Guild wins in court ... again; Thomson Reuters must arbitrate
05/20/2010
For the third time, Thomson Reuters lost its legal bid to avoid arbitrating disputes with the Guild as a three-judge panel of the U.S. Court of Appeals in Manhattan on Thursday rejected the company’s request for an extended court order to block two pending cases from going to arbitration.
The court’s ruling, which was issued without comment, means two Guild disputes with management – one over its refusal since last Oct. 31 to deduct union dues and the other over a disciplinary matter – can be processed by the American Arbitration Association (AAA), as spelled out in our contract. A third dispute over another disciplinary matter was not at issue in this case and also may proceed to arbitration.
“The Guild’s right to have an independent third party enforce our contract is a cornerstone of our ability to effectively represent our members,” said New York Guild President Bill O’Meara. “We’re pleased that the court affirmed that right.”
The Guild is already taking steps to proceed with the three arbitrations.
MANAGEMENT’S STRING OF DEFEATS
The appeals court ruling, the latest in a string of defeats of management’s high-priced gambit to prevent the Guild from enforcing the contract, leaves the company’s legal team with few options for pursuing its current strategy: it can ask for a review by the full roster of judges on U.S. Court of Appeals for the Second Circuit, or it can go to the U.S. Supreme Court.
Before going to the appeals court, Thomson Reuters’ had sought unsuccessfully to block the three arbitration cases, starting last December at the AAA, which our contract designates as the entity that handles all contractual disputes, and later in U.S. District Court in Manhattan, where Judge Sidney Stein ruled against the company in all three cases before him.
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With its ruling, the three-judge appeals panel, which included the court’s chief judge, Dennis Jacobs, lifted its April 8 order that temporarily halted arbitrations, pending oral arguments by the Guild and the company, which were heard on May 11. A similar temporary order was issued by Stein in January for about six weeks before he ruled against the company and lifted his order on March 2.
EVERGREEN CLAUSE AT ISSUE
The appeals court has yet to rule on the merits of the company’s central argument – which was rejected by the lower court – that our contract’s evergreen clause (Art. XXII, Sec. 2(e)) does not obligate it to arbitrate disputes after the formal expiration date of Feb. 28, 2009. A hearing on the merits is unlikely before the fall and a ruling is unlikely before next year.
The evergreen clause reads: “The terms and conditions of this Agreement shall remain in effect during such negotiations as required by applicable law.”
One thing the company needed to do to win the order it sought was to convince the appeals court that it was likely to prevail when the court decides the merits of the case. But during oral arguments, management attorney Ana Salper of Epstein Becker & Green came under sharp questioning from Jacobs over her claim that the phrase “as required by applicable law” renders the rest of the evergreen clause essentially meaningless.
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Jacobs asked Salper who drafted the language (she said management did) and why the phrase to which she tried to attach great meaning was even necessary. “Whatever is required by applicable law is required by applicable law,” he told her.
ARBITRATIONS AND NUCLEAR WASTE
Salper also claimed the company would suffer “irreparable harm” – the court’s other requirement for issuing the order management wanted – if it were forced to arbitrate disputes with the Guild. To bolster its claim of “irreparable harm,” the company’s court filings cited a legal precedent in which a court had blocked the storage of nuclear waste until it could decide the issue on its merits.
Guild attorney Hanan Kolko of Meyer Suozzi English & Klein was quick to point out the very obvious factual distinctions between nuclear waste and arbitration. “Your Honor, that (nuclear waste storage case) is what irreparable harm is; this is not irreparable harm,” he told the court.
Kolko also pointed out that management had committed a potentially fatal error of failing to follow proper court procedure to request its arbitration-blocking order, an issue also seized upon by Judge Ralph Winter, one of the three judges on the panel.
In an entirely separate dispute, unrelated to the court battle, the Guild has filed five charges against Thomson Reuters over its declaration of impasse and imposition of work rules. The Guild has asked the U.S. National Labor Relations Board to issue a complaint, similar to an indictment, on each charge and is hoping for a decision shortly.