                                                                                                                           Opinions of the United
2004 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


8-23-2004

Local 221 v. Quaker Mfg
Precedential or Non-Precedential: Non-Precedential

Docket No. 03-4230




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"Local 221 v. Quaker Mfg" (2004). 2004 Decisions. Paper 390.
http://digitalcommons.law.villanova.edu/thirdcircuit_2004/390


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                                                                 NOT PRECEDENTIAL

                       UNITED STATES COURT OF APPEALS
                            FOR THE THIRD CIRCUIT
                                 ___________

                                      No. 03-4230
                                      ___________

                 LOCAL 221-G BAKERY, CONFECTIONERY,
          TOBACCO WORKERS AND GRAIN MILLERS (BCTGM), AFL-CIO

                                            v.

                         QUAKER MANUFACTURING, LLC,

                                                       Appellant




                    On Appeal from the United States District Court
                        for the Middle District of Pennsylvania

                    District Court Judge: The Honorable Yvette Kane
                                 (D.C. No. 01-cv-02450)
                                      ___________


                                 Argued on M ay 5, 2004

    Before: SLOVITER, FUENTES, Circuit Judges, and POLLAK, District Judge.*

                            (Opinion Filed: August 23, 2004)




      *
         The Honorable Louis H. Pollak, Senior District Judge for the United States
District Court for the Eastern District of Pennsylvania, sitting by designation.
                                                  Paul J. Dellasega (argued)
                                                  Thomas, Thomas & Hafer, LLP
                                                  305 North Front Street
                                                  P.O. Box 999
                                                  Harrisburg, PA 17108-0999
                                                                Counsel for Appellant

                                                  Ira H. Weinstock
                                                  Jason M. Weinstock (Argued)
                                                  Ira H. Weinstock, P.C.
                                                  800 North Second Street
                                                  Harrisburg, PA 17102
                                                               Counsel for Appellee

                               ________________________

                                OPINION OF THE COURT
                               ________________________

FUENTES, Circuit Judge:

      Appellee, Local 221-G, Bakery, Confectionery, Tobacco Workers and Grain Millers,

AFL-CIO (“Union”), is a labor organization that represents employees of Appellant, Quaker

Manufacturing, LLC (“Quaker”). In November 1997, Quaker and Union entered into a

Collective Bargaining Agreement (“CBA”) in effect through October 2000. The CBA

outlines a three-step process for settling grievances. If this grievance procedure fails, the

CBA provides that the grievance may be submitted to arbitration.

       Quaker subsequently decided to close one of its food plants, located in

Shiremanstown, Pennsylvania. Quaker entered into a Closure Agreement (“CA”) with Union

representing employees at the plant. The CA superceded the CBA where the terms were

inconsistent. However, remaining CBA provisions were incorporated into the CA by

reference.


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       The CA provides a severance bonus to employees permanently terminated as a result

of the plant closure. In April 2001, Union filed a general grievance for employees and

former employees who were on workers’ compensation and disability, and who did not

receive the full severance pay and benefits pursuant to the CA. Union followed the grievance

procedure outlined in the CBA, but the parties failed to reach a settlement. In June 2001,

Union requested that Quaker submit the grievance to arbitration. However, Quaker refused

to arbitrate. As a result, Union filed suit in the District Court, claiming that Quaker’s refusal

to arbitrate the grievance violated the CBA and the CA. Union argued that the CBA

provided a right to arbitration, and that, under a plain reading of the CA, this arbitration

provision was incorporated into the CA by reference. The District Court granted Union’s

motion for summary judgment.

       Quaker filed timely appeal to this Court. We review a district court’s grant of

summary judgment de novo. On appeal, Quaker argues that the CBA was completely

superceded by the CA and, therefore, that there is no surviving obligation to arbitrate under

the CBA. Quaker also argues that the District Court interpreted the CA incorrectly by

ignoring a typographical error in a provision that specifically precludes arbitration of

grievances related to certain subject matter, including the payment of severance bonuses.

       We are not convinced by Quaker’s first argument. However, because there is an

obvious typographical error in a provision of the CA that specifically limits arbitration in

certain circumstances, we vacate the District Court’s grant of summary judgment and remand

this case for further proceedings on the interpretation of this provision of the CA.



                                               3
                                           I.

       Union argues that portions of the CBA, including § 3.04, which addresses arbitration,

survived because they were explicitly incorporated into the CA by reference. The CA

provides:

       [T]he November 3, 1997 to October 29, 2000 Collective Bargaining Agreement
       (“Current CBA”) between [Quaker] and Union is superceded by this Closure
       Agreement. The current CBA is amended as shown in Paragraph 28 below. The
       remaining provisions of the current CBA are incorporated by reference herein and are
       made a part of this Closure Agreement. To the extent that any remaining provision
       in the current Collective Bargaining Agreement conflicts with the terms of this
       Closure Agreement, the terms of the Closure Agreement will prevail.


