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Teamsters Local Union No. 89 v. the Kroger Co.

February 1, 2013



This matter is before the court on two motions for summary judgment. The Plaintiff, Teamsters Local Union No. 89 ("the Union"), filed a motion for summary judgment against the Defendant, The Kroger Co. ("Kroger"), in which the Union seeks to compel Kroger to arbitrate its former employee's grievance pursuant to Kroger's collective bargaining agreement ("CBA") with the Union (DN 60). Kroger's motion for summary judgment contends that the CBA is inapplicable to the grievance at issue, and as such Kroger is not obligated to arbitrate (DN 57).

The Union's complaint asserts that by refusing to arbitrate, Kroger: (1) violated and breached Kroger's CBA with the Union; (2) violated the Labor Management Relations Act of 1947, 29 U.S.C. § 185 because Kroger is allegedly a joint employer of the grievant; and (3) violated the Federal Arbitration Act, 9 U.S.C. § 4 (DN 1). The Union seeks an order that Kroger is obligated to arbitrate, either in bilateral or tripartite arbitration, and that attorneys' fees are warranted (DN 1).

For the reasons set forth herein, the court will grant Kroger's motion for summary judgment as a matter of law and deny the Union's motion for summary judgment.


The following facts are undisputed (DNs 57 and 60): Kroger owns a warehouse and distribution center, the Kroger Distribution Center ("KDC"). Prior to 2007, Kroger also employed warehouse and transportation employees at the KDC. Regarding these employees, Kroger and the Union were parties to two agreements, (1) a national CBA-the Kroger Master Agreement ("KMA")-which included a grievance and arbitration clause; and (2) a supplemental CBA, which addressed local union issues.

(1) In October 2006, Kroger announced its intention to "changeover" operations at the KDC and contract with outside vendors for transportation and warehouse services.

(2) In November 2006, Kroger and the Union bargained over Kroger's decision to use outside vendors at the KDC. The parties' negotiated a "Letter of Understanding" ("LOU") to ensure that KDC employees would retain bargaining unit protections while the Union negotiated agreements with the vendors.*fn1 In the LOU the parties agreed that until the Union reached a CBA with each vendor, Kroger would process pending employee grievances under the KMA.

(3) In February 2007, the Union successfully negotiated CBAs with the vendors-Transervice Logistics Inc. ("Transervice") for transportation operations, and Zenith Logistics ("Zenith") for warehouse operations.

(4) In April 2007, after the vendors negotiated CBAs with the Union, Kroger and the Union amended the LOU and agreed (1) that Kroger would settle a specific list of pending employee grievances under the KMA; (2) that the Union would withdraw a specific list of pending grievances from being arbitrated under the KMA; (3) that the LOU would expire in September 2011; and (4) that "Kroger will meet with [the Union] and either resolve any outstanding grievances resulting from [KDC employees'] employment with Kroger or permit the grievances to proceed through the Kroger Master Grievance Process." (DN 57). The LOU was silent regarding future employee grievances against Kroger. However, Kroger specifically rejected two Union proposals: (a) Kroger would not allow all former Kroger employees at the KDC to remain covered by Kroger's KMA; and (b) Kroger would not agree to be a joint employer to all former Kroger employees at the KDC (DNs 57 and 60).*fn2

(5) In February 2007, Kroger instituted the changeover and transferred KDC operations to Transervice and Zenith. Pursuant to Kroger's negotiations with the Union, the vendors hired most of Kroger's former employees at the KDC.

(6) In April 2007-after the Union's ongoing CBA negotiations with the vendors failed and the KDC employees went on a short strike-the Union finalized CBAs with Transervice and Zenith. After those CBAs were finalized, Kroger's former employees were covered by the Union's CBAs with Transervice or Zenith. This case arose regarding a former Kroger employee, Frank Herdt, who worked as a driver at the KDC prior to the 2007 changeover (DNs 57 and 60). Transervice hired Herdt in 2007 and he became a bargaining unit employee under Transervice's CBA with the Union, which included an arbitration provision just as the KMA did with Kroger (DN 57).

In late 2009, Herdt was arrested for stealing from Kroger (DN 60). In response, Kroger's risk management department alerted Transervice, Herdt's employer, that Herdt was banned from Kroger property. He was no longer permitted to make deliveries to any Kroger facilities and denied further access to Kroger property, including the KDC (DNs 57 and 60).

In July 2010, the Union filed a grievance with Kroger on Herdt's behalf (DN 60). The grievance acknowledges that Herdt was not a Kroger employee, but rather a Transervice employee (DN 1). However, the Union identifies Kroger's KMA as the basis for the grievance and alleges that Kroger violated KMA Article 10, which provides that Kroger will not terminate an employee without just cause (DN 1).*fn3

The grievance states that "Kroger disciplined and caused the suspension of the grievant, Frankie Herdt, without just cause and without first being given a hearing, when it barred him from its property, continues to bar him from its property, and thereby prevents him from performing bargaining unit work." (DN 60). In other words, the Union alleges that Kroger effectively terminated Herdt by banning him from Kroger property, even though Herdt was not directly employed by Kroger.

Herdt's criminal charges were later dismissed. Pursuant to Transervice's CBA with the Union, Transervice reinstated Herdt and he was awarded backpay and benefits (DN 60).

When Kroger banned Herdt from its property both Transervice and the Union contacted Kroger on Herdt's behalf (1) Transervice requested via letter that Kroger rescind the ban and allow Herdt onto its property, which Kroger denied (DN 57); and (2) the Union filed a grievance with Kroger, which Kroger refused to arbitrate (DN 60).

In response to Transervice, Kroger denied the request to allow Herdt onto Kroger's property in August and in September of 2010 (DN 57). Kroger noted that Herdt was Transervice's employee and the "decision as to what employment action to take with respect to Herdt belongs solely to Transervice." Thus, Kroger denied responsibility for paying Herdt's backpay and benefits, explaining that "[t]o suggest Kroger was responsible for any costs associated with the fact that your employee was stealing from Kroger, your customer, is entirely inappropriate." (DN 57) (emphasis in original).

In response to the Union's grievance, Kroger's Vice President of Labor Relations stated via letter in ...

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