Opinion
CIV. NO. 2:13-01670 WBS EFB
2013-10-08
SERVICE EMPLOYEES INTERNATIONAL UNION, LOCAL 1021, Plaintiff, v. PRIVATE INDUSTRY COUNCIL OF SOLANO COUNTY, INC., dba WORKFORCE INVESTMENT BOARD OF SOLANO COUNTY, Defendant.
MEMORANDUM AND ORDER RE: MOTION
TO STAY; MOTION TO COMPEL
ARBITRATION
Plaintiff Service Employees International Union, Local 1021 (sometimes "the Union") brought this action under the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 185, and the Federal Arbitration Act ("FAA"), 9 U.S.C. § 4, to compel defendant Private Industry Council of Solano County (sometimes "WIB") to arbitrate eight grievances pursuant to the parties' Collective Bargaining Agreement ("CBA"). (First Changed Compl. to Compel Arbitration ("FAC") (Docket No. 12).)
Defendant now moves to stay this action pending the outcome of proceedings before the National Labor Relations Board ("NLRB") and the California Public Employment Relations Board ("PERB"), or, alternatively, to dismiss the action. (Def.'s Mot. to Stay Action or to Dismiss ("Mot. to Stay") (Docket No. 7).)
I. Factual & Procedural History
On January 18, 2013, the parties entered into the CBA. (See FAC Ex. A.) Section II of the CBA designates the Union as the exclusive bargaining representative for all WIB employees. (Id. § II.) Section XIX of the CBA outlines the procedure for resolving grievances under the CBA. (Id. § XIX.) It applies to any "claim or complaint by a regular or probationary employee . . . the Union, or the Employer, concerning the interpretation or application of this Agreement regarding any action of the employer pertaining to wages, hours, or working conditions." (Id. § XIX(A).)
Section XIX(C) provides that the parties to a grievance should first attempt to resolve that grievance informally:
Grievances shall initially be taken up by the employee and the immediate supervisor in an attempt to settle the matter on an informal basis. The Employer's Business and Employment Services Manager, or his or her designee, shall be advised of such meetings at least three (3) days prior and shall attend them. The parties consider it most desirable to settle grievances informally and promptly. If this process does not resolve the matter the employee may proceed to the formal process described herein.(Id. § XIX(C).) The formal resolution process consists of three steps. (Id.) Although Section XIX(C) requires that a party to a grievance proceed through the outlined steps in sequence, Section XIX(D) provides that the employer's "[f]ailure . . . to respond to a grievance within the specified time limits automatically grants the grievant the right to process the grievance to the next step." (Id. § XIX(D)(2).)
At Step One, the grievant may submit a written grievance to the Executive Director of WIB within seven days after the completion of the informal process. (Id. § XIX(C).) The Executive Director or his or her designee must schedule a meeting to hear the grievance within ten days and issue a written response to the grievant and the union within ten days of that meeting. (Id.)
If the grievance is not resolved at Step One, Step Two permits the Union or employer to submit a written request for an Adjustment Board within ten days after Step One is completed. (Id.) The Adjustment Board must convene within twenty-five days of this request, conduct an informal hearing, and issue a written advisory opinion reflecting a majority vote of the Adjustment Board. (Id.) Either party may appeal the Adjustment Board's decision within fifteen days after its opinion is issued. (Id.)
If the grievance is not resolved at Steps One or Two, Step Three allows either party to submit a written request for arbitration to the Union or the Executive Director within fifteen days of the conclusion of Step Two. (Id.) If a party submits a request for arbitration, the Union and WIB are required to select a mutually acceptable and impartial arbitrator or, if they cannot do so, to scratch down a list of five names submitted by the American Arbitration Association until only one arbitrator remains. (Id.) The CBA provides that "the decision of the arbitrator shall be final and binding upon the parties." (Id.)
