George Day Const. Co., Inc. v. United Broth. of Carpenters and Joiners of America, Local 354

• Decision Date: 04 January 1984
• Docket Number: No. 83-1512,83-1512
• Parties: 115 L.R.R.M. (BNA) 2459, 100 Lab.Cas. P 10,758 GEORGE DAY CONSTRUCTION CO., INC., Petitioner/Appellant, v. UNITED BROTHERHOOD OF CARPENTERS AND JOINERS OF AMERICA, LOCAL 354, Respondent/Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1471

722 F.2d 1471

115 L.R.R.M. (BNA) 2459, 100 Lab.Cas. P 10,758

GEORGE DAY CONSTRUCTION CO., INC., Petitioner/Appellant, v. UNITED BROTHERHOOD OF CARPENTERS AND JOINERS OF AMERICA, LOCAL 354, Respondent/Appellee.

No. 83-1512.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted June 13, 1983.

Decided Jan. 4, 1984.

Karen E. Ford, Littler, Mendelson, Fastiff & Tichy, San Francisco, Cal., for petitioner-appellant.

David A. Rosenfeld, Van Bourg, Allen, Weinberg & Roger, San Francisco, Cal., for respondent-appellee.

Appeal from the United States District Court for the Northern District of California.

Before WALLACE, TANG and NELSON, Circuit Judges.

TANG, Circuit Judge:

This appeal involves the validity of an arbitration award. The employer asserts that because the dispute arose after the expiration of the collective bargaining agreement the duty to arbitrate terminated with the agreement. The employer also contends that the subcontracting obligation did not survive the contract and that neither the arbitrator nor the district court had jurisdiction to determine this question. Finally the employer maintains that the arbitrator's conclusion contradicts the express terms of the contract. We conclude that the district court did not err in confirming the award. We affirm.

I

Between June 16, 1977, and June 16, 1980, the United Brotherhood of Carpenters and Joiners of America, Local 354 [the union] and the George Day Construction Co., Inc. [the employer] were parties to a collective bargaining agreement between the union and a multi-employer construction industry bargaining unit. In March and April 1980, the employer sought to withdraw from the multi-employer bargaining unit, and indicated its intention to cancel the collective bargaining agreement at its termination in June. The contract expired on June 16, 1980. The union and employer bargained over a possible new contract between June 1980 and August 26, 1980. They reached impasse on August 26, 1980.

After the contract expired but before impasse, the union filed a grievance on August 19, 1980. The grievance stated that before impasse the employer had commenced two construction projects and was using nonunion subcontractors on both jobs in violation of section 50 of the collective bargaining agreement. ¹

Both parties participated in the arbitration. The employer appeared and contested the arbitrator's authority. The union responded that the grievance was arbitrable. The parties also argued the merits of the dispute and, without reservation, submitted the matter to the arbitrator for decision.

The arbitrator ruled that the issue was arbitrable, i.e., that he had jurisdiction over the case, even though the events took place subsequent to the expiration of the contract. He ruled that the employer had violated section 50 of the collective bargaining agreement, and ordered backpay for those union employees who should have been employed on those projects. He also ordered the employer to refrain from violating section 50 in the future.

The employer subsequently brought suit under section 301 of the Labor Management Relations Act [the Act], 29 U.S.C. Sec. 185, to vacate the award. Both parties filed motions for summary judgment. The district court denied the employer's motion, granted the union's and confirmed the award.

II

The employer questions first the arbitrator's assumption of jurisdiction. The arbitrator ruled that the parties' duty to arbitrate survived the expiration of the contract even though the dispute arose after the expiration of the collective bargaining agreement. The district court held that the arbitrator's ruling was entitled to deference. We agree.

It is a settled principle of labor law that "arbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit." United Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582, 80 S.Ct. 1347, 1352, 4 L.Ed.2d 1409 (1960). It is equally settled that, in the usual case, the court is charged with the duty of deciding the issue of arbitrability. John Wiley & Sons, Inc. v. Livingston, 376 U.S. 543, 557, 84 S.Ct. 909, 918, 11 L.Ed.2d 898 (1964); Francesco's B., Inc. v. Hotel & Restaurant Employees & Bartenders Union, Local 28, 659 F.2d 1383, 1387 (9th Cir.1981). However, because an arbitrator's jurisdiction is rooted in the agreement of the parties, Ficek v. Southern Pacific Co., 338 F.2d 655, 657 (9th Cir.1964), the parties may agree to submit even the question of arbitrability An agreement to allow the arbitrator to decide the question of arbitrability may be acted upon by the arbitrator even though it is collateral to the collective bargaining agreement containing the arbitration clause. See Syufy Enterprises v. Northern California State Assn. of IATSE Locals, 631 F.2d 124, 125 (9th Cir.1980), cert. denied, 451 U.S. 983, 101 S.Ct. 2314, 68 L.Ed.2d 839 (1981). Moreover, consent to grant the arbitrator such authority may be implied from the conduct of the parties in the arbitration setting. See, e.g. International Brotherhood of Teamsters, Local 117 v. Washington Employers, Inc., 557 F.2d at 1350; Ficek v. Southern Pacific Co., 338 F.2d at 656-57.

