CLARK COUNTY PUBLIC EMPLOYEES ASSOCIATION, Appellant, v. WILLIAM PEARSON, KAREN HAYES, THALIA DONDERO, BRUCE WOODBURY, MANUEL CORTEZ, JAY BINGHAM, and PAUL CHRISTENSEN, CLARK COUNTY COMMISSIONERS; EX OFFICIO, THE BOARD OF TRUSTEES OF THE UNIVERSITY MEDICAL CENTER OF SOUTHERN NEVADA, Respondents
Clark County Public Employees Ass'n v. Pearson
Young, C. J., Springer and Mowbray, JJ., concur.
CLARK COUNTY PUBLIC EMPLOYEES ASSOCIATION, Appellant, v. WILLIAM PEARSON, KAREN HAYES, THALIA DONDERO, BRUCE WOODBURY, MANUEL CORTEZ, JAY BINGHAM, and PAUL CHRISTENSEN, CLARK COUNTY COMMISSIONERS; EX OFFICIO, THE BOARD OF TRUSTEES OF THE UNIVERSITY MEDICAL CENTER OF SOUTHERN NEVADA, Respondents.
CLARK COUNTY PUBLIC EMPLOYEES ASSOCIATION, Appellant, v. WILLIAM PEARSON, KAREN HAYES, THALIA DONDERO, BRUCE WOODBURY, MANUEL CORTEZ, JAY BINGHAM, and PAUL CHRISTENSEN, CLARK COUNTY COMMISSIONERS; EX OFFICIO, THE BOARD OF TRUSTEES OF THE UNIVERSITY MEDICAL CENTER OF SOUTHERN NEVADA, Respondents.
No. 20404
September 14, 1990
798 P.2d 136
Easterly & Armstrong and David Lockie, Elko, for Appellant.
Rex Bell, District Attorney, and Paul D. Johnson, Deputy District Attorney, Clark County, for Respondents.
OPINION
By the Court,
Rose, J.:
The sole question presented by this appeal is whether the district court erred in determining that the parties' three labor disputes are not arbitrable under the parties' collective bargaining agreement. Appellant has pointed to provisions of the collective bargaining agreement which at least arguably cover these disputes, but whether the parties intended these disputes to be arbitrable is not certain. Precisely because the question of arbitra-bility is in doubt, however, we hold that the district court's order staying arbitration must be reversed and this case remanded with instructions that the district court enter an order compelling arbitration of these disputes. If the question of arbitrability is in genuine doubt, our previous decisions clearly require that doubt to be resolved in favor of arbitrability.
FACTS
In 1986, the University Medical Center of Southern Nevada (UMC) initiated a "clinical ladder program" under which nurses could receive added proficiency pay for fulfilling certain proficiency requirements. The documentation on the ladder program contains the heading, "Personnel Policies and Procedures." In September 1988, UMC and the Clark County Public Employees Association (CCPEA) entered into a collective bargaining agreement which covers the nurses, but does not expressly address the clinical ladder program. Some time thereafter, UMC terminated the ladder program. In response, on April 10, 1989, CCPEA filed a formal demand for arbitration on three disputes: (1) whether the clinical ladder program as a whole is incorporated into the collective bargaining agreement; (2) whether individual "contracting agreements" entered into by nurses as part of the program are incorporated into the collective bargaining agreement; and (3) whether UMC has failed to compensate nurses with proficiency pay and reimbursement of expenses for activities undertaken pursuant to the program. UMC refused to arbitrate and applied for an order staying arbitration from the district court. CCPEA then filed a complaint that requested an order compelling arbitration. The district court granted UMC's application and ordered arbitration on these disputes to be stayed indefinitely. CCPEA appeals the order granting the stay.
Article 10 of the collective bargaining agreement subjects any "grievance" to binding arbitration. The issue presented is whether the three disputes surrounding the ladder program constitute "grievances." In pertinent part, Article 10 defines the scope of grievances as follows:
ARTICLE 10
Grievance Procedure
2. For the purposes of this Agreement, a grievance shall be defined to mean a dispute between an employee(s) and/or the Association and UMC over the interpretation or application of the express terms of this Agreement.
