Opinion ID: 6342702
Heading Depth: 2
Heading Rank: 3

Heading: Formation of the Contract between Unite Here

Text: and Sycuan Sycuan contends that the district court cannot compel arbitration because there was no agreement between the parties to arbitrate. This is a question of contract formation and courts generally decide whether the parties formed a contract before compelling arbitration. See Granite Rock Co. v. Int’l Bhd. of Teamsters, 561 U.S. 287, 296 (2010). The parties do not dispute the material facts about the formation of the contract. As part of the Compact with California, Sycuan agreed to adopt and maintain the TLRO. UNITE HERE LOCAL 30 V. SYCUAN BAND 13 In the TLRO, Sycuan promised California that if any union made certain promises contained in Section 7(b) of the TLRO to the Tribe, Sycuan would automatically enter into a bilateral contract with that union adopting the TLRO’s terms. Unite Here sent Sycuan a letter in November 2019, notifying the Tribe of its intent to organize and promising to comply with Section 7(b) of the TLRO. According to the promises Sycuan made to California, upon the receipt of this letter, a contract was immediately formed between Unite Here and Sycuan. Normally, “an ordinance . . . does not amount to an offer since it merely evidences the municipal corporation’s intent to do something in the future, but does not thereby make a promise that it shall be done.” 1 Williston on Contracts § 4:9 (4th ed.). But if the ordinance is thereby communicated to another, “in such a way as to lead that other to believe that no further assent by the communicator is necessary, it may become an offer.” Id. Here, when Sycuan promised California that it would adopt and maintain the TLRO, Sycuan communicated to the union that no further assent was necessary. The TLRO is essentially an open-ended offer to any union to enter into a bilateral contract. When Unite Here sent the November 2019 letter and made promises to Sycuan, Unite Here accepted Sycuan’s offer. As consideration for the contract, Unite Here made the promises contained in Section 7(b)—i.e., promises not to disparage the Tribe, attempt to influence the outcome of tribal elections, engage in economic disruption at the casino or strike-related picketing on tribal lands. When Sycuan received the November 2019 letter, an enforceable contract was formed. Sycuan claims that it never formed a contract with Unite Here because the TLRO is an unenforceable agreement to 14 UNITE HERE LOCAL 30 V. SYCUAN BAND agree because the TLRO’s terms are not sufficiently definite. However, the terms of the contract were definitively established in the TLRO without any further negotiation between the union and the Tribe. Section 7(d) leaves little ambiguity. By its terms, any union’s Section 7(b) promises constitute an offer to accept all of the TLRO’s terms as a bilateral contract and Sycuan was bound to accept this offer. The terms were definite, there was nothing left to negotiate, and a contract was formed. IV. Validity of the Contract between Unite Here and Sycuan Sycuan argues that the district court erred because its answer and counterclaim raise a valid affirmative defense of preemption. Sycuan contends that if the NLRA preempts the TLRO, there is no enforceable promise to arbitrate. Sycuan is mistaken. A defense that a law invalidates a contract with an arbitration provision is an issue for the arbitrator to decide. Buckeye Check Cashing, Inc., 546 U.S. at 444–46; Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 397, 402–04 (1967). In Buckeye Check Cashing, the Supreme Court distinguished between a “challenge[] specifically [to] the validity of the agreement to arbitrate” and a “challenge[] [to] the contract as a whole, either on a ground that directly affects the entire agreement (e.g., the agreement was fraudulently induced), or on the ground that the illegality of one of the contract’s provisions renders the whole contract invalid.” Id. at 444. A court should decide only challenges to “the arbitration clause itself.” Id. at 445–46. Challenges to “the contract’s validity [are] considered by the arbitrator in the first instance.” Id. Rent-A-Ctr., W., Inc. v. Jackson, 561 U.S. 63 (2010) reaffirmed this rule. UNITE HERE LOCAL 30 V. SYCUAN BAND 15 Sycuan’s preemption argument is a challenge to the contract as a whole, not the arbitration clause. Sycuan says, “the Complaint is barred because the purported Tribal Labor Relations Ordinance, including any arbitration provisions contained therein, are preempted by the National Labor Relations Act, 29 U.S.C. § 151, et seq., and, therefore, is unenforceable where such provisions conflict with the NLRA.” Sycuan does not argue that the arbitration clause itself is invalid. Rather, Sycuan challenges the contract as a whole and so the preemption argument is for the arbitrator to decide. See Buckeye Check Cashing, 546 U.S. at 445–46. Sycuan also argues that, if a contact does exist, the issue of NLRA preemption is outside the scope of the arbitration provisions of the TLRO. We can decide this issue because generally “courts will decide which issues are arbitrable.” Oracle Am., Inc. v. Myriad Grp. A.G., 724 F.3d 1069, 1072 (9th Cir. 2013). The TLRO states that “[a]ll issues shall be resolved exclusively through the binding dispute resolution mechanisms herein.” Sycuan argues that “all issues” means all issues arising under the TLRO, and the TLRO does not mention the NLRA, preemption, or conflicts of law. Preemption is not excluded from the arbitration agreement. The arbitration agreement does not, and need not, cover only specifically identified disputes, Buckeye Check Cashing, Inc., 546 U.S. at 443–44, and federal courts apply a presumption in favor of arbitrability, United Steelworkers of Am. v. Warrior & Gulf Nav. Co., 363 U.S. 574, 582–83 (1960). The arbitration clause here is broad and covers “[a]ll issues” under the contract. Preemption as a defense to an alleged breach is an issue covered by the contract. Sycuan also argues that arbitrating NLRA preemption infringes on its sovereign immunity, which it claims it has not waived. “[A] waiver of [tribal] sovereign immunity 16 UNITE HERE LOCAL 30 V. SYCUAN BAND ‘cannot be implied but must be unequivocally expressed.’” Santa Clara Pueblo v. Martinez, 436 U.S. 49, 58 (1978) (quoting United States v. Testan, 424 U.S. 392, 399 (1976)). Sycuan admits that it waived immunity for disputes “arising under” the TLRO. Sycuan denies, however, waiving sovereign immunity “with respect to the issue of NLRA preemption” because such a waiver was not clear and unequivocal. Sycuan also contends that NLRA preemption is a threshold issue that the district court should consider before sending the underlying claims to arbitration because if the NLRA preempts the TLRO then the waiver of sovereign immunity may also be preempted and arbitrating sovereign immunity is contrary to the principles of sovereign immunity. Here, there was an express waiver of tribal sovereign immunity as Sycuan agreed in Section 13(e) of the Compact’s TLRO to waive its immunity from suit for the purpose of compelling arbitration. Further, when a tribe agrees to judicial enforcement of an arbitration agreement it waives its immunity concerning that agreement. See C & L Enters. v. Citizen Band Potawatomi Indian Tribe of Okla., 532 U.S. 411, 418–20 (2001). Sycuan cites no law supporting its argument that the arbitration agreement must expressly list all issues to which the Tribe waives sovereign immunity. There is no sovereign immunity to arbitration because a party is only obligated to arbitrate when that party agreed to arbitrate, as Sycuan did here. Because the validity of the contract and the issue of preemption are for the arbitrator to decide, we do not examine the arguments or express a view on them here. UNITE HERE LOCAL 30 V. SYCUAN BAND 17