National Arbitration Center
Title: Portland Hospital Service Corporation and International
Union of Operating Engineers Local 701
Arbitration arises pursuant to Agreement between International Union of
Operating Engineers Local 701 ("Union" or “Local 701"), and
Portland Hospital Service Corporation ("Employer" or “PHSC”),
under which LUELLA E. NELSON was selected to serve as Arbitrator and under
which her Award shall be final and binding upon the parties.
parties stipulated to the facts upon which this case is to be decided and
submitted joint exhibits relating to the stipulated facts.
Both parties filed post-hearing briefs on or about September 20, 1997.
behalf of the Union:
James P. O’Connor, Esquire, General Counsel, IUOE Local 701, 555 E
First Street, Gladstone, OR 97027
behalf of the Employer:
Nelson D. Atkin II, Esquire, Lane Powell Spears Lubersky, 520 SW
Yamhill, Suite 800, Portland, OR 97204-1383
Given the stipulated facts listed above and, if the grievance was timely
filed, does the language in the main body of the CBA concerning shift
differential apply to Local 701 members, as well as Local 107 members, or
should the contract be reformed as argued by PHSC?
RELEVANT SECTIONS OF AGREEMENT
ARTICLE II - DISPUTES AND GRIEVANCES
2. An employee having a
grievance shall present such grievance to the Production manager and/or
General manager and if unresolved, to the Union, within five (5) work days
after the occurrence. If the
Union determines the matter to merit further processing, such grievance shall
be filed in writing with the Employer within thirty (30) calendar days of its
5. In the event of
arbitration, the following will apply:
The arbitrator will not have authority to modify, add to, alter, or detract
from the provisions of this Agreement. ...
6. Should either the
Employer or Union fail to initiate a grievance within the thirty (30) calendar
day time limitation herein provided, such party is deemed barred from further
prosecution of such grievance.
ARTICLE V - WAGES
1. The wage scales attached
hereto as Addenda A, B and C shall constitute the minimum wages payable during
the life of this Agreement. Nothing
shall prohibit the Employer from paying higher rates than those set forth.
9. If, during the term of
the Agreement, the Employer establishes a regular shift which ends later than
6:30 p.m, it will pay an appropriate shift differential, and negotiate the
amount of and hours qualifying for differential payment.
ARTICLE VI - HOURS
1. Day Shift.
The day shift is from 5:30 a.m. for leads, sub-leads, soil sort, and
wet wash handlers and from 6:00 a.m. for all other laundry categories until
6:30 p.m. Any employee who is
assigned work that commences after 6:00 a.m. and ends before 6:30 p.m. is on
the day shift for the entire period he works. ...
7. Swing Shift.
Any shift which is scheduled to end after 6:30 p.m. is a swing shift
and any employee working on a swing shift shall be paid fifty cents ($.50)
additional for each hour worked on the entire shift.
ADDENDUM C TO LABOR AGREEMENT
PORTLAND HOSPITAL SERVICE CORPORATION
INTERNATIONAL UNION OF OPERATING ENGINEERS LOCAL NO. 701
Engineers shall not be regularly scheduled for day shifts starting
before 5:00 a.m. If an engineer
is required to start work before 5:00 a.m., the engineer shall receive time
and one-half of the regular hourly rate for all hours worked before 5:00 a.m.
THE PERIOD PRIOR TO 1996
Local 701 has represented the engineers at PHSC for at least 25 years.
Other employees of PHSC are represented either by the Textile Workers
(“Local 107"), the Teamsters (“Local 305"), or are unrepresented.
At least for the last five Collective Bargaining Agreements (“CBAs”),
PHSC negotiated a basic agreement with Local 107, which covered all employees.
The three unions then negotiated and signed Addendums to the Agreement
on those terms and conditions that were different from the main body of the
Agreement. Any differences
applying to Local 701 were set out in Addendum C to the CBA for the years
1984, 1987, 1990, 1993, and 1996. Except as specifically excluded in the Addendums, all
provisions in the main body of the CBAs applied to all employees of PHSC.
PHSC’s practice for at least the last five contract periods has been
to negotiate the main body of the CBA with Local 107, and then negotiate any
changes to that document, or any unique issues, with the other two unions.
For example, in 1994, PHSC negotiated a mid-term amendment to the CBA
(concerning a six day workweek and a ten hour day) directly with Local 107.
When this was completed, it presented the changes to the other two
unions for their signature, without offering to negotiate the changes with
6. PHSC never entered into negotiations with Local 701 concerning this mid-term change, though it did present the finalized change to Local 701 for its signature (to make it part of the main CBA applicable to Local 701 employees). However, Local 701 never ratified that change to the main body of the CBA and so it never became effective for Local 701.
