Kellogg Tries to Dodge Arbitration in Sixth Circuit

CINCINNATI (CN) – The Kellogg Company asked a Sixth Circuit panel Wednesday to overturn a lower court decision that requires the cereal giant to arbitrate a dispute with “casual” employees of the company.

The Bakery, Confectionery, Tobacco Workers and Grain Millers International AFL-CIO union, along with its local chapter, filed suit against Kellogg when the company refused to pay casual employees – defined as workers who “provide regular employees with relief from extended work schedules” – ratification bonuses related to the parties’ collective-bargaining agreement.

Kellogg paid the $15,000 bonuses to full-time employees at its four ready-to-eat cereal plants after the CBA was ratified on July 31, 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.

U.S. District Judge Gordon J. Quist in Michigan initially denied the union’s motion to compel arbitration, agreeing with Kellogg that the prohibitive language was “clear and unambiguous.”

“Although the provision goes on to describe the limited fringe benefits that casual employees receive,” Quist wrote, “it does not qualify the unambiguous language in the prior sentence stating that the ‘terms and conditions’ – including the grievance/arbitration provisions – of the master and supplemental agreements do not apply to casual employees.”

However, Judge Quist reversed course after the union filed a motion for reconsideration and cited additional language in the CBA.

Specifically, the union claimed paragraph eight, 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 procedure.

Quist agreed, vacated his previous opinion, and granted the union’s motion to compel arbitration, which prompted the appeal by Kellogg to the Sixth Circuit.

Attorney Craig Lubben argued Wednesday on behalf of the cereal and snack giant, and said that the first paragraph of the agreement bars causal employees from participating in the grievance process afforded to full-time employees.

U.S. Circuit Judge Karen Nelson Moore immediately asked him about paragraph eight.

Lubben said that paragraph is part of a “common drafting approach” that does not create an ambiguity with the previous paragraphs.

He added that paragraph eight of the agreement “is a recognition of what is different in labor law … [and is] clearly not inconsistent with the first part.”

Attorney Devki Virk argued on behalf of the union, disagreeing with Lubben’s analysis.

“The silence in paragraph one,” she said, “cannot overcome [the rest of the agreement.]”

Virk reminded the panel that the Sixth Circuit has consistently ruled that unless a right is specifically excluded in a CBA, arbitration should be used to settle the dispute. She called the language in the Kellogg agreements “as broad as broad can be.”

U.S. Circuit Judges Richard Allen Griffin and Eugene Siler Jr. also sat on the panel.

No timetable has been set for the court’s decision.

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