Washington Metropolitan Area Transit Authority v.  LOCAL 2, Office Professional Employees International Union, AFL-CIO and CLC

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
 WASHINGTON METROPOLITAN AREA
TRANSIT AUTHORITY,
Petitioner-Appellant,
v. No. 04-2274 
LOCAL 2, Office Professional
Employees International Union,
AFL-CIO and CLC,
Respondent-Appellee. 
Appeal from the United States District Court
for the Eastern District of Virginia, at Alexandria.
James C. Cacheris, Senior District Judge.
(MISC-04-33)
Argued: November 30, 2005
Decided: October 4, 2006
Before WIDENER and GREGORY, Circuit Judges,
and HAMILTON, Senior Circuit Judge.
Affirmed by published opinion. Judge Widener wrote the opinion, in
which Judge Gregory and Senior Judge Hamilton concurred.
COUNSEL
ARGUED: Robert G. Ames, VENABLE, L.L.P., Washington, D.C.,
for Appellant. David Raphael Levinson, Washington, D.C., for
Appellee. ON BRIEF: Lesley A. Pate, VENABLE, L.L.P., Washing-

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ton, D.C., for Appellant. Martin P. Hogan, GROMFINE & TAYLOR,
P.C., Alexandria, Virginia, for Appellee.
OPINION
WIDENER, Circuit Judge:
The issue in this appeal is whether any part of petitioner Washing-
ton Metropolitan Area Transit Authority’s closing an employee cafe-
teria amounted to an arbitrable withdrawal of a benefit of employment
under two applicable agreements, a multi-state Compact creating the
Authority and a collective bargaining agreement between the Author-
ity and respondent Local 2, Office Professional Employees Interna-
tional Union. We agree with the district court that the claim was
arbitrable and affirm.
I.
The Authority was created by Compact, the parties to which are
Maryland, Virginia, and the District of Columbia. At a most basic
level, the Authority was created to "plan, develop, finance, and cause
to be operated improved transit facilities" in the District of Columbia
metro area. In connection with this mission, the Compact defines
"transit facilities" broadly, as "all real and personal property . . . and
all equipment, fixtures, buildings, and structures and services inciden-
tal to or required in connection with the performance of transit ser-
vice." The Authority is governed by a Board of Directors composed
of two directors from each jurisdiction with power to "construct,
acquire, own, operate, maintain, control, sell and convey [such] real
and personal property," "enter into and perform contracts, leases, and
agreements," and "control and regulate the use of facilities owned or
controlled by the Authority." In addition to empowering the Authority
and its Board, the Compact restrains it by requiring it to bargain col-
lectively with unions representing its employees. And Article 66(c) of
the Compact specifically refuses the Authority to arbitrate any labor
dispute not resolved by collective bargaining. "Labor dispute" "shall
be broadly construed" and is defined as "any controversy concerning
wages, salaries, hours, working conditions, or benefits . . . including
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. . . the interpretation or application of such collective bargaining
agreements . . . ."
The collective bargaining agreement at issue in this case supple-
ments the Compact. For example, it states, in Article V, that the "Au-
thority hereby retains the sole and exclusive control over any and all
matters inherent in the operation, management, and administration of
the Transit Authority including, but not limited to: the determination
of the location, relocation, or termination of any or all of its opera-
tions or functions . . . ." Regarding labor disputes, the Agreement pro-
vides additional detail regarding arbitration procedures: Article XX,
section 6 states that, as to "contract grievances," arbitral jurisdiction
"shall be confined exclusively to the specific provision or provisions
of the agreement at issue." And section 7 of the same Article states
that, as to "disputes not covered by this agreement concerning the
wages, hours, or working conditions," the parties must first try collec-
tively bargaining—and if either party declares that no agreement has
been so reached, "interest arbitration" may be invoked.
The instant dispute over these provisions was triggered by the
Authority notifying the Union, on November 14, 2002, that it was
going to close the cafeteria at its downtown-District of Columbia
headquarters, known as the Jackson Graham Building. At the time,
the cafeteria had been operating for about 30 years, though it had
been closed to the public since the terrorist attacks of September 11,
2001. The Authority justified the closure in terms of its need for the
space to be used for other activities of the Authority, and the former
cafeteria space is now used for storage and a law library, the reloca-
tion of which allowed for expanded offices for the Authority’s legal
staff. The decision to close the cafeteria also was influenced by the
growing number of restaurants available nearby.
