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Pacific Coast District, Marine Engineers' Beneficial Association AFL-CIO v. Liberty Maritime Corp.

United States District Court, District of Columbia

September 14, 2018




         This case involves a dispute between a labor union and a shipping company. On August 14, 2017, plaintiff District No. 1, Pacific Coast District, Marine Engineers' Beneficial Association AFL-CIO (“MEBA” or “the union”) brought this action against defendant Liberty Maritime Corporation (“Liberty”) pursuant to Section 301 of the Labor Management Relations Act, 29 U.S.C. § 185. Compl. [Dkt. # 1] ¶¶ 1, 34. MEBA alleges that Liberty refused to arbitrate a dispute as required by the terms of their collective bargaining agreement (“Agreement”), and it seeks an order compelling arbitration. Compl. ¶¶ 9, 35-37. Liberty answered the complaint, see Ans. [Dkt. # 5]; Am. Ans. [Dkt. # 7], and plaintiff has moved for judgment on the pleadings. Pl.'s Mot. for J. on the Pleadings [Dkt. # 8] (“Pl.'s Mot.”); Pl.'s Mem in Supp. of Pl.'s Mot. [Dkt. # 8-1] (“Pl.'s Mem.”).

         The union contends that it is entitled to an order compelling arbitration as a matter of law based on the terms of the Agreement. Pl.'s Mem. at 1-2. Liberty has opposed the motion, arguing that arbitration is premature because the union failed to negotiate in good faith prior to invoking the arbitration clause. Def.'s Opp. to Pl.'s Mot. [Dkt. # 9] (“Def.'s Opp.”) at 1, 7-18. But the union maintains that the determination of whether the parties have engaged in good faith negotiations is itself a question that must be decided by an arbitrator, and not by the Court, under the terms of the Agreement. Pl.'s Mem. at 15. It also seeks attorneys' fees to cover the cost of bringing this case and preparing the instant motion. Id.

         Because the Court agrees that the predicate question of whether the parties complied with the good faith negotiation requirement in the wage reopener provision of the Agreement must be resolved by an arbitrator, it will grant plaintiff's motion for judgment on the pleadings, enter judgment in favor of MEBA, and enjoin Liberty from refusing to participate in the arbitration of the parties' wage dispute on the grounds that the union failed to engage in good faith negotiations before invoking the arbitration clause. But the union's request for attorneys' fees will be denied.


         Plaintiff MEBA is a labor union that represents employees in the U.S. maritime industry who are located at ports throughout the United States and on oceangoing vessels. Compl. ¶ 2. Liberty is a shipping company that operates various seagoing vessels, and many of its employees are represented by MEBA. Id. ¶ 3.

         On January 23, 2012, MEBA and Liberty signed a Memorandum of Understanding (“MOU” or “Agreement”), a collective bargaining agreement that is in effect until at least June 15, 2019. Compl. ¶¶ 8-9; Ex. A to Compl. [Dkt. # 1-1] (“MOU”) at 1. The Agreement contains a “wage reopener provision, ” which states that “[e]ither party may reopen this Agreement, effective as of October 1, 2015, by giving the other party written notice at least 60 days and no more than 90 days prior to the reopener date.” MOU § 3(f); Compl. ¶ 10. According to the MOU, “[i]n the event the Agreement is reopened, the parties agree to negotiate over the wages, benefits, and other economic terms and conditions for subsequent years of the extended Agreement.” MOU § 3(f); Compl. ¶ 11. The Agreement goes on:

If, after engaging in good faith negotiations . . . the parties are unable to reach an agreement regarding changes in wages, benefits or other economic terms and conditions, the parties agree to submit on an expedited basis their dispute to a mutually selected arbitrator in accordance with the provisions set forth in the [collective bargaining agreement]. The arbitrator's decision will be final and binding on the parties.

MOU § 3(g); Compl. ¶ 12.

         By letter on January 24, 2017, MEBA notified Liberty of its intent to reopen the Agreement for negotiations pursuant to the wage reopener provision, and it proposed several available dates for conducting the negotiations. Compl. ¶ 13; Ex. B to Compl. [Dkt. # 1-2]; see Am. Ans. ¶ 13; Def.'s Opp. at 3. One week later, MEBA provided Liberty with its first bargaining proposal. Compl. ¶ 14; Am. Ans. ¶ 14. The pleadings contain considerable detail about what happened next.

