Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_05-cv-02718/USCOURTS-cand-3_05-cv-02718-0/pdf.json

Parties Involved:
Prison Health Services, Inc.
Respondent
Seiu 250 Health Care Workers Union Local 250, AFL-CIO
Petitioner

Document Text:

United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

SEIU 250 HEALTH CARE WORKERS

UNION LOCAL 250, AFL-CIO,

Petitioner,

v

PRISONER HEALTH SERVICES, INC,

Respondent. /

No C-05-2718 VRW

ORDER

On June 6, 2005, SEIU 250 Health Care Workers Union Local

250, AFL-CIO (“SEIU”) filed a petition to compel arbitration in

Alameda County superior court against Prison Health Services, Inc

(“PHS”). SEIU and PHS are parties to a collective bargaining

agreement, and the dispute-at-issue arises from PHS’s decision to

discipline, and subsequently to terminate, Susan Battersby

(“Battersby”), a PHS employee who was a union member. Petition

(Doc #1, Ex 1). On July 1, 2005, PHS removed this action to

federal court, asserting that the court has federal question

jurisdiction over SEIU’s petition because it arises under section

Case 3:05-cv-02718-VRW Document 23 Filed 12/07/05 Page 1 of 10
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

2

301(a) of the Labor Management Relations Act of 1947 (“LMRA”). Not

of Rem (Doc #1) at 3.

Three motions are currently pending before the court. On

July 12, 2005, PHS moved to dismiss SEIU’s petition under FRCP

12(b)(6) for failure to state a claim upon which relief can be

granted. Doc ##5,6. On September 27, 2005, SEIU filed a motion to

compel arbitration. Doc ##12, 13. In the same filing, SEIU also

requested attorneys’ fees under Cal Labor Code § 1128 and Cal Code

Civ Pro § 128.5 on the ground that PHS’s arguments are essentially

frivolous. Doc #13.

The court held a hearing on these motions on December 1,

2005. For the reasons stated below, the court DENIES PHS’s motion

to dismiss, GRANTS SEIU’s motion to compel arbitration and DENIES

SEIU’s motion for attorneys’ fees. After briefly describing the

underlying facts of this case, the court examines the merits of

these motions in turn.

I

The following facts are drawn from SEIU’s petition to

compel arbitration and its accompanying documents. SEIU is a

California labor organization that negotiated and executed a

collective bargaining agreement (“CBA”) on behalf of PHS’s

employees. Petition at 1-2. The CBA includes many provisions that

pertain to the present dispute. Article 9 of the CBA prohibits PHS

from discriminating or harassing employees. CBA (Petition, Ex A)

at 12-13. In particular, article 9.1 prohibits discriminating

against an employee based on certain protected classifications, and

article 9.2 prohibits discriminating because of an employee’s union

activity. Id. Article 15 specifies the procedures that PHS must

Case 3:05-cv-02718-VRW Document 23 Filed 12/07/05 Page 2 of 10
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

3

follow when conducting performance evaluations. Id at 30-31.

The key to the present dispute appears to reside in

article 16, which governs the discipline and discharge of

employees. Id at 31-33. In particular, article 16.1 provides:

Non-probationary employees shall only be disciplined or

discharged for just cause. To maintain their employment,

each employee must retain his or her own security

clearance from the Alameda County Sheriff’s office. If

the County Sheriff’s Office directs the Employer to

replace an employee for loss of security clearance or for

any other reason, it will be deemed just cause for

termination. The Employer will have no further

obligations under this Agreement to the employee

regardless of the reason for the loss of the security

clearance or the reason given by the County Sheriff’s

Office. Discipline or discharge of non-probationary

employees shall be subject to the grievance and

arbitration procedure.

Id at 31-32 (emphasis supplied).

