A federal court of appeals ordered Kroger limited partnership to arbitrate whether UFCW Local 1995’s contract applied to a new “warehouse” that Kroger opened and calls a “local fulfillment center.” The fulfillment center fills orders placed by Walgreen pharmacies, not Kroger stores.
The contract’s grievance procedure states that UFCW Local 1995 and Kroger would arbitrate “any grievance, dispute or complaint over the interpretation or application of” the contract. UFCW Local 1995 argued that the recognition clause required Kroger to recognize UFCW Local 1995 because the fulfillment center was a “store” within the meaning of the recognition clause.
Because UFCW Local 1995’s grievance raised a question about the “interpretation” or “application” of the recognition clause, the appeals court ruled that there was a presumption that Kroger was required to arbitrate the grievance. The court explained that the presumption of arbitrability requires courts to order parties to arbitrate, unless the arbitration clause is not susceptible to an interpretation that it covers the dispute. The court emphasized that the presumption is particularly applicable when the arbitration clause is broad, like that of UFCW Local 1995.
The appeals court rejected Kroger’s arguments that the arbitration clause could not be interpreted as covering this dispute because the “supply chain division” of the Kroger Company operated the fulfillment center and employed the employees who work there, not Kroger limited partnership. The court also rejected Kroger’s argument that recognition clause expressly excluded the fulfillment center because the clause only applies to workers in retail stores, not warehouses, and Kroger characterized the fulfillment center as a warehouse.
The court explained that the fulfillment center could be Kroger’s most recent version of a store because the center receives the product from Kroger’s supply chain, stocks that product on its shelves and then sells the product to Kroger’s customers.
The court concluded that none of Kroger’s arguments clearly and unambiguously excluded UFCW Local 1995’s grievance from arbitration. The court observed that Kroger’s arguments were more about the merits of the grievance, not whether Kroger was obligated to arbitrate the merits. For this reason, Kroger should have directed these arguments to the arbitrator, not the court.
The U.S. Supreme Court recently denied Kroger’s attempt to reverse the appeals court’s decision.
The case is UFCW Local 1995 v. Kroger, 51 F.4th 197 (6th Cir. 2022), affirming 2021 WL 4502862 (M.D. Tenn. 2021).
How this case can help you:
Locals should assert that the recognition – or new stores – clause of their contracts requires retail companies to recognize them as the representative of any store or facility that performs functions different than a warehouse or distribution center, for example, any facility that receives product, and then stocks or sells that product. And locals can use this case to argue that the contract requires the company to arbitrate if the company refuses to do so.
Locals can also use this case to rebut arguments that the contract does not require companies to arbitrate because another corporate entity owns, controls or operates the store or facility, or employs the workers there.
If you have any questions regarding this case, contact George Wiszynski at gwiszynski@ufcw.org.
