Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_06-cv-02539/USCOURTS-caed-2_06-cv-02539-1/pdf.json

Parties Involved:
County of Plumas
Defendant
International Union of Operating Engineers
Plaintiff

Document Text:

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

1

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

INTERNATIONAL UNION OF OPERATING )

ENGINEERS, )

) 2:06-cv-2539-GEB-EFB

Petitioner, )

)

v. ) ORDER

)

COUNTY OF PLUMAS, )

)

Respondent. )

)

The International Union of Operating Engineers (“Petitioner”

or “Union”) moves to compel binding arbitration arguing that the

County of Plumas (“Respondent” or “County”) is required to arbitrate

Petitioner’s challenge to the County’s employee layoff decision

because this decision is a pretext to terminate undesirable employees. 

Petitioner argues this dispute is arbitrable because of an arbitration

provision contained in the parties’ collective bargaining agreement

entitled Memorandum of Understanding (“MOU”). Petitioner also moves

to compel advisory (non-binding) arbitration based on a provision of

the County’s Personnel Rules (“Personnel Rules”). Respondent opposes

the motion. 

Case 2:06-cv-02539-GEB-EFB Document 30 Filed 05/03/07 Page 1 of 8
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

BACKGROUND

On or about August 16, 2005, Respondent sent Petitioner a

letter advising it of the possibility of employee lay-offs. (Joint

Statement of Facts (“JSF”) ¶ 3.) On or about August 30, 2005, the

County’s Board of Supervisors passed and adopted Resolution No. 05-

7192, which contained the County’s final budget for fiscal year 2005-

2006. (Id. ¶ 4.) Between August 16, 2005 and October 13, 2005,

Respondent laid off five Alcohol and Drug Department employees. (Id.

¶ 5.) Respondent contends that the lay-offs were due to County

budgetary considerations resulting from inadequate revenue (as set

forth in its August 16, 2005 letter) and that this decision is not

arbitrable under the MOU. (Id.) On or about October 13, 2005,

Petitioner filed a grievance with Respondent in which it argues that

the real reason for the lay-offs was to eliminate less than desirable

employees and not due to inadequate County revenue. (Id. ¶ 6.) On or

about December 30, 2005, Petitioner requested a list of arbitrators

from the California State Mediation and Conciliation Service. (Id.

¶ 7.) On or about June 19, 2006, Respondent informed Petitioner that

it would not agree to arbitrate this dispute. (Id. ¶ 14.) 

DISCUSSION

Under the Federal Arbitration Act, “[a] party aggrieved by

the failure, neglect, or refusal of another to arbitrate under a

written agreement for arbitration may petition any United States

district court . . . for an order directing that such arbitration

proceed in the manner provided for in such agreement.” 9 U.S.C. § 4. 

“‘[A]rbitration is a matter of contract and a party cannot be required

to submit to arbitration any dispute which [it] has not agreed so to

submit.’” AT& T Tech., Inc. v. Communications Workers of America, 475

Case 2:06-cv-02539-GEB-EFB Document 30 Filed 05/03/07 Page 2 of 8
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

U.S. 643, 648 (1986) (internal citation omitted). “[I]n deciding

whether the parties have agreed to submit a particular grievance to

arbitration, a court is not to rule on the potential merits of the

underlying claims.” Id. at 649. “An arbitration clause in a

collective bargaining agreement creates a presumption of

arbitrability.” Contra Costa Legal Assistance Workers v. Contra Costa

Legal Services, 878 F.2d 329, 330 (9th Cir. 1989). This means “that

‘[a]n order to arbitrate the 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. Doubts should be resolved in favor of coverage.’” 

AT& T Tech., Inc., 475 U.S. at 650. “Because of the presumption

favoring arbitration, the party opposing arbitration bears the burden

of establishing by ‘positive assurance’ that the arbitration clause is

not susceptible to an interpretation that would cover the dispute.” 

Cal. Nurses Ass'n v. Alta Bates Medical Center, 1995 WL 420774, 149

L.R.R.M. (BNA) 2773 (N.D. Cal. July 16, 1995) (citing United Food and

Commercial Workers Union, Local 770 v. Geldin Meat Co., 13 F.3d 1365,

1368 (9th Cir. 1994)). 