In 1995, PHSC changed the work schedule for the members of Local 107
from an eight hour to a ten hour work day.
Article V, Section 9 of the CBA which was then in effect provided:
during the term of the Agreement, the Employer establishes a regular shift
which ends later than 6:30 p.m., it will pay an appropriate shift
differential, and negotiate the amount of hours qualifying for differential
Article V, Section 9, set forth above, had been in the CBA between the
parties commencing with the 1990-93 Agreement, which came into effect July 1,
1990. During the term of the
1990-1993 CBA and the 1993-96 CBA, the engineers represented by Local 701
worked a number of different shift schedules, some of which ended after 6:30
p.m. Engineers had worked such
schedules for most, if not all, of the 25 years PHSC had been operation.
At no time during the term of either the 1990-1993 or the 1993-1996
CBAs did any of the engineers or any representatives of Local 701 claim that
Article V, Section 9 required PHSC to negotiate and pay a shift differential
to the engineers who worked a shift ending after 6:30 p.m.
In July 1995, PHSC and Local 107 eventually reached agreement on a $.50
per hour shift differential with Local 107, along with a number of other
provisions implementing a ten-hour work schedule.
THE 1996 NEGOTIATIONS
Negotiations between PHSC and Local 107 over the current CBA took place
from July 2, 1996 through September 10, 1996.
During those negotiations, PHSC and Local 107 agreed to include in the
CBA those provisions which had been agreed upon in 1995 implementing a ten
hour work day, including the $.50 per hour shift differential.
If called as a witness, PHSC’s General Manager, Hans Laursen (“Laursen”)
would testify that by agreeing to incorporate the shift differential into the
CBA, PHSC had no intention that by doing so PHSC would pay shift differential
to either the engineers or the employees represented by the Teamsters.
Local 701's negotiating agenda for the 1996 CBA included a request for
shift differential. PHSC and
Local 701 discussed this issue.
The CBA negotiations between PHSC and Local 701 commenced with a
meeting on August 23, 1996. PHSC
and Local 701 agreed that there was no problem with their reaching agreement
on their addendum prior to the completion of negotiations with Local 107 on
the main body of the contract.
PHSC refused Local 701's request for shift differential on September
9,1996. The union representative
said he was dropping the shift differential proposal.
On September 10, 1996, the parties agreed the shift differential
proposal by Local 701 had been dropped from their direct negotiations.
The Local 701 Addendum was viewed by the parties as “one page on the
end of a contract.” The parties
shared this view of the Addendum:
George Robins: “Essentially, our whole agreement is a side agreement.”
“An addendum, yes.”
Article V, Section 9, of the 1996 CBA provides that: [quotation
Addendum C to the 1996 CBA does not exclude this shift differential
language for Local 701.
After the completion of the negotiations with Local 107, on September
19, 1996, PHSC’s attorney, Nelson Atkin (“Atkin”), prepared a draft
contract and sent it to Laursen with a cover letter which stated that:
for your review is a draft of the new labor agreement between Portland
Hospital Service Corporation and the Laundry Workers, Engineers and Teamsters.
I have also enclosed a draft of the side letter between PHSC and the
Engineers regarding the boot allowance and tool replacement policy.
believe the new agreement incorporates both of the mid-term contract changes
negotiated with the laundry workers, as well as the changes we have agreed to
with each of the three respective unions.
If you find the agreement in order I will start the process of
obtaining the necessary signatures from each of the union representatives on
the sufficient number of original copies.
Laursen reviewed and approved the drafts provided to him by Atkin who
then prepared the new CBA including each of the three Addendums.
Atkin then sent the CBA and the appropriate Addendum to Local 107 on
October 1, 1996.
PHSC implemented the contractual wage increase for the engineers
retroactive to July 1, 1996, in the paycheck which the engineers received on
October 11, 1996.
Following the return of the signed CBA from Local 107, Atkin then sent
the CBA, along with the appropriate Addendum, to George Robins (“Robins”)
at Local 701 on October 31, 1996. The
letter included the signature pages for Local 701, page 19 to the main CBA,
and page 24 (Addendum C).
Robins reviewed the CBA and Addendum C and informed Atkin that he
noticed that changes had been made in the PTO provisions; he also found
several typographical errors. Robins
told Atkin that Local 701's members had not been aware of these changes in the
PTO provisions, and he would have to discuss them and have them ratified
before Local 701 could sign the Agreement.
