Sheet Metal Workers Local No. 2 v. Silgan Containers Manufacturing Corp.

United States Court of Appeals
For the Eighth Circuit
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No. 11-3251
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Sheet Metal Workers Local No. 2
lllllllllllllllllllll Plaintiff - Appellant
v.
Silgan Containers Manufacturing Corp.
lllllllllllllllllllll Defendant - Appellee
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Appeal from United States District Court
for the Western District of Missouri - St. Joseph
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Submitted: April 17, 2012
Filed: August 28, 2012
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Before RILEY, Chief Judge, MELLOY and GRUENDER, Circuit Judges.
MELLOY, Circuit Judge.
Sheet Metal Workers Local No. 2 ("the Union") attempted to commence
arbitration of terminated employee Joshua Stracener's grievance. Before arbitration
proceedings commenced, Stracener died, and the employer, Silgan Manufacturing
Corp. ("Silgan"), refused to proceed with arbitration. The Union brought this suit to
compel arbitration. Upon cross-motions for judgment on the pleadings, the district
court found Silgan did not agree to arbitrate claims of a deceased employee and

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dismissed the case. We reverse, holding that the parties agreed to mandatory
arbitration of Stracener's claim, and no legal principle deprives the Union of power
to enforce that agreement.
I
The Union is the exclusive bargaining representative for workers at Silgan.
The Collective Bargaining Agreement ("the CBA") between the Union and Silgan
includes a grievance procedure for "any grievance that may arise between the
company and any of its employees." Under this provision, employees may file a
grievance against their supervisor or shop steward. If the employee and his or her
supervisor do not resolve a grievance in the first instance, the CBA sets out a
procedure for the Union to process the grievance further, if it so chooses. Any
grievance that the Union and Silgan do not initially resolve"may be submitted to
arbitration."
The CBA also provides a procedure for employees to protest their discharge.
An employee wishing to protest "must file his protest in writing with the Union
within seven (7) calendar days of discharge." The Union and Silgan are then to
discuss the "merits of the case," and if they find the employee was wrongfully
discharged, Silgan must reinstate the employee and compensate him or her for time
lost at the regular rate of pay.
On February 3, 2010, Stracener, a member of the bargaining unit, was
discharged under § 29.1 of the CBA, which provides that "[a]n employee may be
discharged for dishonesty, intoxication, or other just cause." Pursuant to the CBA's
grievance procedure, the Union first protested the discharge on Stracener's behalf,
then it filed a grievance, seeking reinstatement and compensation for lost wages.
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When this initial grievance failed to resolve the dispute, the Union made a
demand for arbitration. In accordance with the CBA, Silgan and the Union mutually
selected an arbitrator and scheduled an initial hearing for November 17, 2010.
However, on November 12, 2010, Stracener was killed in a car accident.
Following Stracener's death, the scheduled hearing did not occur. The Union
attempted to reschedule the arbitration, but Silgan refused to proceed with the
hearing, arguing that Stracener's death removed the dispute from the CBA's
mandatory arbitration provision. The Union then brought this suit, seeking to compel
arbitration, and the parties filed cross-motions for judgment on the pleadings. The
district court found for Silgan, holding that the CBA did not mandate arbitration of
grievances where the employee at issue has died, because deceased people are not
included in the definition of "employee" in the CBA. The Union now appeals that
decision to this court.
II
"We review a district court's grant of judgment on the pleadings de novo."
Minch Family LLLP v. Buffalo-Red River Watershed Dist., 628 F.3d 960, 965 (8th
Cir. 2010) (internal quotation marks omitted). We also review de novo a district
court's interpretation of a contract's arbitration provision. Int'l Bhd. of Elec. Workers,
AFL-CIO, Local 1 v. GKN Aerospace N. Am., Inc., 431 F.3d 624, 627 (8th Cir.
2005). When considering arbitration agreements in CBAs, we are particularly
mindful of repeated instructions to interpret arbitration agreements broadly, in light
of a general national policy favoring that method of dispute resolution. See United
Steelworkers of Am., AFL-CIO-CLC, Local No. 164 v. Titan Tire Corp., 204 F.3d
858, 861 (8th Cir. 2000) ("The presumption of arbitrability prevails when an
arbitration clause contains no clear, exclusionary language."); Kan. City Royals
Baseball Corp v. Major League Baseball Players Ass'n., 532 F.2d 615, 620 (8th Cir.
