Union’s Rights To Arbitration Not Waived When Individual Members File Lawsuit In Court

City of Akron police officers are represented by Lodge No. 7 of the Fraternal Order of Police (FOP). Members of the FOP include both current and retired officers in the City of Akron. These members have primary health insurance through the Ohio Police And Fire Pension Fund (OP&F) and secondary coverage through the City of Akron.

The City has always required retirees to enroll in OP&F as a condition of participating in the City’s secondary plan. Traditionally, members of the FOP were not required to pay for their health insurance. When OP&F changed this policy and began requiring the co-payments of premiums, a group of retirees filed a lawsuit against the City alleging the City of Akron ordinances entitled them to payment of their insurance premiums and that retirees were not required to enroll in OP&F. The Ohio Court of Appeals eventually ruled in the City’s favor in the lawsuit.

At about the same time, the FOP brought a grievance against the City for violating the collective bargaining agreement by increasing premiums, requiring retirees to maintain OP&F as their primary coverage, and ceasing to provide secondary coverage to certain retirees. The City refused to arbitrate the grievance citing the favorable result it received in the lawsuit filed by the retirees.
As the City argued, the prior lawsuit was “res judicata” of the FOP’s arbitration request. The doctrine of res judicata provides that “a valid, final judgment rendered upon the merits bars all subsequent actions based upon any claim arising out of the transaction or occurrence that was the subject matter of the previous action.”

The Ohio Court of Appeals rejected the City’s arguments, and compelled the City to proceed to arbitration. The Court pointed out that the retirees and the FOP lacked “privity” because they did not have a “mutuality of interest.” As the Court put it, “while both seek health care benefits, one seeks primary coverage while the other seeks secondary coverage. These interests actually conflict. If the FOP obtains the secondary coverage it seeks, there will be less money for primary coverage and vice versa. Each suit poses a threat to the viability of the other fund. Consequently, the relief sought by the FOP – secondary insurance benefits – directly conflicts with the relief sought by the retirees – primary insurance benefits. As these parties have no mutuality of interest, they are not in privity with one another.”

The City also argued that the FOP waived its right to arbitrate the dispute by in some fashion participating in the retirees’ lawsuit. Once again, the Court disagreed, concluding “the FOP has not evidenced its disinclination to resort to arbitration, nor has the FOP substantially invoked a judicial process. To the contrary, the record reflects that the FOP has followed the appropriate steps to pursue arbitration. First, the FOP attempted to resolve its disputes through the grievance procedure outlined in the contract. When the FOP failed to resolve the dispute through the grievance process, it notified the City that it intended to seek arbitration of the dispute. As a result, we find no evidence that the FOP has acted inconsistently with its right to arbitrate the dispute.”

Fraternal Order of Police, Akron Lodge No. 7 v. City of Akron, 2007 WL 675630 (Ohio App. 2007).

This article appears in the May 2007 issue