Installit, Inc. v. Carpenters 46 Northern California Counties Conference Board, No. 3:2016cv01514 - Document 37 (N.D. Cal. 2016)
Court Description: Order Granting Defendant's 23 Motion to Compel Arbitration and Staying Case. Signed by Judge Thelton E. Henderson on 10/04/2016. (tehlc1, COURT STAFF) (Filed on 10/4/2016)
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Installit, Inc. v. Carpenters 46 Northern California Counties Conference Board 1 UNITED STATES DISTRICT COURT 2 Doc. 37 NORTHERN DISTRICT OF CALIFORNIA 3 4 INSTALLIT, INC., Plaintiff, 5 6 7 8 9 v. CARPENTERS 46 NORTHERN CALIFORNIA COUNTIES CONFERENCE BOARD, Case No. 16-cv-01514-TEH ORDER GRANTING DEFENDANT'S MOTION TO COMPEL ARBITRATION AND STAYING CASE Defendant. 10 United States District Court Northern District of California 11 This matter came before the Court on September 19, 2016 for a hearing on 12 Defendant’s motion to compel arbitration. After carefully considering the parties’ written 13 and oral arguments, the Court now GRANTS Defendant’s motion and hereby STAYS 14 Plaintiff’s claim pending completion of arbitration. 15 16 17 BACKGROUND Plaintiff Installit Inc. (“Installit”) is a California corporation and employer in the 18 business of installing pre-fabricated doors and cabinets in the San Francisco Bay Area. 19 Compl. ¶ 4. Defendant Carpenters 46 Northern California Counties Conference Board 20 (“Carpenters” or “the Union”) is a labor organization with its principal place of business in 21 Oakland. Id. ¶ 5. 22 Installit has been a signatory to a collective bargaining agreement with Carpenters 23 since its formation as a company in 1993. Id. ¶ 15. The latest iteration of that agreement 24 was the 2011 Carpenters Master Agreement for Northern California (“2011 Agreement”), 25 which provided in part: 26 27 28 The Agreement shall remain in full force and effect from the 18th day of May, 2011 through the 30th day of June, 2015, and shall continue thereafter unless either party, not more than ninety (90) days nor less than sixty (60) days prior to the 30th Dockets.Justia.com 1 day of June, 2015 … serves written notice on the other of its desire to … extend or terminate this Agreement. 2 2011 Agreement § 2 (Ex. C to Imus Decl.). The parties agree that the terms of the 2011 3 Agreement were in effect when on April 15, 2015 Carpenters sent Installit a notice of 4 termination. Compl. ¶ 15. They dispute whether between April 15 and June 30, 2015 they 5 were bound by an additional agreement. Installit claims that it had become a signatory to 6 the 2014 Master Agreement (“2014 Agreement”) with Carpenters, which went into effect 7 on July 1, 2014 and was to expire on June 30, 2019. Compl. ¶ 15. The Union claims that it 8 had negotiated an agreement for the period of 2014 to 2018 with other employers and that 9 Installit never became a signatory to that agreement. Mot. at 2. 10 Between June 15th and June 30th, 2015, the parties entered into negotiations over a United States District Court Northern District of California 11 successor agreement. Compl. ¶ 16. During those negotiations, Installit alleges that 12 Carpenters’ representatives insisted that Installit would not be accepted as a signatory 13 unless B-K Mill, a third-party neutral employer, became a signatory and joined the Union. 14 Compl. ¶¶ 15-17. B-K Mill is a non-union manufacturer of cabinets and doors. Mot. at 3. 15 On June 30, 2015, Carpenters sent Installit a Notice of Impasse and a letter 16 declaring that Installit “is no longer bound to the Carpenters Master Labor Agreement for 17 Northern California.” Compl. ¶ 17. As a result of the termination, Installit allegedly lost all 18 of its contracts with manufacturers, terminated its employees and ceased doing business. 19 Id. ¶ 1. Installit’s loss of employees caused the Carpenters Pension Trust Fund for 20 Northern California to assess Installit over $1.4 million in withdrawal liability. Id. 21 Plaintiff claims that Defendant violated Section 8(b)(4) of the Labor Management 22 Relations Act (“LMRA”), 29 U.S.C.A. § 158(b)(4), when it terminated Installit for the 23 purpose of pressuring another employer, B-K Mill, to enter into a collective bargaining 24 agreement with the Union. Compl. ¶¶ 21-22. This conduct, Plaintiff alleges, constitutes an 25 unfair labor practice and gives rise to a cause of action for damages under Section 303 of 26 the LMRA, 29 U.S.C.A. § 187. Id. Plaintiff seeks declaratory relief, compensatory 27 damages, punitive damages, costs and attorneys’ fees. Compl. ¶ 3. 