From the start, the Union opposed the closure decision and insisted
that it was subject to collective bargaining. Meetings on this point
ensued, but the Union’s demand ultimately was refused. The Authori-
ty’s position was based largely on the Agreement’s management
rights provision, Article V. Despite this claim of management rights,
during the parties’ negotiations the Authority indicated a willingness
to continue to negotiate the effects of its decision, and the Authority
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also proposed an alternative food-service canteen, which the Union
rejected.
A month before the cafeteria was closed, which occurred on Febru-
ary 28, 2003, the Union invoked what is called "interest arbitration"
under Article XX, section 7 of the Agreement. The Authority immedi-
ately moved to dismiss on the basis that its decision was not subject
to interest arbitration, but only "contract arbitration," in which case
the decision was privileged under Article V of the Agreement. The
Arbitrator sided with the Union, holding that the dispute did not
involve "workspace" and accordingly that the issue was neither inher-
ently within the management-rights provision nor otherwise covered
by the Agreement. On the contrary, the Arbitrator found that the clo-
sure amounted to a termination of a longstanding and significant
employment benefit, which was subject to interest arbitration under
Article XX, section 7. Though called an award, this decision did not
reach the merits. Rather, it determined that the closure would be sub-
ject to a future interest arbitration if and when the collective bargain-
ing also ordered were to be declared fruitless.
The Authority petitioned the district court to vacate the arbitral
award, which the Union cross-moved to confirm. The district court
confirmed the award and the Authority now appeals.
II.
A.
At the outset, we briefly address the Union’s threshold contention
that the Authority waived its right to contest arbitrability in the courts.
The Union’s argument rests on the doctrine that claims must be made
to an arbitrator before a court will consider them. See, e.g., Dist. 17,
United Mine Workers of Am. v. Island Creek Coal Co., 179 F.3d 133,
140 (4th Cir. 1999).
We disagree. First, the Authority argued before the Arbitrator that
this was a rights arbitration case requiring a different arbitration pro-
cess under a different provision of the Agreement. And, relatedly, it
asserted that its decision was "privileged" under Article V. The claim
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of privilege can only be understood in its ordinary sense, as a claim
that the Arbitrator lacked the power to address the Authority’s deci-
sion. Indeed, the Arbitrator described the position of the Authority as
a contention that the closure decision was "beyond the jurisdiction
and power of this Board to review." We are of opinion that this con-
test preserved the issue for review. Absent an express agreement to
submit the question of arbitrability to the Arbitrator, as here, the issue
is presumed to be appropriate for judicial determination, First Options
of Chicago, Inc. v. Kaplan, 514 U.S. 938, 943-44 (1995), which sup-
ports our considering it.
B.
The foregoing analysis also impacts our decision about what stan-
dard of review to apply. The Authority urges de novo review. At first
glance, this request appears to confuse the standard governing our
review of the district court’s conclusions with the standard for our
review of the Arbitrator’s decision. As the Union points out, the
Supreme Court has held that courts are not to reverse arbitral deci-
sions simply because they disagree with the interpretation of the con-
tract in question. See United Steelworkers of Am. v. Enter. Wheel &
Car Corp., 363 U.S. 593, 598-99 (1960). But when reviewing awards
that determine only arbitrability, like the one here, we have so
deferred only where the parties have agreed to submit the question of
arbitrability to the arbitrator. See United States Postal Serv. v. Am.
Postal Workers Union, AFL-CIO, 204 F.3d 523, 527 n.1 (4th Cir.
2000). We are directed to no such agreement here, and we do not
infer one from the existence of the Agreement and Compact under
which only labor disputes are arbitrable because this case presents a
foundational question of what is a labor dispute. See Champion Int’l
Corp. v. United Paperworkers Int’l Union, AFL-CIO, 168 F.3d 725,
729-30 (4th Cir. 1999) (assessing arbitrability independently). For
these reasons, and to be consistent with our finding that the Authority
has not waived its challenge to arbitrability, we will exercise de novo
review. As we now discuss, the standard of review we apply is not
determinative.
Both parties list two issues for our consideration: (1) whether the
Arbitrator’s decision that the cafeteria closure is subject to "interest
arbitration" was correct, and, if so, (2) whether the Arbitrator’s deci-
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sion exceeded the scope of his authority. But because arbitrability
depends on whether or not the cafeteria constituted an employment
benefit as defined by the two governing instruments, we—like the
Arbitrator—perceive little difference between these two formulations.
