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United Government Security Officers of America International Union v. American Eagle Protective Service Inc.

United States District Court, D. Utah

June 11, 2019

UNITED GOVERNMENT SECURITY OFFICERS OF AMERICA INTERNATIONAL UNION, and UNITED GOVERNMENT SECURITY OFFICERS OF AMERICA INTERNATIONAL UNION LOCAL 320, Plaintiffs,
v.
AMERICAN EAGLE PROTECTIVE SERVICE, INC., and PARAGON SYSTEMS, INC., Defendants.

          MEMORANDUM DECISION AND ORDER GRANTING DEFENDANTS' MOTION FOR SUMMARY JUDGMENT AND DENYING PLAINTIFFS' MOTION FOR SUMMARY JUDGMENT

          DAVID NUFFER UNITED STATES DISTRICT JUDGE.

         District Plaintiffs are labor organizations that represent employees in the governmental security services industry.[1] Defendants provide security for federal facilities and they employed security officers who were members of Plaintiffs working at various federal facilities in Utah.[2] Plaintiffs and Defendants were parties to a collective bargaining agreement spanning June 29, 2012, through July 31, 2015 (“CBA”).[3] Plaintiffs' Complaint seeks declaratory relief under the CBA and to compel arbitration of a grievance involving Defendants' termination of a member employee, Michael Reid (“Reid”).[4]

         The parties filed cross-motions for summary judgment regarding Plaintiffs' claims.[5]Plaintiffs argue that arbitration of the Reid grievance is mandated by the plain language of the CBA.[6] Defendants argue that Plaintiffs' claims are time barred, [7] and that the plain language of the CBA expressly excludes arbitration of the Reid grievance.[8]

         Because the six-month limitations period of National Labor Relations Act (“NLRA”) § 10(b) applies to Plaintiffs' claims, and because Plaintiffs filed their Complaint more than six months after Defendants refused to arbitrate the Reid grievance, Plaintiffs' claims are time barred. Therefore, Defendants' Motion for Summary Judgment[9] is GRANTED, and Plaintiffs' Motion for Summary Judgment[10] is DENIED.

         Contents

         UNDISPUTED MATERIAL FACTS ............................................................................................ 3

         DISCUSSION ................................................................................................................................. 5

         The six-month limitations period of NLRA § 10(b) applies to Plaintiffs' claims .............. 6

         The six-month limitations period of NLRA § 10(b) is more analogous and significantly more appropriate than Utah's six-year statute of limitations for breach of contract .................................................................................. 7

         The only Circuit Court of Appeals case that applied a state statute of limitations to an LMRA § 301 action to compel arbitration over NLRA § 10(b) supports the application of NLRA § 10(b) to Plaintiffs' claims in this case ........... 10

          Tenth Circuit case law involving other types of LMRA § 301 actions does not support application of Utah's six-year statute of limitations for breach of contract to Plaintiffs' claims in this case .................................................. 12

          The subsequent expiration of the parties' CBA does not remove the implication of federal labor law policies to Plaintiffs' claims to compel arbitration ....... 14

         Plaintiffs' claims are time barred by the six-month limitations period of NLRA § 10(b) 16

         ORDER ......................................................................................................................................... 17

         UNDISPUTED MATERIAL FACTS [11]

         1. Plaintiff United Government Security Officers of America International Union (“UGSOA”) is a labor organization that represents employees in the governmental security services industry, including employees, represented by its local, Plaintiff United Government Security Officers of America, Local 320 (“Local 320”), in Utah. UGSOA maintains its headquarters in East Wareham, Massachusetts; Local 320 maintains its headquarters in Salt Lake City, Utah.

         2. Plaintiffs are labor organizations representing employees in an industry affecting commerce, as defined in the Labor Management Relations Act (“LMRA”).[12]

         3. Defendant American Eagle Protective Services Corporation (“AEPS”) is a corporation that provides security services for federal facilities in Salt Lake City, Utah; maintains a corporate headquarters in Austin, Texas; is an employer, as defined by the LMRA;[13] and was authorized to do business within the District of Utah at all relevant times.