Robins made no mention of the shift differential provision in the CBA.
Robins returned the signed CBA and addendum to Atkin with a letter
dated November 13, 1996. On
November 19th, Atkin sent the CBA and appropriate Addendum to
Teamsters Local 305. Following
receipt of the signed CBA from the Teamsters, Atkin remailed the CBA and
Addendum C to Robins on December 5, 1996.
After the CBA, Addendum and side letter were approved by vote of Local
701 members, Local 701 signed both signature pages and these were attached to
the original CBA.
THE PENDING GRIEVANCE
Local 701 filed a grievance on behalf of its members, Joe Kott and Jim
McCarley, on February 28, 1997.
PHSC responded to the grievants by letter to Robins from Laursen on
March 10, 1997. Robins responded
to Laursen by letter of March 14, 1997.
The parties have been unable to resolve this good-faith dispute by
agreement and so have submitted it to a mutually-chosen arbitrator.
THE PARTIES’ RESPECTIVE POSITIONS
Local 701's position is that the shift differential language in the
main body of the CBA now applies to its members, as well as to Local 107
members, since it was not excluded in Addendum C.
Historically, whatever terms and conditions have been in the main body
of the CBA have been applied to Local 701 except where they were specifically
excluded in Addendum C.
Historically, there have been two methods by which terms have become
part of the CBA governing Local 701 members: by direct negotiation and by
application of the terms of the main body of the CBA which is negotiated by
PHSC and Local 107.
By not excluding the shift differential from the Addendum C, PHSC made
it applicable to Local 701, via the main body of the CBA.
PHSC’s position is that this language was negotiated between Local
107 and PHSC to apply only to the employees represented by Local 107. The provision does not apply to either the drivers or the
engineers, notwithstanding the oversight of not including it as one of the
exclusions from the main contract set forth in the appropriate Addendum.
The Addendum should be reformed to include this exclusion.
Alternatively, PHSC’s position is that this grievance is untimely
inasmuch as it was filed more than 30 calendar days after the event causing
the grievance to have “occurred”. The grievance occurred either on the
date in which the engineers received their first retroactive wage payment
(October 11, 1996), or the first pay day following the union’s receipt of
the fully executed Agreement in late December 1996.
The grievance was filed more than 30 days following both of these
POSITION OF THE UNION
Employer bears the burden of proving a mutual mistake by clear and convincing
evidence. Given the stipulated
record, it cannot meet its burden. It
must show any alleged mistake was not due to want of care or lack of
would be appropriate in the event of a mutual mistake.
A party should not be allowed to take advantage of benefits from an
error to which it was a party. However,
in this case, there has been a unilateral, not a mutual, mistake.
Local 701 made no mistake related to the main body of the CBA.
It had no input into the language of the main body of the CBA and did
not attempt to negotiate it with the Employer.
It simply received the language the Company had settled on, and read
and applied it as written. The
Arbitrator should do the same.
an alleged mistake was unilateral, and was not so gross as to indicate to the
opposite party that an error has been made, no relief can be accorded the
mistaken party. Any mistake was a
unilateral one, made by PHSC in failing to exclude the shift differential
provision of the main body of the CBA for Local 701.
If PHSC intended to exclude Local 701's members from the shift
differential language, it had the burden of doing so.
If it meant to do so but did not take sufficient care, it is stuck with
the result it caused.
Arbitrator has no authority to modify, add to, alter or detract from the
provisions of the Agreement. The
request to reform the contract asks the Arbitrator to exceed her authority.
The Agreement is not ambiguous. As
a result, neither Article VI, Sec. 7, nor the Local 701 Addendum may be
rewritten. Parties are stuck with
the words they caused to be placed in the Agreement. Clear contract language cannot be ignored.
Contracts are reduced to writing and signed to avoid disputes of this
kind. Where the language is clear
and unambiguous, extrinsic evidence such as bargaining history and past
practice is irrelevant. Signature
on a contract evidences acceptance of it as a final integration of the
negotiated agreement. Extrinsic
evidence cannot be considered to ascertain the “real” meaning of the
language. Ignoring clear language
or legislating new language would usurp the parties’ roles.
is not unfair to enforce the CBA’s terms.
An arbitrator should not save a party from the language it freely
signed. Absent fraud, deceit, or
an unfair labor practice by the opposing party, an arbitrator may not re-write
a contract to correct a party’s mistake.
There was no such improper behavior here.