1976) ("In resolving questions of arbitrability, the courts are guided by Congress's
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declaration of policy that arbitration is the desirable method for settling labor
disputes. Accordingly, a grievance arising under a collective bargaining agreement
providing for arbitration must be deemed arbitrable unless it may be said with
positive assurance that the arbitration clause is not susceptible of an interpretation
that covers the asserted dispute. Doubts should be resolved in favor of coverage."
(internal quotation marks and citation omitted)).
We hold that the arbitration provision in the CBA between the Union and
Silgan mandated arbitration of Stracener's grievance. The fact that Stracener died
after being discharged, but before arbitration of his claim commenced, does not alter
our conclusion. In reaching this holding, we must address two issues. First, we
consider whether the parties agreed to arbitrate Stracener's claim, and we determine
that they did. Second, we consider whether any other principle of law brings
Stracener's claim outside the mandatory arbitration provision of the CBA, and answer
that question in the negative.
A
As the district court found, the CBA's protections are limited to "employees."
With the exception of "matters that the parties specifically exclude, all of the
questions on which the parties disagree . . . come within the scope of the grievance
and arbitration provisions of the collective agreement." United Steelworkers of Am.
v. Warrior & Gulf Navigation Co., 363 U.S. 574, 581 (1960). Here, the CBA in
general, and the grievance section in particular, refer exclusively to matters between
"employees" and the Company. Although Article 32, which covers arbitration, does
not specifically refer to "employees," it sets out the procedure for arbitration of
"grievances," which the CBA defines as between employees and the company. Thus,
the CBA's general limitation to employees is incorporated by reference in Article 32.
The CBA's grievance provisions apply to the resolution of grievances that arise in the
scope of a covered employee's employment. See CBA § 31.1 ("[A]ny grievance that
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may arise between the Company and any of its employees shall be taken up in the
following manner."); id. at § 32.1 ("Any dispute or grievance arising as to the
meaning or interpretation of this Agreement that cannot be settled in Step #3 of the
grievance procedure may be submitted to arbitration.").
There is no indication in the CBA that this mandatory arbitration provision
ceases to apply when employees die after their grievances arise but before arbitration
of those grievances commence. The CBA contains no explicit provision that
excludes from mandatory arbitration claims of employees who die before arbitration
proceedings begin. Neither does it implicitly exclude these claims. For example, the
CBA provides for both equitable and monetary damages: employees may recover
damages both in the form of reinstatement and compensation for lost wages. Neither
the CBA nor Missouri law in general provides a reason such compensation could not
flow to a deceased employee's estate. See Aufenkamp v. Grabill, 112 S.W.3d 455,
460 (Mo. Ct. App. 2003) ("Generally, when a party to a contract dies and the contract
is not one of a personal nature, the decedent's interest or obligation under the contract
passes to the personal representative.").
Silgan argues that, since the decedent's estate was not a signatory to the
arbitration agreement, the agreement does not bind the estate, and the estate may thus
choose to pursue its claim outside of mandatory arbitration. This argument rests on
a flawed premise. The decedent's estate stands in the decedent's shoes and has the
same rights and obligations as the decedent did while he was alive. Johnson v. Great
Heritage Life Ins. Co., 490 S.W.2d 686, 691 (Mo. Ct. App. 1973) ("As administratrix
of the deceased debtor the appellant stands in the shoes of her decedent, and therefore
has a right under the contract as alleged to require performance by the insuror to retire
the debt she avers is still outstanding."); Engelsmann v. Holekamp, 402 S.W.2d 382,
390 (Mo. 1966) (noting that an executor of an estate stands in the shoes of a deceased
trustee "insofar as the duty and obligation to render an account is concerned"). Thus,
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just as an employee must submit to mandatory arbitration in life, so to must the estate
of that employee after his or her death.1
Silgan's reliance on the Supreme Court case, Allied Chemical & Alkali
Workers of America v. Pittsburgh Plate Glass Co., 404 U.S. 157 (1971), to hold that
deceased employees are excluded from the definition of employee in the CBA is also
misplaced. In Pittsburgh Plate Glass, the Supreme Court held that it is not an unfair
labor practice for employers to refuse to bargain with employees who have "ceased
work without expectation of further employment" because those people are no longer
employees. Id. at 168. In reaching this conclusion, the Court noted that "there is no
anomaly in the conclusion that retired workers are 'employees' within § 302(c)(5) [of
the Labor Management Relations Act] entitled to the benefits negotiated while they
were active employees, but are not 'employees' whose ongoing benefits are embraced
by the bargaining obligation of § 8(a)(5)." Id. at 170. The Court further observed
that the retirees "plainly do not share a community of interests broad enough to justify
inclusion of the retirees in the bargaining unit." Id. at 173.