This action arises out of eight grievances brought under the CBA. These grievances allege that defendant violated CBA provisions relating to hours, (FAC Ex. B, ¶ 2), medical benefits, (id. ¶ 3), personnel files (id. ¶¶ 5-6), job postings (id. ¶¶ 1, 4), employee discipline (id. ¶ 8), and the informal grievance procedure itself. (Id. ¶ 7.) Plaintiff alleges that prior to April 25, 2013, it attempted to resolve these grievances through the informal process, but that defendant "refused to participate in the informal process if the Union is present or requests to be present." (FAC ¶ 6.) On April 25, 2013, plaintiff sent a letter to defendant in which it sought to initiate the formal resolution process. (Id. ¶ 7.) This letter noted that "the Union has attempted to resolve these grievances by the Informal Resolution process on numerous occasions with your agency[,] but you have maintained communications are to be sent only to the Executive Director or an employee must initiate the grievance in order for it to be valid." (Id. Ex. B, at 47.)
On May 3, 2013, defendant responded that the CBA did not permit the Executive Director to become involved at this stage because, to its knowledge, "no part of this Informal Resolution Process has been initiated . . . and no case can be made that ^the grievance is not resolved' via this prescribed initial process." (Id. Ex. C, at 52.) Defendant further stated that "there is similarly no allowable role for an agency SEIU Steward or you as an SEIU Field Representative to sit in upon or participate in the CBA-prescribed three-party meeting to attempt informal resolution." (Id.)
On May 7, 2013, plaintiff sent defendant a letter stating that it believed that defendant's letter constituted a response to its submission of a formal grievance and requesting the appointment of an Adjustment Board. (Id. Ex. D, at 54.) After defendant reiterated that the Executive Director would not involve himself in the grievance process, (see id. Ex. E, at 56), plaintiff sent defendant a letter on May 23, 2013 in which it requested arbitration of its grievances. (Id. Ex. F, at 58.)
On April 26, a day after plaintiff submitted its formal grievances to defendant, plaintiff filed a charge with the NLRB. (Def.'s Req. for Judicial Notice ("RJN") Ex. B (Docket No. 8-2).) Plaintiff asserted that defendant retaliated against it in violation of National Labor Relations Act, 29 U.S.C. § 151 et seq., by "refus[ing] to process a series of grievances because the Union and the grievants wanted the Union Representative to be present at the first informal step of the grievance procedure." (Id.) Plaintiff filed a similar unfair labor practice charge, pursuant to the Meyers-Milias-Brown Act ("MMBA"), Cal. Gov. Code § 3500 et seq., with PERB on May 13, 2013. (Id. Ex. G (Docket No. 8-7).) On May 30, 2013, the NLRB dismissed plaintiff's charge and stated that it lacked jurisdiction over defendant because it was a state entity. (Id. Ex. C (Docket No. 8-3).) Plaintiff filed a timely appeal of NLRB's decision on June 12, 2013. (Id. Ex. D (Docket No. 8-4).) Both proceedings are currently pending.
On August 6, 2013, plaintiff filed a motion to compel arbitration in Solano County Superior Court. (Compl. (Docket No. 1-1).) Defendant removed the action to this court under its federal question jurisdiction pursuant to 28 U.S.C. § 1441(a). (Not. of Removal (Docket No. 1).) Defendant now moves to stay plaintiff's motion to compel arbitration pending resolution of the proceedings before the NLRB and PERB or, alternatively, to dismiss the motion. (Mot. to Stay 1.)
Defendant raises several arguments in favor of dismissal. First, defendant argues that plaintiff's motion to compel arbitration pursuant to California Code of Civil Procedure § 1281 is preempted by federal law. (Mot. to Stay 9-10.) Second, defendant argues that plaintiff failed to properly notice and serve the motion in the manner required by applicable California and federal law. (Id. at 12.)
Plaintiff's FAC has cured both of these deficiencies, as the motion to compel arbitration is now based on federal law, (see FAC 3:1217), is properly noticed (see FAC 1:1221), and was properly served upon defendant prior to removal. (See Pl.'s Mem. of P.& A. in Supp. of Pl.'s Pet. to Compel Arbitration 11:714 (Docket No. 11).)
