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Arbitration is strictly a matter of consent, and thus is a way to resolve those disputes--but only those disputes--that the parties have agreed to submit to arbitration. Applying this principle, courts should order arbitration of a dispute only where the court is satisfied that neither the formation of the parties' arbitration agreement nor (absent a valid provision specifically committing such disputes to an arbitrator) its enforceability or applicability to the dispute is in issue. Where a party contests either or both matters, the court must resolve the disagreement.
In June 2004, respondent local union (Local), supported by its parent international (IBT), initiated a strike against petitioner Granite Rock, the employer of some of Local's members, following the expiration of the parties' collective-bargaining agreement (CBA) and an impasse in their negotiations. On July 2, the parties agreed to a new CBA containing no-strike and arbitration clauses, but could not reach a separate back-to-work agreement holding local and international union members harmless for any strike-related damages Granite Rock incurred. IBT instructed Local to continue striking until Granite Rock approved such a hold-harmless agreement, but the company refused to do so, informing Local that continued strike activity would violate the new CBA's no-strike clause. IBT and Local responded by announcing a companywide strike involving numerous facilities and workers, including members of other IBT locals. Granite Rock sued IBT and Local, invoking federal jurisdiction under § 301(a) of the Labor Management Relations Act, 1947 (LMRA), seeking strike-related damages for the unions' alleged breach of contract, and asking for an injunction against the ongoing strike because the hold-harmless dispute was an arbitrable grievance under the new CBA. The unions contended that the ratification date of the CBA was subject to arbitration under the arbitration clause of the CBA. Granite’s tort claim was dismissed. The U.S. Court of Appeals for the Ninth Circuit required arbitration of the existence of the CBA and affirmed the dismissal of the tort claim. Certiorari was granted.
The U.S. Supreme Court held that the dispute over the CBA's ratification date was a matter for the district court, not an arbitrator, to resolve. The presumption in favor of arbitration did not override the principle that arbitration was only required when the parties agreed to submit the specific dispute at issue to arbitration, and judicial resolution was thus required concerning when the CBA was formed and whether its arbitration clause covered the matters which the unions sought to arbitrate. Further, the issue of when the CBA was formed could not be said to arise under the CBA as required to warrant arbitration. However, there was no cognizable tort claim based on the parent union's alleged interference with the CBA, but other remedies were available for the alleged misconduct.