Superior Court of Massachusetts, Suffolk, Business Litigation Session
MEMORANDUM OF DECISION AND ORDER ON DEFENDANTâS
MOTION TO DISMISS OR STAY THE ACTION PENDING ARBITRATION OR
PROCEEDINGS BEFORE THE DEPARTMENT OF LABOR RELATIONS
Mitchell H. Kaplan, Justice of the Superior Court
The
plaintiff, City of Somerville (the City), has a Collective
Bargaining Agreement (CBA) with the defendant, Somerville
Police Employees Association (SPEA). The CBA addresses, among
many other things, what constitutes overtime work and how
overtime pay is to be calculated. Eighty-two Somerville
police officers, including the president of SPEA, filed an
action in the United States District Court for the District
of Massachusetts, Docket No. 2017-CV-10979 (the Federal
Action) in which they assert that the manner in which the
City calculates and pays overtime wages to them violates the
Fair Labor Standards Act, 29 U.S.C. § § 201 et seq. (FLSA),
and, in consequence, the Massachusetts Wage Act, G.L.c. 149,
§ § 148 and 150 (the Wage Act) as well. In the Federal Action
the City has denied that it has violated either the FLSA or
the Wage Act. In its Second Amended Complaint (the Complaint)
filed in this case, the City alleges that the president of
SPEA and its legal counsel (not defense counsel in this
action) solicited Somerville police officers to be the
plaintiffs in the Federal Action at a union meeting, and SPEA
is financing that litigation. The City also alleges that it
calculates and pays overtime wages in accordance with the
relevant provisions of the CBA. It asserts that: (i) by
reason of its manner of underwriting the Federal Action, SPEA
has breached the covenant of good faith and fair dealing
implied under the CBA (Count I); and (ii) if the City is
found liable to the plaintiffs in the Federal Action, then
SPEA might have violated its duty of fair representation owed
those plaintiffs in negotiating the CBA and, if so, SPEA is a
joint tortfeasor with the City under G.L.c. 231B with respect
to those plaintiffs and liable to the city for its pro rata
share of the Cityâs liability to the plaintiffs for its
violation of the FLSA and the Wage Act (Count II).
The
case is now before the court on SPEAâs motion to dismiss the
Complaint or alternatively to stay it while the Cityâs claims
are arbitrated or the claims are submitted to the
Massachusetts Department of Labor Relations (DLR) for
resolution. For the reasons that follow, the motion to
dismiss is ALLOWED.
ADDITIONAL PROCEDURAL BACKGROUND
In the
Federal Action, the City filed a motion for leave to file a
third-party complaint asserting essentially the same claims
that it asserts this action. On April 16, 2018, the Federal
Court (Saylor, J.) denied that motion from the bench. He
reasoned that the claim for violation of the duty of fair
representation "doesnât seem to make sense ... under the
circumstances" and declined to allow it to proceed. He
then also declined to exercise supplemental jurisdiction over
the claim asserting breach of the implied covenant. In
response, the City filed the instant case.
DISCUSSION
Count
I: Breach of the Covenant of Good Faith and Fair Dealing
"Every
contract [including a collective bargaining agreement] in
Massachusetts is subject, to some extent, to an implied
covenant of good faith and fair dealing. See Anthonyâs
Pier Four, Inc. v. HBC Assocs., 411 Mass. 451, 473
(1991). This implied covenant may not be âinvoked to create
rights and duties not otherwise provided for in the existing
contractual relationship, â Uno Restaurants, Inc. v.
Boston Kenmore Realty Corp., 441 Mass. 376, 385 (2004),
but rather concerns the manner of performance. It has been
explained that the implied covenant exists so that the
objectives of the contract may be realized. See Crellin
Technologies, Inc. v. Equipmentlease Corp., 18 F.3d 1,
10 (1st Cir. 1994). The concept of good faith and fair
dealing in any one context is shaped by the nature of the
contractual relationship from which the implied covenant
derives. The scope of the covenant is only as broad as the
contract that governs the particular relationship."
Ayash v. Dana-Farber Cancer Institute, 443 Mass.
367, 385 (2005).
In
this case, the City takes up many pages of its Complaint
alleging facts concerning the manner in which the CBA was
negotiated. These allegations are not relevant to a claim for
breach of the covenant implied in the contract. Here the
concept of good faith and fair dealing addresses only
"the manner of performance" of the CBA not whether
any particular provision was or was not bargained about. As
best the court understands this claim, the City contends that
SPEA has acted to deprive it of one of the benefits of the
CBA, that is, what goes into the computation of overtime pay,
because the components and manner of that computation are
specifically called out in the CBA. See Complaint, par. 41.
