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Albrecht v. Newman

Decided: August 17, 1992.

JAY E. ALBRECHT; BERT D. ALTON, III; ROY L. ASHLOCK, SR.; MARC BERGMAN; MERWYN L. BICKLER; JORGE A. BLACKWOOD; WALTER BLAYNEY, JR.; ERVIN BYLER; JOHN B. CASSIDY; EUFEMIO R. CASTILLO; H. J. CHELLON; BRUCE A. CURRY; RALPH J. DALEY; DONZELL DIGBY; JAMES W. DOTY; CARL DOTY; WILLIAM T. FLARTEY; CHARLES R. FORD; RICHARD A. FRERKES; LEO GLADU; JOSEPH GOMES, JR.; ROBERT A. GRABENDIKE, JR.; HARRY HALPIN; SANFORD HAMMACK; KELLY BOND HARTMAN; THOMAS F. HOLCOMB; WILLIAM A. HOLLIFIELD; ARTHUR HOPWOOD; RICHARD G. HUSSUNG; JOHN R. JAY; MARTIN L. KIMBRELL; W. W. KORTUM; ARTHUR C. KREPS; DAVID LATHAN; JOSEPH L. LEMAR; DANIEL B. MAZZAANTI; DAVID MILLER; EARLE P. MILLIGAN; GLEN OPENSHAW; JOHN J. ORTEGEL; RALPH OTT; RANDY T. RAIL; EUGENE L. RIENKS; EARL J. ROSEKRANS; ALBERT SANCHEZ; HERBERT E. SIELER; WILLIAM H. SIMPKINSON; EDWARDO SOSA; JIMMY STANSBURY; JAMES STIDHAM; CLAYTON THREEWIT; ALMYRA R. TIERNEY; RICHARD E. WEIMER; FLOYD G. WHITE; WILLIAM A. WILLIAMS; NORMAN WOLFGANG; HELEN L. WOOD; AND WILTON A. WOODALL, PLAINTIFFS-APPELLANTS, AND BETTY ASKEW; ERNEST S. BLAISE; ROBERT J. BROOKS; ROBERT M. BURNS, JR.; JOHN I. CARSON; JOHN CARTER; MARCELO CASAS; JUAN C. CASTRO; CHARLES E. COLLISON; WILLIAM E. CRUM; HAROLD A. DECESARI; GERALD F. EMERT; MICHAEL S. FAHEY; CLIFTON HARRIS; ROBERT HARADA; DONALD E. HART, JR.; PAUL HARVEY; CHARLES A. HOLM; MODESTO D. HURTADO; CALVIN G. JACOBS; RICHARD A. KING; JERRY KNOX; HENRY E. LAUER; DANIEL LECHLITER; ROBERT D. MCCARTY; WILLIAM D. MCCRILLIS; FRANCESCA MCKEOWN; NORBERTO MARTINEZ; GARY LEE MASON; RONALD E. MIELE; GENE P. MILLER; LEWIS M. MITCHELL; NORMAN K. MOORE; CHARLES G. MULLIKIN; GERALD E. OAKLEY; BASIL T. PULLER; MARK L. REES; KENNETH D. REINKE; JOSEPH W. ROBINSON; DALE R. SCHREINER; DAVID W. SMITH; RANDALL H. SPENCER, SR.; SCOTT H. TUFTS; ROBERT E. WHITESIDE; GERALD E. WINEY; DONALD F. WRIGHT; WAYNE YOUNGER; DONALD ANCELL; EDWARD A. ANDERSON; OSCAR Q. ANLOAGUE; GEORGE C. BEACH; JAMES E. BROWN; CINDY A. CARPENTER; RICHARD S. CHIORINO; GEORGE S. CLIG; TOM COLLILNS; LAWRENCE E. COOK; DONALD DALTON; LINDA D. DUENAS; WILL DUMONT; TIMOTHY R. EVERHART; ANDY FLORES; GERALD D. FREDRICKSEN; PHILLIP GAGO; JEFFREY GEYER; JAY HANSEN; HARRY W. KOWOLSKY; LEONARDO Z. LARA; DANIEL LOPEZ; RICHARD LUBNIEWSKI; KARL MCGUINNESS; CHARLES E. MARSHALL, JR.; JANET C. MATTHEWS; DAVID F. MERCHANT; CLAUDE W. MINYARD; DONALD R. MORGAN; DONALD E. MOTZ; PAUL MURPHY, JR.; GENE NEEDHAM; ROBERT PHILIPS; JOHN M. PORTER, JR.; ROBERT R. POWELL; DENNIS B. RAMSEY; CURT D. RITZA; A.M. ROMAN; THERESA E. STEPHENS; STEVE E. SWAN; CLARENCE M. TOMES; ARTHUR A. HERNANDEZ; DANIEL J. MANRIQUEZ; WILLIAM PIKE; JAMES R. RYAN; SILAS ABERNATHY, JR.; FRED BAUMAN; DAVID R. BEDFORD; BRUCE L. BENTON; STEPHEN R. BLANCHARD; JOHN BONADIO; OLIVER L. DUCKWORTH; JAMES EDWARDS; ROBERT STANLEY FENTON; JAMES GALLIGAN; CRAIG HACKETT; DANIEL J. HOLLEY; JOHN A. HOUSEHOLDER; DAVID IRELAND; HERMAN JACKSON; JAMES T. JACKSON; MICHAEL P. MURPHY; CHARLES OLSON; ANNE L. ANTRIM-QUISTGARD; ALAN HUGH RENARD; FRED RISKE; DAVID G. ROBINSON; ADRIAN O. STAMPLEY; WARREN THIETJE; PATRICK TRAYNOR; MARK ULLOM; JAMES F. WAGNER AND ANDREW P. FOLTZ, PLAINTIFFS,
v.
CONSTANCE NEWMAN, DIRECTOR OF OFFICE OF PERSONNEL MANAGEMENT, H. LAWRENCE GARRETT, III, SECRETARY, DEPARTMENT OF NAVY AND UNITED STATES OF AMERICA, DEFENDANTS-APPELLEES. SCOTT L. ANDREEN, ROD R. BOULTINGHOUSE, MICHAEL S. DAVIS, TERRY L. GRAM, RICHARD V. JONES, BENJAMIN LUTHER, FRANK R. NADOLSKI, ERIC R. NELSEN, HEIKO STOPSACK, FRANCO STONE AND RICHARD G. STOUT, PLAINTIFFS-APPELLANTS, V. THE UNITED STATES, DEFENDANT-APPELLEE.



