Laborers Intern. Union Local 252 v. Town Concrete Pipe of Washington, Inc.

• Decision Date: 07 July 1982
• Docket Number: No. 81-3169,81-3169
• Citation: 680 F.2d 1284
• Parties: 111 L.R.R.M. (BNA) 2617, 94 Lab.Cas. P 13,711 LABORERS INTERNATIONAL UNION LOCAL 252, Plaintiff-Appellant, v. TOWN CONCRETE PIPE OF WASHINGTON, INC., Defendant-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1284

680 F.2d 1284

111 L.R.R.M. (BNA) 2617, 94 Lab.Cas. P 13,711

LABORERS INTERNATIONAL UNION LOCAL 252, Plaintiff-Appellant, v. TOWN CONCRETE PIPE OF WASHINGTON, INC., Defendant-Appellee.

No. 81-3169.

United States Court of Appeals Ninth Circuit.

Argued and Submitted April 8, 1982.

Decided July 7, 1982.

Lawrence R. Schwerin, Seattle, Wash., for plaintiff-appellant.

Dean Zografos, Williams & Zografos, P. C., Salem, Or., for defendant-appellee.

Appeal from the District Court for the Western District of Washington.

Before HUG, SKOPIL and FLETCHER, Circuit Judges.

FLETCHER, Circuit Judge:

Laborers International Union Local 252 (Local 252) appeals from the district court's grant of summary judgment to Town Concrete Pipe of Washington, Inc. (Town Concrete), in the Local's section 301 suit to compel arbitration. 29 U.S.C. § 185.

FACTS

Local 252 and Town Concrete are parties to a collective bargaining agreement containing a mandatory grievance-and-arbitration procedure covering questions of contract interpretation. The contract contains a provision for an automatic cost-of-living increase, the size of which was to be based on the Bureau of Labor Statistics' (BLS) Cost of Living (COL) Index. In 1978, the BLS discontinued the COL, and began issuing revised versions of the Consumer Price Index (CPI). Town Concrete took the position that the change from the COL Index to the CPI eliminated the cost-of-living clause from the contract, and that a new clause had to be negotiated. The parties negotiated, discussed arbitration, and the union filed a charge with the NLRB. Finally, the union filed the present suit to compel arbitration of the cost-of-living clause. We note jurisdiction under 28 U.S.C. § 1291 and reverse.

ANALYSIS

The only issue in this case is whether the meaning of the cost-of-living clause is a question of contract interpretation subject to arbitration. The district court held that it was not and accordingly refused to compel arbitration. The district court's decision apparently was based on: (1) the savings clause in the contract; ¹ and (2) the fact that the parties had bargained over the cost-of-living clause.

Federal labor policy favors arbitration, and doubts as to whether a particular dispute is arbitrable should be resolved in favor of arbitration. See United Steelworkers v. American Mfg. Co., 363 U.S. 564, 80 S.Ct. 1343, 4 L.Ed.2d 1403 (1960); United Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574, 80 S.Ct. 1347, 4 L.Ed.2d 1409 (1960); United Steelworkers v. Enterprise Wheel & Car Corp., 363 U.S. 593, 80 S.Ct. 1358, 4 L.Ed.2d 1424 (1960) (Steelworkers trilogy); Haig Berberian, Inc. v. Cannery Warehousemen, 535 F.2d 496, 499 (9th Cir. 1976). Although it is true that the question of what issues are arbitrable is for the court, not the arbitrator, Leyva v. Certified Grocers of California, 593 F.2d 857, 861 (9th Cir. 1979), a court's determination of arbitrability must be based on the arbitration clause, not on the substantive contract clauses, Haig Berberian, 535 F.2d at 499. Interpretation of substantive provisions must be left to the arbitrator in the first instance. In order to determine that the savings clause covered the instant dispute, the district court had to read and interpret not only the savings clause but the cost-of-living clause as well. Both of these are substantive provisions of the contract and thus present questions for the arbitrator, not the court. Id.

Furthermore, even if the court were entitled to interpret the savings clause, that clause cannot be read properly to cover the instant dispute. The savings clause applies to "invalidation" of any part of the contract by "legislation, or by any decree of a court of competent jurisdiction." See footnote 1, supra. Because arbitrators cannot ordinarily determine questions of "external law," see, e.g., Barrentine v. Arkansas-Best Freight System, 450 U.S. 728, 737-38, 101 S.Ct. 1437, 1442-43, 67 L.Ed.2d 641 (1981) The second basis for the court's decision is also erroneous. The fact that the parties have attempted to renegotiate the cost-of-living clause does not mean it is not subject to arbitration. Any clause in the contract could be renegotiated if the parties chose to do so; while contract clauses are still in effect, however, they continue to be subject to the arbitration clause unless...