Northern Cal. Dist. Council of Hod Carriers v. Pennsylvania Pipeline, Inc.

• Decision Date: 06 March 1980
• Citation: 162 Cal.Rptr. 851,103 Cal.App.3d 163
• Parties: , 108 L.R.R.M. (BNA) 2550 NORTHERN CALIFORNIA DISTRICT COUNCIL OF HOD CARRIERS et al., Plaintiffs and Respondents, v. PENNSYLVANIA PIPELINE, INC., also known as Pennsylvania Pipeline Company and Pennsylvania Pipeline and Construction Company, Defendant and Appellant. Civ. 43845.
• Court: California Court of Appeals Court of Appeals

Page 851

162 Cal.Rptr. 851

103 Cal.App.3d 163, 108 L.R.R.M. (BNA) 2550

NORTHERN CALIFORNIA DISTRICT COUNCIL OF HOD CARRIERS et al., Plaintiffs and Respondents, v. PENNSYLVANIA PIPELINE, INC., also known as Pennsylvania Pipeline Company and Pennsylvania Pipeline and Construction Company, Defendant and Appellant.

Civ. 43845.

Court of Appeal, First District, Division 2, California.

March 6, 1980.

Rehearing Denied April 4, 1980.

Hearing Denied April 30, 1980.

Monteleone & McCrory, Wilmer E. Windham, Los Angeles, for defendant and appellant.

Van Bourg, Allen, Weinberg & Roger, Victor J. Van Bourg, David A. Rosenfeld, San Francisco, for plaintiffs and respondents.

TAYLOR, Presiding Justice.

Pennsylvania Pipeline, Inc. (Employer) appeals from a judgment confirming an ex parte arbitration award in favor of the Northern California District Council of Hod Carriers and the Construction, Production and Maintenance Laborers Local Union No. 1130 (hereafter collectively the Union). Employer contends that: 1) it never became bound by the collective bargaining agreement negotiated by the multi-employer association; 2) it was deprived of due process by the ex parte arbitration; 3) the award was contrary to public policy; and 4) venue was improperly laid. For the reasons set forth below, we have concluded that the judgment must be affirmed.

The pertinent facts, substantially as found by the court below, are as follows: The Employer became a member of the Underground Contractors Association of Northern California, Inc. (Association) ¹ which was a party to the Laborers' Master Agreement (Master Agreement) with the Union, and in conjunction with a number of other multi-employer associations had negotiated a contract with the Union, which ran from June 1974, to June 1977. Section 9 of the Master Agreement set forth a procedure for the arbitration of grievances.

In November 1975, several disputes arose between the Employer and the Union on the Tuolumne Water District No. 2 Sonora to Columbia Intercepter Job. On November 25, 1975, the Union notified the Association of a grievance between the Employer and the Union; thereafter, the Union advised the Association of subsequent grievances against the Employer relating to the Columbia Interceptor Job. The Union charged that the Employer had appointed a non-union subcontractor and that the Employer had hired persons other than laborers to perform laborers' work, in violation of certain provisions of the Master Agreement. The Employer's work on the Columbia Interceptor Job occurred between November 3, 1975, and May 13, 1976.

On December 16, 1975, pursuant to the terms of section 9 of the Master Agreement, a board of adjustment convened to hear the Union's grievances. The board of adjustment was comprised of two members appointed by the Association and two members appointed by the Union. The Employer was represented by its president, Peter Disandro, Jr., and John Pestana, the executive director of the Association. The board of adjustment heard and considered the grievances but became deadlocked.

About January 21, 1976, the Association notified the Employer that its membership was terminated, effective January 31, 1976. Thereafter, pursuant to the terms and conditions of section 9 of the Master Agreement, the attorney for the Union wrote to the Association requesting arbitration of the grievances and suggested the names of arbitrators. Robert Burns was selected and recommended June 30, 1976, and July 1, 1976, as hearing dates. By letter dated April 23, 1976, on the letterhead of the Association, Pestana, as executive director of the Association, notified the attorney for the Union that he would be available on the dates selected. On May 11, 1976, the Union attorney notified Burns that the parties had accepted both dates.

On June 30, 1976, the attorney for the Union received a mailgram from the Employer stating that the Employer was not a member of the Association and that any arrangements for settlement of the grievances would have to be mutually agreed upon between the parties. At 10 a. m. on June 30, 1976, the attorney for the Union, with representatives of the Union, appeared in San Francisco at the time and place designated for the regularly scheduled arbitration hearing before Burns. No representative from the Association or the Employer appeared. The hearing was convened at 10:50 a. m. Both oral and documentary evidence was received. On July 20, 1976, Burns, sitting as a neutral fifth member of the board of adjustment, issued an arbitration opinion and award, sustaining the grievances of the Union.