Had PHSC wished to exclude Local 701's members from a term in the main
CBA, it could have done so. Its
subjective intent is not at issue. The
Employer should be required to comply with the language or renegotiate it.
of the Agreement will not give Local 701 a windfall or permit it to gain
through arbitration provisions which it was unable to obtain through
bargaining. The main body of the
CBA is 19 pages long; Local 701's addendum is only two pages long.
The Employer handed the vast majority of the total agreement to Local
701; Local 701 did not “obtain at the table” the vast majority of the
CBA’s terms and conditions. This
has been the case for at least the past five contracts.
parties should be left to their contractual methods for revisiting contract
language, either by agreed-upon mid-term negotiations or in negotiations at
the end of this contract. Any
inequitable or unintended results of the ratified language must be overcome
through negotiations, not by an arbitrator’s award.
In direct negotiations with Local 701, the Employer denied shift differential. By agreeing to shift differential for the larger Local 107 unit, and failing to exclude it in the Local 701 addendum, the Employer bound itself to grant shift differential nonetheless. The parties’ two-step bargaining system has met their needs for many years. It may result in an unpleasant situation for PHSC in this situation; a possible result is that one or both parties may determine to change the bargaining process in the future. This is for the parties to resolve, not the Arbitrator. The Arbitrator should leave the parties with the language of their contract and require them to abide by those terms unless and until they renegotiate the Agreement. It may be difficult to leave parties with imperfect agreements, but the Arbitrator’s authority is limited.
parties’ stipulations do not address the issue of timeliness, and Local 701
does not believe this is an issue. However,
the grievance was timely filed for a continuing violation.
Each denial of the shift premium
violated the Agreement and justified the filing of a new grievance.
Local 701 seeks no back pay for its members prior to the filing of the
grievance. It could have filed a
grievance earlier based on the clear contract language, but it did not waive
prospective rights under the agreement by waiting.
POSITION OF EMPLOYER
grievance must be denied because it is untimely.
It was filed more than 30 calendar days after the event causing the
grievance. That event was either October 11, 1996, when engineers
received their retroactive wage payment, or late December 1996, when the Union
received the fully-executed Agreement. The
grievance was not filed until February 28, 1997. PHSC has repeatedly raised the timeliness argument during the
Union has had ample opportunity to claim the shift differential language
applied to its members. That
language has been in the Agreement since 1990, and employees it represents
have worked shift schedules ending after 6:30 p.m. in that period.
The Union did not argue the Employer should negotiate and pay a shift
differential. When the Employer
and Local 107 agreed on a $.50/hour shift differential in 1995, the Union did
not claim that differential should be paid to its members who worked shifts
ending after 6:30 p.m. Because it
failed to file a grievance within 30 days, its grievance is untimely.
Agreement should be reformed to exclude Article V, Section 9 because of a
mutual mistake. The mistake is
that Addendum C failed to state that the shift differential does not apply to
Local 701. Local 701's
negotiating agenda for 1996 included a request for shift differential, and
that proposal was discussed in negotiations.
The Employer refused that request, and the Union dropped that proposal.
This clearly demonstrates that neither party intended employees
represented by Local 701 to receive a shift differential.
When there is no dispute about the intended result of the written
language, the erroneous language will be reformed to reflect the parties’
need to reform the Agreement is supported by the fact that Robins noted some
changes in the Agreement of which he was not aware, and told the Employer’s
attorney he had to have the changes ratified before signing.
He made no mention of the shift differential provision, even though
this was a perfect opportunity to mention that the Union intended to ratify
the shift differential provision. The
Union cannot specifically ratify some changes and sit on its rights regarding
the Agreement took effect on July 1, 1996, employees did not grieve the
failure to pay the shift differential for nearly eight months.
The Union’s failure to object to nonpayment for eight months suggests
it did not believe a shift differential had been granted.
It is taking advantage of an inadvertent error in the written form of
the Agreement. The Employer did
not intend the shift differential language to apply to engineers represented
by the Union or employees represented by the Teamsters.
The Union has not offered testimony that Local 701 intended the shift
differential language to apply to its members.
Union requested a shift differential, and its proposal was rejected.
The parties continued bargaining and reached an agreement that did not
include payment of a shift differential.
It is not reasonable to require the Employer to pay a shift
differential to engineers merely because of an error in not excluding Article
V, Section 9 from the Agreement.
fact that the error in the written form of the Agreement involves more than a
few words does not prevent an arbitrator from reforming the contract.
Clerical errors can affect significant portions of an Agreement. The Employer is not claiming it is entitled to anything
different than agreed to in negotiations.
The Agreement should be reformed to exclude application of the shift
differential provisions to Local 701 members.
Neither party intended for it to apply.
applicable standards for contract interpretation are well established.