28 2 Defendant denies most allegations and raises a number of affirmative defenses, 1 2 including but not limited to: the arbitrability of Plaintiff’s claim, a statute of limitations 3 bar, and failure to exhaust remedies available through the National Labor Relations Board. 4 Answer at 4. 5 Defendant seeks to compel arbitration on the basis that the 2011 Agreement 6 requires arbitration of Plaintiff’s statutory claim. Mot. at 2. Section 51 of the 2011 7 Agreement includes a grievance and arbitration procedure leading to final and binding 8 arbitration of “any dispute concerning any application or interpretations of this 9 Agreement.” 2011 Agreement § 51 (emphasis added). Section 7 sets a procedure for 10 resolving disputes following a notice of termination: The Employer … specifically agrees that the permanent neutral Arbitrator may order … the parties to bargain in good faith for any period following a written notice of termination of this Agreement unless and until a lawful impasse occurs or until a successor Agreement is negotiated. United States District Court Northern District of California 11 12 13 14 2011 Agreement § 7 (Ex. C to Imus Decl.). Before the Court is Defendant’s motion to compel arbitration, filed on August 11, 15 16 2016. 17 18 LEGAL STANDARD 19 I. 20 The Federal Arbitration Act (“FAC”) The Federal Arbitration Act applies to arbitration agreements in any contract 21 affecting interstate commerce. See Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 119 22 (2001); 9 U.S.C.A. § 2. Section 4 of the FAA ensures that “private agreements to arbitrate 23 are enforced according to their terms.” Volt Info. Scis., Inc. v. Bd. of Trs. of Leland 24 Stanford Junior Univ., 489 U.S. 468, 479 (1989). Accordingly, a party to an arbitration 25 agreement can petition a United States District Court for an order directing that 26 “arbitration proceed in the manner provided for in such agreement.” 9 U.S.C.A. § 4. 27 Additionally, the FAA contains a mandatory stay provision. Id. § 3. 28 3 Under the FAA, arbitration agreements “shall be valid, irrevocable, and enforceable 1 2 save upon such grounds as exist at law or in equity for the revocation of any contract.” Id. 3 § 2. “[T]he FAA’s purpose is to give preference (instead of mere equality) to arbitration 4 provisions.” Mortensen v. Bresnan Commc’ns, LLC, 722 F.3d 1151, 1160 (9th Cir. 2013). 5 Nonetheless, arbitration “is a matter of consent, not coercion.” Volt, 489 U.S. at 479. In 6 accordance with this principle, the Supreme Court has held that parties may agree to limit 7 the issues subject to arbitration. Mitsubishi Motors Corp. v. Soler Chrysler–Plymouth, Inc., 8 473 U.S. 614, 628 (1985). “The party seeking arbitration bears the burden of proving the existence of an 9 arbitration agreement, and the party opposing arbitration bears the burden of proving any 11 United States District Court Northern District of California 10 defense, such as unconscionability.” Pinnacle Museum Tower Assn. v. Pinnacle Mkt Dev., 12 LLC, 55 Cal. 4th 223, 236 (2012). Furthermore, “the party resisting arbitration bears the 13 burden of proving that the claims at issue are unsuitable for arbitration.” Green Tree Fin. 14 Corp.-Ala. v. Randolph, 531 U.S. 79, 91 (2000) (internal citations omitted). 15 16 17 II. Section 301(a) of the Labor Management Relations Act (“LMRA”) A union may bring an action under Section 301 of the LMRA for specific 18 enforcement of an agreement to arbitrate. 29 U.S.C.A. § 185; see Textile Workers Union of 19 Am. v. Lincoln Mills of Ala., 353 U.S. 448, 458 (1957). The question of whether a dispute 20 is arbitrable is one for the court to decide based on the language of the contract. See AT&T 21 Technologies, Inc. v. Communications Workers of America, 475 U.S. 643, 649 (1986). 