Article 17 provides for a grievance and arbitration

procedure. Id at 33-35. Article 17.1 defines a grievance, which

may be oral or in writing, “as any dispute or complaint arising

between the parties hereto under or out of this Agreement or the

interpretation, application, performance, termination, or any

alleged breach thereof.” Id at 33. Moreover, article 17.1 also

provides that “[g]rievances shall be processed promptly, and all

parties thereto shall make a reasonable effort to adjust or settle

such disputes by the following [three] steps,” which are set forth

in Articles 17.2-17.4. Id at 33-34. If the grievance is not

satisfactorily resolved by the third step, article 17.5 permits the

SEIU to refer the grievance to an arbitrator, who is empowered to

make a final and binding decision. Id at 34-35.

//

//

Case 3:05-cv-02718-VRW Document 23 Filed 12/07/05 Page 3 of 10
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

4

II

It is well established that parties may agree to

arbitrate disputes rather than having them heard in court. In

1925, Congress enacted the Federal Arbitration Act (FAA) to

“reverse the longstanding judicial hostility to arbitration

agreements,” to “place [such] agreements on the same footing as

other contracts” and to “manifest a liberal federal policy favoring

arbitration agreements.” EEOC v Waffle House, Inc, 534 US 279,

288-89 (2002) (internal quotation marks omitted). Thus, the FAA

“embodies a clear federal policy in favor of arbitration,” and

“‘[a]ny doubts concerning the scope of arbitrable issues should be

resolved in favor of arbitration.’” Simula, Inc v Autoliv, Inc,

175 F3d 716, 719 (9th Cir 1999) (quoting Moses H Cone Mem’l

Hospital v Mercury Constr Corp, 460 US 1, 24-25 (1983)). Moreover,

“[a]n order to arbitrate [a] particular grievance should not be

denied unless it may be said with positive assurance that the

arbitration clause is not susceptible of an interpretation that

covers the asserted dispute.” United Steelworkers v Warrior & Gulf

Navigation Co, 363 US 574, 582-83 (1960).

The Supreme Court has held that an arbitrator should

generally decide procedural and substantive issues pertaining to an

arbitration agreement unless the issue involves a question of

arbitrability, which the court defines as “[t]he question whether

the parties have submitted a particular dispute to arbitration.” 

Howsam v Dean Witter Reynolds, 537 US 79, 83 (2002). “The standard

for demonstrating arbitrability is not high,” Simula, 175 F3d at

719, and the district court retains no discretion to hear suits

that are subject to arbitration. Id. When faced with requests

Case 3:05-cv-02718-VRW Document 23 Filed 12/07/05 Page 4 of 10
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

5

regarding arbitration, the court’s sole duties are to determine

whether an arbitration agreement exists and to enforce rigorously

the terms of that agreement. Id at 720.

III

On December 7, 2004, SEIU filed a grievance on behalf of

Battersby for PHS’s alleged violation of articles 9, 15 and 16 of

the CBA. Petition, Ex B at 1. In particular, SEIU alleged that

PHS discriminated against Battersby and harassed her because of her

union activity as a chief shop steward and “based on protected

classifications as set forth in Article 9.1 [of the CBA].” Id at

2-3. PHS subsequently fired Battersby, and SEIU alleges that it

continued its grievance to include whether PHS had just cause to

terminate her. Petition at 2.

Since about April 2005, SEIU alleges that it has been

willing to refer this dispute to arbitration in accordance with

article 17, but PHS has refused to do so. Id. SEIU also asserts

that it has complied with the CBA at all relevant times. Id.

A

PHS provides two arguments why SEIU’s petition to compel

arbitration should be dismissed. First, PHS notes that article

16.1, which only applies to non-probationary employees, provides

that “[t]he Employer will have no further obligations under this

Agreement to the employee regardless of the reason for the loss of

the security clearance or the reason given by the County Sheriff’s

Office.” Doc #6 at 4-6; CBA at 31. PHS alleges that Battersby was

terminated because she lost her security clearance, which was

required for her employment with PHS at Santa Rica Jail in Dublin,

Case 3:05-cv-02718-VRW Document 23 Filed 12/07/05 Page 5 of 10
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

6

California. Doc #5 at 2. Accordingly, PHS argues that article

16.1 “could not be more explicit” in excluding the present dispute

from the arbitration requirement. Doc #6 at 5.