         4. Defendant Paragon Systems Inc. (“Paragon”) is a security contractor with a corporate headquarters in Herndon, Virginia; is an employer, as defined by the LMRA;[14] and was authorized to do business within the District of Utah at all relevant times.

         5. Plaintiffs were the exclusive bargaining agent at all times relevant for certain security guards (including Reid) employed by Defendants in Salt Lake City, Utah.

         6. At all times relevant, Plaintiffs and Defendants were parties to a CBA spanning June 29, 2012, through July 31, 2015.[15]

         7. Defendants employed Reid, a security officer; Reid was a member of Plaintiffs.

         8. On December 30, 2013, at 3:57 p.m., Ronald Osborne (“Osborne”), an employee of the federal Department of Homeland Security with oversight of the security contract between the federal government and Defendants, sent an email to AEPS Contract Manager Daniel Koning (“Koning”). The email states in part: “[Reid's] behavior is not acceptable and is unprofessional. . . . [T]his needs to stopped [sic] immediately.”[16] The email was not provided to Plaintiffs or Reid upon or prior to Reid's termination.

         9. By a letter dated January 3, 2013, Defendants terminated Reid's employment. The letter states in part: “The termination is based on [Reid's] inability to conform to government and company standards.”[17] Defendants provided the letter to Reid on January 6, 2013.

         10. As of January 6, 2014, the termination letter was the only communication from AEPS or Paragon to Plaintiffs or Reid regarding the reasons for Reid's discharge.

         11. Plaintiffs filed a grievance, alleging AEPS discharged Reid without just cause.[18]AEPS denied the grievance on or about January 29, 2014.[19]

         12. Plaintiffs appealed the grievance denial to arbitration by written notice to the Federal Mediation and Conciliation Service on February 28, 2014.

         13. On June 1, 2015, at 9:51 a.m., Osborne sent an email to Koning. The email states in part: “Reid had several disciplinary actions taken by me . . . He was moved around to several post [sic] and spoken to by me. If [Koning] had not removed [Reid] from the contact [sic] I would have.”[20]

         14. By email dated August 11, 2015, to former UGSOA attorney Comeka Anderson Diaz, AEPS attorney Frank Davis provided an affidavit (dated August 10, 2015) of Koning concerning Reid's discharge. The affidavit states in part: “Following Reid's discharge, I advised the Union of the basis of the discharge, as described herein. As a result of the plain language in the CBA, I concluded that the decision to discharge Reid was not subject to arbitration . . . .”[21]

         15. By email dated September 22, 2015, AEPS attorney Frank Davis stated to UGSOA attorney Robert Kapitan, “[f]or all of the reasons provided to Comeka [Anderson Diaz] in previous correspondence, AEPS does not agree that it is bound to arbitrate the Reid matter.”[22]

         16. Plaintiffs filed their Complaint in this case on February 27, 2018.

         DISCUSSION

         Summary judgment is appropriate if “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.”[23] A factual dispute is genuine when “there is sufficient evidence on each side so that a rational trier of fact could resolve the issue either way.”[24] A fact is material if “it is essential to the proper disposition of [a] claim.”[25] And in ruling on a motion for summary judgment, the factual record and all reasonable inferences drawn therefrom are viewed in a light most favorably to the nonmoving party.[26]

         The parties agree that there is no dispute as to any material fact in this case.[27] Plaintiffs argue the undisputed material facts demonstrate that arbitration of the Reid grievance is mandated by the plain language of the parties' CBA.[28] Defendants argue that Plaintiffs' claims are time barred, [29] and that the plain language of the CBA expressly excludes arbitration of the Reid grievance.[30] Because the statute of limitations issue is dispositive of Plaintiffs' claims, the parties' other arguments are not addressed.