3. Disputes specifically excluded in other articles of this Agreement from the grievance appeal and arbitration procedure set forth herein shall not be construed as in the purview of this Article 10.
(Emphasis added.)
LEGAL DISCUSSION
I. Standards of appellate review of the question of arbitrability.
Whether a dispute is arbitrable is essentially a question of construction of a contract. Thus, the reviewing court is obligated to make its own independent determination on this issue, and should not defer to the district court's determination. Local U. No. 77 v. Public Util. Dist. No. 1, 696 P.2d 1264, 1266 n.2 (Wash.Ct.App. 1985). Unless the parties clearly and unmistakably provide otherwise in their agreement, the question of arbi-trability is to be decided by the district court, not the arbitrator. Int'l Assoc. Firefighters v. City of Las Vegas, 104 Nev. 615, 620 n.6, 764 P.2d 478, 481 n.6 (1988) (quoting AT&T Technologies v. Communications Workers of America, 475 U.S. 643, 649 (1986)). Unlike the bargaining agreement in Firefighters, the agreement in the present case does not provide that the arbitrator shall make the threshold determination of arbitrability. Therefore, the district court was authorized to make the determination regarding arbitrability.
"Nevada courts resolve all doubts concerning the arbitrability of the subject matter of a dispute in favor of arbitration." Firefighters, 104 Nev. at 618, 764 P.2d at 480 (citing Exber, Inc. v. Sletten Constr. Co., 92 Nev. 721, 729, 558 P.2d 517, 522 (1976)). Disputes are presumptively arbitrable, and courts should order arbitration of particular grievances "unless it may be said with positive assurance that the arbitration clause is not susceptible of and interpretation that covers the asserted dispute." Firefighters, 104 Nev. at 620, 764 P.2d at 481 (quoting AT&T Technologies, 475 U.S. at 650) (emphasis added). Moreover, the U.S. Supreme Court has stated that, in cases involving broadly worded arbitration clauses, "in the absence of any express provision excluding a particular grievance from arbitration, we think only the most forceful evidence of a purpose to exclude the claim from arbitration can prevail." AT&T Technologies, 475 U.S. at 650 (emphasis added) (citation omitted). Finally, Nevada's Uniform Arbitration Act prohibits courts from considering the merits of the underlying disputes in making the more limited threshold determination of arbitrability. NRS 38.045(5) provides that "[a]n order for arbitration shall not be refused on the ground that the claim in issue lacks merit or bona fides or because any fault or grounds for the claim sought to be arbitrated have not been shown." The Court in AT&T Technologies also cautioned against considering the merits of the dispute:
Whether "arguable" or not, indeed even if it appears to the court to be frivolous, the union's claim that the employer had violated the collective bargaining agreement is to be decided, not by the court asked to order arbitration, but as the parties have agreed, by the arbitrator.
AT&T Technologies, 475 U.S. at 650. A drafter of the national Uniform Arbitration Act points out that there is a serious risk that courts will make the determination of arbitrability on the basis of an evaluation of the underlying merits of a dispute. Pirsig, Comments on Arbitration Legislation and the Uniform Act, 10 Vand. L. Rev. 685, 695 (1957). Courts must guard against this intrusion into labor-management relations.
II. The arbitrability of the parties' three disputes.
Without passing in any way on the underlying merits of the parties' three disputes, we hold that these disputes are arbitrable. These disputes are to be decided by an arbitrator because we cannot say with positive assurance that the arbitration clause is not susceptible of any interpretation covering these disputes, there is no express provision excluding these particular disputes from arbitration, and there is no extrinsic evidence of intent to exclude these disputes from arbitration. Under the arbitration clause in Article 10, arbitrability turns on interpretation of other substantive provisions of the collective bargaining agreement. At least two articles of the parties' bargaining agreement are clearly susceptible of an interpretation covering these disputes. Article 5 states in pertinent part:
ARTICLE 5
Management Rights
1. UMC is entitled, without negotiation, to the sole right and authority to operate and direct the affairs of UMC in all its various aspects. Those rights include but are not limited to the following:
(g) Promulgate, revise and modify rules, regulations and personnel policies.
