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                THE SUPREME COURT OF NEW HAMPSHIRE

                          ___________________________


Public Employee Labor Relations Board
No. 2013-497


           APPEAL OF HILLSBOROUGH COUNTY NURSING HOME
           (New Hampshire Public Employee Labor Relations Board)

                          Submitted: June 26, 2014
                     Opinion Issued: September 12, 2014

      Carolyn M. Kirby, of Goffstown, by brief, for Hillsborough County
Nursing Home.


      Law Offices of Shawn J. Sullivan, PLLC, of Concord (Shawn J. Sullivan
on the brief), for AFSCME, Local 2715.

      LYNN, J. The Hillsborough County Nursing Home (County) appeals the
decision of the New Hampshire Public Employee Labor Relations Board
(PELRB), which found that the County committed an unfair labor practice by
refusing to participate in the arbitration of employment grievances filed by
AFSCME, Local 2715 (Union), the union representing certain nursing home
employees. We affirm.

       The following facts were found by the PELRB. The County and the Union
are parties to a collective bargaining agreement (CBA) that expired June 30,
2013. In June 2011, the County notified certain nursing home employees,
including Patricia Perkins, Diana Maurice, and Joan Gendron, that their
positions would be eliminated in August 2011 due to budget reductions. After
the employees exercised contractual “bumping rights,” the County informed
them of their new positions. Perkins and Maurice were moved into full-time
positions in a different department with different work schedules, and Gendron
was moved from a full-time position to a part-time position. The County also
informed a fourth employee, Pamela Bennett, that her work schedule would
change. All four employees filed grievances, asserting that the changes violated
the CBA.

      Article 16.1 of the CBA provides:

      [A] grievance is defined as a complaint or claim by an employee or
      group of employees in the bargaining unit or the Union specifying
      the names of the bargaining unit employees involved, the date(s) of
      the alleged offense(s) and the specific Contract provision(s) involved
      which arises under and during the terms of this Agreement.

Article 16.1 also contains a grievance procedure consisting of four steps: Step
1 – discuss the grievance with immediate supervisor; Step 2 – present written
grievance to the Administrator; Step 3 – file written grievance with the
Commissioners; and Step 4 – submit written request to the PELRB to appoint
an arbitrator to resolve the grievance. Article 16.4 of the CBA provides: “If the
grievance is not reported and/or processed within [the applicable time limits
specified in the CBA], the matter shall be deemed waived and no further action
will be taken with respect to such grievance unless both parties mutually agree
to an extension of said time limits.”

      The parties failed to resolve the grievances, and in January 2012, the
Union sent Request for Appointment of Arbitrator forms to the County. The
County refused to arbitrate the grievances, alleging that the Union had failed to
timely file them and follow the grievance procedure and that the grievances
were therefore waived under Articles 16.1 and 16.4 of the CBA. Thereafter,
both the Union and the County filed unfair labor practice complaints with the
PELRB. After an evidentiary hearing, the PELRB found that the County
committed an unfair labor practice when it refused to participate in arbitration
because the CBA provides for final and binding arbitration. It further found
that the County’s timeliness and failure to follow grievance procedure defenses
raised issues of procedural arbitrability that must be decided by an arbitrator.
Accordingly, the PELRB found that the County committed an unfair labor
practice and dismissed the County’s unfair labor practice complaint.

       On appeal, the County argues that the PELRB erred by: (1) refusing to
rule on the threshold issue of the procedural arbitrability of the grievances; and
(2) finding that the County committed an unfair labor practice. We address
these arguments in turn.




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      RSA chapter 541 governs our review of PELRB decisions. See RSA 273-
A:14 (2010); RSA 541:2 (2007). Under RSA 541:13 (2007), we will not set aside
the PELRB’s order except for errors of law, unless we are satisfied, by a clear
preponderance of the evidence, that it is unjust or unreasonable. The PELRB’s
findings of fact are presumed prima facie lawful and reasonable. RSA
541:13. In reviewing the PELRB’s findings, our task is not to determine
whether we would have found differently or to reweigh the evidence, but,
rather, to determine whether the findings are supported by competent evidence
in the record. See Appeal of Dean Foods, 158 N.H. 467, 474 (2009). We review
the PELRB’s rulings on issues of law de novo. See Appeal of Portsmouth
Regional Hosp., 148 N.H. 55, 57 (2002).