Unlike the interests of retirees the Supreme Court considered in Pittsburgh
Plate Glass, the interests of employees whose grievances arise in the course of their
employment, but who die before those grievances are resolved, do not diverge from
the interests of current employees. In Pittsburgh Plate Glass, the issue was the
employer's continuing obligation to negotiate with former employees over future
Silgan points to a Missouri statute that empowers executors of estates to1
"[r]eceive assets from fiduciaries or other sources" to argue that the estate would not
be bound by the result in the arbitration proceeding. See Mo. Rev. Stat. § 473.810(2).
This reading is too broad. The language of the statute does not suggest that the estate
has any greater contractual rights than the decedent did while alive, nor do Missouri
cases suggest as much. See Johnson, 490 S.W.2d at 691; Engelsmann, 402 S.W.2d
at 390. There is thus no indication that Missouri courts would find the CBA's
mandatory arbitration provision not binding on Stracener's estate.
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benefits. But here, the issue is the employer's continuing obligation to resolve
disputes with former employees over an issue that occurred during the employee's
employment. The two situations are clearly different: one imposes continuing
bargaining obligations on the employer, while the other merely refuses to lift
responsibility for mediating and resolving existing disputes with former employees.
Where a union seeks to resolve a deceased employee's grievance, the interests of the
deceased and current employees continue to be aligned, despite the death. The shared
goal is the robust enforcement of the just-cause provision, which is important not only
to the discharged employee, but also to active members of the bargaining unit.
The parties agree that Stracener's claim for wrongful discharge was subject to
the CBA during his lifetime. Because this claim arose while Stracener was an
employee, the CBA continues to control his claim and mandate arbitration of it, even
after his death.
B
There remains the issue of whether some other legal principle revokes the
CBA's mandatory arbitration in the aftermath of Stracener's death. At oral argument,
Silgan invoked the principles of agency law to argue for such a revocation. Silgan
argues that the Union was Stracener's agent, and that after Stracener's death, the
Union lost the power to compel arbitration because, under agency law, it could not
assert the interests of a deceased principal.
Silgan is correct that if Stracener were the principal and the Union were the
agent, then upon Stracener's death, basic principles of agency law would deprive the
Union of power to enforce the CBA on Stracener's behalf. See Wood v. Hudson, 823
S.W.2d 158, 160 (Mo. Ct. App. 1992) ("The principal-agent relationship . . . is
terminated by death.").
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We conclude, however, that the Union was not Stracener's agent. Unlike a2
We decline to more broadly define the relationship between employees and2
unions outside the facts of this case. However, we do note that it is possible that this
relationship might not be amenable to principal-agent analysis at all. As commentator
and former Solicitor General Archibald Cox noted:
In my judgment it is a mistake to attempt to force agreements between
labor unions and employers into more familiar legal pigeonholes such
as usage, third party beneficiary contracts, or contracts negotiated by the
union as agent for the employees as principals. The law has always had
trouble with tripartite relationships; and in the labor field there are
additional complications. The parties affected by a collective bargaining
agreement are employer, union, and many individual employees. The
identity of the individual employees may change from day to day; Joe
Smith quits but Annie Jones is hired. Often several employees have
conflicting interests, as where the claim is that some are being permitted
to deprive others of work by doing jobs outside of their own
classification. The second party—the labor union or collective
bargaining representative—is in a very real sense only the third
party—the individual employees—acting as an organized group through
its agents and through constitutional processes. The group interests,
however, may conflict with the claims of individuals because several
classes of individuals have divergent interests, because the demands of
group organization and coherence clash with individual self-interest, or
even because the union officialdom is not immediately responsive to the
wishes of a numerical majority of the members. Since experience offers
no factual parallel to these arrangements, no other legal conception is
quite analogous.
