Kellogg Must Arbitrate Bonus Dispute With Part-Timers

CINCINNATI (CN) – The Sixth Circuit ruled Wednesday that cereal giant Kellogg must arbitrate a dispute over contract bonuses brought by a union representing “casual” employees who fill in for full-time workers.

A federal judge in Michigan initially denied the union’s motion to compel arbitration but reversed course upon reconsideration, and the Cincinnati-based federal appeals court affirmed that decision.

The lawsuit was filed in September 2016 by The Bakery, Confectionery, Tobacco Workers and Grain Millers International AFL-CIO union and its local chapter because The Kellogg Company refused to pay collective-bargaining agreement ratification bonuses to casual employees – defined as workers who “provide regular employees with relief from extended work schedules.”

Full-time employees were given $15,000 bonuses at four of Kellogg’s ready-to-eat cereal plants after the CBA was ratified in July 2015.

The agreement includes language that “the terms and conditions of the supplemental and master agreements will not apply to casual employees,” and then lists several fringe benefits that do apply to the casual employees.

The case was argued in the Sixth Circuit last month and Wednesday’s opinion, authored by U.S. Circuit Judge Karen Nelson Moore, says that although the language in the arbitration provisions of the CBA is broad, it compels arbitration for the casual employees’ dispute.

“Based on the language in [the agreement], if a settlement is not possible, then any type of dispute will proceed in arbitration. By including all-encompassing arbitration provisions, the presumption of arbitrability applies,” Judge Moore wrote in the 14-page ruling. (Emphasis in original.)

She also agreed with the union’s argument that paragraph eight of the CBA, which states that casual employees may be fired without “being subject to the grievance procedure,” would be unnecessary if casual employees were excluded entirely from the grievance process.

“Under paragraph 8, Kellogg can choose not to have a casual employee’s grievance regarding the discontinuation of employment go to arbitration,” she wrote. “Because this action does not concern the discontinuation of employment, the exclusion in paragraph 8 does not apply.”

Moore rejected Kellogg’s contention that an arbitrator lacks authority to remedy the issue because they are barred from modifying the CBA.

“Because the $15,000 ratification bonus is in the 2015 master agreement, if an arbitrator determines that casual employees are entitled to the bonus, [a supplemental agreement] does not stand in the way of an arbitrator having authority to grant relief,” the ruling states.

U.S. Circuit Judges Richard Allen Griffin and Eugene Siler concurred with Moore’s opinion.

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