Alaska Employment Law

Introduction

As the 2009 Term draws to a close, the United States Supreme Court issued an opinion on June 24, 2010, addressing circumstances when an arbitrator or court should determine whether a dispute is subject to arbitration.  The case is Granite Rock Company v. International Brotherhood of Teamsters.  This summary briefly reviews the case and discusses its significance.

The Case

Granite Rock executed a new collective bargaining agreement with a local branch of the Teamsters, but it was not yet ratified.  The CBA contained a broad arbitration provision.  It also included a no strike provision.  Notwithstanding the no strike provision, the local went on strike.  The international branch assisted the local.

Granite Rock filed suit for tortious interference against the international union and breach of the CBA against the local.  The district court dismissed the tortuous interference claim for failure to state a claim.  The tortious interference claim against the international union failed because the international union was not a party to the CBA had no rights or duties under the CBA, and was not recognized under the Labor Management Relations Act.

The contract claim (for violating the no strike clause) depended on when the CBA was ratified. The district court concluded that this issue was for the court to decide, and sent the issue to a jury that concluded the CBA was ratified before the strike commenced.  The district court sent the contract damages issue to an arbitrator.  The Unions appealed, arguing that the contract dispute should have been referred to an arbitrator.

The Ninth Circuit agreed and reversed.  The Ninth Circuit relied upon the CBA’s arbitration clause that provided it covered “all disputes arising under this agreement.”  The Ninth Circuit affirmed dismissal of the tortious interference claim.  District Judge Sedwick was on the panel, but he did not author the opinion (he is misidentified as “James Sedwick” in the clerk’s slip opinion).

The Opinion

In an opinion authored by Justice Thomas, the Court reversed 7-2.  The Court held that the dispute over the CBA’s ratification date was for the court and not the arbitrator to decide because it hinged upon a threshold issue that courts usually decide; specifically, whether an agreement even exists. On the tortious interference claim, the Court concluded that the lower courts did not err in refusing to recognize a cause of action for that claim.

Significance

In our annual Term preview we predicted:

In Granite Rock, I think the Court will reverse, or at least reverse on the second issue.  On the first issue, there is or should be a cause of action against an international branch of a union that displaces its local union and causes a strike that breaches a collective bargaining agreement.  On the second issue, I am not sure that the arbitrator would decide whether or not there was an agreement to begin with because the fundamental issue was whether or not there was even an agreement yet (whether the CBA was ratified). That is usually for the court to decide.