Court Opinion

ID: 9795995
Source: CourtListenerOpinion
Date Created: 2023-08-31 03:44:50.684886+00
Date Added: 2024-06-11T08:43:49.619546
License: Public Domain

FABE, Chief Justice,
with whom CARPENETI, Justice, joins, dissenting.
The court's decision today rests entirely on its determination that, contrary to the contentions of the Classified Employees Association (CEA), the parties' collective bargaining agreement (CBA) cannot plausibly be read to prohibit or limit outsourcing by the Borough School District. Because I believe that the determination whether CEA's interpretation of the CBA is plausible should be made by the arbitrator, not by the court, I disagree with the court and would reverse the superior court's decision not to compel arbitration.
CEA claims that the District's outsourcing decision violated the parties' CBA. Under the CBA's grievance arbitration clause, employee grievances alleging "misinterpretation or inequitable application" of the terms of the CBA are arbitrable.1 CEA's claim that outsourcing violates the terms of the CBA, whether meritorious or wildly improbable, is a grievance regarding the proper interpretation of the CBA and is thus the type of grievance that the parties have agreed to arbitrate.
The court concludes otherwise first by determining that the CBA cannot reasonably be interpreted to prohibit outsourcing, then by reasoning that therefore CEA's complaint about outsourcing does not actually involve interpretation of the CBA, and finally by concluding that CEA's complaint is thus not actually encompassed by the arbitration clause.2 But in doing so the court directly hinges its decision regarding the arbitrability of CEA's claim on its own view of the merits of CEA's claim-something that is not generally appropriate in the context of labor arbitration.
The court is correct that the threshold question of whether a claim is arbitrable is one for the courts, not for the arbitrator.3 A court confronting this question must determine, keeping in mind the presumption in favor of arbitrability,4 whether there is a plausible interpretation of the CBA's arbitration clause (taking into account any exclusionary clauses) that covers the type of claim presented. But in doing so the court should not examine the plausibility of the claim itself.
Where, as here, the CBA's arbitration clause explicitly covers all claims alleging "misinterpretation or inequitable application" of the terms of the CBA, and there is no exclusionary clause, the court's role is limited to deciding whether the claim, on its face, concerns the proper interpretation of the CBA. The court concludes here that CEA's grievance "does not concern the proper interpretation of" the CBA.5 But CEA contends that the CBA prohibits outsourcing-asserting, among other things, that the CBA's silence regarding outsourcing means that outsourcing is not permitted. While perhaps practically or legally incorrect, this claim inescapably involves interpretation of the CBA. Though the court finds CEA's interpretation of the CBA untenable, it is nonetheless an interpretation of the CBA. And choosing between competing interpretations of the CBA is precisely the task the parties have agreed to put in the hands of the arbitrator.
Because the instant case does not fall under the National Labor Relations Act,6 we *361need not necessarily adopt the reasoning of federal labor law cases; however, as the court seemingly acknowledges,7 such cases are nonetheless instructive. In AT & T Technologies, Inc. v. Communications Workers of America, the United States Supreme Court reviewed and reaffirmed various basic legal principles pertaining to the arbitrability of labor disputes, including that "in 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" and that "[wlhether 'arguable' or not, indeed even if it appears to the court to be frivolous, the union's claim that the employer has violated the collective-bargaining agreement is to be decided, not by the court asked to order arbitration, but as the parties have agreed, by the arbitrator." 8
The court notes that "CEA points to no term in the contract" to support its position and that furthermore there is "no clause in the CBA discussing outsourcing."9 But the fact that CEA's claim that outsourcing violates the CBA may not be plausible and is not necessarily supported by any specific language in the CBA does not mean that it is not arbitrable. In Building Materials & Construction Teamsters Local No. 216 v. Granite Rock Co., a case that we have recently cited,10 the Ninth Cireuit found that a union's claim that an employer violated an implied term of a CBA was arbitrable under an arbitration clause that covered only disputes "arising under" the CBA, regardless of whether the union's claim was plausible or supported by any language in the CBA.11 Though the employer argued that the CBA could not be reasonably interpreted to contain the implied term that provided the basis for the union's claim, the Ninth Circuit reasoned that "[the district court was not required to determine whether the union's claim rested on a 'plausible' reading of the agreement" 12 and that "onee the court determines that the parties' dispute concerns the proper interpretation of the agreement, it has 'no business weighing the merits of the grievance, considering whether there is equity in a particular claim, or determining whether there is particular language in the written instrument which will support the claim.""13
Similarly, in International Brotherhood of Electrical Workers, Local 1228 v. WNEV-TV, New England Television Corp., the First Circuit concluded that a union's eclaim-main-taining that an employer had violated the parties' CBA by eliminating an employee lounge-was arbitrable under an arbitration clause that encompassed "all complaints, disputes or questions as to the interpretation, *362application or performance of" the CBA.14 The First Cireuit came to this conclusion despite the fact that the trial court found that there was no language in the CBA creating a duty to provide or maintain such a lounge.15 The court in WNEV-TV recognized that
[what one man considers frivolous another may find meritorious, and it is common knowledge in industrial relations circles that grievance arbitration often serves as a safety valve for troublesome complaints. Under these circumstances it seems proper to read the typical arbitration clause as a promise to arbitrate every claim, meritorious or frivolous, which the complainant bases upon the contract. The objection that equity will not order a party to do a useless act is outweighed by the cathartic value of arbitrating even a frivolous grievance and by the dangers of excessive judicial intervention.[16]
