Disputing Blog by Karl Bayer, Victoria VanBuren, and Holly Hayes
Texas’ Fourth District in San Antonio has held that an arbitration provision included in a collective bargaining agreement (“CBA”) requires a local firefighter’s union to engage in arbitration over a health insurance benefits dispute. In The City of San Antonio v. International Association of Fire Fighters, Local 624, No. 04-CV-00783-CV (October 2, 2013), the International Association of Fire Fighters, Local 624 (the “Union”) filed a lawsuit against the City of San Antonio on behalf of community firefighters. According to the Union, the City unilaterally changed the health benefits provided to local firefighters without following the appropriate collective bargaining procedures in violation of local statutes. The City responded to the Union’s complaint by filing a motion to abate the proceedings in favor of arbitration. After a trial court refused to grant the City’s motion to abate, San Antonio filed both an interlocutory appeal and a petition for a writ of mandamus with The Fourth District.
First, the appeals court stated the only issue in the case was “what venue is appropriate for resolution of the Union’s claim: judicial review and remedy as advocated by the Union, or arbitration as advocated by the City.” After that, the court examined whether the Federal Arbitration Act or Texas common law governed the parties’ CBA. Because the Union did not dispute that the FAA applied to the agreement, the Fourth District held that an interlocutory appeal was the appropriate judicial mechanism in the case and denied the City of San Antonio’s petition for a writ of mandamus.
Next, the appeals court addressed “whether the Union’s claim falls within the scope of the CBA’s arbitration agreement.” According to the court,
The Union seeks a judicial declaration that the City has, without authority, changed health-care benefit eligibility without bargaining collectively. A court cannot make such a declaration without first interpreting the current CBA provisions regarding health-care benefits and then determining whether the information or action required by the City alters or changes the CBA’s current provisions. Therefore, we conclude this claim is within the scope of the arbitration agreement.
The appeals court continued,
Although the Union couched its suit as a declaratory judgment action based on a statute, the thrust of its complaint arises under the very terms of the CBA, and thus its pleading as a declaratory judgment suit does not control. See Rapid Settlements, Ltd. v. SSC Settlements, LLC, 251 S.W.3d 129, 144 (Tex. App.—Tyler 2008, no pet.) (holding that the trial court erred in granting a declaratory judgment that “usurped [the] … right to a meaningful arbitration” when the court necessarily had to interpret the underlying contract to determine the parties’ rights).
Because the Union’s lawsuit involved “the interpretation or application of the CBA,” which was was “within the scope of the CBA’s arbitration agreement,” Texas’ Fourth District reversed the trial court’s order and abated the underlying lawsuit pending arbitration.
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