      To address the issues before us, we must begin with a discussion of the
distinction between “substantive arbitrability” and “procedural arbitrability.”
“Substantive arbitrability refers to whether a dispute involves a subject matter
that the parties have contractually agreed to submit to arbitration.” Local 285
v. Nonotuck Resource Associates, Inc., 64 F.3d 735, 739 (1st Cir. 1995).
“Procedural arbitrability, on the other hand, concerns such issues as . . .
whether grievance procedures or some part of them apply to a particular
dispute, whether such procedures have been followed or excused, or whether
the unexcused failure to follow them avoids the duty to arbitrate.” Id.
(quotation omitted). The difference between substantive and procedural
arbitrability has legal significance. In Southwestern New Hampshire
Transportation Co., Inc. v. Durham, 102 N.H. 169 (1959), we held that, while
the scope of an arbitration clause in a collective bargaining agreement presents
a question of law for the court (or, now, the PELRB) to decide, see
Southwestern Trans. Co., 102 N.H. at 173, “preliminary and procedural
matters relating to the processing of grievances are questions for the arbitrator
to decide,” id. at 178; see also Howsam v. Dean Witter Reynolds, Inc. 537 U.S.
79, 84 (2002) (stating that “presumption is that the arbitrator should decide
allegations of waiver, delay, or a like defense to arbitrability” (quotation and
brackets omitted)); John Wiley & Sons v. Livingston, 376 U.S. 543, 557 (1964)
(holding that questions concerning adherence to grievance procedure in a CBA
should be decided by arbitrator); Bechtel Const. Inc. v. Laborers’ Int. U. of N.
America, 812 F.2d 750, 753 (1st Cir. 1987) (reasoning that alleged failure to
properly adhere to each step of a grievance procedure presents “a classic
question of ‘procedural arbitrability’ for the arbitrator to decide”).

      The County argues that the Union waived the underlying grievances
because it did not follow the CBA’s grievance procedure. Relying on our
decision in Southwestern, the PELRB decided that whether the Union properly
adhered to the CBA’s grievance procedure was an issue of procedural
arbitrability and should be decided by the arbitrator. The County does not
dispute the PELRB’s conclusion that these challenges involve matters of
procedural arbitrability. The County argues instead that, our holding in
Southwestern notwithstanding, RSA 273-A:6, I (2010) grants the PELRB


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statutory authority to decide issues of procedural arbitrability where, as here,
the Union’s demand for arbitration violates the CBA and, therefore, constitutes
an unfair labor practice. Noting that “RSA 273-A:5’s provision for unfair labor
practice charges against a union did not exist in 1959 when this Court opined
that procedural arbitrability is a question for an arbitrator to decide,” the
County contends that the Public Employee Labor Relations Act (PELRA) should
be interpreted as effectively overruling our holding in Southwestern. It is true
that the PELRA, RSA chapter 273-A, was not enacted until 1975, see Laws
1975, 490:2, :6, and that it granted the PELRB primary jurisdiction over all
violations of RSA 273-A:5 (2010). See RSA 273-A:6, I. However, nothing in the
text or purpose of the PELRA is at odds with our decision in Southwestern with
respect to procedural arbitrability issues. Therefore, we conclude that the
enactment of the PELRA has no effect on the continuing validity of our holding
in that case that issues of procedural arbitrability are to be decided by the
arbitrator.

       In support of its argument that the PELRB should decide the issue of
procedural arbitrability, the County also cites Appeal of Westmoreland School
Board, 132 N.H. 103, 105 (1989), for the premise that “unless the parties
clearly state otherwise, the question of whether the parties agreed to arbitrate
is to be decided by the court, not the arbitrator.” (Quotation omitted.) The
County’s reliance on Westmoreland is misplaced because at issue in that case
was substantive arbitrability, not procedural arbitrability. In Westmoreland, a
non-tenured teacher and the teachers association filed a grievance alleging that
the teacher’s non-renewal was a violation of a collective bargaining agreement
provision that prohibited disciplinary discharges without just cause. Appeal of
Westmoreland School Bd., 132 N.H. at 107. The collective bargaining
agreement contained a grievance procedure, which included binding
arbitration, for claims based upon alleged violations of the agreement. Id. at
106-07. The dispute between the parties was whether the provision of the
agreement prohibiting disciplinary discharges without just cause also applied
to contract non-renewals. Id. at 107. In order to guide the PELRB in
determining whether a dispute such as the one at issue was arbitrable under
the agreement’s arbitration clause, we adopted the four principles outlined by
the United States Supreme Court in AT&T Technologies, Inc. v.
Communications Workers of America, 475 U.S. 643, 647-50 (1986):

