Union Barred From Suing State Without First Seeking Arbitration

In Service Employees International Union, Local 1000 (CSEA) v. Department of Personnel Administration, (— Cal.Rptr.3d —, 2006 WL 2522626, Cal.App. 3 Dist., Sept. 1, 2006), a California Court of Appeal considered a union’s court challenge to the state’s refusal to allow distribution of political material at state worksites.

The Court ruled that because the union had not first tried to resolve its disagreement with the state through arbitration, as required by its contract with the state, it could not bring its case to court.

Facts

The Service Employees International Union, Local 1000 (“Union”) entered into various collective bargaining agreements with the State of California (“State”). The agreements allow the union to distribute various types of materials to workers, excluding that which is “libelous, obscene, defamatory, or of a partisan political nature.” The agreements also establish grievance and arbitration procedures to resolve disputes between the Union and the State about the terms of the contract.

Prior to the November 2004 statewide election, the Union supported Proposition 72, a measure that would have established a statewide, employer-paid health care system. The State refused to allow the Union to distribute pro-Proposition 72 literature at its worksites, alleging that it violated the contract’s ban on distributing partisan political materials.

The Union filed a lawsuit, claiming that the material was not “partisan,” and that therefore the State was violating the contract by not allowing the Union to distribute it, and was also violating the Union’s right to free speech under the United States Constitution, causing it irreparable harm. The State demurred, saying that the contract required the Union to arbitrate its dispute with the State before filing suit. The trial court agreed with the State, and the Union appealed.

Decision

The appellate court held that the Union’s claim that its constitutional right of free speech was infringed did not trump its contractual obligation to seek arbitration. The Court quoted Griswold v. Mount Diablo School District (1976) 63 Cal.App.3d 648: “Even where the statute sought to be applied and enforced by the administrative agency is challenged upon constitutional grounds, completion of the administrative remedy has been held a prerequisite to equitable relief.”

Additionally citing “the strong public policy of this State favoring arbitration and requiring us to resolve all doubts in favor of arbitration,” the Court said it therefore rejected the Union’s argument that its free speech right excused its obligation to pursue the remedy outlined in its contract. “More than the mere mention of the First Amendment is necessary to demonstrate the rare type of irreparable harm that justifies skipping arbitration and rushing to the courts,” the Court said.

The Union’s failure to exhaust the grievance and arbitration remedies was therefore “fatal to its action in the courts of this State,” the Court ruled, affirming the trial court’s judgment of dismissal.

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