         The six-month limitations period of NLRA § 10(b) applies to Plaintiffs' claims

         Plaintiffs assert claims under LMRA § 301[31] for declaratory relief and to compel arbitration of the Reid grievance pursuant to the parties' CBA.[32] LMRA § 301 extends federal jurisdiction to “[s]uits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce[.]”[33] However, there is no federal statute of limitations expressly applicable to LMRA § 301 actions.[34] Consequently, courts must “‘borrow' the most suitable statute or other rule of timeliness from some other source.”[35]

         As a general rule, when no expressly applicable federal statute of limitations exists, courts assume “Congress intended that the courts apply the most closely analogous statute of limitations under state law[.]”[36] “In some circumstances, however, state statutes of limitations can be unsatisfactory vehicles for the enforcement of federal law.”[37] In such instances, it is “inappropriate to conclude that Congress would choose to adopt state rules at odds with the purpose or operation of federal substantive law.”[38] Therefore, “when a rule from elsewhere in federal law clearly provides a closer analogy than available state statutes, and when the federal policies at stake and the practicalities of litigation make that rule a significantly more appropriate vehicle for interstitial lawmaking, [courts] have not hesitated to turn away from state law.”[39]

         The six-month limitations period of NLRA § 10(b) is more analogous and significantly more appropriate than Utah's six-year statute of limitations for breach of contract

         Plaintiffs argue that Utah's six-year statute of limitations for breach of contract should be applied to their claims because it is the most analogous state limitations period.[40] Defendants argue that the most analogous and appropriate limitations period for Plaintiffs' claims is the six-month limitations period for unfair labor practice claims under NLRA § 10(b).[41] The Tenth Circuit Court of Appeals has not addressed the appropriate limitations period for LMRA § 301 actions to compel arbitration pursuant to a collective bargaining agreement. However, ten Circuit Courts of Appeals (“Circuit Courts of Appeals”) have addressed the issue. Each adopted the six-month limitations period of NLRA § 10(b) rather than much lengthier state statutes of limitations for breach of contract.[42]

         These Circuit Courts of Appeals recognize that “[u]nlike most contracts, collective bargaining agreements establish a grievance resolution process in order to insure a smoothly functioning labor-management relationship.”[43] These grievance resolution processes generally involve arbitration, and “[a]rbitration is a policy at the heart of federal labor law, which has been, and will continue to be greatly favored by the courts.”[44] “Arbitration is a core policy of the federal labor law because it brings about a ‘final adjustment of differences by a means selected by the parties.'”[45]

         “Refusal to arbitrate amounts to ‘a direct challenge to the private settlement of disputes under [a collective-bargaining agreement].'”[46] “[T]he complex, delicately-balanced system of industrial relations comes under siege; the stability of the process is placed at risk; and the need for some efficacious restorative [sic] is correspondingly great.”[47] Thus, “an action to compel arbitration is not readily analogous to a traditional breach of contract suit where damages are sought.”[48] “Rather, this type of suit seeks to vindicate the vital interest of federal labor law in maintaining ‘the system of industrial self-government . . . with its heavy emphasis on grievance, arbitration, and the law of the shop[.]'”[49]

         The six-month limitations period of NLRA § 10(b) “sets ‘the proper balance between the national interests in stable bargaining relationships and finality of private settlements,' and a party's interest in invoking the arbitral process under the collective bargaining system.”[50] And because of this, the Circuit Courts of Appeals hold that when considering an action to compel arbitration, the limitation period in NLRA § 10(b) is more closely analogous than state statutes of limitations for breach of contract.

         The Circuit Courts of Appeals also hold that there is significant reason to apply the NLRA's limitations period in LMRA § 301 actions to compel arbitration.[51] “This is particularly true when an employee grievance claiming wrongful discharge is at the root of the dispute” because such a discharge is an unfair labor practice under the NLRA.[52] When arbitration is the remedy for a grievance alleging a union member's wrongful discharge, “it is important that the remedy be promptly invoked and promptly administered-important to the named parties and especially important to the aggrieved employee union member, and to those in management who have had direct relationships with the grievant.”[53] “A long period of controversy and conflict can be a serious burden, both for the grievant and for the management, and can poison the relationship between the contracting parties that the contract was designed to establish and preserve.”[54] And “a lengthy limitations period merely extends the time during which the dispute resolution system effectuated by arbitration remains in limbo, with increased possibility of memories fading, witnesses becoming unavailable, and documentary evidence disappearing.”[55]“[S]uch a period of purgatory [also] may well interfere with intervening collective bargaining negotiations.”[56]

         Therefore, the Circuit Courts of Appeals hold that lengthy state statutes of limitations for breach of contract are inconsistent with federal labor law policy and are inappropriate for actions to compel arbitration of a collective bargaining agreement. The six-month limitations period of NLRA § 10(b) is significantly more appropriate.