Appealed from: U.S. District Court for the Northern District of California. Judge Smith. Appealed from: U.S. District Court for the Central District of California. Judge Hupp. Appealed from: U.S. Claims Court. Judge Hodges, Jr.

Before Michel, Clevenger and Rader, Circuit Judges.

Clevenger

CLEVENGER, Circuit Judge.

Robert A. Muniz appeals the judgment of the United States District Court for the Northern District of California dismissing his complaint for lack of jurisdiction. Muniz v. United States, Civ. No. 89-1894 (N.D. Cal. Feb. 4, 1991). Jay E. Albrecht et al. appeal the judgment of the United States District court for the Central District of California dismissing their complaint for lack of jurisdiction. Albrecht et al. v. Horner, No. CV-88-1816-HLH (C.D. Cal. Mar. 12, 1991). Scott L. Andreen et al. appeal the judgment of the United States Claims Court dismissing their complaint for lack of jurisdiction. Andreen et al. v. United States, No. 548-88C (Cl. Ct. Feb. 6, 1991).

Because the three appeals raise common issues of law, we consolidated them for decision. For the reasons set forth below, each of the appealed judgments is affirmed.

I

The appealed cases involve present and former employees of the federal government whose terms and conditions of employment are or were governed by collective bargaining agreements. The agreements are or were between the agencies in which plaintiffs are or were employed and the unions to which they belong or belonged. Section 7121(a) of the Civil Service Reform Act of 1978 (CSRA), 5 U.S.C. § 7121(a) (1988), requires that all such agreements contain grievance procedures:

(a)(1) Except as provided in paragraph (2) of this subsection, any collective bargaining agreement shall provide procedures for the settlement of grievances, including questions of arbitrability. . . . The procedures shall be the exclusive procedures for resolving grievances which fall within its coverage.

Paragraph (2) of section 7121(a) however provides that "any collective bargaining agreement may exclude any matter from the application of the grievance procedures which are provided for in the agreement."

