Ramirez-Lebron v. International Shipping Agency, Inc.

This appeal arises out of a labor dispute over seniority rights between two groups of employees of Defendant International Shipping Agency (ISA). The two groups consist of three and seven employees respectively (G3 and G7). The ten total employees, all employed as “checkers,” are members of the Unión de Empleados de Muelles de Puerto Rico (AFL-CIO), Local 1901 I.L.A. (Union). G7 filed a verified complaint pursuant to § 301 of the Labor Management Relations Act (LMRA), 29 U.S.C. § 185, alleging that ISA and G3 fraudulently procured, in breach of the collective bargaining agreement (CBA), an arbitration award granting seniority rights to G3. Neither the Union nor G7 was a party to the agreement between ISA and G3 that presaged the award. As alleged, the Union, prior to the award, notified both ISA and the arbitrator that the Union objected to any resolution of the matter absent its participation as exclusive bargaining representative for all ten member employees. G7 asked the district court to (1) vacate the arbitration award in favor of G3, (2) order an arbitration hearing at which the Union and G7 would be provided a meaningful opportunity to be heard, and (3) render damages against ISA. The district court dismissed G7′s complaint. According to the court, G7 lacked standing to request a vacatur of the arbitration award and failed to exhaust its contractual remedies under the CBA’s grievance procedure.

We exercise jurisdiction under 28 U.S.C. § 1291. Our review of a Rule 12(b) dismissal is de novo. See McCloskey v. Mueller, 446 F.3d 262, 265-66 (1st Cir. 2006). Accepting all well pleaded factual allegations of the complaint as true, we conclude the district court erroneously dismissed G7′s complaint. Those factual allegations are sufficient under § 301 to establish G7′s standing and sustain G7′s claim that ISA, by entering into a side agreement with G3 designed to procure an arbitration award, breached the CBA and effectively repudiated its arbitration provisions, thereby estopping ISA from posing the defense of exhaustion. See Ashcroft v. Iqbal, 129 S.Ct. 1937, 1950 (2009) (“[O]nly a complaint that states a plausible claim for relief survives a motion to dismiss.”).