22 Where a labor agreement contains an arbitration clause, there is a presumption in favor of 23 arbitrability of disputes arising between the parties to the agreement. Id. at 650. This 24 presumption furthers the strong national policy favoring arbitration of labor disputes. Id. at 25 650-51. A court must defer to arbitration “unless it may be said with positive assurance 26 that the arbitration clause is not susceptible to an interpretation that covers the asserted 27 dispute,” and “doubts should be resolved in favor of coverage.” Id. at 650. 28 4 1 DISCUSSION Defendant brings the present motion under the Federal Arbitration Act, 9 U.S.C.A. 2 3 § 1 et seq., and Section 301 of the LMRA, 29 U.S.C.A. § 185(a). The Court finds that both 4 legal regimes necessitate arbitration of Plaintiff’s claim. 5 6 I. The FAA Requires Arbitration of Plaintiff’s Claim. In ruling on a motion to compel arbitration under the Federal Arbitration Act, a 7 8 district court’s inquiry is two-fold. The court decides “whether a valid agreement to 9 arbitrate exists; and if it does, whether the agreement encompasses the dispute at issue.” Cox v. Ocean View Hotel Corp., 533 F.3d 1114, 1119 (9th Cir. 2008) (quoting Chiron 11 United States District Court Northern District of California 10 Corp. v. Ortho Diagnostic Sys., Inc., 207 F.3d 1126, 1131 (9th Cir. 2000)). “If the 12 response is affirmative on both counts, the [FAA] requires the court to enforce the 13 arbitration in accordance with its terms.” Chiron, 207 F.3d at 1131. Here, the Court need not engage in the first part of the analysis. Plaintiff concedes 14 15 that a valid and enforceable agreement existed between the parties at the time of the 16 dispute. Between April 15, 2015 and June 30, 2015, the parties were bound by the 17 arbitration provisions of the 2011 Agreement.1 Neither the validity nor the substance of 18 those provisions is disputed. Plaintiff argues that even though it was bound by an agreement to arbitrate, its 19 20 statutory tort claim under Section 303 of the LMRA falls outside the scope of this 21 agreement. Opp’n at 2. First, Plaintiff alleges that the parties did not intend to arbitrate 22 statutory claims since they did not include language to that effect in the agreement. Id. at 23 8-9. Second, Plaintiff explains that its “entire case against Carpenters is based on the 24 allegation that Carpenters terminated its 2014 Master Agreement with Installit as part of 25 the Carpenters’ campaign to coerce … B-K Mill into becoming a signatory.” Id. at 2. This 26 1 27 28 Plaintiff’s allegation that there was another agreement in effect between the parties—the 2014 Agreement—does not have a bearing on the present analysis. Plaintiff does not argue that there is a difference in the language or the scope of the arbitration provisions of the 2011 Agreement and alleged 2014 Agreement. 5 1 conduct, Plaintiff claims, constitutes an “illegal secondary activity” in violation of Section 2 8(b)(4)(ii)(A) of the LMRA. Id. According to Plaintiff, whether or not Carpenters 3 committed an unfair labor practice does not require interpretation of the 2011 Agreement 4 and thus does not fall within the parties’ agreement to arbitrate. Id. at 4-8. Lastly, Plaintiff 5 questions an arbitrator’s expertise in adjudicating a Section 303 claim. Id. at 8. 6 Defendant contends that arbitration is not precluded in situations where a party 7 asserts a violation of a federal statute. Reply at 2. To the contrary, arbitration is compelled 8 as long as the parties’ agreement reaches the statutory issues and there is no congressional 9 command overriding the FAA’s mandate to compel arbitration. Id. Defendant argues that the parties’ agreement to arbitrate encompasses Installit’s statutory claim because the 11 United States District Court Northern District of California 10 factual allegation underlying the claim—Carpenters’ termination of Installit for an 12 unlawful purpose—touches matters in the 2011 Agreement. Id. at 5. Lastly, Defendant 13 asserts that the expertise, or lack thereof, of a labor arbitrator is irrelevant to the question 14 of whether a court or an arbitrator should decide the merits of Plaintiff’s claim. Id. at 12. 