Appellants claim the right to have various kinds of pay computed under the Fair Labor Standards Act (FLSA), an issue they prefer to adjudicate in the courts. The trial courts dismissed their claims, reasoning that these FLSA pay claim disputes were not excluded from the dispute resolution processes provided by the grievance and arbitration procedures contained in the collective bargaining agreements.

In Carter v. Gibbs, 909 F.2d 1452 (Fed. Cir. 1990) (in banc), cert. denied sub nom. Carter v. Goldberg, U.S. , 111 S. Ct. 46 (1990), this court held that the federal courts lack jurisdiction over an FLSA pay dispute not excluded from grievance and arbitration pursuant to section 7121(a)(2). The parties in Carter v. Gibbs agreed that the FLSA pay dispute in the case was a grievable matter and that the relevant collective bargaining agreement did not exclude the dispute from the grievance and arbitration procedures under section 7121(a)(2). This court thus was not required to delineate the interpretative standard to be applied in deciding whether a disputed issue is excluded by section 7121(a)(2), nor was it required to decide if claims of former employees arising from past employment under collective bargaining agreements are still limited by the exclusivity provisions of section 7121(a)(1). These issues are ripe for decision in these consolidated cases.

II

Muniz was formerly employed by the Department of the Navy as a fire fighter. Upon his separation from government service due to retirement, he was entitled, under 5 U.S.C. § 5551(a) (1988), to a lump sum payment for his accumulated annual leave. The lump sum payment proffered to Muniz did not include his customarily and regularly received FLSA overtime pay pursuant to 29 U.S.C. § 207(k) (1988). Muniz brought suit in the district court to correct the alleged error in computation of his lump sum payment. The government conceded error in the computation but moved to dismiss the case for lack of jurisdiction because Muniz's claim to FLSA entitlement was not excluded from the grievance and arbitration procedures in the collective bargaining agreement to which Muniz had been subject. Citing Carter v. Gibbs and concluding that Muniz's agreement did not contain "adequately specific" language to exclude Muniz's claim from grievance and arbitration, the district court dismissed the complaint for lack of jurisdiction.

The issue thus is not whether Muniz is entitled to a properly calculated lump sum payment, but whether the path to achieving that result, under section 7121(a) of the CSRA, is the judicial or the arbitral process. If Muniz's collective bargaining agreement as a matter of statutory exclusivity requires arbitration of the FLSA issue, the question then is whether Muniz, as a former employee, escapes the grasp of statutory exclusivity.

A

Whether the district court possesses jurisdiction to hear Muniz's claim is a matter of law, which we review de novo. See Zumerling v. Marsh, 783 F.2d 1032, 1034 (Fed. Cir. 1986). The root of that matter is, of course, the correct legal interpretation of the collective bargaining agreement pursuant to which Muniz was employed by the Navy. That issue is also a question of law, subject to our de novo review on appeal. See Bonner v. Merit Sys. Protection Bd., 781 F.2d 202, 205 (Fed. Cir. 1986).

A full understanding of Carter v. Gibbs is the necessary predicate to examination of the language in Muniz's collective bargaining agreement. Carter v. Gibbs unswervingly endorses the proposition that mandatory dispute resolution procedures contained in a federal collective bargaining agreement constitute the exclusive means for resolution of disputes grievable under the agreement, unless the negotiated terms of the agreement exclude the dispute from the agreement's dispute resolution processes. Carter v. Gibbs also teaches that implied exclusions from the exclusive dispute resolution mechanism are disfavored. Carter, 909 F.2d at 1455. As this court explained in detail, citing Lindahl v. Office of Personnel Management, 470 U.S. 768, 773 (1985), the Congressionally unambiguous and unmistakable preference for exclusivity of arbitration is a central part of the comprehensive overhaul of the civil service system provided by the CSRA. Carter, 909 F.2d at 1455-56. That comprehensive overhaul has in turn barred parallel remedies in the courts for resolution of disputes arising from collective bargaining agreements. See Karahalios v. National Fed'n of Fed. Employees Local 1263, 489 U.S. 527, 535 (1989); United States v. Fausto, 484 U.S. 439, 445 (1988).

