First, it argues that the arbitrator refused to postpone the hearing to consider relevant evidence, in violation of Mich. Comp. Laws § 691.1703(1)(c). On the last day of the arbitration hearing, Fremont asked to continue the matter so that it could present rebuttal evidence but the arbitrator denied Fremont's request. Second, Fremont contends that the arbitrator refused to adhere to the "plain meaning" of the CBA, in violation of Mich. Comp. Laws § 691.1703(1)(d). (Mot. to Vacate, ECF No. 8-2, PageID.204.) In particular, Fremont argues that the arbitrator misinterpreted the "just cause" requirement in the CBA.

Fremont's reliance on state law is misplaced. The Court of Appeals for the Sixth Circuit has "repeatedly held that claims involving rights created by a CBA are governed by the LMRA." Aloisi v. Lockheed Martin Energy Sys., Inc. , 321 F.3d 551, 556 (6th Cir. 2003) (citing cases). "Section 301 preempts state law when the application of state law requires the interpretation of a collective bargaining agreement." Lingle v. Norge Div. of Magic Chef, Inc. , 486 U.S. 399, 413, 108 S.Ct. 1877, 100 L.Ed.2d 410 (1988) ; see also Kallen v. District 1199, Nat'l Union of Hosp. & Health Care Emps., RWDSU, AFL-CIO , 574 F.2d 723, 725 (2d Cir. 1978) ("Since federal courts indisputably have jurisdiction under section 301 to enforce a labor arbitration award,...we agree with the district court that suits to vacate awards are cognizable under the same statute.").

Fremont's state-law claims are preempted because they challenge an arbitration conducted pursuant to a CBA. Fremont's rights with respect to that arbitration derive from the CBA. Moreover, both of Fremont's claims require interpretation of the CBA. Fremont's claim that the arbitrator refused to postpone the hearing "upon [a] showing of sufficient cause for postponement," in order to "consider evidence material to the controversy," see Mich. Comp. Laws § 691.1703(1)(c), requires the Court to examine the terms of the CBA to determine what evidence would be material.¹ Similarly, Fremont's claim that the arbitrator did not apply the "plain meaning" of the CBA clearly involves interpretation of the CBA. Accordingly, federal law applies, not state law.

The fact that the CBA provides that an arbitration award is enforceable "[i]n any circuit court having jurisdiction thereof, as an award rendered in a...