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Litigation

Split U.S. High Court: Collective Bargaining Dispute Belongs In Court

WASHINGTON, D.C. - (Mealey's) A dispute over the ratification date of a collective bargaining agreement (CBA) is for a court to decide, not an arbitrator, a split U.S. Supreme Court ruled June 24 (Granite Rock Co. v. International Brotherhood of Teamsters, et al., No. 08-1214,U.S. Sup.).

"This formation date question requires judicial resolution here because it relates to [International Brotherhood of Teamsters (IBT), Local 287's] arbitration demand in such a way that the District Court was required to decide the CBA's ratification date in order to determine whether the parties consented to arbitrate the matters covered by the demand.  The parties agree that the CBA's arbitration clause pertains only to disputes that 'arise under' the agreement.  Accordingly, to hold the parties' ratification-date dispute arbitrable, the Court of Appeals had to decide whether that dispute could be characterized as 'arising under' the CBA," Justice Clarence Thomas wrote for the majority.

However, on remand, the high court unanimously agreed that the employer, Granite Rock Co., may not bring a federal tort claim under Section 301(a) of the Labor Management Relations Act against IBT for allegedly interfering with the CBA.

Chief Justice John G. Roberts Jr. and Justices Antonin Scalia, Anthony M. Kennedy, Ruth Bader Ginsburg, Stephen G. Breyer and Samuel Anthony Alito Jr. joined in the majority opinion.  Justices John Paul Stevens and Sonia Sotomayor joined in part.

Justice Sotomayor filed a partially dissenting opinion holding that the dispute over the ratification date belongs before an arbitrator.  Justice Stevens joined in the opinion.

Granite Rock has facilities throughout northern California, employs 800 people and maintains 15 separate labor contracts with more than five unions.  Granite Rock's contract with Local 287 expired in May 2004.  In the midst of a strike on July 2, 2004, Granite Rock and Local 287 reached a tentative agreement for a successor CBA.  They agreed that the agreement would not be binding until it was ratified by bargaining unit employees.

Th e bargaining unit voted to accept the agreement, which contained a multifaceted no-strike provision and a provision for arbitration.  Three days later, an IBT agent instructed Granite Rock employees not to return to work the following day to pressure Granite Rock into accepting a hold-harmless agreement.  The next day, a companywide strike was called by IBT and Local 287.

Granite Rock immediately sued Local 287 in the U.S. District Court for the Northern District of California, seeking to enjoin the strike.  Without proof that ratification of the agreement occurred, the injunction was denied and the strike continued.  The strike ended in mid-September without Granite Rock's agreement to hold the IBT harmless.  Granite Rock revived its lawsuit after a bargaining unit member came forward with a sworn statement that ratification of the agreement occurred July 2.  Granite Rock also added claims against IBT for causing the strike.

The District Court dismissed the IBT and ordered a jury trial to determine whether the agreement came into being upon being ratified July 2.  The jury ruled in favor of Granite Rock.  The District Court then determined that the matter of whether the strike violated the no-strike clause was arbitrable.

Local 287 appealed the jury verdict to the Ninth Circuit U.S. Court of Appeals, which reversed the District Court ruling that it had jurisdiction.  However, the Ninth Circuit affirmed dismissal of Granite Rock's Section 301(a) claim against IBT.  Granite Rock then appealed to the U.S. Supreme Court.

[Editor's Note:  Full coverage will be in the July issue of Mealey's Litigation Report: Employment Law.  In the meantime, the opinion is available at www.mealeysonline.com or by calling the Customer Support Department at 1-800-833-9844.  Document #73-100716-011Z.  For all of your legal news needs, please visit www.lexisnexis.com/mealeys.]

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For more information, call editor Bajeerah LaCava at 610-205-1102, or e-mail her at bajeerah.lacava@lexisnexis.com.