2. All rights and responsibilities of UMC not specifically modified by this agreement shall remain the functions of UMC. The above enumerated management rights shall not contravene the expressed terms of this Agreement and shall be subject thereto.
(Emphasis added.)
Without passing on the merits of the parties' disputes, we note that paragraph two may have particular application to the parties' third dispute concerning proficiency pay and reimbursement for activities previously undertaken by nurses pursuant to the ladder program. If UMC has duties to award proficiency pay and reimbursement for activities already undertaken pursuant to the clinical ladder program, these duties certainly could be termed "responsibilities." Such responsibilities were not specifically modified by the parties' agreement. Although susceptible of other interpretations, the phrase "shall remain the functions of UMC" at least arguably obligates UMC to carry through on any preexisting obligations owing to nurses who satisfied program requirements. Under NRS 38.045(5), it is for the arbitrator, not the courts, to decide on the merits whether and to what extent this phrase obligates UMC to compensate these nurses. Courts must resist the temptation to reach the merits of these interpretive issues. If the issue is arbitrable, courts may intervene after the arbitrator makes an arbitrary or irrational award, but not before. The parties' third dispute is very similar to a traditional wage dispute. Requiring these nurses to pursue individual contract actions in court against UMC, instead of arbitration, hardly seems conducive to good labor-management relations or the efficient disposition of controversies.
Paragraph two is also susceptible of interpretations covering the parties' first two disputes. For example, even if UMC has the power to terminate the program under paragraph 1(g), paragraph two may mean that the ladder program was incorporated into the parties' agreement until such time as UMC elected to terminate the program, with arbitration to be required for disputes arising under the program prior to its termination. UMC very possibly had many personnel policies which it continued after signing this agreement, even though the policies were not specifically enumerated in the agreement. We cannot say with positive assurance that the clinical ladder program was not such a policy.
A second article in the agreement which is susceptible of an interpretation covering these disputes is Article 28, which provides in pertinent part:
ARTICLE 28
Education/Training
1. UMC is committed to encourage and assist its employees in increasing and broadening their skills and knowledge through continued education in areas that will contribute to their job performance with UMC. To this end, UMC agrees to establish education and training programs and policies that will support this commitment.
4. UMC shall maintain an in-service education program which includes assignment-related training.
7. If UMC requires an employee to attend an educational program outside of the hospital, the time spent at such a meeting shall be considered as work time, and the employee shall be reimbursed for all fees and travel expenses incurred in connection therewith.
(Emphasis added.)
Paragraphs one and four arguably support CCPEA's contentions that the ladder program, and individual contracts entered into thereunder, were incorporated into the collective bargaining agreement. As described in UMC's documentation, the ladder program certainly could be classified as one of the "training programs and policies" referred to in paragraph one. The clinical ladder program is more than a simple wage incentive for productivity; it is a training program to increase nurses' proficiency. In order to qualify for proficiency pay, nurses are graded on several criteria, such as "Knowledge/Skill." Certainly this program falls under UMC's general commitment, stated in paragraph one, to increase employees' "skills and knowledge."
Paragraph seven at least arguably supports the nurses' claims for reimbursement for personal expenses incurred in connection with the program. While the voluntary ladder program does not permit reimbursement for most personal expenses, some expenses are reimbursable under the program. If participating nurses incurred expenses in any activities outside of the hospital, paragraph seven at least arguably supports the claim for reimbursement. The strength of the underlying reimbursement and other claims are irrelevant to our determination of arbitrability, so long as the claims are colorable. Indeed, the record contains insufficient evidence for this court even to begin to evaluate the merits of the nurses' claims. This evidence will come out before the arbitrator on the merits. Once the arbitrator makes a decision, courts will have a much firmer record on which to assess the validity of the parties' claims.
