Napa Association of Public Employees v. County of Napa

• Decision Date: 31 October 1979
• Docket Number: P,AFL-CI
• Citation: Napa Association of Public Employees v. County of Napa, 98 Cal.App.3d 263, 159 Cal.Rptr. 522 (Cal. App. 1979)
• Court: California Court of Appeals
• Parties: , 103 L.R.R.M. (BNA) 2499 NAPA ASSOCIATION OF PUBLIC EMPLOYEES, SEIU 614,laintiff and Appellant, v. COUNTY OF NAPA and Board of Supervisors of the County of Napa, Napa County Personnel Department, Defendants and Respondents. Civ. 44719.

Page 522

159 Cal.Rptr. 522

98 Cal.App.3d 263, 103 L.R.R.M. (BNA) 2499

NAPA ASSOCIATION OF PUBLIC EMPLOYEES, SEIU 614, AFL-CIO, Plaintiff and Appellant, v. COUNTY OF NAPA and Board of Supervisors of the County of Napa, Napa County Personnel Department, Defendants and Respondents.

Civ. 44719.

Court of Appeal, First District, Division 1, California.

Oct. 31, 1979.

Hearing Denied Dec. 28, 1979.

Stewart Weinberg, Van Bourg, Allen, Weinberg & Roger, San Francisco, for plaintiff and appellant.

Stephen W. Hackett, County Counsel, Joseph C. Folkard, Deputy County Counsel, Napa, for defendants and respondents.

GRODIN, Associate Justice.

Napa Association of Public Employees (SEIU Local 614, AFL-CIO) is an employee organization which represents public service employees and public service employee supervisors of the County of Napa for purposes of bargaining pursuant to the Meyers-Milias-Brown Act, Government Code section 3500 et seq. In August 1977 the association and the county entered into written memoranda of understanding specifying wages, hours, and working conditions for the two units. ¹ For all purposes relevant to this proceeding, the two memoranda are identical. Each provided a grievance procedure, culminating in binding arbitration, to resolve disagreements over the "interpretation, application, or compliance with the terms of the Memorandum of Understanding," as well as matters involving disciplinary action or discharge. ² The first step of the grievance procedure called for informal discussion between the grieving party and the immediate supervisor. If the grieving party was not satisfied with the solution at that step, then the grievance was to be reduced to writing and presented to successive levels of supervision, culminating (unless resolved along the way) with the county's personnel director. Within 10 days from the receipt of the decision of the personnel director, or his designee, the grieving party could request that the dispute be submitted to arbitration by either a tripartite arbitration panel or (through mutual agreement) a single arbitrator, whose decision would then be binding upon the parties.

Section 28.10(15) of both agreements provided, under the heading "Holidays," for "Four hours paid leave on the afternoon before Christmas Day or New Year's Day." On October 20, 1977, the county's personnel director advised the association's representative that county employees would not receive paid leave for Christmas and New Year's in 1977 because those holidays fell on a Sunday that year, and the county interpreted section 28.10(15) as not requiring paid leave for that reason. On December 12, 1977, the association filed grievances under both agreements, asserting the existence of a dispute over the interpretation of section 28.10(15) and requesting as relief that the employees receive four hours' paid leave in accordance with the agreements.

The county declined to consider the grievances on their merits or to proceed to arbitration on two grounds. One, subsequently abandoned, ³ was that the grievances were signed by employees rather than by a representative of the association. The other ground was that the grievances had not been timely filed.

The county relied, for this latter contention, upon the section of the agreement pertaining to the first step of the grievance procedure. That section provided in part: "Within ten (10) work days from the occurrence of the matter on which the grievance is based, or within ten (10) work days from the time the employee would reasonably be expected to know of the occurrence, the grieving party shall discuss the grievance with the immediate supervisor informally." It was the county's position that its announcement of intent on October 20, 1977, constituted an "occurrence" as to which a grievance could have been filed, and the grievance filed nearly two months later was, therefore, untimely.

The association thereupon filed a petition to compel arbitration pursuant to Code of Civil Procedure section 1281.2, which provides in relevant part as follows: "On petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party thereto refuses to arbitrate such controversy, the court shall order the petitioner and the respondent to arbitrate the controversy if it determines that an agreement to arbitrate the controversy exists, unless it determines that: [p] (a) The right to compel arbitration has been waived by the petitioner ; . . ." (Emphasis added.) The trial court, after hearing based on the pleadings and affidavits, entered findings in accord with the county's contentions as set forth in the preceding paragraph ⁴ and concluded therefrom that although an agreement to arbitrate the controversy did exist, the association "has waived its right to compel arbitration of the grievances herein by failing to comply with the time limit within which the memoranda of understanding require that grievances be commenced." On that ground it denied the petition and the association appeals. (Code Civ.Proc., § 1294(a).) We reverse, on the ground that the trial court's conclusion of waiver was erroneous as a matter of law.