App. at 18 (emphasis added). Paragraph 28 (entitled “Union Representation”) is unrelated

to arbitration or grievance procedures. Therefore, the CA, by its plain terms, incorporates

section 3.04 (entitled “Grievance Procedure”) of the CBA to the extent that this section does

not contradict any other CA provision.

       We reject Quaker’s first argument that no arbitration obligations exist under the CA.

The CA contains clear language indicating that the CBA was not completely superceded by

the CA. Interpreting the plain language of the CA, the CBA’s arbitration provision is

incorporated by reference, except where it specifically conflicts with the CA. Therefore, we

find that the arbitration provision in the CBA survives to the extent that it does not conflict

with provisions of the CA.

       However, as Quaker points out, the CA explicitly restricts arbitration in certain

instances. Under Paragraph 8 of the CA: “The parties agree to discuss in the Labor




                                                4
Management meeting, disputes regarding the application of [specified paragraphs] of this

Closure Agreement.” App. at 26. These specified paragraphs include:

4 (Date of Closure and Schedule of Reduction);
11 (Enhanced Severance);
14 (Employee Transition Services);
18 (Employees Currently on STD and LTD);
19 (Employees Currently off Work on Worker’s Compensation); and
22 (Orderly Operations and Shutdown - Code of Conduct).


Id. (emphasis added). The CA goes on to state: “Disputes regarding these paragraphs are not

subject to the grievance arbitration procedure or NLRB charges.” Id. Thus, the CA restricts

arbitration proceedings, but only when they concern the subject matter of these specified

paragraphs. The CBA grievance procedure requiring arbitration continues to apply to all

other subject matter under the CA.

       In the instant case, Union’s grievance is based on severance payments owed pursuant

to Paragraph 12 of the CA. Paragraph 12 states: “An enhanced severance bonus will be

payable to Employees who are permanently terminated as a result of the closure of the

Shiremanstown Plant and who meet all of the requirements as outlined in this agreement.”

App. at 27. The paragraph then outlines a formula for enhanced severance bonuses.

       Union argues that arbitration concerning such severance payments is not restricted

under the CA because Paragraph 12 is not listed as containing subject matter precluded from

arbitration. However, Quaker claims that a typographical error exists in the provision of the

CA limiting arbitration. Although Paragraph 12, pertaining to the enhanced severance bonus

formula, is not included among the topics for which the CA restricts arbitration, Quaker



                                             5
argues that, due to a typographical error, Paragraph 11 was mistakenly listed among those

provisions for which arbitration is precluded. Quaker contends that the number “11” rather

than the number “12” mistakenly precedes the title “Enhanced Severance” in the provision

of the CA limiting arbitration.     Quaker argues that, at the very least, the issue of a

typographical error in a contract presents a dispute of material fact sufficient to warrant

denial of summary judgment.

       Examining the CA, there does appear to be an inconsistency in the provision limiting

arbitration of certain subject matter.    This provision refers to the paragraph entitled

“Enhanced Severance” as Paragraph “11.” Elsewhere in the text of the CA, however,

Paragraph 11 is entitled “Past Service Accrual,” and this paragraph discusses the date to

which past service accrual is adjusted. App. at 27. Paragraph 11 does not, in fact, pertain

to enhanced severance benefits. Actually, Paragraph 12 is entitled “Enhanced Severance

Bonus,” and describes the severance bonus payable to employees permanently terminated as

a result of the Shiremanstown plant closure. Id. The District Court based its grant of

Union’s motion for summary judgment on the fact that Paragraph 12 was not included among

the provisions precluded from arbitration under the CA. However, we agree with Quaker

that listing Paragraph “11” among the restricted provisions rather than Paragraph “12” was

a typographical error because Paragraph 12 actually addresses enhanced severance bonuses.




       Union does not specifically contest this assertion, and describes the apparent mismatch

of the paragraph number and its title as a “discrepancy” in the CA. Union Br. at 20. We



                                              6
believe that the mismatch resulted from a typographical error and that, regardless, an

inconsistency exists in the CA that affects the interpretation of a provision central to the

dispute in this case. We, therefore, find that the existence of the typographical error raises

a genuine issue of material fact sufficient to defeat a motion for summary judgment.

       Accordingly, we vacate the District Court’s grant of summary judgment to Union, and

remand this case for further proceedings on whether the CA limits arbitration of disputes

concerning payment of severance bonuses.




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