Defendant also argues that dismissal is warranted because plaintiff failed to exhaust the grievance procedure under the CBA and because the CBA does not provide for union involvement during the informal dispute resolution process. (Mot. to Stay 1012.) These arguments are duplicative of its arguments in opposition to the motion to compel arbitration itself, and the court will address them in that context.
II. Request for Judicial Notice
A court may take judicial notice of facts "not subject to reasonable dispute" because they are either "(1) generally known within the territorial jurisdiction of the trial court or (2) capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned." Fed. R. Evid. 201. Judicial notice may properly be taken of matters of public record outside the pleadings. See MGIC Indem. Corp v. Weisman, 803 F.2d 500, 504 (9th Cir. 1986). In addition, "a court may consider evidence on which the complaint necessarily relies if: (1) the complaint refers to the document; (2) the document is central to the plaintiff's claim; and (3) no party questions the authenticity of the copy attached to the . . . motion." Daniels-Hall v. Nat'l Educ. Ass'n, 629 F.3d 992, 998 (9th Cir. 2010).
Both parties request the court to take notice of the CBA. (See Pl's Not. of Non-Opp'n to Def.'s Req. for Judicial Notice (Docket No. 10).) A court may take notice of a collective bargaining agreement. See, e.g., Busey v. P.W. Supermarkets, Inc., 368 F. Supp. 2d 1045, 1049-50 (N.D. Cal. 2005). Moreover, the CBA is attached to the First Changed Complaint, is central to its motion to compel arbitration, and neither party questions its authenticity. See Daniels-Hall, 629 F.3d at 998. The court will therefore take notice of the CBA.
Defendant also requests that the court take notice of documents filed in administrative proceedings before the NLRB and PERB. (See RJN Exs. B-G.) Because these documents are public records of administrative agencies, the court will judicially notice them. See Anderson v. Holder, 673 F.3d 1089, 1094 n.1 (9th Cir. 2012). However, the court will not take judicial notice of any disputed facts contained in these administrative complaints. See Lee v. City of Los Angeles, 250 F.3d 668, 690 (9th Cir. 2001).
Finally, plaintiff's motion to compel arbitration is accompanied by several letters between Steve Cutty, the Field Representative for the Union, and Robert Bloom, the Executive Director of WIB. (See FAC Exs. B-F.) Although the parties dispute the legal significance of these letters, they are attached to the complaint, are central to plaintiff's case, and neither party disputes their authenticity. See Daniels-Hall, 629 F.3d at 998. Accordingly, "[t]he court does not take judicial notice of the facts contained in these documents but will take judicial notice that correspondence occurred." Robinson v. Salazar, 838 F. Supp. 2d 1006, 1030 n.11 (E.D. Cal. 2012) (McAuliffe, J.).
III. Motion to Stay
Section 301 of the LMRA provides that "[s]uits for violation of contracts between an employer and a labor organization . . . may be brought in any district court in the United States having jurisdiction of the parties, without respect to the amount in controversy or . . . the citizenship of the parties." 29 U.S.C. § 185(a). "Although district courts have concurrent jurisdiction with the NLRB over such cases, federal courts . . . must defer to the NLRB when, on close examination, section 301 cases fall within the NLRB's primary jurisdiction." Serv. Emps. Int'l Union v. St. Vincent Med. Ctr., 344 F.3d 977, 983 (9th Cir. 2003) (quoting United Ass'n of Journeymen & Apprentices of the Plumbing & Pipefitting Indus., Local 342 v. Valley Eng'rs, 975 F.2d 611, 613-14 (9th Cir. 1992) (internal quotation marks omitted)).
"To determine whether a case is within the NLRB's primary jurisdiction, we have drawn the jurisdictional line by asking whether the major issues to be decided . . . can be characterized as primarily representational or primarily contractual." Id. (quoting Pace v. Honolulu Disposal Serv., Inc., 227 F.3d 1150, 1152 (9th Cir. 2000) (internal quotation marks omitted)). For instance, the court does not have "initial authority to consider and pass upon questions of representation and determination of appropriate bargaining units." Local 3-193 Int'l Woodworkers of Am. v. Ketchikan Pulp Co., 611 F.2d 1295, 1301 (9th Cir. 1980). By contrast, a suit that "turns on a question of contract interpretation . . . is properly in federal court rather than before the NLRB." Pace, 277 F.3d at 1157.