Under federal law applicable to collective bargaining agreements, questions of waiver and laches are normally for the arbitrator, rather than the court, to decide. (John Wiley & Sons v. Livingston (1964)376 U.S. 543, 84 S.Ct. 909, 11 L.Ed.2d 898; International U. of Op. Eng., Loc. 150 v. Flair Builders, Inc. (1972) 406 U.S. 487, 92 S.Ct. 1710, 32 L.Ed.2d 248.) Since the agreement in this case involves a governmental employer excluded from coverage under the National Labor Relations Act, however, it is state law, and specifically section 1281.2 of the California arbitration statute which governs; and that section makes the question of waiver a matter for judicial determination.

Ordinarily, determination of waiver is said to be a question of fact, binding upon an appellate court if supported by substantial evidence. (Sawday v. Vista Irrigation Dist. (1966) 64 Cal.2d 833, 836, 52 Cal.Rptr. 1, 415 P.2d 816.) Here, however, the trial court determined that waiver existed as a legal conclusion from its determination that the association could have filed a grievance over the county's intended application of the disputed provision and that it failed to do so within 10 days. The question before us is whether that conclusion was correct as a matter of law. (Doers v. Golden Gate Bridge, etc., Dist. (1979) 23 Cal.3d 180, 185, 151 Cal.Rptr. 837, 588 P.2d 1261.)

In support of the trial court's conclusion, the county points to cases in which courts have declared that where a contract provides that a demand for arbitration be filed within an agreed upon time, and one of the parties allows the agreed upon time to pass without making a demand, he waives his right to compel arbitration. There are, indeed, a number of opinions which contain such declarations, including Freeman v. State Farm Mut. Auto. Ins. Co. (1975) 14 Cal.3d 473, 483, 121 Cal.Rptr. 477, 535 P.2d 341; Butchers Union v. Farmers Markets (1977) 67 Cal.App.3d 905, 909, 136 Cal.Rptr. 894; Gunderson v. Superior Court (1975) 46 Cal.App.3d 138, 144, 120 Cal.Rptr. 35; and Jordan v. Friedman (1946) 72 Cal.App.2d 726, 727, 165 P.2d 728, but careful examination suggests that the declarations must be approached with caution. Freeman involved a statutory period of limitations applicable to the institution of arbitration under the uninsured motorist provision of an automobile insurance policy. Butchers Union involved a collective bargaining agreement to which federal law applied and as to which the waiver provisions of section 1281.2 were deemed by the court to be irrelevant. Gunderson involved the question whether defendants in a malpractice suit waived their right to compel arbitration by failing to assert it; no question of compliance with contractual time limits was involved. And Jordan involved an attempt by a general contractor to invoke an arbitration clause for the purpose of defending against a mechanic's lien filed by a subcontractor after the work had been completed, where the contract provided that any demand for arbitration should be filed with the architect (which was not done) and " 'within a reasonable time after cause thereof and in no case later than the time of final payment . . . .' " (72 Cal.App.2d at 727, 165 P.2d at 728.) None of these cases involves holdings to the effect that failure to invoke arbitration within the period provided for in a contract constitutes automatic waiver.

There is, in any event, another line of cases which suggests that waiver is a question involving consideration of the state of mind of the party who is alleged to have waived arbitration (whether or not the facts reflect an intention to relinquish or abandon the right to arbitrate) and the extent of prejudice, if any, to the party opposing arbitration (whether that party has been prejudiced by the actions relied upon as constituting waiver). (See A. D. Hoppe Co. v. Fred Katz Constr. Co. (1967) 249 Cal.App.2d 154, 161-163, 57 Cal.Rptr. 95; cf. Martinez Typographical Union v. Silversun Corp. (1967) 256 Cal.App.2d 255, 260, 63 Cal.Rptr. 760.) The Supreme Court recently endorsed this approach in Doers v. Golden Gate Bridge, etc., Dist., supra, 23 Cal.3d 180, 151 Cal.Rptr. 837, 588 P.2d 1261, holding (in accordance with the federal rule) that the mere filing of a lawsuit does not waive contractual arbitration rights, as some courts had suggested, in the absence of evidence of prejudice arising from the litigation of the dispute. (Id., at 188, 151 Cal.Rptr. 837, 588 P.2d 1261.) This conclusion followed, in the court's view, from the "strong public policy" favoring arbitration, a policy deemed to require that courts " 'closely scrutinize any allegation of waiver of such favored right' (Seidman & Seidman v. Wolfson, supra, 50 Cal.App.3d 826, 835, 123...