15 16 As discussed below, the Court finds that Plaintiff has not met its burden of proving that the statutory claim at issue is unsuitable for arbitration. 17 18 19 20 1. Statutory Claims Are Arbitrable Even Where an Arbitration Agreement Does Not Explicitly State So. Plaintiff asserts that its tort claim does not lend itself to arbitration because it arises 21 out of a violation of a federal statute, namely Section 8(b)(4) of the LMRA, 29 U.S.C.A. 22 §§ 158(b)(4). Plaintiff relies on Section 303(b) of the LMRA for the proposition that 23 resolution of the present dispute is only proper in federal court. Opp’n at 2-3. 24 Section 303(a) does provide that a party injured by an unfair labor practice, in 25 violation of Section 303(a), “may sue therefor in any district court of the United States.” 26 29 U.S.C.A § 187. However, the fact that Section 303 establishes a right to sue for 27 damages resulting from an unfair labor practice does not mean that federal courts retain 28 exclusive jurisdiction over those suits. To the contrary, the Supreme Court in Mitsubishi 6 1 stated in no uncertain terms that there is no reason to depart from the federal policy 2 favoring arbitration where a party bound by an arbitration agreement raises claims founded 3 on statutory rights. Mitsubishi, 473 U.S. at 626, 628 (explaining that “[b]y agreeing to 4 arbitrate a statutory claim, a party does not forgo the substantive rights afforded by the 5 statute; it only submits to their resolution in an arbitral, rather than a judicial, forum.”); see 6 Shearson/Am. Exp., Inc. v. McMahon, 482 U.S. 220, 226 (1987) (noting that the “duty to 7 enforce arbitration agreements is not diminished when a party bound by an agreement 8 raises a claim founded on statutory rights.”) In the decades following Mitsubishi, courts 9 have consistently enforced arbitration agreements for claims arising under federal statutes. See e.g., CompuCredit Corp. v. Greenwood, 132 S. Ct. 665, 673 (2012) (enforcing an 11 United States District Court Northern District of California 10 arbitration agreement for claims under the Credit Repair Organizations Act); Gilmer v. 12 Interstate/Johnson Lane Corp., 500 U.S. 20, 35 (1991) (enforcing an agreement to 13 arbitrate claims under the Age Discrimination in Employment Act). 14 Plaintiff next suggests that the Court must find language in the arbitration 15 agreement showing the parties’ intent to arbitrate statutory claims. Plaintiff relies on Old 16 Dutch Farms for the proposition that “absent a clear, explicit statement” in the agreement 17 that parties intended to arbitrate tort claims, it must be assumed that they did not. Opp’n at 18 8-9; Old Dutch Farms, Inc. v. Milk Drivers & Dairy Emp. Local Union No. 584, Int'l Bhd. 19 of Teamsters, Chauffeurs, Warehousemen & Helpers of Am., 359 F.2d 598, 603 (2d Cir. 20 1966). This is simply not the law. Since Old Dutch, the Supreme Court has repeatedly held 21 that statutory claims may be the subject of arbitration agreements even where those 22 agreements do not contain “a clear, explicit statement” to that effect. See e.g., Gilmer, 500 23 U.S. at 26; Mitsubishi, 473 U.S. 614, 625-27. The Second Circuit itself has disavowed 24 Plaintiff’s reading of Old Dutch. See Interstate Brands Corp. v. Bakery Drivers & Bakery 25 Goods Vending Machines, Local Union No. 550, Int'l Bhd. of Teamsters, 167 F.3d 764, 26 769 (2d Cir. 1999) (declining to follow Old Dutch’s requirement of a “clear and explicit 27 statement”). 28 7 Given that statutory claims can be resolved through arbitration even where an 1 2 agreement to arbitrate does not explicitly state so, the Court turns to the key question in 3 this proceeding—whether the arbitration provisions of the 2011 Agreement reach or 4 encompass Plaintiff’s Section 303 claim. 5 The Parties’ Arbitration Agreement Reaches the Statutory Issue. 6 2. 