Unpublished Disposition, 857 F.2d 1478 (9th Cir. 1988)

OIL, CHEMICAL AND ATOMIC WORKERS INTERNATIONAL UNION, andits LOCAL 1-547, Plaintiff-Appellant,v.CHEVRON U.S.A., INC., a Delaware corporation, Defendant-Appellee.

No. 87-6440.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted May 4, 1988.Decided Sept. 1, 1988.

Before GOODWIN and HALL, Circuit Judges, and ROBERT C. BELLONI,^*  District Judge.

MEMORANDUM^** 

BACKGROUND

In October 1986 Chevron U.S.A., Inc. (Chevron) informed the Oil, Chemical and Atomic Workers International Union (Union) that it would implement a mandatory drug testing program at its El Segundo refinery. Chevron rejected the Union's request to negotiate the program's rules. The Union filed a grievance contesting the unilateral implementation of the program. The Union claimed that the program violated Article I Section 1, Article X Section 12, Article XV, and Article XVIII Sections 3, 4, and 7 of the collective bargaining agreement. Chevron refused to process or arbitrate the grievance. On November 21, 1986 the Union filed a complaint for declaratory and injunctive relief. The district court concluded that no irreparable harm would result from the implementation of the program and on December 24, 1986 declined to issue a preliminary injunction or to compel arbitration.

The parties then filed cross-motions for summary judgment. Chevron sought to have the complaint dismissed, and the Union sought to compel arbitration. The court heard arguments on the motions on September 1, 1987. The district judge granted Chevron's motion and dismissed the complaint. He concluded that (1) Chevron was entitled to implement drug testing under management rights clause of the collective bargaining agreement; and, (2) the health and safety and the arbitration clauses did not require Chevron to arbitrate the grievance. The district judge also declined to issue a permanent injunction prohibiting implementation of the program pending arbitration. The Union does not contest the court's refusal to issue an injunction.

STANDARD OF REVIEW

An appeal from an order granting a summary judgment motion is reviewed de novo. State of Alaska v. United States, 754 F.2d 851, 853 (9th Cir.), cert. denied, 474 U.S. 968 (1985). Likewise, denial of a motion to compel arbitration is reviewed de novo. Lorber Industries of Cal. v. Los Angeles Printworks, 803 F.2d 523, 524-25 (9th Cir. 1986).

DISCUSSION

The Union claims that the judge considered the merits of the dispute and improperly applied the law when he interpreted the agreement and refused to order arbitration. Chevron argues that the agreement does not require it to arbitrate the implementation of the drug testing program.

A. National Labor Policy

The court's duty is to interpret the collective bargaining agreement to determine whether the parties intended to arbitrate a particular grievance. AT & T Technologies v. Communications Workers, 475 U.S. 643, 651 (1986). If the court determines that the parties intended to arbitrate a dispute, it is left to the arbitrator to resolve the merits of the parties' substantive interpretations of the agreement. Id. However, arbitration is a right created by contract, and a party cannot be compelled to arbitrate that which he has not agreed to arbitrate. Id. at 648. The national labor policy strongly favors the use of arbitration as a means of resolving labor disputes. See Utility Workers of America v. So. Cal. Edison Co., Nos. 87-5674, 87-5702, slip op. at 5142 (9th Cir. May 4, 1988), amended, August 19, 1988. The policy is designed to promote industrial peace and avoid the economic upheaval that results from strikes and employer lockouts. To facilitate this policy the Supreme Court has established a number of rules of construction for collective bargaining agreements and arbitration clauses.

The Supreme Court has created a strong presumption in favor of arbitration. "An order to arbitrate the particular grievance 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. Doubts should be resolved in favor of coverage." United Steelworkers of America v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582-83 (1960). See also Local No. 70 v. Interstate Distributor Co., 832 F.2d 507, 509 (9th Cir. 1987). When the agreement contains a broad arbitration clause " ' [i]n the absence of any express provision excluding a particular grievance from arbitration, we think only the most forceful evidence of a purpose to exclude the claim from arbitration can prevail.' " AT & T Technologies, 475 U.S. at 650 (quoting Steelworkers v. Warrior & Gulf, 363 U.S. at 584-85).

In order to properly interpret the arbitration clause the court also examines the agreement's no-strike clause. When there is no exception in the no-strike clause courts should avoid reading exceptions into the arbitration clause because "one is the quid pro quo for the other." United Steelworkers of America v. American Manufacturing Company, 363 U.S. 564, 567 (1960). See also Independent Soap Workers v. Procter & Gamble Mfg. Co., 314 F.2d 38, 42 (9th Cir.) (court considers inclusion of no-strike clause and bargaining history to determine parties' intent concerning the arbitration clause), cert. denied, 374 U.S. 807 (1963).

B. Interpretation

The four clauses relied upon by the parties to determine whether the dispute is arbitrable are the no-strike clause, the arbitration clause, the management rights clause, and the health and safety clause. The no-strike clause admits of no exceptions.

The arbitration clause provides that employees may present complaints or grievances to the company "with the understanding that the general subject of wages, hours, and working conditions shall not be considered a complaint excepting insofar as the applicability thereof to a particular case may make it a matter of direct individual concern only to the employee or employees asserting the same." Chevron argues that this language provides that the Union cannot dispute a management decision until it is applied to a specific employee. Chevron relies on Oil, Chemical & Atomic Workers, Etc. v. Shell Oil, 555 F. Supp. 142 (S.D. Tex. 1983), aff'd mem., 724 F.2d 975 (5th Cir. 1984) for the proposition that it has no duty to arbitrate a policy grievance. In Shell Oil the employer implemented a rule requiring employees to shave their beards for safety reasons. The district court concluded that safety measures were expressly exempt from the grievance process, and as no employee had been disciplined there was nothing to arbitrate. Id. at 145. Here the language of the health and safety article does not support the same construction. Article XVIII section 4(a) merely provides that "health and safety recommendations" from the safety committee are not arbitrable. (emphasis supplied). Chevron does not claim that any part of the drug testing program was submitted to the safety committee for a recommendation.

