Court Has No Jurisdiction To Interpret Labor Contract

Written on 09/02/2022
Will Aitchison

Alison Schaber works for Ramsey County in Minnesota and is the pres­ident of the Ramsey County Deputy Federation. Under the Federation’s collective bargaining agreement, the County is required to provide a matching contribution to the employee’s deferred compensation account of up to $25 per month per contributing employee.

The County did not send the employer match portion of Schaber’s deferred compensation funds to her deferred compensation account. Instead, it remitted the matching funds directly to Schaber through her paycheck.

In May 2020, Schaber filed a griev­ance alleging that the County violated the CBA because the County failed to remit the matching funds directly to her deferred compensation account. When the County denied the grievance, Schaber filed a class action complaint against the County, alleging that the County breached its fiduciary duties and breached the unilateral contract created by its online summary of employment policies by failing to remit its employ­er match contribution to employees’ deferred compensation accounts. The County moved to dismiss Schaber’s claims, arguing that the Court lacked jurisdiction because Schaber’s claims were subject to the CBA’s arbitration agreement.

The Minnesota Court of Appeals agreed with the County. The Court reasoned that “although Schaber’s com­plaint does not explicitly reference the CBA, it refers to, and relies on, the CBA’s ‘matching’ requirement. In other words, the CBA, not the County’s policies, is the controlling contract that answers Schaber’s questions of whether, and to what extent, an employer will match an employee’s contribution.

“As her complaint makes clear, Schaber’s claims involve a dispute or disagreement as to the interpretation or application of the CBA’s deferred compensation match. Accordingly, her claims fall within the scope of the CBA’s grievance procedure, and she must go through that process, including arbitration, before the district court can exercise jurisdiction.”

Schaber v. Ramsey County, 2022 WL 1616625 (Minn. App. 2022).

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