"[T]he major issue to be decided in this case - the arbitrability of the alleged violations of the Agreement - is primarily contractual." St. Vincent, 344 F.3d at 983; see also Bhd. of Teamsters & Auto Truck Drivers Local No. 70 v. Celotex Corp., 708 F.2d 488, 490 n.3 (9th Cir. 1983) ("[P]rimary jurisdiction lies with the district court for breach of collective bargaining agreement claims." (citations omitted)). Plaintiff's NLRB and PERB charges allege only that defendant violated the NLRA and MMBA by refusing to allow union representatives to attend informal meetings as part of the grievance resolution process. (See RJN Exs. B and G.) By contrast, plaintiff's grievances allege that defendant violated various terms in the CBA relating to hours, medical benefits, job postings, access to personnel files, and the informal grievance procedure itself. (See FAC Ex. B.) The application of the CBA to these grievances "does not depend even partially on the question of whom the union represents." St. Vincent, 344 F.3d at 983 (quoting Valley Eng'rs, 975 F.2d at 614 (internal quotation marks omitted)).
Defendant argues that this dispute is representational because it involves "whether employees are entitled to have Union representation during its initial informal grievance resolution process." (See Mot. to Stay 7:1-2.) Not so. A dispute is not representational simply because it implicates union representation. Rather, a representational dispute involves "determining the appropriate group of employees for the bargaining unit." Cappa v. Wiseman, 659 F.2d 957, 959 (9th Cir. 1981). It is undisputed that plaintiff is the authorized bargaining representative for the employees whose grievances are at issue here. (See FAC Ex. A § II.) Even if this case had "representational overtones," which it does not, that would not be sufficient to stay a "classic contractual dispute" such as this action. Pace, 227 F.3d at 1157.
Nor does the pendency of parallel administrative proceedings justify a stay. The Ninth Circuit has held that when a question of contract interpretation is "inextricably bound up" with a representational issue before the NLRB, the court must consider whether the NLRB's decision will preclude the contract claim and whether the equities favor a stay. Cent. Valley Typographical Union No. 46 v. McClatchy Newspapers, 762 F.2d 741, 747-48 (9th Cir. 1985), abrogated on other grounds by Cortez Byrd Chips, Inc. v. Bill Harbert Constr. Co., 529 U.S. 193 (2000). But these considerations are relevant "only when the dispute involves representational issues." Id. (citation omitted). Even when a "§ 301 suit and [an] unfair labor practice charge involve a virtually identical issue," a district court need not stay an action that "addresse[s] no issues within the NLRB's primary jurisdiction." Int'l Bhd. of Elec. Workers, Local 352 v. Brink Constr. Co., 825 F.2d 207, 213 (9th Cir. 1987).
An analogous rule applies in the context of PERB proceedings. See, e.g., Keiser v. Lake County Superior Court, No. C05-02310 MJJ, 2005 WL 3370006, at *6 (N.D. Cal. Dec. 12, 2005) (holding that plaintiff's federal claims were not barred by the pendency of her PERB charge even though they were "based on the same conduct underlying her PERB charge.")
As explained above, plaintiff's NLRB and PERB charges allege only that defendant violated federal and state labor law by refusing to allow union representatives to be present during the informal grievance resolution process. This allegation is distinct from those raised in the grievances themselves, which are based on the terms of the CBA and therefore fall under the primary jurisdiction of the court. Celotex Corp., 708 F.2d at 4 90 n.3; cf. Int'l Union of Painter and Allied Trades, Dist. 15, Local 159 v. J&R Flooring, Inc., 656 F.3d 860, 869 (9th Cir. 2011) (noting that the NLRB "declined to reach the contractual dispute" in that case because it "was not the proper forum" (citation and internal quotation marks omitted)). As a result, the mere "potential of conflict between the court's decision and the NLRB's ultimate decision . . . does not compel the stay." Brink, 825 F.2d at 213. Accordingly, the court will deny defendant's motion to stay this action.
