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July 31, 1992


The opinion of the court was delivered by: Baker, District Judge.


The plaintiff, Independent Lift Truck Builders Union ("Union") and the defendant, Hyster Company, are parties to a collective bargaining agreement ("the Agreement"). The Union has sued Hyster to compel Hyster to arbitrate a grievance. According to the Union, Hyster violated the Agreement by unilaterally making changes to its retiree benefits plan. Hyster has moved to dismiss, claiming that it has no duty to arbitrate a grievance concerning benefits for retirees. The Union has moved for a temporary restraining order to enjoin Hyster from discontinuing the retiree's benefits under the old plan and implementing the new plan until the matter is resolved through arbitration. The court will treat the Union's Motion for a Temporary Restraining Order as a Motion for a Preliminary Injunction under Federal Rule of Civil Procedure 65.*fn1

I. Hyster's Motion to Dismiss

Prior to January 1, 1992, retirees of Hyster enjoyed health benefits that included dental coverage, prescription drug benefits and vision care benefits. Hyster unilaterally changed the benefits plan for certain retirees, eliminating vision and dental coverage, lowering certain deductibles, and increasing premiums for certain retirees.*fn2 The Agreement between Hyster and the Union is effective from June 1, 1991 through June 4, 1994. The Union points out that under Article III of the Agreement, "All disputes are subject to arbitration." Article XIX of the Agreement states:

  1. The present pension and insurance program
  shall be continued during the term of the
  Agreement with no change except as indicated
  below. . . .
  3. The current Hyster medical plan stays in
  effect until December 31, 1991. A new Hyster
  80/20 comprehensive Health Plan including Dental,
  Prescription Drugs, and Vision Coverage as
  outlined in the new Hyster Health Plan Booklet
  dated January 1, 1992, becomes effective January
  1, 1992.

The Union argues that Hyster's unilateral action of decreasing health benefits for retirees violates Article XIX of the Agreement. The Union also claims that the dispute is ripe for arbitration.

Hyster refuses to submit the dispute to arbitration. It claims that the retirees' grievances are not arbitrable as a matter of law because the Union does not represent retirees and the Agreement does not cover retirees. Hyster also argues that although it provides benefits to retirees, it has no obligation to do so under the Agreement. The Union, on the other hand, argues that even assuming arguendo that there are questions as to whether the Agreement covers retirees, those questions are for an arbitrator to resolve, not the court.

In AT & T Technologies v. Communications Workers of America, 475 U.S. 643, 106 S.Ct. 1415, 89 L.Ed.2d 648 (1986), the Supreme Court outlined four basic principles for determining whether a labor dispute is arbitrable. First, "arbitration is a matter of contract, and a party cannot be required to submit to arbitration any dispute which it has not agreed to submit." Id. at 648, 106 S.Ct. at 1418 (citing United Steelworkers of America v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582, 80 S.Ct. 1347, 1353, 4 L.Ed.2d 1409 (1960); United Steelworkers of America v. American Mfg. Co., 363 U.S. 564, 80 S.Ct. 1343, 4 L.Ed.2d 1403 (1960)). Second, whether an issue is arbitrable is a question for the court unless the parties have expressly contracted otherwise. Id. (Citing Warrior & Gulf, 363 U.S. at 582-83, 80 S.Ct. at 1352-53.) "The duty to arbitrate being of contractual origin, a compulsory submission to arbitration cannot precede a judicial determination that the collective bargaining agreement does in fact create such a duty." John Wiley & Sons, Inc. v. Livingston, 376 U.S. 543, 546-47, 84 S.Ct. 909, 913, 11 L.Ed.2d 898 (1964) (cited in AT & T Technologies, 475 U.S. at 649, 106 S.Ct. at 1418). An arbitrator is not empowered to determine his or her own jurisdiction. AT & T Technologies, 475 U.S. at 651, 106 S.Ct. at 1419. Third, "[i]n deciding whether the parties have agreed to submit a particular grievance to arbitration, a court is not to rule on the potential merits of the underlying claim" that the collective bargaining agreement has been violated. AT & T Technologies, 475 U.S. at 649, 106 S.Ct. at 1418 (citing American Mfg., 363 U.S. at 568, 80 S.Ct. at 1346). Finally, where the collective bargaining agreement contains a broad arbitration clause, there is a presumption of arbitrability, and all doubts in interpreting the contract should be resolved in favor of arbitrability. Id. at 650, 106 S.Ct. at 1419.