                to the arbitrator for decision.   United Steelworkers v. Warrior & Gulf Co., 363 U.S. at 583 n. 7, 80 S.Ct. at 1353 n. 7;  International Brotherhood of Teamsters, Local 117 v. Washington Employers, Inc., 557 F.2d 1345, 1349 (9th Cir.1977)
                

In Washington Employers, the parties called upon the arbitrator to decide whether the employer's failure to pay bargained for wage increases was willful within the meaning of a state statute entitling employees to double damages for such violations. The employer refused to arbitrate the question and the union brought suit to compel arbitration. Prior to a judicial ruling, the employer agreed to arbitrate the dispute. The arbitrator ruled adversely to the employer and the employer sought reconsideration by arguing that the arbitrator had exceeded his jurisdiction by basing his decision on state law which was preempted by federal law. The arbitrator denied the motion for reconsideration. The union brought suit in district court to enforce the award. The district court refused to enforce the award holding, in part, that the applicable state laws were preempted. On appeal, this court reversed, holding that the employer's conduct evinced an intent to allow the arbitrator to decide the merits. 557 F.2d at 1349-50. We noted that the employer could have preserved the jurisdictional question for judicial determination by making an appropriate reservation in conjunction with the stipulation to arbitrate. Id. at 1350. But failing to do so the employer waived the right to an independent judicial examination of the question of arbitrability.

Similarly, in Ficek, supra, we observed that the employer's submission of the merits of the dispute to arbitration without reserving the question of arbitrability constituted an implied consent to allow the arbitrator to determine the controversy. 338 F.2d at 656. We reasoned that "[a] claimant may not voluntarily submit his claim to arbitration, await the outcome, and, if the decision is unfavorable, then challenge the authority of the arbitrator to act." Id. at 657.

In the instant action the employer, by conduct evinced clearly its intent to allow the arbitrator to decide not only the merits of the dispute but also the question of arbitrability. The merits of the dispute along with the question of jurisdiction were fully addressed by the parties during the arbitration proceeding and, at its conclusion, the entire controversy was submitted to the arbitrator for decision. Nowhere in the record is there any indication that the employer reserved the question of arbitrability for initial determination in a judicial forum. Under these circumstances, we conclude that the employer impliedly consented to the arbitrator's deciding both the question of arbitrability and the merits of the controversy. The employer, by its conduct, clearly demonstrated this purpose.

Had the employer objected to the arbitrator's authority, refused to argue the arbitrability issue before him, and proceeded to the merits of the grievance, then, clearly the arbitrability question would have been preserved for independent judicial scrutiny. The same result could be achieved by making an objection as to jurisdiction and an express reservation of the question on the record. However, where, as here, the objection is raised, the arbitrability issue is argued along with the merits, and the case is submitted to the arbitrator for decision, it becomes readily apparent that the parties have consented to allow the arbitrator to decide the entire controversy, including the question of arbitrability.

As the employer points out, in the usual case, an employer who objects to arbitration on jurisdictional grounds may refuse to arbitrate the case. The union is then put to the task of petitioning the court to compel arbitration under section 301 of the Act. In such cases the question of substantive arbitrability comes before the court in the first instance.

The employer states, however, that the collective bargaining agreement applicable to this action contained a provision allowing a default award in the event a party fails to participate in an arbitration. It complains that it would be unfair to hold that the employer waived its right to an independent judicial evaluation of the arbitrability question under these circumstances.

We find no unfairness in this result. First, the employer agreed to the default provision in the collective bargaining agreement. The employer cannot be heard to complain on fairness grounds about ramifications arising out of a contractual provision to which it knowingly assented.

Second, the employer could have avoided the problem by simply not giving the arbitrability question to the arbitrator for...