The court disagrees. PHS tries to characterize the

issues surrounding Battersby’s termination as issues of

arbitrability that the court should decide under AT&T Technologies,

Inc v Communications Workers of America, 475 US 643, 649 (1986). 

But PHS ignores that AT&T and other precedent require that courts

strictly construe exclusionary provisions in arbitration

agreements. Id at 650; Teamsters Local 315 v Union Oil Co, 856 F2d

1307, 1309 (9th Cir 1988). In this case, article 16.1 does not

indicate that the parties intended to exclude the present dispute

from arbitration. Rather, the last sentence of this provision,

italicized in the above quotation, mandates disputes like the

present one to be arbitrated.

Moreover, at the hearing on this motion, PHS’s counsel

conceded that not every dispute related to an employee who failed

to maintain a security clearance would involve termination. Such

disputes could involve benefits, vacation pay or a host of other

matters. Plainly, these disputes would not fall outside some

exception to the grievance process created by the security

clearance loss provision of article 16.1. That being the case, and

the CBA being otherwise silent on arbitrability of a dispute

concerning termination due to loss of security clearance, it seems

plain that the present dispute does not fall outside the grievance

and arbitration process.

Barely more persuasively, PHS next argues that SEIU’s

petition should be dismissed because SEIU never filed a grievance

Case 3:05-cv-02718-VRW Document 23 Filed 12/07/05 Page 6 of 10
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

7

related to Battersby’s termination —— in particular, PHS argues

that the December 7, 2004, written grievance is irrelevant because

it predates by three months Battersby’s loss of security clearance

and termination. Doc #6 at 6. PHS begins by asserting that the

issue whether SEIU filed an arbitrable grievance is one for the

court, not an arbitrator, to decide. Id at 7. PHS relies on

United Industrial Workers v Kroger Co, 900 F2d 944 (6th Cir 1990),

in which the Sixth Circuit held that “[p]rocedural questions of

whether steps of a grievance procedure have been followed are

generally left to the arbitrator[; s]ubstantive questions of

whether an arbitrable grievance has been filed at all, however, are

for the courts to decide.” Id at 947 (citation omitted); see also

Retail, Wholesale & Dep't Store Union, Local 390 v Kroger Co, 927

F2d 275, 279 (6th Cir 1991) (same).

The Ninth Circuit apparently has not yet dealt with this

issue. But even if the court were to adopt the Kroger approach,

the court’s review would be necessarily limited to whether, in some

general sense, SEIU presented a grievance. Courts lack the power

to decide whether a party has precisely complied with grievance

procedures set forth in an arbitration agreement. John Wiley &

Sons, Inc v Livingston, 376 US 543, 555-59 (1964). Accordingly, an

arbitrator, and not the court, must decide whether SEIU’s purported

grievance satisfies the specific procedural requirements set forth

in article 17 of the CBA.

In any event, SEIU has shown that it filed an arbitrable

grievance. For the purposes of the present 12(b)(6) motion, the

court must accept as true SEIU’s allegation in its petition that

“there has been and continues to be a grievance as it applies to

Case 3:05-cv-02718-VRW Document 23 Filed 12/07/05 Page 7 of 10
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

8

whether or not the Employer had just cause to discharge Susan

Battersby * * *.” Petition at 2.

Moreover, because the procedure for filing grievances

under article 17 appears flexible, the court cannot conclude that

SEIU’s allegation that it grieved Battersby’s termination is

unreasonable, or that there are no set of facts that would entitle

SEIU to relief. The court notes that because article 17.2 allows

for oral grievances, it does not appear necessary for SEIU to have

filed a formalistic written grievance to prevail on its claim when

it is clear the parties were already in an ongoing dispute

involving Battersby’s employment. An oral grievance could be

sufficient and there does not seem to be any basis for PHS to claim

that it did not understand the dispute that SEIU was pursuing on

behalf of Battersby. Furthermore, the court notes that article

17.1 only requires that the parties “make a reasonable effort to

adjust or settle” disputes by the three-step process set forth in

articles 17.2-17.4. Hence, even if SEIU never filed a grievance

encompassing Battersby’s termination, SEIU might be able to show

that it made a “reasonable effort” to satisfy article 17's

requirements. Accordingly, the court finds that PHS’s claim that

SEIU never filed a grievance challenging Battersby’s termination is

not a suitable ground to dismiss SEIU’s petition. The court

therefore DENIES PHS’s motion to dismiss SEIU’s petition.