7 Courts must enforce valid arbitration agreements even when a party has raised a 8 federal statutory claim if the “agreement to arbitrate reache[s] the statutory issues” and if 9 Congress has not evinced an intention to preclude a waiver of judicial remedies for the statutory rights at issue. Mitsubishi, 473 U.S. at 628; see Gilmer, 500 U.S. at 26. The 11 United States District Court Northern District of California 10 arbitration agreement reaches or encompasses the statutory claim when the factual 12 allegations underlying that claim “touch matters” covered by the agreement containing the 13 arbitration clause. Simula, Inc. v. Autoliv, Inc., 175 F.3d 716, 721 (9th Cir. 1999). The 14 question here is not whether the arbitration agreement explicitly mentions unfair labor 15 practices or any other statutory claims for relief but “whether the factual allegations 16 underlying [the claim] are within the scope of the arbitration clause whatever the legal 17 labels attached to those allegations.” Mitsubishi, 473 U.S. at 622 n. 9. 18 (a) The Scope of the Parties’ Arbitration Agreement is Broad. 19 To determine whether the agreement to arbitrate encompasses Plaintiff’s claim, the 20 21 Court must first ascertain the scope of the arbitration clause by analyzing its plain 22 language. See Simula, 175 F.3d at 720-21. Here, the parties have agreed to arbitrate “any 23 dispute concerning any application or interpretations of this Agreement.” 2011 Agreement 24 § 51. 25 Plaintiff argues that the scope of this arbitration clause is narrow and does not reach 26 its allegation of an unfair labor practice. Reply at 4. Plaintiff asks the Court to distinguish 27 the present clause from the arbitration clause at issue in Interstate Brands, which covered 28 disputes arising from “any act or conduct between the parties.” Id. at 5; Interstate Brands 8 1 Corp, 167 F.3d at 765. The arbitration clause here could be narrower that the clause in 2 Interstate Brands and it could still be broad enough to reach Plaintiff’s claim. 3 Multiple courts have interpreted broadly arbitration clauses similar to the one here 4 and have ordered arbitration of statutory claims pursuant to those clauses. In Simula, the 5 Ninth Circle interpreted broadly an arbitration clause covering “all disputes arising in 6 connection with [an] agreement” between an inventor of air bag systems and a supplier of 7 components. Simula, 175 F.3d at 720-21 (ordering arbitration of plaintiff’s antitrust, 8 trademark, trade secret and defamation claims). In Mediterranean Enterprises, the Ninth 9 Circuit found a clause requiring arbitration of “any disputes arising hereunder the Agreement” to be more narrow than a clause requiring arbitration of disputes “relating to” 11 United States District Court Northern District of California 10 an agreement. Mediterranean Enterprises, Inc. v. Ssangyong Corporation, 708 F.2d 1458, 12 1464 (9th Cir. 1983). In Coors Brewing, the Tenth Circuit ruled that an arbitration clause 13 covering “any dispute arising in connection with the implementation, interpretation or 14 enforcement” of an agreement was sufficiently broad to cover antitrust disputes between 15 the parties. Coors Brewing Co. v. Molson Breweries, 51 F.3d 1511, 1515 (10th Cir.1995). 16 Given the Supreme Court’s admonition that “ambiguities as to the scope of the 17 arbitration clause [be] resolved in favor of arbitration,” the Court is bound to interpret the 18 scope of the parties’ arbitration agreement liberally. Volt, 489 U.S. at 468. Disputes 19 “concerning any application or interpretations” of the agreement between Installit and 20 Carpenters are analogous to disputes “arising in connection” with an agreement, as in 21 Simula, and disputes “relating to” an agreement, as discussed in Mediterranean 22 Enterprises. Compare 2011 Agreement § 7, with Simula, 175 F.3d at 720-21, and 23 Mediterranean Enterprises, 708 F.2d at 1464. The Court therefore finds that the arbitration 24 clause in Section 51 of the 2011 Agreement lends itself to broad interpretation and could, 25 depending on Plaintiff’s allegations, encompass a statutory claim. 26 27 28 9 1 (b) Plaintiff’s Factual Allegations Touch Matters Covered by the 2011 2 Agreement. 