I. Binding Arbitration

Section 6.02 of the parties’ MOU contains a grievance

procedure with a provision for binding arbitration (entitled “Appeal

Policy”). It provides, in part, that “[t]he County hereby establishes

a personnel action appeals procedure in order to have an impartial

hearing on disputed personnel actions which have been appealed on the

basis of . . . [Personnel Rule] 16.02 (Disciplinary Action)[].” (JPS,

Ex. A at 25-26.) Rule 16 prescribes that “[a] permanent employee

shall not be dismissed, demoted, or suspended without pay unless the

Case 2:06-cv-02539-GEB-EFB Document 30 Filed 05/03/07 Page 3 of 8
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

appointing authority serves the employer with a ‘notice of intended

disciplinary action’ at least seven (7) working days before the action

is taken.” (JPS, Ex. B at 35.) 

A. The Sufficiency of the Allegation

Petitioner contends that Respondent violated Rule 16 of the

Personnel Rules when it laid-off employees and therefore it is

required to submit to binding arbitration under the MOU. (Memorandum

in Supp. of Petition to Compel Arb. (“Mem.”) at 1:28, 2:1.) 

Respondent counters that the Petition “does not specifically allege

that the County’s layoff of County employees was a ‘disciplinary

action’ under Section 16 of the Personnel Rules [and] [t]he Union

attempts to reframe its grievance . . . in its moving papers in

support of its Petition.” (Opp’n at 6:20-23.) Petitioner rejoins

that “Respondent provides no authority why this issue would make the

Petition incomplete” and Petitioner’s initial grievance alleged that

“the ‘layoffs’ were motivated to eliminate less than desirable

employees rather than due to inadequate County revenue.” (Reply at

2:28, 3:1-3.) Petitioner also contends that “[t]he grievance

indicated the ‘layoffs’ were in violation of the [MOU] and the

[Personnel Rules] [, and] that Petitioner pled Section 6.02 of the MOU

that requires arbitration.” (Id. at 3:3-7.)

Petitioner’s grievance letter provides that “[i]t is the

Union’s position that the lay-offs were not the result of inadequate

revenue sources, but orchestrated to eliminate some employees who are

deemed less desirable.” (JPS, Ex. E.) The letter also states that

the Union “is advancing this grievance pursuant but not limited to the

[MOU] and the [] Personnel Rules . . . .” (Id.) Respondent has not

Case 2:06-cv-02539-GEB-EFB Document 30 Filed 05/03/07 Page 4 of 8
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

Section 1.02 of the MOU provides, in relevant part: 1

County retains, solely and exclusively, all the rights, powers

and authority exercised or held prior to the execution of this

Agreement, except as expressly limited by a specific provision

of this Agreement. Without limiting the generality of the

foregoing, the rights, powers, and authority retained solely

and exclusively by County and not abridged herein, include,

but are not limited to, the following: To manage and direct

(continued...)

5

shown that the allegations in this grievance letter are insufficiently

pled. 

B. The Arbitrability of the Dispute 

Respondent also argues that “the County is not required to

submit the issue of the layoff of County employees to binding

arbitration” because the subject of layoffs is neither within the

scope of the MOU nor the Personnel Rules that are subject to binding

arbitration. (Opp’n at 7:13-14, 8:7-11.) Respondent further contends

that “[b]inding arbitration should not be compelled here because the

[MOU] specifically reserves [to the County] the right to decrease its

workforce.” (Id. at 8:20-21.) Petitioner counters that “the

separation from employment was a termination labeled [by the County]

as a ‘[l]ayoff’” and therefore Respondent is in violation of Rule 16

of the Personnel Rules, which is subject to arbitration under Section

6.02. (Reply at 3:19-20.) At oral argument, the parties agreed that

the decision on whether the employment separation at issue is a layoff

or an arbitrable termination should be resolved by interpretation of

the MOU and Personnel Rules. 

 An employee termination under Rule 16 of the Personnel

Rules is subject to binding arbitration under Section 6.02 of the MOU. 