The Second Cireuit in Procter & Gamble Independent Union of Port Ivory, N.Y. v. Procter & Gamble Manufacturing Co. rejected a company's contention, similar to the District's contention in this case, that arbitration should be refused because "none of the alleged grievances were specifically covered by, any particular provision of the agreement" and the arbitration clause bound it only to the arbitration of grievances "having to do with the interpretation or application of any provision of" the CBA.17 The Second Circuit held that the union's grievances, which included a complaint about outsoure-ing, were arbitrable, reasoning that "the interpretation or construction of the agreement by the Board of Arbitration is the very thing the parties bargained for." 18 The Procter & Gamble Manufacturing court did not examine whether or not the union's claims had merit or were grounded in any specific language in the CBA.
Similarly, in International Union of Electrical, Radio & Machine Workers v. General Electric Co., the Second Circuit held that a union's complaint about an employer's subcontracting of work was arbitrable under an arbitration clause encompassing disputes about "the interpretation or application of a provision of" the CBA, despite the employer's argument that the CBA contained no express provisions regarding subcontracting and the fact that the union had unsuccessfully attempted to negotiate for provisions limiting subcontracting.19 The Second Circuit remarked: ,
What the company has done ... is to - attempt to persuade us to decide that the grievance is not arbitrable because the grievance is groundless inasmuch as {[no] substantive provision of the collective bargaining agreement, according to the company, forbids or restricts subcontracting. But whether a certain brand of company conduct is prohibited by a provision of a collective bargaining agreement will always be the ultimate question which the grievance itself will present.... For us to yield to the urgings of the company and decide it ourselves would be to ignore the admonition contained in the Warrior & Gulf case that courts should not become "entangled in the construction of the substantive provisions of a labor agreement," [20]
As the court points out, the above-cited cases do indeed "advert to the need for a threshold finding as to whether a particular grievance raises a question concerning the interpretation of the collective bargaining agreement." 21 But the court here goes beyond simply making a threshold determination as to whether CEA's claim involves interpretation of the CBA-the court examines the merits of CEA's interpretation and then concludes that because CEA's interpretation is not reasonable, if is not actually an inter*363pretation. Such reasoning puts the cart before the horse and thus is not in line with the predominant federal approach.
The court cites two Seventh Cireuit cases in support of its decision: Local Union No. ©4838, International Brotherhood of Boilermakers v. Shell Oil Co. and Independent Petroleum Workers of America, Inc. v. American Oil Co.,22 on which Local Union No. 483 relies.23 Each of these cases held that where a CBA was silent with regard to outsourcing, arbitration of an outsourcing dispute could not be compelled under an arbitration clause that limited arbitration to questions arising from CBA interpretation.24 However, Local Union No. 483 and Independent Petroleum Workers appear to be outliers, and the continued validity of their approach has been questioned.25 Moreover, the court in Independent Petroleum Workers, on which Local Union No. 483 relies, held that the union's claims were foreclosed by collateral estoppel, making it unclear whether its discussion of their arbitrability was simply - dicta.26
Additionally, in both Local Union No. 483 and - Independent Petroleum Workers the Seventh Circuit actually considered the bargaining history between the parties in the course of concluding that the CBAs did not prohibit outsourcing (and thus that outsourcing disputes were not arbitrable) 27-something the court here seems unwilling to do despite CEA's entreaties.28 And in both of these cases the bargaining history between the parties was the opposite of the bargaining history in the instant case-that is, in both of these cases the unions repeatedly tried and failed to negotiate for CBA provisions specifically prohibiting outsourcing,29 whereas in the instant case there is evidence that the employer tried and failed to negotiate for CBA provisions specifically permitting outsourcing.30 Accordingly, to the extent that these two cases relied on bargaining history to interpret the *364CBA's silence regarding outsourcing, they are importantly distinguishable from the instant case.31
Coupled with the strong presumption in favor of arbitrability, which is accurately set forth in the court's opinion,32 the many cases admonishing against delving into the merits of a union's claim in order to determine its arbitrability suggest that the court has cho-gen to take a distinctly minority approach by resting its decision on a preliminary determination that CEA's interpretation of the CBA is implausible.
The court attempts to bolster its decision to take this minority approach by pointing out that the Public Employment: Relations Act (PERA)33 does not give CEA's employees the power to compel binding interest arbitration. But this is irrelevant. CEA seeks only grievance arbitration, which the parties have specifically contracted for, not interest arbitration. CEA claims that the District's outsourcing violates the parties' existing CBA-it does not seek to compel arbitration for the purpose of renegotiating the terms of the CBA. The court thinks that 'CEA's interpretation of the CBA is implausible and thus characterizes CEA's claim not as a dispute about the interpretation of the CBA but as an effort "to amend & collective bargaining contract by adding a provision that it cannot fairly be said to contain." 34 But the fact that CEA's grievance involves a potentially implausible interpretation of a CBA does not mean that its request for grievance arbitration under the CBA's arbitration clause should be viewed as if it is a request for interest arbitration under PERA. And moreover, as discussed above, the question whether or not CEA's interpretation of the CBA is plausible is a question for the arbitrator, not for the courts-our decision regarding the arbitrability of CEA's: claim simply should not turn on our assessment of its relative merits.
As the court points out, under the CBA's arbitration clause the arbitrator "can add nothing to, nor subtract anything from" the CBA.35 Accordingly, an arbitrator evaluating CEA's outsourcing grievance would be limited to examination and interpretation of the parties' existing CBA and would not have the power to modify the CBA. Thus limited, an arbitrator might well conclude, as the court has concluded, that CEA's interpretation of the CBA is implausible and that "the CBA simply does not speak to the subject of outsourcing." 36 But that determination would be one for the arbitrator to make because "the interpretation or construction of the [CBA] by the [arbitrator] is the very thing the parties bargained for." 37
Therefore, I respectfully dissent.