         The parties exchanged emails concerning the proposal over the course of the next month. Compl. ¶¶ 15-16; Am. Ans. ¶¶ 15-16. While the union claims that Liberty did not provide a counterproposal during this time, and that it did not suggest any dates for the start of the negotiations, see Compl. ¶¶ 15-17, Liberty asserts that it responded to MEBA's proposal by requesting information, and that MEBA refused to provide it with the information it needed in order to bargain. Am. Ans. ¶¶ 15-17; see also Def.'s Opp. at 3.

         On March 10, 2017, MEBA sent Liberty a letter asserting that it had attempted to negotiate in good faith, but because Liberty had not yet engaged in negotiations, the union intended to invoke section 3(g) of the MOU and begin arbitration proceedings. Compl. ¶¶ 18-19; Ex. C to Compl. [Dkt. # 1-3]; see Am. Ans. ¶¶ 18-19. MEBA attached another bargaining proposal to the letter, which it characterized as the union's “last, best and final offer” that it would present to the arbitrator. Compl. ¶¶ 18-19; Ex. C to Compl. [Dkt. # 1-3]; see Am. Ans. ¶¶ 18-19.

         MEBA's counsel then contacted Liberty and invited its assistance in selecting an arbitrator. Compl. ¶ 20; Am. Ans. ¶ 20. Liberty rejected the arbitration demand and subsequently transmitted its first counter-proposal and offered to meet with MEBA and negotiate. Compl. ¶ 21; Am. Ans. ¶ 21.

         MEBA then offered a third proposal, and the parties met on April 18, 2017 to begin negotiations. Compl. ¶ 22; Am. Ans. ¶ 22. At the end of the meeting, Liberty responded with its second counter-proposal. Compl. ¶ 22; Am. Ans. ¶ 22. In response, MEBA gave Liberty the fourth and fifth versions of its proposal. Compl. ¶ 23; Am. Ans. ¶ 23.

         On June 13, 2017, [1] the parties met for a second negotiation session to discuss the new terms. Compl. ¶ 24; Am. Ans. ¶ 24. During the meeting, Liberty gave MEBA its third counterproposal, and the parties set a future meeting date for July 18, 2017. Compl. ¶¶ 23, 27; Am. Ans. ¶¶ 23, 27. Prior to the July meeting, MEBA responded to Liberty's third counter-proposal with a sixth proposal for Liberty's review. Compl. ¶ 27; Am. Ans. ¶ 27.

         On July 12, 2017, Liberty notified MEBA that it would not participate in the upcoming meeting because it did not want to engage in wage negotiations until a pending grievance issue involving both parties had been resolved. Compl. ¶ 28; Am. Ans. ¶ 28. MEBA immediately objected, and it insisted that Liberty's decision to suspend negotiations “amount[ed] to a failure to bargain in good faith.” Compl. ¶ 29; Ex. D to Compl. [Dkt. # 1-4]; see Am. Ans. ¶ 29. MEBA then again invoked section 3(g) of the Agreement and sought to bring the wage reopener dispute before an arbitrator. Compl. ¶ 30; Ex. D to Compl. [Dkt. # 1-4].

         On July 17, 2017, Liberty rejected MEBA's demand for arbitration. Compl. ¶ 31; Ex. E to Compl. [Dkt. # 1-5]; Am. Ans. ¶ 31. Liberty stated in a letter that the demand for arbitration was premature, and it explained that the grievance had to be decided first because resolution of the contract interpretation issue at stake could “have a major economic impact which will affect [the] wage re-opener discussions.” Ex. E to Compl. [Dkt. # 1-5] at 2.

         At that point, the union went to court. On August 14, 2017, it filed a complaint seeking to compel arbitration of the wage reopener issues. Compl. And on November 6, 2017, while the case was pending, the parties settled the grievance that Liberty had cited as the reason for putting negotiations on hold in July. Decl. of Counsel William G. Miossi in Supp. of Def.'s Opp. [Dkt. # 9-1] (“Miossi Decl.”); Ex. A to Miossi Decl.; Def.'s Opp. at 6.

         On November 8, 2017, then, Liberty notified MEBA that it was prepared to restart the wage reopener negotiations. Ex. A to Miossi Decl. [Dkt. # 9-1]. But MEBA refused to continue negotiations, see Ex. B to Miossi Decl. [Dkt. # 9-1]; Ex. C to Miossi Decl. [Dkt. # 9-1]; Ex. D to Miossi Decl. [Dkt. # 9-1], explaining that “[t]he fact that [Liberty] is now willing to bargain does nothing to absolve its conduct that has placed the parties in this situation.” Pl.'s Reply in Supp. of Pl.'s Mot. ...

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