3 To require arbitration, Plaintiff’s factual allegations “need only ‘touch matters’ 4 covered by the contract containing the arbitration clause and all doubts are to be resolved 5 in favor of arbitrability.” Simula, 175 F.3d at 721. Accordingly, the Court will examine the 6 factual allegations raised and whether those could be resolved without any reference to 7 matters within the 2011 Agreement. 8 9 Plaintiff has made the following factual allegations: Carpenters unilaterally and without cause terminated Installit as a signatory to the Agreement (Compl. ¶ 21); Carpenters “improperly declared an impasse in negotiations with Installit” (Id. ¶ 1); those 11 United States District Court Northern District of California 10 actions were committed for the purpose of pressuring B-K Mill to enter into a collective 12 bargaining agreement with Carpenters (Id.; Opp’n at 2); “the only reason Carpenters ever 13 gave Installit for not accepting Installit as a signatory to the 2014 Master Agreement was 14 that B-K Mill did not agree to become a signatory as well” (Compl. ¶ 17, Opp’n at 2); 15 Carpenter’s termination caused Installit to lose contracts and suffer damages (Compl. ¶ 1). 16 Those allegations, Plaintiff asserts, do not concern the application or interpretation of the 17 agreement and thus do not come within the scope of the arbitration agreement. Opp’ at 2. 18 Neither Plaintiff’s argument nor the authorities upon which Plaintiff relies are 19 persuasive enough to carry its burden under the FAA. See Green Tree Fin. Corp.-Ala. v. 20 Randolph, 531 U.S. 79, 91 (2000) (“the party resisting arbitration bears the burden of 21 proving that the claims at issue are unsuitable for arbitration.”) To begin with, Plaintiff’s 22 reliance on Old Dutch Farms, a Second Circuit case from 1966, is misguided. See Old 23 Dutch, 359 F.2d at 600-02. Plaintiff argues that because the arbitration clause in Old Dutch 24 is similar to the arbitration clause here and the Old Dutch court found the employer’s 25 Section 303 claim non-arbitrable, the Court should do the same here. Opp’n at 4-6. Not so. 26 Old Dutch is factually distinguishable and legally not binding. 27 In Old Dutch, plaintiff Old Dutch Farms alleged that defendant union had engaged 28 in an unfair labor practice by inducing employees of a neutral employer, a supplier of Old 10 1 Dutch Farms, to engage in work stoppages in an effort to pressure the neutral employer to 2 stop doing work with Old Dutch Farms. Id. at 600-01. Because the determination of 3 whether the union had engaged in an unlawful labor practice did not depend on the 4 provisions of the contract between Old Dutch and the union, the court held that plaintiff’s 5 claim fell outside the agreement to arbitrate. Id. at 601. While the alleged conduct in Old 6 Dutch was independent from the contractual relationship between the parties, the same is 7 not true here. 8 9 In Old Dutch, the basis of plaintiff’s claim was the union’s conduct against a third party neutral employer, which could be resolved without reference to the agreement between Old Dutch and the union. Id. In contrast here, the basis of Plaintiff’s claim is the 11 United States District Court Northern District of California 10 union’s conduct against Installit—its termination for an unlawful purpose from the 2011 12 Agreement—which cannot be resolved without inquiring into Carpenter’s purpose for 13 terminating Installit and thus without interpreting terms of the agreement. In addition, Old 14 Dutch was decided five decades ago, before courts began imposing a very liberal federal 15 policy favoring arbitration agreements. See Moses H. Cone Mem. Hosp., 460 U.S. at 24-25 16 (“The Arbitration Act establishes that, as a matter of federal law, any doubts concerning 17 the scope of arbitrable issues should be resolved in favor of arbitration, whether the 18 problem at hand is the construction of the contract language itself or an allegation of 19 waiver, delay, or a like defense to arbitrability.”) 20 Plaintiff next argues that the Union attempted to bring the dispute into the purview 21 of the arbitration clause by raising defenses based on provisions of the 2011 Agreement. 