Where the language is clear and unambiguous, the Arbitrator must
give effect to the parties' intent. That
is so even where one party finds the result unexpected or harsh.
Extrinsic evidence cannot be used to prove an interpretation at odds
with clear contract language. It
can be used to demonstrate a latent ambiguity in the language, to prove that a
mutual mistake occurred, or to show that the parties later agreed to modify
their agreement. However, the
party asserting any of these as defenses to an alleged contract violation
bears the burden of demonstrating them. The
ultimate burden of persuasion, however, remains with the moving party--in this
case, the Union.
contract may be reformed only in the rare instance where either a mutual
mistake prevented the contract from expressing the parties’ real agreement,
or one party knew and took advantage of the other party’s unilateral error. Its rarity arises from the need for finality and
predictability. It would disrupt
the collective bargaining relationship if, after reaching a compromise on each
issue in dispute and reducing their agreement to writing, parties were subject
to the risk of having an arbitrator re-write their agreement.
However, an arbitrator ought not enforce the obvious intent of clear,
but patently erroneous, language if the record establishes the language is
contrary to the parties’ reasonable mutual expectations.
Extrinsic evidence of the parties’ intent, such as bargaining
history, is relevant to this issue even where the contract language itself is
clear and unambiguous. Extrinsic
evidence of the parties' intent is also relevant where the contract language
is unclear or ambiguous.
burden of proof regarding arbitrability is on the party arguing a grievance is
not arbitrable. Procedural
provisions are as enforceable as any other contract term.
However, the parties include grievance and arbitration procedures as a
means of resolving disputes. Doubts
regarding such procedural defenses are to be resolved against forfeiture.
time limits are meant to be kept. Parties
incorporate such provisions in contracts in recognition that stale cases are
hard-to-resolve cases. Here, the
parties agreed on the standard by which to judge whether cases were stale. They
agreed that employee grievances must be filed within 30 days after the
occurrence--in this case, the failure to pay shift differential compensation
claim that employees have been under-compensated asserts a continuing
violation which occurs anew each time allegedly improper compensation is paid.
Absent specific contract language requiring a contrary result, the
failure to file a grievance or protest a violation of a clear contract
provision of this nature does not bar insistence upon compliance with the
contractual requirements in the future; it does preclude a remedy for the
period before the filing of the grievance.
It is unnecessary in this case to determine the precise date of the
first occurrence of the alleged contract violation.
The alleged contract violation is of a continuing nature.
It is therefore concluded that the grievance was timely filed.
Agreement is clear and unambiguous. The
main body of the Agreement defines day shifts and swing shifts, and specifies
the shift differential pay for employees who work a swing shift.
Addendum C establishes a different shift schedule for engineers and
provides for overtime pay for hours worked before 5:00 a.m.
By defining both the work hours and the premium pay for engineers, the
parties overrode the comparable provisions in the main Agreement which apply
to Local 107 members.
effect of the “shift schedules” provision of Addendum C is demonstrated by
the parties’ treatment of other issues regarding hours of work and premium
pay. The 1996 changes to Article VI
of the main Agreement incorporated at least two new sections resulting from
mid-term bargaining with Local 107 during the prior contract--(1) the swing
shift differential provision at issue here, and (2) provisions implementing a
ten-hour day and regulating the compensation for such a schedule.
It is undisputed that the latter provisions were not ratified by Local
701 and did not become applicable to its members when they were negotiated with
Local 107 mid-term. Nonetheless, in
1996 negotiations, Local 701 took no steps to expressly exclude those provisions
by proposing a change in Addendum C. This
inaction is consistent with the conclusion that the “shift schedule”
provision of Addendum C overrides comparable provisions of Article VI.
the bargaining history is consistent with the clear contract language, in that
the Union dropped its proposal for shift differential.
The reformation the Employer urges is unnecessary given the clear
contract language consistent with the parties’ intent.
Accordingly, it is concluded that shift differential does not apply to
Local 701 members, but that the contract need not be reformed in order to
effectuate the parties’ real agreement.
Given the stipulated facts listed above and the timely filing of the
grievance, the language in the main body of the CBA concerning shift
differential does not apply to Local 701 members, as well as Local 107 members;
however, the contract need not be reformed as argued by PHSC.
December 19, 1997
LUELLA E. NELSON - Arbitrator[COMMENT1]
The following omits references to exhibits contained in the
parties’ stipulation of facts.
COMMENT: Make sure the first address on page 1 is the right address for these parties--Oregon address for Pacific Northwest clients, California address for Californians.
Date Text on the date case is actually completed, to replace the Date