We fully recognize that other courts have given narrower interpretations to clauses like the CCPEA's which limit arbitration to disputes arising under express contract provisions. Based on the word "express," these courts have ruled against arbitrability on the grounds that the subject matter of the asserted disputes was not expressly enumerated in the bargaining agreement. See Croom v. City of DeKalb, 389 N.E.2d 647 (Ill.App. 1979). The result reached in Croom, however, is simply inconsistent with the principles stated in Firefighters and AT&T Technologies. To construe the parties' phrase, "interpretation or application of the express terms of this Agreement," as a limitation to subject matters expressly enumerated in the agreement would be both unrealistic and counter to the legal presumptions in favor of arbitrability. Any drafter of legal documents realizes that parties will not always be able to anticipate, or desire to specify, every contingency in the express language of an agreement. Businesses change, and disputes may arise which, although not expressly covered by the terms of an agreement, are covered by its spirit or by clear implication from the express terms. Application or interpretation of express contractual terms almost by definition goes beyond the express terms themselves. In accord with the foregoing, other courts have rejected the narrow interpretation accorded these clauses in cases such as Croom. An example of such a case of which we approve is Local U. No. 77, supra.
UMC argues that two provisions in the agreement constitute express exclusions of these disputes from arbitration. First, UMC points to Article 5, paragraph 1(g), quoted above. UMC argues that, since the ladder was a personnel policy, this provision expressly excludes any disputes arising under the clinical ladder program from arbitration. We disagree. First, paragraph 1(g) simply is not an express provision excluding a particular grievance from arbitration within the meaning of either AT&T or the parties' bargaining agreement. The parties' arbitration clause excludes from arbitration disputes which are "specifically excluded in other articles of this Agreement from the grievance . . . procedure." Examples of such express exclusions referred to in the arbitration clause are Article 32, paragraph five and Article 33, paragraph four. Article 32, paragraph three provides for a committee to investigate health and safety problems in the work place. Article 32, paragraph five provides that "[disputes arising under Section 3 of this Article are not subject to resolution under the grievance procedure." Article 32, paragraph five, constitutes a specific exclusion from arbitration. Article 5, paragraph 1(g), does not.
Additionally, assuming that the ladder program is a personnel policy, paragraph 1(g) might well give UMC the power to modify, or possibly even terminate, the ladder program. It does not necessarily follow, however, that UMC can disregard any contractual obligations to nurses arising before the program was terminated. There is a distinction between the ladder program as a personnel policy and individual "contracting agreements," as CCPEA refers to them, entered into pursuant to the policy. In short, the ladder program may comprise both a personnel policy, and contracts for participating nurses. The thrust of the nurses' grievances appears to be contractual, and paragraph 1(g) does not address the contractual components of personnel policies. Therefore, we cannot state with positive assurance that paragraph 1(g) excludes the nurses' disputes from arbitration. Nor does paragraph 1(g) necessarily mean that the parties never intended any disputes arising under the program to be covered by the bargaining agreement. Since the ladder program pre-dated the collective bargaining agreement and the parties did not eliminate the program in the agreement, the parties may have tacitly intended to incorporate the ladder program, among several other "personnel policies," into the agreement until such time as UMC elected to terminate the program pursuant to paragraph 1(g). This question will be for the arbitrator to determine in addressing the merits of these grievances.
The second principal provision which CCPEA claims is an express exclusion of these disputes from arbitration reads as follows:
ARTICLE 36
Entire Agreement
The parties acknowledge that during the negotiations resulting in this Agreement, each had the unlimited right and opportunity to make demands and proposals with respect to any and all subjects or matters . All rights and duties of both parties are specifically expressed in this Agreement and such expression is all-inclusive. Any benefit existing prior to this Agreement is negated unless specifically incorporated into this agreement.
(Emphasis added.)