22 Plaintiff relies on Limbach for the argument that because the Union’s defenses under the 23 agreement are irrelevant to the question of whether the Union committed an unfair labor 24 practice in violation of Section 303, the Union’s defenses do not bring the current dispute 25 within the scope of the arbitration clause. Opp’n at 6-8. The holding of Limbach does not 26 extend this far. See Limbach v. Sheet Metal Workers Intern. Ass’n, AFL-CIO, 949 F.2d 27 1241 (1991). 28 In Limbach, the Third Circuit held that the right of a union to terminate an employer 11 1 within the terms of the collective bargaining agreement does not allow it to terminate an 2 employer for an unlawful purpose. Id. at 1252-53. The defendant union claimed that its act 3 of walking away from a bargaining relationship could not, as a matter of law, constitute 4 coercion with the meaning of Section 8(b)(4)(ii) of the LMRA because the union had a 5 right to disclaim a Section 8(f) agreement. Id. at 1250. In ruling against the union, the court 6 reiterated the well-known legal principle that “an action normally lawful may be unlawful 7 if undertaken to accomplish a forbidden objective.” Id. at 1252. There is no doubt here that 8 the Union could be held liable under Section 303 of the LMRA if it did, in fact, terminate 9 Installit for the purpose of coercing B-K Mill into entering into a collective bargaining relationship with the Union. But Limbach simply does not address the question of whether 11 United States District Court Northern District of California 10 an arbitrator or a federal court should resolve the issue of liability where, as here, the 12 parties had entered into a binding arbitration agreement. 13 At oral argument, Plaintiff reiterated that its claim for damages arises out of the 14 Union’s conduct in terminating Installit for the purpose of pressuring B-K Mill to join the 15 union, an unfair labor practice in violation of Section 8(b)(4)(ii)(A) of the LMRA. Plaintiff 16 contends there is nothing about its claim that requires an application or interpretation of the 17 2011 Agreement. Opp’n at 2. This could be true if the factual basis for the unlawful 18 conduct was, in fact, wholly independent from the parties’ contractual relationship, as it 19 perhaps was in Old Dutch. See Old Dutch, 359 F.2d at 600-03. But here, the basis for the 20 alleged violation is the Union’s conduct in terminating Installit for an unlawful purpose, 21 not its conduct with respect to other employers. Whether the termination was done for an 22 unlawful purpose, in turn, touches matters within the agreement. Sections 2, 6, 7, 33 and 23 50 of the 2011 Agreement are implicated not because they determine the outcome of 24 Plaintiff’s claim, but because they are relevant to the resolution of that claim. 25 In sum, the Court finds that the factual allegations underlying Plaintiff’s claim 26 concern the reasons behind Carpenter’s termination of Installit and thus touch matters in 27 the agreement. Provided that “the standard for demonstrating arbitrability is not high,” 28 Simula, 175 F.3d at 719, and that the Court is required to resolve doubts as to the scope of 12 1 arbitrable issues in favor of coverage, the Court holds that the arbitration agreement 2 between Installit and Carpenters reaches and encompasses Installit’s statutory claim. 3 4 5 6 3. Plaintiff Has Not Met Its Burden Demonstrating Congressional Intent to Preclude Arbitration of Section 303 Claims. Upon finding that an arbitration agreement encompasses the statutory claim, courts 7 will order arbitration unless the party opposing arbitration can show that Congress 8 intended to preclude a waiver of judicial remedies for the statutory claim at issue. See 9 Gilmer, 500 U.S. at 26; see also McMahon, 482 U.S. at 227. 