LOCAL UNION I-369 v. SANDVIK SPEC. METALS

• Decision Date: 05 October 2000
• Docket Number: No. 18772-1-III.,18772-1-III.
• Citation: 10 P.3d 470,102 Wash.App. 764
• Court: Washington Court of Appeals
• Parties: LOCAL UNION I-369, OIL, CHEMICAL AND ATOMIC WORKERS INTERNATIONAL UNION, AFL-CIO and Scott Jackson, Appellants, v. SANDVIK SPECIAL METALS CORPORATION, Respondent.

10 P.3d 470

102 Wash.App. 764

LOCAL UNION I-369, OIL, CHEMICAL AND ATOMIC WORKERS INTERNATIONAL UNION, AFL-CIO and Scott Jackson, Appellants, v. SANDVIK SPECIAL METALS CORPORATION, Respondent.

No. 18772-1-III.

Court of Appeals of Washington, Division 3, Panel Three.

October 5, 2000.

David E. Williams, Critchlow, Williams & Schuster, Richland, for Appellants.

Stephen T. Osborne, Raekes, Rettig, Osborne, Forgette & O'Donnell, Kennewick, Joseph R. Ryan, Nordlund & Ryan, San Anselmo, CA., for Respondent.

SWEENEY, J.

This is a labor dispute. Scott Jackson, a union employee, wants to arbitrate his termination under the arbitration provisions of a 1993 collective bargaining agreement (CBA) with Sandvik Special Metals Corporation. The CBA automatically renews unless either Sandvik or Oil, Chemical and Atomic Workers International Union Local I-369 serves a timely notice to modify, amend, or terminate the CBA. Here, the Union expressed an intent to open the CBA. The question before us is whether that request (demand) together with the Union's conduct was sufficient to terminate the CBA. We conclude that it was not and so reverse and remand with instructions to order arbitration of Mr. Jackson's termination pursuant to the 1993 CBA.

FACTS

The Oil, Chemical and Atomic Workers International Union Local I-369 represents the workers at Sandvik Special Metals Corporation in Kennewick.

The 1993 Collective Bargaining Agreement. A three-year CBA ran from June 1, 1993 to May 31, 1996. The CBA contained a general arbitration clause by which the individual employees, the Union or Sandvik could demand arbitration to resolve "any asserted violation of the specific terms or provisions of this Agreement."

The CBA also provided that, after a 90-day probationary period, an employee could be discharged only for proper cause, subject to a grievance procedure which included arbitration.

The CBA also spelled out the terms of its own duration. After May 31, 1996, it automatically renewed from year to year, unless either party gave 60 to 90 days' notice to modify, amend or terminate. But even if notice was given, the CBA remained in effect "during negotiations" to modify or amend. The CBA terminated upon either party giving 60 days' notice.¹

Notices and Negotiations. On March 22, 1996, the Union informed Sandvik by letter that "Local I-369 wished to open the contract with Sandvik Special Metals." The letter also noted that: "The terms and conditions of this agreement will terminate on May 31, 1996."²

The Union and Sandvik began to negotiate wages and working conditions.

On June 5, 1996, Sandvik sent a memo to all employees that the old CBA had expired but that all its terms and conditions would continue in effect except for union security and arbitration of "certain issues."

On July 22, 1996, Sandvik declared an impasse in the negotiations over economic conditions—wage freeze, two-tier benefit system, and cap on insurance premiums. Sandvik then announced it would unilaterally implement its last offer. Its memo notified employees that the CBA was terminated, but that working conditions would be the same as under the CBA with the same two exceptions: union security and "the agreement to arbitrate certain disputes[.]"

The Union complained to the National Labor Relations Board (NLRB) about improper implementation. The NLRB determined that a valid impasse had been reached. The NLRB also approved the terms of Sandvik's unilateral implementation, finding that Sandvik left intact all required provisions of the CBA and implemented only proposals that "were reasonably encompassed within the most recent contract proposals made to the Union."

A new CBA went into effect on September 23, 1997. But in the meantime, Sandvik refused to arbitrate any grievances after May 31, 1996, because it concluded that the previous CBA had expired.

Sandvik fired Scott Jackson for cause on September 5, 1997, during the impasse period. Mr. Jackson denied any misconduct. Sandvik processed Mr. Jackson's discharge through the 1993 contract's grievance procedure, but it refused to arbitrate.

The Union and Mr. Jackson first filed a state law contract claim in superior court, alleging breach of the CBA. They later amended the complaint to allege jurisdiction under § 301(a) of the Labor Management Relations Act, 29 U.S.C. § 185 (NLRA) and sought either an order forcing Sandvik to arbitrate Mr. Jackson's termination or a trial on the merits and reinstatement of Mr. Jackson with back pay. Sandvik moved for summary judgment, alleging the matter was within the exclusive jurisdiction of the NLRB. The court agreed and granted the motion. The court concluded that resolution of the complaint would require determination of the status of the CBA and was, therefore, preempted by federal law.