This does not constitute an exclusion sufficiently clear to support a stay of arbitration for three reasons. First, under the arguments made above, all three disputes at least arguably are "specifically incorporated" into the Agreement. It will fall to the arbitrator to resolve these disputes on the merits. Second, it is inherently unreasonable to construe this article to operate to extinguish the nurses' rights to added pay or reimbursement for activities the nurses undertook before the parties signed this agreement. Did the parties intend Article 36 to negate nurses' rights to proficiency pay based on their efforts before the agreement was signed or before the program was terminated? We cannot answer in the affirmative with positive assurance. This creates an ambiguity for the arbitrator to resolve. Third, CCPEA points out that the term "benefit" generally is not construed to refer to reimbursement or added pay, but, rather, to ancillary benefits such as health or sick leave; this, too, creates a question of interpretation for the arbitrator.
Finally, we note that the record contains no extrinsic evidence of the parties' bargaining history. It is possible that the parties intended some provision of their agreement to exclude the clinical ladder program from arbitration. It is equally possible, however, that the parties tacitly intended the existing clinical ladder program to become part of the agreement until such time as the program was terminated, just like other personnel policies which may not have been expressly enumera'ted in the agreement.
CONCLUSION
The parties' collective bargaining agreement is silent as to the clinical ladder program, but the parties' disputes are at least arguably covered by provisions in the agreement. Since there is substantial doubt as to whether these disputes are arbitrable, the previous decisions of this court require that doubt to be resolved in favor of arbitration. If there is any doubt as to arbitrability, "the parties are not to be deprived by the courts of the benefits of arbitration, for which they bargained — speed in the resolution of the dispute, and the employment of the specialized knowledge and competence of the arbitrator." Exber, Inc., 92 Nev. at 729, 558 P.2d at 522 (Mowbray, J.) (citing John Wiley & Sons, Inc. v. Livingston, 376 U.S. 543, 557-58 (1964)). The district court erred by failing to resolve the doubts in favor of arbitrability. Accordingly, the district court's order staying arbitration is hereby reversed and this case is remanded with instructions that the district court grant CCPEA's application for an order compelling arbitration.
Young, C. J., Springer and Mowbray, JJ., concur.
Although we follow the majority rule just stated, we note that there is a split of authority on this point, with a minority of courts holding that the arbitrator should decide arbitrability in doubtful cases. The Illinois Supreme Court recently enunciated the minority view in some detail in Donaldson, Lufkin & Jenrette v. Barr, 530 N.E.2d 439 (Ill. 1988).
In Local U. No. 77, a utility began staffing certain "energy conservation consultant" positions with non-union workers. The union maintained that these should be union positions, but the utility disagreed. The utility workers' union sought a court order compelling the utility to arbitrate this dispute. The arbitration clause provided: "Any dispute between the District and the Union or between the District and any employee covered by this Agreement concerning the interpretation, application, claim of breach or violation of the express terms of this Agreement shall be deemed a grievance." Local U. No. 77, 696 P.2d at 1267 n.3 (emphasis added). The parties' contract discussed various job classifications, but did not specifically discuss energy conservation consultants. The district court refused to order arbitration.
The court of appeals reversed and remanded with instructions that the district court order arbitration. The court specifically rejected the argument that the clause "express terms of this Agreement" limited arbitration to disputes arising under express contractual provisions; this clause was insufficient to rebut the strong presumption in favor of arbitration. The court also specifically rejected the argument that the failure to incorporate the nonunion positions into the contract during contract negotiations indicated an intent not to arbitrate these disputes. The court reasoned that simple failure expressly to specify these positions in the contract did not constitute "the most forceful evidence of a purpose to exclude" the dispute from arbitration, as required in previous decisions of the U.S. Supreme Court. Id. at 1268. The court concluded that "a court's inquiry is at an end if the complaint on its face calls for an interpretation of the agreement." Id. at 1267 (citing United Steelworkers of Am. v. American Mfg. Co., 363 U.S. 564, 568 (1960)). Since the workers argued that the energy conservation consultant positions might fall within the term "metermen" in the contract, the court concluded, the dispute at least arguably fell under the contract and, hence, was arbitrable.