City of Somerville v. Somerville Police Employees Association

          MEMORANDUM OF DECISION AND ORDER ON DEFENDANT’S 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 City’s liability to the plaintiffs for its violation of the FLSA and the Wage Act (Count II).

          The case is now before the court on SPEA’s motion to dismiss the Complaint or alternatively to stay it while the City’s 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 "doesn’t 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 Anthony’s Pier Four, Inc. v. HBC Assocs., 411 Mass. 451, 473 (1991). This implied covenant may not be ‘invoked to create rights and duties not otherwise provided for in the existing contractual relationship, ’ 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 ‘grievance’ 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 City’s 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 Dep’t 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 City’s 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 City’s rights under a specific contract provision and whether they have been wrongfully impaired by SPEA’s 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 ...