In fact, the NLRB dismissed plaintiff's charge on the basis that it "does not have jurisdiction" over plaintiff's administrative charge at all. (See RJN Ex. C, at 1.) Although plaintiff has appealed this determination, it would nonetheless be ironic to conclude that this dispute falls under the primary jurisdiction of an agency that has so far disclaimed jurisdiction.
IV. Motion to Compel Arbitration
A. Legal Standard
The FAA states that a written provision in "a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract . . . shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract." 9 U.S.C. § 2. "[T]he FAA limits courts' involvement to 'determining (1) whether a valid agreement to arbitrate exists and, if it does, (2) whether the agreement encompasses the dispute at issue.'" Cox v. Ocean View Hotel Corp., 533 F.3d 1114, 1119 (9th Cir. 2008) (quoting Chiron Corp v. Ortho Diagnostic Sys., Inc., 207 F.3d 1126, 1130 (9th Cir. 2000)). "[A]ny doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration, whether the problem at hand is a construction of the contract language itself or an allegation of waiver, delay, or like defense to arbitrability." Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25 (1983).
The FAA "leaves no place for the exercise of discretion by a district court, but instead mandates that district courts shall direct the parties to proceed to arbitration on issues as to which an arbitration agreement has been signed." Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 218 (1985) (emphasis in original). Upon a showing that a party has failed to comply with a valid arbitration agreement, the district court must issue an order compelling arbitration. See Cohen v. Wedbush, Noble Cooke, Inc., 841 F.2d 282, 285 (9th Cir. 1988), overruled on other grounds by Ticknor v. Choice Hotels Intern., Inc., 265 F.3d 931 (9th Cir. 2001).
B. Discussion
"[L]ongstanding Supreme Court precedent encourag[es] the use of contractual arbitration provisions to resolve labor disputes." J & R Flooring, 656 F.3d at 869 (citations omitted). "The function of the court . . . is confined to ascertaining whether the party seeking arbitration is making a claim which on its face is governed by the contract. Whether the moving party is right or wrong is a question of contract interpretation for the arbitrator." United Steelworkers Co. v. Am. Mfg. Co., 363 U.S. 564, 567-68 (1960). The presence of an arbitration clause in a collective bargaining agreement raises a presumption in favor of arbitration, such that "[a]n order to arbitrate . . . 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." Inlandboatmens Union of Pac. v. Dutra Grp., 279 F.3d 1075, 1079 (9th Cir. 2002) (quoting AT&T Techs., Inc. v. Commc'ns Workers of Am., 475 U.S. 643, 650 (1986) (internal quotation marks omitted)).
The CBA's grievance procedure applies to any "claim or complaint . . . concerning the interpretation or application of this Agreement regarding any action of the employer pertaining to wages, hours, or working conditions." (See FAC Ex. A § XIX(A).) As explained above, plaintiff's grievances allege that defendant violated numerous terms in the CBA relating to hours, medical benefits, job postings, access to personnel files, and use of the informal grievance procedure. (See id. Ex. B.) Plaintiff also alleges that it satisfied each of the steps outlined in the CBA's grievance procedure and ultimately requested arbitration. (See FAC ¶¶ 5-11; see also FAC Exs. B-F.) As a result, plaintiff has shown that the arbitration provision of the CBA "encompasses the dispute at issue" and that it is entitled to arbitrate its grievances. See Cox, 533 F.3d at 1119.