B

Neither party in this case claims that the CBA or its

arbitration provisions are invalid. Accordingly, the court’s first

duty is to determine whether the present dispute is arbitrable ——

that is, whether the dispute falls within the scope of the

Case 3:05-cv-02718-VRW Document 23 Filed 12/07/05 Page 8 of 10
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

9

arbitration agreement. Howsam, 537 US at 83. In arguing that the

present dispute is not arbitrable, PHS only offers the alreadydiscredited argument that article 16.1 excludes the present dispute

from arbitration —— in fact, the CBA does not appear to have any

provisions that prevent this dispute from being arbitrated. And

this dispute is clearly arbitrable based on the broad language of

articles 16.1 and 17.1, the SEIU’s power under article 17.5 to

request arbitration and the strong federal policy favoring

arbitration. Accordingly, the court concludes that the present

dispute is covered by the parties’ arbitration agreement.

PHS also opposes the motion to compel arbitration by

arguing that SEIU never filed an arbitrable grievance concerning

Battersby’s termination. Doc #15 at 3-5. For the reasons stated

earlier, the court rejects this argument. Moreover, in an email

sent on April 16, 2005, from SEIU representative Dana Simon

(“Simon”) to PHS vice-president Deborah Schutz, Simon indicates

that the SEIU’s December 7, 2004, grievance should be expanded to

encompass Battersby’s termination. Doc #17-2; Doc #16 at 2. These

documents together comprise a new grievance that plainly relates to

Battersby’s termination. Accordingly, the court GRANTS SEIU’s

motion to compel arbitration.

C

Finally, SEIU seeks attorneys’ fees under Cal Labor Code

§ 1128 and Cal Code Civ Pro § 128.5, alleging that PHS has not

raised any substantial or credible issues to justify PHS’s refusal

to submit to arbitration. Doc #13 at 6-7. As a preliminary

matter, SEIU improperly seeks attorneys’ fees under a California

statutory provision —— this case was removed on the basis of

Case 3:05-cv-02718-VRW Document 23 Filed 12/07/05 Page 9 of 10
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

10

federal question jurisdiction, because SEIU’s petition arises under

section 301(a) of the LMRA. Not of Rem. Accordingly, federal law

applies to determine whether to award attorneys’ fees.

The Ninth Circuit has held that “the award of fees is

appropriate when a party frivolously or in bad faith refuses to

submit a dispute to arbitration * * *.” United Food & Commercial

Workers Union v Alpha Beta Co, 736 F2d 1371, 1383 (9th Cir 1984);

see also Westinghouse Hanford Co v Hanford Atomic Metal Trades

Council, 940 F2d 513, 523 (9th Cir 1991). Here, SEIU has not

provided any evidence that PHS acted in bad faith. Moreover,

although PHS made a frivolous argument when asserting that article

16.1 excludes the present dispute from arbitration, PHS’s other

arguments were not completely without merit. Hence, the court

DENIES SEIU’s motion for attorneys’ fees.

IV

In sum, the court DENIES PHS’s motion to dismiss (Doc

#5), GRANTS SEIU’s motion to compel arbitration (Doc #12) and

DENIES SEIU’s motion for attorneys’ fees (Doc #13). The clerk is

DIRECTED to close the file and TERMINATE all pending motions.

IT IS SO ORDERED.

 

VAUGHN R WALKER

United States District Chief Judge

Case 3:05-cv-02718-VRW Document 23 Filed 12/07/05 Page 10 of 10