ANALYSIS

A. STATE COURTS — SUBJECT MATTER JURISDICTION

We must first decide whether state courts have authority to review this dispute. In re Marriage of Little, 96 Wash.2d 183, 197, 634 P.2d 498 (1981). Sandvik argues that the dispute is subject to the jurisdiction of the NLRB—exclusively. The Union maintains that the state court has jurisdiction under § 301(a)³ of the NLRA. Under § 301(a), state and federal courts have concurrent jurisdiction over disputes arising under existing CBAs. If, however, the CBA has terminated, jurisdiction shifts to the NLRB.

1. Standard of Review. Jurisdiction is a question of law subject to de novo review. Crosby v. Spokane County, 137 Wash.2d 296, 301, 971 P.2d 32 (1999). And this is an appeal from a summary dismissal. We therefore review the record in a light most favorable to the Union as the non-moving party to determine whether there is a genuine issue of material fact. We will, however, determine whether the substantive law was correctly applied if there is no issue of material fact. Beers v. Southern Pac. Transp. Co., 703 F.2d 425, 428 (9th Cir.1983).

2. Burden of Proof. The employer must first make an arguable case that the action is subject to the exclusive jurisdiction of the NLRB. The burden then shifts to the union to establish § 301(a) jurisdiction. Beaman v. Yakima Valley Disposal, Inc., 116 Wash.2d 697, 712, 807 P.2d 849 (1991).

B. FEDERAL PREEMPTION

Federal preemption means simply that state law yields to federal law in any matter that is arguably either protected or prohibited by the NLRA. The U.S. Supreme Court has interpreted § 301(a) to confer concurrent jurisdiction on both state and federal courts. Charles Dowd Box Co. v. Courtney, 368 U.S. 502, 513, 82 S.Ct. 519, 7 L.Ed.2d 483 (1962). However, federal labor law rather than state contract law controls the disposition of the dispute. Local 174, Teamsters v. Lucas Flour Co., 369 U.S. 95, 102-03, 82 S.Ct. 571, 7 L.Ed.2d 593 (1962). "State law does not exist as an independent source of private rights to enforce collective bargaining contracts." Fristoe v. Reynolds Metals Co., 615 F.2d 1209, 1212 (9th Cir.1980).

1. NLRB Jurisdiction. Congress created the NLRB and gave it primary jurisdiction to resolve disputes that affect collective bargaining. It did so to achieve a uniform national labor policy. Specifically, the NLRB has exclusive jurisdiction to resolve disputes involving collective bargaining practices that are protected under the NLRA and practices that are outlawed as unfair labor practices. 29 U.S.C. § 158(a); San Diego Bldg. Trades Coun. v. Garmon, 359 U.S. 236, 245, 79 S.Ct. 773, 3 L.Ed.2d 775 (1959).

The rationale is that the NLRA protects the bargaining process. But once a CBA is in place, disputes over its interpretation do not implicate national labor concerns. And these disputes are then best decided by the courts. Dowd Box, 368 U.S. at 513, 82 S.Ct. 519.

2. § 301(a) Jurisdiction. Section 301(a) of the NLRA therefore carves out an exception to the exclusive jurisdiction of the NLRB. It gives jurisdiction over contract enforcement to the courts—state and federal. 29 U.S.C. § 185(a).⁴ Congress added it to the NLRA to give the courts jurisdiction to enforce labor contracts. Suits for violation of contracts between an employer and a labor organization "may be brought in any district court of the United States having jurisdiction of the parties, without respect to the amount in controversy or without regard to the citizenship of the parties." 29 U.S.C. § 185(a); Textile Workers Union v. Lincoln Mills, 353 U.S. 448, 77 S.Ct. 912, 1 L.Ed.2d 972 (1957).

Labor and management can even agree to practices that the NLRB would consider "unfair labor practices"—provided they freely contract to do so. Amalgamated Ass'n of Street Employees v. Lockridge, 403 U.S. 274, 300, 91 S.Ct. 1909, 29 L.Ed.2d 473 (1971). The NLRA does not then preempt actions which fall within the purview of § 301.⁵ Section 301(a) gives the courts jurisdiction over suits to enforce arbitration of individual grievances and wrongful discharge. Smith v. Evening News Ass'n, 371 U.S. 195, 199-200, 83 S.Ct. 267, 9 L.Ed.2d 246 (1962).

Two elements are required to establish jurisdiction under § 301(a):

The complaint must allege breach of a contract between an employer and a labor organization, and, the dispositive issue must be governed by the terms of the contract.

Carpenters Health & Welfare Trust Fund v. Tri Capital Corp., 25 F.3d 849, 858 (9th Cir.1994) (citing Painting & Decorating Contractors Ass'n v. Painters & Decorators Joint Comm., Inc., 707 F.2d 1067, 1071 (9th Cir.1983)).

The question here is whether this contract remained in effect. If the CBA remained in effect, there is a strong policy in favor of "judicial enforcement." International Bhd. of Elec. Workers, Local 532 v. Brink Constr. Co., 825 F.2d. 207, 211 (9th Cir. 1987).

3. Contract Termination. The Union contends that the 1993 CBA continued automatically unless and until either the Union or Sandvik gave notice of intent to terminate—a notice unambiguously required by this CBA. The Union argues that its letter notified Sandvik that it...