Issue
The Ninth Circuit Court of Appeals recently addressed the issue of whether the district court erred in dismissing a labor union’s motion to compel arbitration of alleged violations of an agreement with an employer. The agreement restricted the parties’ behavior during union organizing campaigns. Service Employees International Union, Service Employees International Union, Local 399 v. St. Vincent Medical Center; Daughters of Charity Health Systems, Inc., (2003 WL 22155042)
Facts
Service Employees International Union (Union) entered into an agreement with Catholic HealthCare West, which also bound its successor, Daughters of Charity Health Systems, Inc., (collectively, Employer). The agreement restricted the parties’ behavior during union organizing campaigns. The agreement provided that the parties should refrain from certain activities during the campaign. The parties also agreed to submit “unresolved disputes about compliance with or construction of” the agreement to arbitration. The National Labor Relations Board (NLRB) conducted an election and the Union lost.
The Union alleged that Employer violated numerous provisions of the agreement including encouraging workers to vote against unionization, granting favorable working conditions to employees on “vote no” committees, posting information that was not factual, and threatening employees with a loss of benefits. After Employer refused to submit the unresolved disputes to arbitration, the Union filed a complaint in federal district court to compel arbitration. Employer asked the court to dismiss the complaint on the ground that the court lacked jurisdiction since the NLRB possesses primary jurisdiction over the matter because it is purely representational in nature. The district court granted Employer’s motion and dismissed the Union’s complaint.
Appellate Court Decision
The appellate court concluded that the district court erred in dismissing the Union’s complaint to compel arbitration. The Court found that the district court had jurisdiction under section 301 of the Labor Management Relations Act, 29 U.S.C. § 185(a), which grants federal courts jurisdiction over cases involving violations of private labor agreements. Federal courts share jurisdiction with the NLRB in such cases and must tread lightly in section 301 cases that fall within the NLRB’s primary jurisdiction. The NLRB will have primary jurisdiction where the major issue to be decided is primarily representational. If, however, the issue is primarily contractual, a federal court has jurisdiction.
Here the Court concluded that the major issue is primarily contractual because it does not depend on the question of whom the union represents. The only issue is the arbitrability of the alleged violations of the agreement, which is contractual in nature. The Court concluded that even though there are representational overtones in the dispute regarding the parties’ behavior before the representational election, the quest to compel arbitration does not raise a representational issue. The Court noted that its conclusion would be different if the Union challenged the outcome of the election.
The Court determined that the fact that the NLRB conducted the election or certified the results did not prevent the district court from compelling arbitration. It also found that the presumption of arbitrability applies in this case because the arbitration clause is “susceptible of an interpretation that covers the asserted dispute.” Therefore, it reversed the decision of the district court and ordered it to compel arbitration.
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