Archibald Cox, Rights Under a Labor Agreement, 69 Harv. L. Rev. 601, 604 (1956);
see also Yolton v. El Paso Tennessee Pipeline Co., 668 F. Supp. 2d 1023, 1034–35
(E.D. Mich. 2009) ("The Court recognizes that two of the essential elements of
agency are absent in the relationship between a union and its retired employees—the
principal's right to control the agent and the agent's fiduciary duty to the principal.
This suggests that agency principles perhaps should not be applied.").
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true principal, an individual employee covered by the CBA does not have power to
override the Union's wishes. See State ex rel. Ford Motor Co. v. Bacon, 63 S.W.3d
641, 642 (Mo. 2002) ("Agency is the fiduciary relationship which results from the
manifestation of consent by one person to another that the other shall act on his behalf
and subject to his control, and consent by the other so to act." (internal quotation
marks omitted)). An employee, for example, lacks the power to bring or arbitrate his
or her own grievance, and instead must rely entirely on the Union to do so. The CBA
also empowers the Union to exert significant and often exclusive control over the
grievance process. Under the CBA, if the employee and his immediate supervisors
cannot satisfactorily resolve the employee's grievance, the Union not only has
discretion over whether to proceed further, but also takes control of the grievance
process going forward. In fact, at the initial meeting after the Union takes over the
grievance process, the CBA allows for the presence of the individual employee only
"upon prior request of the Union." If the grievance or dispute is not resolved through
this initial procedure, the CBA calls for arbitration between the "parties" of the CBA,
which the CBA defines as the employer and the Union.
Moreover, under this CBA, as is often the case with CBAs, employees do not
have standing to bring an action against the employers unless the employee can show
lack of fair representation by the Union. See, e.g., Blanchard v. Simpson Plainwell
Paper Co., 925 F. Supp. 510, 515 (W.D. Mich. 1995) ("Because plaintiffs are
individual employees who were not parties to the arbitration, they lack standing to
challenge the arbitration decisions upholding their discharges."); Katir v. Columbia
Univ., 821 F. Supp. 900, 901 (S.D.N.Y. 1993) ("In accordance with the collective
bargaining agreement, the parties to the arbitration were [the employer] and the
Union. Because [the employee] was not a party to the arbitration, she lacks standing
to petition to vacate the Award."); Acuff v. United Papermakers & Paperworkers,
AFL-CIO, 404 F.2d 169, 171 (5th Cir. 1968) ("[T]o some extent the interests of
particular individuals are subordinated to the interests of the group both at the
contract negotiation stage and thereafter. . . . If the individual employee could
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compel arbitration of his grievance regardless of its merit, the settlement machinery
provided by the contract would be substantially undermined, thus destroying the
employer's confidence in the union's authority and returning the individual grievant
to the vagaries of independent and unsystematic negotiation." (internal quotation
marks omitted)).
Finally, the Union does not consider only the interests of the individual
employee it represents, as it would were this a true agent–principal relationship. See
Kahn v. Royal Banks of Mo., 790 S.W.2d 503, 507 (Mo. Ct. App. 1990) ("An agent
who acts for a purpose unrelated to the principal's welfare violates this duty of
loyalty, which requires an agent to place his principal's interest above all others,
including the agent's."). In deciding whether to bring a grievance, for instance, the
Union considers not only whether the individual employee wishes to pursue that
grievance, but also whether such a grievance is in the interests of the represented
employees as a whole.
Because we hold that Stracener was not the principal and the Union was not his
agent, agency law does not require us to hold that the Union lost the power to enforce
the CBA on Stracener's behalf when Stracener died.
III
The CBA's mandatory arbitration provision applies to Stracener's grievance.
The fact that Stracener died before arbitration proceedings commenced does not
render the Union unable to enforce the CBA's arbitration provision on his behalf.
Accordingly, we reverse and remand to the district court for further proceedings
consistent with this opinion.
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