Defendant does not dispute that plaintiff's grievances arise under the terms of the CBA. Rather, defendant contends that it is not required to arbitrate these grievances because plaintiff has not initiated an informal resolution of these grievances. (See Mot. to Stay 10-11.) Defendant argues that plaintiff's efforts to initiate informal proceedings with union representatives fail to comply with the CBA because the CBA permits only the employee, defendant, and defendant's Business and Employment Services Manager to attend an informal meeting. (See id.; see also Def.'s Reply at 8-9 (Docket No. 15).) As a result, defendant concludes, plaintiff has not satisfied a condition precedent to arbitration and its motion to compel arbitration should be denied. (See Def.'s Reply at 9.)
The court need not resolve this argument because it is a "procedural question" that should be decided by an arbitrator, not by the court. Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 85 (2002); see also, e.g., Hosp. & Inst. Workers Union Local 250 v. Marshal Hale Mem'l Hosp., 647 F.2d 38, 41 (9th Cir. 1981) (holding that disputes regarding "alleged non-compliance with a similar multiple-step [grievance] procedure . . . should be resolved by the arbitrator" (citation omitted); Cannery Workers, Processors, Warehousemen, & Helpers, Teamsters Local 601 v. Diamond Foods, Inc., No. 2:09-cv-01175 GEB JFM, 2009 4505909, at *4-5 (E.D. Cal. Nov. 20, 2009) (holding that union's alleged failure to file a written grievance, as required by the parties' CBA, was a "procedural question" that did not bar the court from compelling arbitration).
John Wiley & Sons, Inc. v. Livingston, 376 U.S. 543 (1964), is also instructive. Wiley argued that it was excused from arbitrating a dispute with its union because the union had not exhausted the three-step grievance procedure set forth in the collective bargaining agreement. Id. at 555-56. The Court disagreed. Id. at 556-57. It reasoned that once a court has determined "that the parties are obligated to submit the subject matter of a dispute to arbitration, 'procedural' questions which grow out of the dispute and bear on its final disposition should be left to the arbitrator." Id. at 557. The Court therefore concluded that "whether grievance procedures or some part of them apply to a particular dispute, whether such procedures have been followed or excused, or whether the unexcused failure to follow them avoids the duty to arbitrate" are procedural questions that do not bar a court from compelling arbitration. Id.
Defendant attempts to distinguish Wiley by noting that the grievance procedure there did not require informal resolution as a condition precedent to arbitration. (Def.'s Reply at 9.) This is a distinction without a difference: whether or not defendant's reading of the CBA is correct, it is not the court's place to "decide whether a condition precedent to arbitrability has been fulfilled." Howsam, 537 U.S. at 84 (citations omitted). It would be especially inappropriate for the court to do so here because plaintiff's seventh grievance alleges that defendant violated the CBA by refusing to process informal grievances brought by Union representatives in a timely manner. (See FAC Ex. B.) As a result, the question of whether plaintiff complied with the CBA's grievance procedures "cannot . . . be answered without consideration of the merits of the dispute which is presented for arbitration." Wiley, 376 U.S. at 557; see also Republic of Nicaragua v. Standard Fruit Co., 937 F.2d 469, 477-78 (9th Cir. 1991) (warning that courts "must be careful not to overreach and decide the merits of an arbitrable claim" in the course of interpreting an arbitration clause).
In short, the arbitration provision of the CBA encompasses plaintiff's grievances, see Cox, 533 F.3d at 1119, and an arbitrator, rather than the court, should decide whether plaintiff has complied with the grievance procedures set forth by the CBA. See Howsam, 537 U.S. at 85. Accordingly, the court must grant plaintiff's motion to compel arbitration.
In its Reply, plaintiff asks the court to order an attorney's fee award to punish defendant for its allegedly dilatory tactics. (Pl.'s Reply at 9-11 (Docket No. 17).) The court will not award attorney's fees at this time, and will consider the merits of a fee award only upon receipt of a properly filed motion for attorney's fees.
--------
IT IS THEREFORE ORDERED that:
(1) defendant's motion to stay or, in the alternative, to dismiss be, and the same hereby is, DENIED;
(2) plaintiff's motion to compel arbitration be, and the same hereby is, GRANTED.
________________________
WILLIAM B. SHUBB
UNITED STATES DISTRICT JUDGE