(JPS, Ex. A at 25-26, Ex. B at 35.) Section 1.02 of the MOU

specifically exempts from arbitration the County’s layoff decisions.1

Case 2:06-cv-02539-GEB-EFB Document 30 Filed 05/03/07 Page 5 of 8
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

(...continued) 1

its business and personnel; . . . to create, change, combine

or abolish jobs, departments and facilities in whole or in

part; to direct the work force; to increase or decrease the

work force and determine the number of employees needed; to

hire, transfer, promote, layoff, and maintain the discipline

and efficiency of its employees . . . . (JPS, Ex. A, at 5.)

6

However, the MOU does not address the arbitrability of Petitioner’s

contention that the layoff decision was a pretext to justify the

terminations of the employees. (Opp’n at 8:20-21; JPS, Ex. A at 5.) 

Thus the issue is whether Respondent has met its “burden of

establishing by ‘positive assurance’ that the arbitration clause [and

the relevant provisions of the MOU and Personnel Rules are] not

susceptible to an interpretation that would cover the dispute.” 

California Nurses Ass'n, 1995 WL 420774. Respondent has not satisfied

this burden. Therefore, the parties are required to submit this

matter to binding arbitration. 

II. Advisory Arbitration

Petitioner also argues that Respondent should be mandated to

participate in advisory arbitration because its layoffs violated the

layoff policy in Rule 14 of the Personnel Rules. (Mem. at 7:19-21,

26.) Respondent counters that “[t]he Personnel Rules do not provide

for an advisory arbitration over the layoff of employees due to

inadequate County revenue under [Rule] 14" and therefore “[t]he

Union’s request for mandamus compelling this process shall be denied.” 

(Opp’n at 10:11-14.) 

Rule 18 of the Personnel Rules provides, in relevant part,

for advisory arbitration “on disputed personnel actions which have

been appealed on the basis of [Personnel Rule] 17.04 (Grievance).” 

(JPS, Ex. B at 41.) Under Rule 17.04, “[a] grievance is a written

Case 2:06-cv-02539-GEB-EFB Document 30 Filed 05/03/07 Page 6 of 8
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

objection to a managerial act or omission that allegedly affects

adversely or unfairly an employee’s wages, hours, or other terms and

conditions of employment, and for which the County has provided no

other procedure for administrative relief.” (Id. at 38.) Further,

Rule 17.04 prescribes that “[t]he subject matter of a grievance may

include . . . [v]iolation of an MOU or these Rules by an officer or

employee.” (Id.) Petitioner contends Respondent violated the layoff

policy established in Rule 14 of the Personnel Rules. (Reply at 5:1-

2.) A violation of Rule 14 is “the subject matter of a grievance”

under Rule 17.04 since it is a “violation of [the Personnel] Rules.” 

(JPS, Ex. B at 41.) Respondent has not satisfied its burden of

showing it is not required to participate in advisory arbitration. 

Therefore, the Union’s request for mandamus compelling advisory

arbitration on this issue is granted. 

III. Attorney Fees

Petitioner argues that it is entitled to attorney fees

because “Respondent has no basis for refusing to arbitrate the

underlying grievance” and therefore “has acted in bad faith.” (Mem.

at 8:19, 21.) Respondent counters, inter alia, that “[t]here is no

evidence of bad faith on the part of the County.” (Opp’n at 10:19-

20.) An “award of [attorney] 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 F.2d 1371, 1383 (9th Cir. 1983). Petitioner has not shown

that Respondent was frivolous or acted in bad faith when refusing to

submit to arbitration. Therefore, Petitioner’s request for attorney

fees is denied. 

Case 2:06-cv-02539-GEB-EFB Document 30 Filed 05/03/07 Page 7 of 8
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

CONCLUSION

For the reasons stated, the Union’s Petition to Compel

Arbitration is granted.

Dated: May 2, 2007

 

GARLAND E. BURRELL, JR.

United States District Judge

Case 2:06-cv-02539-GEB-EFB Document 30 Filed 05/03/07 Page 8 of 8