. The CBA's grievance arbitration clause is quoted in full at 354.

. Majority Op. at 354-55.

. Majority Op. at 353.

. Majority Op. at 352-53.

. Majority Op. at 355-56 n. 27.

. See 29 U.S.C. § 152(2) (2000).

. - See Majority Op. at 355 (citing Local Union No. 483, Int'l Bhd. of Boilermakers v. Shell Oil Co., 369 F.2d 526 (7th Cir.1966)).

. 475 U.S. 643, 649-50, 106 S.Ct. 1415, 89 LEd.2d 648 (1986). AT & T, though it eloquently summarizes these important basic principles, is factually distinguishable from the instant case in that AT & T involved competing interpretations of an exclusionary clause in the CBA asserted by the employer to preclude arbitration of a particular dispute. Id. at 644-46, 106 S.Ct. 1415. Because the threshold question of arbitra-bility must be decided by the court, the AT & T Court held that it was improper for the trial court to submit to the arbitrator the issue of the proper interpretation of the CBA's arbitration and exclusionary clauses. Id. at 651, 106 S.Ct. 1415. In this case, by contrast, it is not competing interpretations of the CBA's arbitration clause or of an exclusionary clause that are at issue, but competing substantive interpretations of the CBA. Indeed, the AT & T Court acknowledged that if the arbitration provisions were interpreted to cover the type of dispute at issue it would be "for the arbitrator to determine the relative merits of the parties' substantive interpretations of the agreement." Id.

. Majority at 354.