In other words, if the Arbitrator correctly interpreted the Compact and
the Agreement, he did not exceed the scope of his authority because
his award determined only arbitrability. Cf. Champion Int’l Corp.,
168 F.3d at 730.
Under either formulation under either document, the fundamental
question in the case is whether the cafeteria closure was a core mana-
gerial decision. On this issue the case of Ford Motor Co. v. NLRB,
441 U.S. 488 (1979), is dispositive. There, the Supreme Court consid-
ered whether the company’s decision to raise prices in an employee
cafeteria constituted a "term[ ] and condition of employment" under
the National Labor Relations Act provision which is analogous (con-
struing 29 U.S.C. § 158(d)). In essence, the Court deferred to the
NLRB’s consistent position that "in-plant food prices and services are
mandatory bargaining subjects"; in other words, that such things are
conditions of employment. 441 U.S. at 497. In so holding, the Court
referred to the length of the employees’ lunch break, 441 U.S. at 491
n.3, and it cited with approval a variety of NLRB decisions related to
food service, 441 U.S. at 498 n.11. It found particularly significant
that "the company is not in the business of selling food to its employ-
ees, and the establishment of in-plant food prices is not among those
managerial decisions[ ] which lie at the core of entrepreneurial con-
trol." 441 U.S. at 498 (quotation omitted). To the contrary,
"[i]ncluding within § 8(d) the prices of in-plant-supplied food and
beverages would . . . serve the ends of the [Act]." 441 U.S. at 498.
The Authority’s position that Ford Motor is inapposite is not well
taken. First, while it is true that Ford Motor was not a decision with
respect to providing such cafeteria services, 441 U.S. at 498 n.10, as
a matter of elementary logic, if price changes to pre-existing service
are subject to bargaining, then elimination of such service is also bar-
gainable. What is more, the Authority claims that Ford Motor does
not apply because there was no business purpose for the price hike in
Ford Motor, whereas in this case it needed office space. We think this
is a distinction without a difference. In any case, the cafeteria price-
hike at issue in Ford Motor had just such a purpose: avoiding pay-
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ments the company was contractually obligated to make to the cafete-
ria vendor when cafeteria revenues fell below a certain level. 441 U.S.
at 492 n.4. In all events, that a decision has a business purpose does
not automatically remove it from the realm of collective bargaining;
a host of profit-motivated business decisions are nevertheless tradi-
tionally subject to collective bargaining. See Fibreboard Paper
Prods. Corp. v. NLRB, 379 U.S. 203, 224 (1964) (Stewart, J., concur-
ring) ("Compulsory retirement, layoffs according to seniority, assign-
ment of work among potentially eligible groups within the plant . . .
all have been recognized as subjects of compulsory collective bar-
gaining."). Stated otherwise, it is the nature of the business purpose
and its relationship to the fundamentals of the business that control,
not merely the existence of a business purpose.
Consequently, the Authority’s argument that First National Main-
tenance is instead the dispositive decision is not well taken. To begin
with, First National Maintenance is not contrary to Ford Motor, as
the Authority argues; on the contrary, the decisions interpreting First
National Maintenance appear to be confined to major operational
changes: for example, see Arrow Auto. Indus., Inc. v. NLRB, 853 F.2d
223, 225-32 (4th Cir. 1988) (plant closure); and Dorsey Trailers, Inc.
v. NLRB, 233 F.3d 831, 841-44 (4th Cir. 2000) (plant relocation).
Simply put, Ford Motor, on the one hand, and First National Mainte-
nance, on the other, deal with different categories of labor problems.
We thus are of opinion that closing a cafeteria, even for a legiti-
mate business purpose, is unlike closing a plant or operational divi-
sion, and we so hold.
Lastly, the Authority contends that the arbitrator’s decision
exceeded its authority. The argument, perhaps a little oversimplified,
remains that the closing of the cafeteria is governed by Article V of
the WMATA Compact, which gives WMATA authority over real
property issues and that this is a real property issue. The district court
carefully examined this question. It found that the arbitrator correctly
"found that the decision to close the cafeteria was a ‘decision to ter-
minate a working condition that has been a longstanding past prac-
tice.’" It held that in Ford Motor Company, the Court "held that food
service at work is a matter affecting ‘conditions of employment.’" We
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agree with the district court and hold that Ford Motor Company con-
trols in this case.
The judgment of the district court is accordingly
AFFIRMED.
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