         The rational of the Circuit Courts of Appeals is persuasive. Moreover, “there is a certain value in achieving uniformity among the federal circuits in applying the same time limitations to suits to compel arbitration.”[57] “[N]ational uniformity is particularly important when ‘those consensual processes that federal labor law is chiefly designed to promote-the formation of the collective agreement and the private settlement of disputes under it' are implicated.”[58]

         The only Circuit Court of Appeals case that applied a state statute of limitations to an LMRA § 301 action to compel arbitration over NLRA § 10(b) supports the application of NLRA § 10(b) to Plaintiffs' claims in this case

         Only a single case from the Eleventh Circuit Court of Appeals-United Paperworks Int'l, Local #395 v. ITT Rayonier, Inc.-applied a state statute of limitations to an LMRA § 301 action to compel arbitration over the NLRA § 10(b) limitations period.[59] But in that case, the most analogous state limitations period was Florida's one-year statute of limitations for specific performance of a contract.[60] The Eleventh Circuit distinguished its case from other cases involving less analogous state statutes of limitations for general breach of contract claims, and from cases with much lengthier state statutes of limitations, such as six years.[61] “Although one-year is admittedly twice as long as six-months, it is difficult to see how a statute of limitations that is only six months longer could frustrate or significantly interfere with the federal interest in resolving labor disputes quickly.”[62] Therefore, the Eleventh Circuit held that “the one-year statute of limitations, although it interferes to some small degree with the federal policy of resolving labor disputes rapidly, does not frustrate or significantly interfere with that or any other federal policy.”[63]

         Under the same rationale the Eleventh Circuit used to distinguish ITT Rayonier, Inc. from cases that applied NLRA § 10(b) to actions to compel arbitration, ITT Rayonier, Inc. supports application of NLRA § 10(b) to Plaintiffs' claims in this case. Utah's statute of limitations for general breach of contract claims is less analogous to an LMRA § 301 action to compel arbitration than Florida's statute of limitations for specific performance of a contract and the NLRA § 10(b) limitations period.[64] And Utah's six-year limitations period would frustrate and interfere with federal labor law policies to a much greater degree than the one-year Florida statute of limitations and the NLRA § 10(b) limitations period.[65] The Eleventh Circuit recognized: “[Other] courts had to choose between six months and six years. Given the federal interest in the speedy resolution of labor disputes, it is not surprising that each court chose the six-month period.”[66] Therefore, despite applying a state statute of limitation over NLRA § 10(b), ITT Rayonier, Inc. supports application of NLRA § 10(b)'s six-month limitations period to Plaintiffs' claims to compel arbitration in this case.

         Tenth Circuit case law involving other types of LMRA § 301 actions does not support application of Utah's six-year statute of limitations for breach of contract to Plaintiffs' claims in this case In arguing that Utah's six-year statute of limitations should apply to their claims, Plaintiffs rely on two Tenth Circuit cases[67]-Trustees of Wyoming Laborers Health and Welfare Plan v. Morgen & Oswood Constr. Co., Inc. of Wyoming[68] and Garcia v. Eidal Int't Corp.[69] In these cases, the Tenth Circuit rejected application of the six-month NLRA § 10(b) limitations period in favor of lengthier state statutes of limitations for breach of contract.[70] But neither of these cases support Plaintiffs' argument.

         In Trustees of Wyoming, the trustees of employee benefit pension and insurance funds (that had been established under the LMRA) sought to enforce the terms of trust agreements against an employer under the Employee Retirement Income Security Act.[71] The Tenth Circuit held that Wyoming's 10-year statute of limitations for breach of contract claims applied to the trustees' claim to recover damages for unpaid employer contributions.[72] And in Garcia, plaintiff employees sued their employer and union alleging the employer entered a sham sale of its business to repudiated a collective bargaining agreement and evade its contractual obligations.[73]The Tenth Circuit held that if the employees could establish that the collective bargaining ...


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