. Lexington Mktg, Group, Inc. v. Goldbelt Eagle, LLC, 157 P.3d 470 n. 46 (Alaska 2007) (citing and quoting Granite Rock for the proposition that "[bly providing that '[alll disputes arising under this agreement' shall be-resolved through arbitration, the parties agreed 'to submit all grievances to arbitration, not merely those which the court will deem meritorious'" (second alteration in original)). ' |

. 851 F.2d 1190, 1193-95 (Oth Cir.1988).

. Id. at 1194.

. Id. (quoting United Steelworkers of Am. v. Am. Mfg. Co., 363 U.S. 564, 568, 80 S.Ct. 1343, 4 L.Ed.2d 1403 (1960)).

. 778 F.2d 46, 46-48 (Ist Cir.1985).

. Id. at 48.

. Id.

. 298 F.2d 644, 645 (2d Cir.1962).

. Id. at 645-47.

. 332 F.2d 485', 487-90 (2d Cir.1964).

. Id. at 489-90 (quoting United Steelworkers of Am. v. Warrior & Gulf Nav. Co., 363 U.S. 574, 585, 80 S.Ct. 1347, 4 L.Ed.2d 1409 (1960).

. Majority Op. at 355.

. Majority Op. at 355 (citing Local Union No. 483, Int'l Bhd. of Boilermakers v. Shell Oil Co., 369 F.2d 526 (7th Cir.1966); Indep. Petroleum Workers of Am., Inc. v. Am. Oil Co., 324 F.2d 903 (7th Cir.1964), aff'd per curiam by an equally divided court, 379 U.S. 130, 85 S.Ct. 271, 13 L.Ed.2d 333 (1964)).

. 369 F.2d at 528-29.

. Local Union No. 483, 369 F.2d at 527-29; Indep. Petroleum Workers, 324 F.2d at 906-07.

. See Int'l Bhd. of Elec. Workers, Local 21 v. Ill. Bell Tel. Co., 491 F.3d 685, 689-90 (7th Cir.2007) (narrowing and limiting Independent Petroleum Workers, stating that "Supreme Court precedent constrains a broad reading of Indep/endent] Petroleum Workers, which centered around parties with a unique bargaining history and CBA"); Mobil Oil Corp. v. Local 8-766, Oil, Chem. & Atomic Workers Int'l Union, 600 F.2d 322, 328-29 (ist Cir.1979) (discussing Independent Petroleum Workers as limited to its specific facts and its arbitrability reasoning as potentially dicta); Local 710, Int'l Bhd. of Teamsters v. Montgomery Ward & Co., 708 F.Supp. 209, 212 (N.D.Ill.1989) (questioning and limiting Independent Petroleum Workers ).

. - Indep. Petroleum Workers, 324 F.2d at 909.

. Local Union No. 483, 369 F.2d at 528 ('The district court found that the bargaining history between Shell and the Union shows that the Union had sought without success to have Shell agree to a provision in the agreement 'specifically prohibiting or limiting' Shell's right to contract out work, and that each proposal was rejected by Shell and none included in the agreement. This finding has substantial support in the record."); Indep. Petroleum Workers, 324 F.2d at 907 ("The bargaining history between plaintiff and defendant relative to the right of the latter to contract out work is much discussed in the briefs. Plaintiff urges that such history is irrelevant. We think, however, it has some significance and may properly be considered.").

. | Majority Op. at 354-55.

. Local Union No. 483, 369 F.2d at 528 ("Shell's consistent refusal, in three bargaining agreements, to agree to limit its freedom to contract out the work, the settlement of the strike and that issue without acceding to the Union demand, and the Union's tacit acceptance of Shell's position in its December, 1962, letter distinguish contracting out cases in which courts have compelled arbitration."); Indep. Petroleum Workers, 324 F.2d at 907 ("[Pllaintiff for many years had sought the inclusion of a clause in the collective bargaining agreement specifically prohibiting or limiting the right of the defendant to contract out work. On each occasion the proposal was rejected. This bargaining history while of course not controlling fortifies the conclusion which we have reached that plaintiff's claim is without merit.").

. Majority Op. at 350.

. See 20 A. Lorp, Wiuiston on Contracts § 56:46 (4th ed.2001) (discussing the importance of the parties' specific bargaining history to the court's decision in Local Union No. 483 ).

. Majority Op. at 352-53.

. AS 23.40.070.

. Majority Op. at 357.

. Id.

. Id.

. Procter & Gamble Indep. Union of Port Ivory, N.Y. v. Procter & Gamble Mfg. Co., 298 F.2d 644, 646 (2d Cir.1962).