Our sister circuits have followed the many teachings of the Supreme Court regarding the emphatic nature of the exclusivity provisions stated in the CSRA. See Montplaisir v. Leighton, 875 F.2d 1, 3 (1st Cir. 1989) and cases cited therein ("The circuits have been equally as forthcoming; in a variety of settings, they have followed the Court's lead and treated CSRA as establishing the sole mechanism for resolving labor conflicts in the federal arena."). Moreover, this court has respected "the Supreme Court's admonitions to leave the architecture of the federal personnel system to Congress," Volk v. Hobson, 866 F.2d 1398, 1403 (Fed. Cir.), cert. denied, 490 U.S. 1092 (1989), by "abstain[ing] completely from inventing other remedies when Congress has set up a complete, integrated statutory scheme." Id. at 1402. The CSRA, as construed by the Supreme Court, thus necessarily will bar aggrieved employees from resolution in the trial courts of many of their disputes.

B

Against the background of Carter v. Gibbs, we must now examine and interpret Muniz's collective bargaining agreement. Articles 10 and 11 of that agreement establish the grievance and arbitration procedures, which all agree serve as the exclusive procedure available to the parties and employees. Article 10, section 1.b. states that "matters excluded from this Article and arbitration are included in Appendix A to this Agreement." Appendix A sets forth 14 specific grievable matters that are "excluded from the negotiated grievance procedures and arbitrations." Among the 14 items is one related to compensation, number 11, "Injury Compensation." Compensation for accumulated annual leave payable upon separation, the issue in this case, is not expressly excluded by Appendix A.

Muniz contends, nonetheless, that his compensation claim, while not expressly excluded in Appendix A, is impliedly excluded from the otherwise mandatory exclusive grievance and arbitration remedy because language contained in Article 11, concerning arbitration procedures, appears to limit the authority of the arbitrator. Article 11, section 5 provides that:

Arbitration may not extend to the interpretation or change of Navy or higher authority policies or regulations, nor changes or proposed changes in agreements. Similarly arbitration shall not change, modify, alter, delete or add to the provisions of this Agreement as such right is the prerogative of the contracting parties only. The arbitrator will only have the authority to interpret and apply bilaterally negotiated provisions of this Agreement. He shall not have the authority to decide matters in this Agreement involving the interpretation or application of Navy or higher authority policies, regulations or laws regardless of whether such policies, regulations or laws are quoted, paraphrased, cited or otherwise referenced in this Agreement.

In Muniz's view, his grievable compensation claim could not have been arbitrated properly because under Article 11, section 5, the arbitrator lacked the authority to decide matters involving the interpretation or application of the FLSA to his claim. Consequently, any grievable matter that raises any issue concerning the interpretation or application of any law or regulation is necessarily excluded, for purposes of section 7121(a)(2), from the otherwise exclusive arbitration remedy. The government correctly argues that Muniz's view, if accepted, leaves the dispute resolution process in the agreement in shambles, because any issue in grievance or arbitration apparently could be removed from the process at any time by an alleged need to construe or apply a law or regulation. Whether an FLSA pay claim in dispute is subject to or excluded from arbitration would therefore not depend on the nature of the claim in dispute. All such claims would be arbitrable if a legal issue were not raised.

We agree with Muniz that the meaning of a collective bargaining agreement is to be derived from its reading as a whole, and that section 7121(a)(2) exclusions need not always be as specifically listed as those in Appendix A to Muniz's agreement. See Bonner, 781 F.2d at 205. But we also agree with the government that Muniz's reading of Article 11, section 5 produces a potential result wholly inconsistent with the stated intent of the parties in Article 10 to resolve workplace-derived disputes by grievance and arbitration. Section 3 of Article 16, for example, provides that employees "should accrue annual leave in accordance with existing applicable laws and regulations," and section 6 of that article allows carry-over of leave "in accordance with applicable laws and regulations." Disputes about annual leave, including the laws and regulations used to compute such leave, are directed by Article 10 to the grievance and arbitration processes. In light of the interplay between Articles 10 and 16, Muniz's reading of Article 11, section 5 thus creates ambiguity as to which matters were intended to be included in or excluded from the statutorily mandated grievance and arbitration processes.

Carter v. Gibbs and the precedent upon which it rests, however, require us to conclude that the parties to the agreement must explicitly and unambiguously express in the words of the contract their intent to exclude the matter from the grievance and arbitration processes in order for an exclusion to satisfy section 7121(a)(2). Muniz's collective bargaining agreement taken as a whole fails to satisfy that test, and his claim for recomputed annual leave cannot be deemed excluded from the statutorily mandated dispute resolution processes agreed to by the parties.