SPEA has done this by helping to organize and finance the
Federal Action, in which some police officers assert that the
CBA, in this regard, does not meet the requirements of the
FLSA. The argument that when a union assists members who
believe that they have statutory rights to increased pay,
beyond what may be set out in a CBA, it violates the covenant
is certainly novel. However, the court need not consider
whether it states a claim on which relief may be granted to
decide the pending motion.
Article VII of the CBA is entitled: "Grievance and
Arbitration Procedure." Section 1 of Art. VII provides
that "a âgrievanceâ shall be defined as a complaint
between the [City] and [SPEA] and/or any employee(s)
involving an alleged violation of a specific provision of
this Agreement." Section 2, Step 4 of Art. VII addresses
arbitration. It explains how an arbitrator is to be selected.
It then states: "Notwithstanding anything to the
contrary, no dispute or controversy shall be subject for
arbitration unless it involved an alleged violation of a
specific provision of this Agreement ... The arbitrator shall
arrive at his decision solely upon the facts, evidence and
contentions as presented by the parties during the
arbitration proceedings."[1] The question presented by
this motion is whether the Cityâs claim for breach of the
covenant of good faith and fair dealing implied in the CBA
constitutes an alleged violation of a specific provision of
the CBA and therefore must be arbitrated.
The
first question to be resolved is whether the court or the
arbitrator should determine whether this dispute concerning
breach of the covenant is subject to arbitration. It is
axiomatic that the parties can only be required to arbitrate
a dispute if they have contractually committed to do so. See
Massachusetts Highway Depât v. Perini Corp., 444
Mass. 366, 374 (2005). The parties argue as to whether the
particular arbitration provision in the CBA is
"broad" or contains "words of
limitation." See Local Union No. 1710, International
Association of Fire Fighters, AFL-CIO v. City Of
Chicopee, 430 Mass. 417, 424 (1999) (Local
Union) (where the SJC discusses the difference). The
court finds that it is somewhat of hybrid. On the one hand it
does not require arbitration "of all disputes arising
out of, or relating to, this Contract." Id. at
423. On the other, it does require arbitration of a complaint
"involving an alleged violation of [any] specific
provision of [the CBA]," without any words constraining
which provision or limiting arbitration to certain subject
matters. Compare Id. at 424. The court finds the
language of the CBA sufficiently limited and unusual to
suggest the need for the court to decide if this dispute is
subject to arbitration. See Id. at 421
("whether an agreement creates a duty to arbitrate is
undeniably an issue for judicial determination unless the
parties clearly and unmistakably provide otherwise"
(internal citations and quotations omitted)). Furthermore,
the question whether a claim which references a specific CBA
provision, but is based on a violation of the implied
covenant, is covered by this arbitration provision seems
particularly appropriate for judicial consideration.
As
noted above, the covenant which is implied in every contract
does not "create rights and duties not otherwise
provided for in the existing contractual relationship,"
Uno Restaurants, Inc. v. Boston Kenmore Realty
Corp., 441 Mass. at 385. The right or duty implicated in
this case is the method for computing overtime pay. The
Cityâs contention is that by, in effect, sponsoring the
Federal Action, SPEA is acting in a manner that prevents the
City from realizing the benefits of that section of the CBA
that addresses overtime wages. The court finds that this is a
claim that in practical effect constitutes a dispute
involving the Cityâs rights under a specific contract
provision and whether they have been wrongfully impaired by
SPEAâs conduct. As such, the dispute between the City and
SPEA asserted in Count I "involve[s] an alleged
violation of a specific provision of the [CBA]," namely,
the overtime provision, and must be submitted to
arbitration.[2]
Count
II: Contribution from a Joint Tortfeasor
G.L.c.
231B, § 1(a) provides that "where two or more persons
become jointly liable in tort for the same injury to person
or property, there shall be a right of contribution among
them even though judgment has not been recovered against all
or any of them." G.L.c. 231B, 3(a) permits a joint
tortfeasor to enforce its right to contribution against the
other joint tortfeasor in a separate action. In Count II, the
City alleges that if it is liable to the plaintiffs in the
Federal Action for violation of FLSA and the Wage Act, SPEA
is a joint tortfeasor with the City as to that amount,
because "the prospect" arises for those
plaintiffs to assert that "SPEA acted arbitrarily, in
bad faith, recklessly and/or without regard for the rights of
the employees that it represented by negotiating and agreeing
to provisions in the CBA that the [Federal Action plaintiffs]
contend to be contrary to their statutory rights."
Complaint par. 80, emphasis added. In other words, if the
FSLA and Wage ...