In a 2-1 decision handed down on August 12, the Sixth Circuit reversed a district court’s ruling that an arbitrator should decide whether 93 labor grievances against AK Steel Corporation must be resolved through arbitration.
What made this a difficult case was that there were two contracts involved: (1) a “2007 Agreement” that included a grievance and arbitration procedure and provided that questions of substantive arbitrability (i.e., whether particular disputes are subject to that procedure) must be arbitrated; and (2) a “Transition Agreement” that provided, with limited exceptions, that disputes arising under it fall outside the scope of the 2007 Agreement’s grievance and arbitration procedure. The Transition Agreement was incorporated into the 2007 Agreement but stated that it took precedence over that agreement during a six-month Transition Period.
The Sixth Circuit held that the arbitrability of the 93 grievances, which AK Steel argued arose under the Transition Agreement, must be determined by a court because the Transition Agreement (unlike the 2007 Agreement) did not clearly and unmistakably commit that determination to arbitration. The opinion was delivered by Judge Boyce Martin and joined by District Judge Jack Zouhary.
In dissent, Judge Helene White argued that the 2007 Agreement’s provision requiring arbitration of arbitrability applied to the Transition Agreement as well. In her view, the majority opinion improperly assumed that the 93 grievances arose under the Transition Agreement although the union argued that they arose under the 2007 Agreement. “Who decides who decides” depended on which agreement the grievances were governed by, and, in light of the dispute on that issue, Judge White concluded that arbitration of arbitrability was most in keeping with the parties’ contractual intent.
This case illustrates how in complex factual scenarios, particularly those involving multiple agreements, the settled principles of arbitration law can come into conflict. The majority applied the rule that arbitrability is a question for the court unless it is clearly and unmistakably committed to arbitration. Judge White, on the other hand, applied the rule that where a contract contains an arbitration clause, a dispute is presumptively arbitrable unless it can be said with positive assurance that the clause is not susceptible of an interpretation that would cover that dispute. Issues of “who decides who decides” are at the forefront of the Supreme Court’s recent arbitration jurisprudence.