C

The remaining issue in Muniz's appeal is whether the jurisdictional bar is removed by his retirement and consequent status as a nonemployee at the time his suit was filed.

On this point, Muinz's contentions are simple and straightforward: first, only current employees, not retirees, are subject to the CSRA and second, he was not a current employee when his claim arose. We must disagree with both contentions.

Section 7121(a) of the CSRA governs grievance procedures for federal employees, and section 7103(a)(9) defines "grievance" as "any complaint . . . by an employee concerning any matter relating to the employment of the employee[.]" 5 U.S.C. § 7103(a)(9) (1988). Muniz's collective bargaining agreement refers in Article 10, section 1, to "grievances of employees"; section 7103 (a)(2) of the CSRA defines an employee as an individual "employed in an agency . . . or whose employment in an agency has ceased as a result of any unfair labor practice[.]" 5 U.S.C. § 7103(a)(2) (1988). These definitional provisions, however, do not indicate whether the dispute resolution processes of a collective bargaining agreement can apply to retired former employees. We must look instead to provisions of the statute that afford remedies to retired employees. Such provisions demonstrate that retirees are not excluded from the reach of the CSRA because of their non-employment status. For example, retirees are in many instances permitted to rearrange spousal survivor annuity benefits afforded by the CSRA. See 5 U.S.C. § 8339(k)(2)(A), (j)(5)(A), (j)(5)(C), (o)(1)(A) (1988); see also 5 C.F.R. §§ 831.612, .613 (1992). Retirees similarly may alter various life and health insurance benefits provided by the CSRA. See 5 U.S.C. §§ 8706(b)(4), 8905(e) (1988). Employees also may apply for CSRA disability retirement benefits after they have been separated from service. See, 5 U.S.C. § 8337 (1988). Consequently, the fact that Muniz is retired can not alone establish that he is beyond the reach of the CSRA.

We agree with Muniz on the proposition that he is only subject to the dispute resolution processes of the collective bargaining agreement if his claim arose while he was an employee subject to the agreement. To determine when the claim to the lump sum payment arose, we must decide the nature of this claim. To do so, we must consider the holdings of the Supreme Court in Nolde Bros., Inc. v. Local No. 358 Bakery & Confectionery Workers Union, AFL-CIO, 430 U.S. 243 (1977) and Litton Fin. Printing Div. v. National Labor Relations Bd., U.S. , 111 S. Ct. 2215 (1991).

The circumstances in Nolde are comparable to those in this case. Both involve collective bargaining agreements that cover claims for compensation payable upon severance. In Nolde, the collective bargaining agreement expired, and negotiations over a new agreement ceased when the employer, faced with a strike threat, closed its plants and terminated the employment status of the employees. In so doing, the employer refused to pay the former employees the severance pay to which they could lay claim under the agreement. The union, on behalf of the former employees, unsuccessfully demanded severance pay and the employer refused to arbitrate the dispute. The district court refused to compel arbitration of the issue, reasoning that the arbitration remedy died with the contract. The court of appeals reversed on the theory that the arbitration remedy survived termination because the claims in issue arose before termination of the employment status. The Supreme Court granted certiorari to determine if the severance pay claims of the union members, persons similarly situated to Muniz, were arbitrable. Nolde Bros., Inc. v. Local No. 358 Bakery & Confectionery Workers Union, AFL-CIO, 425 U.S. 970 (1976).

The Supreme Court held that the parties' agreement to arbitrate survived termination of the contract with regard to the claim for severance pay. The Court characterized that claim as deferred compensation, the right to which accrued and vested during employment but the payment of which would be occasioned only after termination. Nolde, 430 U.S. at 248. The Supreme Court stated that the "parties' obligations under their arbitration clause survived contract termination when the dispute was over an obligation arguably created by the expired agreement," id. at 252, and thus concluded that the arbitration remedy must be available to resolve a dispute that arose after expiration of a contract, when the claim depended upon a right which had accrued and vested during employment. Id. at 255.

In reaching that Conclusion, the Supreme Court stated that it has established a strong presumption favoring arbitrability:

To be consistent with congressional policy in favor of settlement of disputes by the parties through the machinery of arbitration . . . an order to arbitrate the particular grievance should not be denied 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 ...


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