10 Plaintiff has brought to the Court’s attention no evidence of congressional intent to United States District Court Northern District of California 11 bar arbitration of Section 303 claims. Plaintiff relies entirely on the language of Section 12 303(b), which allows a party to bring a case in federal court for damages suffered as a 13 result of an unfair labor practice. Opp’n at 3; 29 U.S.C.A. § 187(b). But the Supreme Court 14 squarely rejected the argument that the mere creation of a cause of action is sufficient to 15 demonstrate congressional intent to preclude arbitration. See Greenwood, 132 S. Ct. at 670 16 (“If the mere formulation of the cause of action in this standard fashion were sufficient to 17 establish the ‘contrary congressional command’ overriding the FAA…, valid arbitration 18 agreements covering federal causes of action would be rare indeed. But that is not the 19 law.”) (internal citations omitted). Thus, absent evidence in the statute’s text or legislative 20 history that Congress intended to preclude a Section 303 claim from arbitration, this Court 21 is bound to presume a Section 303 claim arbitrable. See Mitsubishi, 473 U.S. at 629. 22 23 24 25 4. It Is Irrelevant Whether This Court Or An Arbitrator Has More Expertise in Adjudicating Section 303 Claims Plaintiff contends this Court is better suited to decide the merits of Plaintiff’s 26 Section 303 claim than an arbitrator because a labor arbitrator does not have expertise in 27 resolving such statutory tort claims. Opp’n at 8. As Defendant points out, the Supreme 28 Court has repeatedly rejected this argument. Reply at 12; see e.g., Mitsubishi, 473 U.S. at 13 1 633-34; Gilmer, 500 U.S. at 30-32. The complexity of an area of law, or the fact that a 2 claim under a particular statute was tradionally heard in a judicial form, does not remove 3 an otherwise arbitrable claim from arbitration. See Mitsubishi, 473 U.S. at 633-34. In fact, 4 access to expertise is considered one of the hallmarks of arbitration. Id. at 633 (“The 5 anticipated subject matter of the dispute may be taken into account when the arbitrators are 6 appointed, and arbitral rules typically provide for the participation of experts either 7 employed by the parties or appointed by the tribunal.”) 8 9 Plaintiff has not convinced the Court to stray from the current legal regime, which stresses the “unique and critical role played by arbitration in the context of a collective bargaining agreement.” Sw. Reg'l Council of Carpenters v. Drywall Dynamics, Inc., 823 11 United States District Court Northern District of California 10 F.3d 524, 529 (9th Cir. 2016). 12 13 14 II. Section 301 of the LMRA Also Compels Arbitration of Plaintiff’s Claim Defendant seeks to compel arbitration pursuant to Section 301 of the LMRA, which 15 confers jurisdiction on federal courts to enforce collective bargaining agreements, 16 including agreements to arbitrate. 29 U.S.C.A. § 185; see Textile Workers, 353 U.S. at 455. 17 In ruling on an action to compel arbitration under Section 301, a court must defer to 18 arbitration “unless it may be said with positive assurance that the arbitration clause is not 19 susceptible to an interpretation that covers the asserted dispute.” AT&T Techs, 475 U.S. at 20 650 (citing Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582-83 (1960)). 21 In the present case, the Court cannot say “with positive assurance” that the 22 arbitration clause is not susceptible to an interpretation that covers Plaintiff’s claim. As 23 discussed above, Plaintiff’s claim that it was terminated for an unlawful purpose concerns 24 the application of a number of provisions of the 2011 Agreement. Further, the agreement 25 does not contain any provisions excluding certain grievances from arbitration. In situations 26 such as this, the presumption in favor arbitration is even more applicable. See AT&T 27 Techs, 475 U.S. at 650. 28 14 1 2 CONCLUSION For the reasons states above, the Court GRANTS Defendant’s motion to compel 3 arbitration and directs the parties to proceed to arbitration. Pursuant to Section 3 of the 4 Federal Arbitration Act, the Court STAYS the current action pending completion of 5 arbitration. 9 U.S.C.A. § 3. The parties shall file a joint statement within ten days of the 6 arbitrator’s decision. 7 8 IT IS SO ORDERED. 9 10 United States District Court Northern District of California 11 Dated: 10/04/16 _____________________________________ THELTON E. HENDERSON United States District Judge 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 15
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