One court noted that "[l]ike any contract, an agreement to arbitrate may be limited in its substantive scope in an almost infinite variety of ways." PaineWebber, Inc. v. Hartmann, 921 F.2d 507, 511 (3d Cir. 1990). In general, courts, not arbitrators, decide whether the subject matter of a dispute falls within the scope of an arbitration agreement. For example, in Local 106, Service Employees Int'l Union v. Homewood Memorial Gardens, Inc., 838 F.2d 958 (7th Cir. 1988), the court held that it, rather than an arbitrator, had the authority to decide whether the collective bargaining agreement (and therefore the arbitration clause) had expired. The court reasoned:

  The collective bargaining agreement with its
  arbitration clause is the sole source of an
  arbitrator's decision making authority.
  Therefore, when the existence of an arbitration
  clause is in dispute then so is the arbitrator's
  authority. It is illogical to require an
  arbitrator, and not a court, to determine the
  arbitrator's authority to act.

Id. at 961. In Chicago Typographical Union v. Chicago Sun Times, 860 F.2d 1420 (7th Cir. 1988), the court refused to order the defendant to arbitrate with the union when it found that there was no actual "dispute" or "controversy." The Union had sued the company to force it to arbitrate the meaning of a clause in the collective bargaining agreement. However, the court found that the company had not taken a position on the meaning of that clause. Because the arbitration clause in the collective bargaining agreement did not authorize "advisory opinions," but only referred to "controversies" or "disagreements," the arbitrator did not have the authority to resolve the issue. In Oil, Chemical and Atomic Workers Int'l Union v. Amoco Oil Co., 883 F.2d 581, 585 (7th Cir. 1989), the portion of the arbitration clause at issue provided "[q]uestions directly involving or arising from applications, interpretations or alleged violations of the terms of arbitrations awards . . ." may be referred to arbitration. The court determined that the appellant was not required to arbitrate an issue which the court deemed did not arise from an arbitration award, even though the dispute presented issues similar to those involved in the arbitration award. The court reasoned that the dispute was not within the scope of the arbitration clause. See also General Drivers, Warehousemen and Helpers, Local Union 89 v. Moog Louisville Warehouse, 852 F.2d 871, 874 (6th Cir. 1988) (dispute not arbitrable where arbitration clause provided that the company was not required to arbitrate where the union did not give notice within fifteen days, and the union had not given notice within the prescribed time).

In this case, there is no dispute initially that the court, and not an arbitrator, must decide the question of whether the dispute is arbitrable. In determining whether the dispute is arbitrable, the court finds that this case is distinguishable from cases such as Homewood Memorial, Chicago Sun Times, and Amoco Oil. In those cases, the disputes, on their faces, did not fall within the arbitration clauses. In this case, the arbitration clause in the Agreement is very broad. It provides that "[a]ll disputes are subject to arbitration." The dispute centers around whether the Union represents retirees as well as current employees under the Agreement. Resolving the dispute involves interpreting the Agreement and ascertaining whether the parties intended it to cover retirees. Interpreting a collective bargaining agreement is a core function of an arbitrator, and the arbitration clause in this case gives the arbitrator authority to resolve any dispute under the Agreement. The court finds, therefore, that the dispute in this case as to whether Hyster can unilaterally change health benefits for retirees, is arbitrable. The Seventh Circuit has stated in dicta that "[p]rocedural issues including the standing of a party to the arbitration, the res judicata effect of a prior arbitration award and the timeliness of filing a grievance are for the arbitrator so long as the subject matter of the dispute is within the arbitration clause." Chicago Sun Times, 860 F.2d at 1424.

In order to find that the dispute in this case was not arbitrable, the court essentially would have to rule on the merits of the dispute. The dispute concerns whether Hyster can change the retirees' benefits before the expiration of the Agreement in 1994. That issue turns on whether the retirees are covered under Article XIX of the Agreement. A determination that retirees are not employees represented by the Union and covered by the Agreement would constitute a resolution of that issue. Warrior Gulf "cautioned against `becoming entangled in the construction of the substantive provisions of a labor agreement, even through the back door of an arbitration clause.'" Warrior & Gulf, 363 U.S. at 585, 80 S.Ct. at 1354; Bechtel Construction Inc. v. Laborers' Int'l Union, 812 F.2d 750, 753 (1st Cir. 1987). In addition, there is a strong presumption in favor of the arbitration of labor disputes in order to minimize "industrial strife." Associated Plumbing & Mechanical Contractors of Sacramento, Inc. v. Local Union No. 447, 811 F.2d 480, 481 (9th Cir. 1987). "An order to arbitrate the particular grievance should not be denied unless it may be ...

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