Likewise, the agreement's language does not support Chevron's argument that it is not bound to arbitrate rules that have not yet been applied to an individual employee. The arbitration clause provides that employees can grieve a dispute if the application "may make it a matter of direct individual concern ... to the employee or employees asserting the same." The language does not require an employee to have faced the immediate threat of discipline before a grievance is proper. Chevron does not contend that the implementation of a mandatory drug testing program is not a matter of direct individual concern to the employees within the program's ambit.

Moreover, the language in the first paragraph of the arbitration clause must be read in conjunction with the language in the second paragraph. The second paragraph provides that " [a]ny employee or group of employees covered by this Agreement who believes himself or themselves to have been injured or treated unfairly by reason of application of any of the provisions of this Agreement" has the right to grieve and arbitrate the dispute. (emphasis supplied). This broad language provides that so long as the dispute is covered by the agreement, it is arbitrable. It makes no exception for what Chevron calls a policy grievance. The arbitration clause's broad language does not exclude "policy" grievances as Chevron contends. Nor does the language preclude arbitration of health and safety grievances.

A review of recent case law indicates that many unions and employers are arbitrating grievances over drug testing plans as they apply to all covered employees. See Intern. Broth. of Elec. Wkrs. v. Fla. Power & Light, 678 F. Supp. 257, 259 (S.D. Fla. 1987) (court enjoins implementation of drug testing program and orders parties to expidited arbitration); Oil, Chemical & Atomic Workers v. Amoco Oil Co., 653 F. Supp. 300, 302 (D.N.D. 1986) (parties agree that implementation of mandatory drug testing program arbitrable); Stove, Furnace & Allied Appliance v. Weyerhaeuser, 650 F. Supp. 431, 433-34 (S.D. Ill. 1986) (court enjoins implementation of drug testing program pending arbitration); International Chemical Workers Union v. Olin Corp., No. 87 C 5745 (N.D. Ill. August 3, 1987) (available in Westlaw DCT data base) (court orders parties to expedited arbitration of drug testing program before it is applied to an individual employee).

Chevron argues that this court's decision in Aluminum Co. of America v. International U., Etc., 630 F.2d 1340 (9th Cir. 1980) supports its view of the agreement. However, the factual underpinnings of Aluminum Company are distinguishable from the instant case. In Aluminum Company the parties had tried to bargain the terms of a new attendance policy in contract negotiations but were unsuccessful. After the parties signed the contract the employer unilaterally implemented the policy. The employer then refused to arbitrate the attendance policy until it was applied to a specific employee. The district court denied the union's motion to compel arbitration. This court concluded that the policy "may be unfair or an impermissible company policy, but the parties agreed to leave the resolution of these issues to the collective bargaining process, negotiation, the economic strength of the parties, and such judicial action as may be available, at least until the policy is applied in particular cases." Id. at 1344 (footnote omitted). Important to the decision was the fact that the parties had attempted negotiation, and that the union retained the right to strike over grievances that were deemed non-arbitrable. Id. at 1342.

In the instant case there is no evidence of negotiation. Furthermore, the Union gave up its right to settle the drug testing dispute through its "economic strength" when it agreed to the broad no-strike clause. It is presumed therefore that the parties chose arbitration to settle the dispute. See Steelworkers v. American Manufacturing, 363 U.S. at 567. In Aluminum Company the employer refused to arbitrate the attendance policy before it was applied to a specific employee. The undisputed facts in this case establish that in 1985 Chevron, at the Union's request, arbitrated a grievance filed over its new attendance policy before it was applied to a specific employee. The contractual relationship and the bargaining history of Chevron and the Union are very different from that of the parties in Aluminum Company.

The final clause to be examined is the management rights clause. The agreement contains a management rights clause covering several areas of plant operations. However, that clause does not provide that disputes which arguably fall under it are exempt from arbitration. The language has just the opposite effect. It begins " [s]ubject to the provisions of this agreement" management functions are vested in the company. The arbitration clause is a provision of the agreement; accordingly the functions in the management rights clause are subject to the arbitration clause. Chevron gains no support for its position from this clause. In the absence of an express provision only forceful evidence of the intent to exclude the dispute from arbitration will prevail. AT & T Technologies, 475 U.S. at 654 (Brennan, J., Concurring). Accord Teamsters Union Local 287 v. Frito-Lay, Inc., 849 F.2d 1210, 1212-13 (9th Cir. 1988). If Chevron is to defeat the plain language of the agreement then it must present forceful evidence that the parties did not intend the arbitration clause to apply.

Chevron argues the agreement's language is unambiguous, therefore the court may not examine extrinsic evidence to interpret the agreement. Extrinsic evidence is generally inadmissible to contradict a clear contract term. Hotel Emp., et al. Health Tr. v. Elks Lodge, 1450, 827 F.2d 1324, 1327 (9th Cir. 1987). The district court relied exclusively on the four corners of the document in reaching its decision. However, bargaining history is important in determining whether the parties have agreed to arbitrate a dispute. See AT & T Technologies, 475 U.S. at 655 (Brennan, J., Concurring) Independent Soap Workers, 314 F.2d at 42.