      (1) arbitration is a matter of contract and a party cannot be
      required to submit to arbitration any dispute which he has not
      agreed so to submit . . . ; (2) unless the parties clearly state
      otherwise, the question of whether the parties agreed to arbitrate is
      to be decided by the court, not the arbitrator; (3) a court should
      not rule on the merits of the parties[’] underlying claims when
      deciding whether they agreed to arbitrate; and (4) under the
      “positive assurance” standard, when a CBA contains an arbitration
      clause, a presumption of arbitrability exists, and in the absence of


                                       4
      any express provision excluding a particular grievance from
      arbitration, we think only the most forceful evidence of a purpose
      to exclude the claim from arbitration can prevail.

Appeal of Westmoreland School Bd., 132 N.H. at 105-06 (quotations and
brackets omitted). When we adopted these principles, we stated that “the first
two provisions comport with existing law in our state.” Id. at 106. This
statement makes clear that the first two Westmoreland principles are
consistent with our holding in Southwestern that “the scope of an arbitration
clause in a collective bargaining agreement presents a question of law for the
court.” Southwestern Trans. Co., 102 N.H. at 173. In Westmoreland, we
merely outlined the principles to be used to determine the scope of an
arbitration clause in a collective bargaining agreement. Therefore, the
Westmoreland principles dictate only how a court should address issues of
substantive arbitrability. See Appeal of Westmoreland School Bd., 132 N.H. at
106. They do not speak to the issue of the procedural arbitrability of a dispute.

      The County cites other cases that have applied the Westmoreland
principles, but these cases also involved issues of substantive arbitrability. See
Appeal of Police Comm’n of City of Rochester, 149 N.H. 528, 534 (2003); Appeal
of Town of Durham, 149 N.H. 486, 487-88 (2003); Appeal of AFSCME Local
3657, 141 N.H. 291, 293-96 (1996). The United States Supreme Court has
similarly held that the principles it outlined in AT&T apply to questions of
substantive arbitrability and that “procedural questions which grow out of the
dispute and bear on its final disposition are presumptively not for the judge,
but for an arbitrator, to decide.” Howsam, 537 U.S. at 84 (quotation omitted).

       Finally, the County argues that “[t]he PELRB’s decision in Mountain View
Nursing Home v. AFSCME Council 93, Local 3685 (PELRB Decision No. 2006-
089) is directly on point and dispositive in this case.” The County is correct
that the facts in Mountain View mirror those of the present case and that, in
Mountain View, a PELRB hearings officer did rule on issues of procedural
arbitrability. See Mountain View Nursing Home v. AFSCME Council 93, Local
3685, PELRB Decision No. 2006-089, at 2-5 (PELRB June 1, 2006). However,
as the PELRB observed, Mountain View was a hearings officer decision that
was not subject to review by the PELRB. See N.H. Admin. Rules, Pub 205.01(c)
(absent a request for review by the PELRB, a hearing officer’s decision becomes
final after thirty days). We agree with the PELRB that the decision in this case
“represents the proper application of the law to the facts of this case.”

      In sum, we conclude that because a procedural challenge to arbitrability
is a matter to be determined by the arbitrator in the first instance, the PELRB
did not err in refusing to make a threshold determination as to the procedural
arbitrability of the grievances in this case.




                                        5
      The County next argues that it did not breach the CBA because it was
enforcing its contractual rights by refusing to arbitrate grievances that, it
contends, the Union waived by failing to adhere to the grievance procedure. It
is undisputed that a wrongful refusal to arbitrate a legitimate demand
constitutes a breach of a collective bargaining agreement and an unfair labor
practice. See School Dist. #42 v. Murray, 128 N.H. 417, 422 (1986); see also
RSA 273-A:5, I(h).

       Here, the County does not argue that the grievances at issue were not
substantively arbitrable. Rather, its position is that the Union is procedurally
defaulted because it failed to follow the CBA’s grievance procedure. However,
as explained above, procedural arbitrability issues are to be decided by the
arbitrator; the assertion of such issues affords no basis for refusing to
participate in arbitration. Accordingly, we hold that the PELRB did not err in
determining that the County committed an unfair labor practice by refusing to
arbitrate the grievances.

                                                  Affirmed.

      DALIANIS, C.J., and HICKS, CONBOY, and BASSETT, JJ., concurred.




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