The trial court concluded as a matter of law that: 1) the board of adjustment had jurisdiction to hear the grievances and delegate to Burns the right to hear, decide and issue an opinion and award; 2) the Association was the agent of the Employer at all times relevant and the Employer was bound by the acts and agreements of the Association; 3) through this agency, the Union and the Employer stipulated and agreed in writing to the date, time and place of the arbitration hearing; 4) the Employer violated the Master Agreement; 5) certain persons were deprived of work by the violation of the Master Agreement by the Employer; and 6) the Employer was obligated to pay them the amounts indicated.

In January 1977, the Union filed the instant petition for confirmation of the arbitration award, pursuant to Code of Civil Procedure, section 1285. The court subsequently entered its judgment confirming the award.

The parties agree that the major question on appeal is whether the court properly concluded that the Employer was bound by the arbitration provision of the Master Agreement.

The Employer contends that, at most, it had delegated to the Association only the authority to act as the Employer's agent for its direct or future collective bargaining agreements and, in any event, that this limited agency was revocable and had been revoked.

The record indicates that the Employer executed an application for membership in the Association on July 3, 1975, and paid the $100 membership fee. Above the subscription, in type the same size as the rest of the application, paragraph 1 reads: "That the Certificate of membership to be issued Shall be subject to the provisions of the . . . By-Laws . . . In force or hereafter adopted by (The Association ) And such . . . By-Laws . . . shall be considered an essential part of the contract of membership between (The Association ) And the undersigned " (emphasis added).

Section 7 of article I of the by-laws states, in pertinent part: "Each contractor member of the Association Grants, appoints and designates the Board of Directors, or its duly designated nominee As representative, agent and attorney-in-fact, with full powers to negotiate with all labor union and labor organizations with which the member has or may have collective bargaining relations, and to execute contracts and amendments With such organizations for and on behalf of the Council and its members, subject to the approval of the Board of Directors as provided herein.

"No member of the Association shall sign a collective bargaining agreement that is other and different than the agreement negotiated by the Association for and on behalf of itself and each and every member." (Emphasis added.)

Section 2 of the Master Agreement provided that the Association was the bargaining agent for all of its present and future members.

Section 16(a) of the Master Agreement provides: "The (overall multi-employer association) and each Signatory Association further warrants and represents that Any person, firm or corporation which may become a member of (The overall multi-employer Association ) or any Signatory Association Shall automatically become subject to and bound by this Agreement " (emphasis added).

The trial court's helpful memorandum opinion accompanying its initial order of confirmation stated that the Employer, by seeking and receiving membership in the Association, become a party to the agreement, and accordingly, was obligated to resolve its differences with the Union through arbitration, as provided in the Master Agreement. The court noted that "Article I, Section 7, of the . . . By-Laws With its provisions regarding collective bargaining is not in small print or inconspicuous," and that the Employer had actual knowledge of this provision and knowingly consented to the Association acting on its behalf.

As this matter involves an arbitration provision in a collective bargaining agreement between an employer and a labor organization representing employees in an industry affecting interstate commerce, we must apply federal substantive law (Safeway Stores, Inc. v. Brotherhood of Teamsters, 83 Cal.App.3d 430, 435-437, 147 Cal.Rptr. 835).

The existence of an underlying agreement to arbitrate is to be decided by a court rather than an arbitrator (Safeway Stores, supra, 83 Cal.App.3d 430, 147 Cal.Rptr. 835; Nolde Brothers, Inc. v. Bakery Workers, 430 U.S. 243, 97 S.Ct. 1067, 51 L.Ed.2d 300; Delta Lines, Inc. v. International Brotherhood of Teamsters, 66 Cal.App.3d 960, 136 Cal.Rptr. 345.

The role of a court in reviewing the validity of an arbitration award under a collective bargaining agreement is an extremely narrow one. Findings on questions of law or fact by the arbitrator are final and conclusive. Neither the merits of the controversy nor the sufficiency of the evidence to support the arbitrator's award are matters for judicial review. A court must affirm an arbitrator's award if it can in any rational way be derived from the agreement, and can only reverse if there is a manifest disregard of the agreement, totally unsupported by principles of contract construction and the law of the shop (Safeway Stores, supra, p. 437, 147 Cal.Rptr. 835).

Where a collective bargaining agreement provides that any contractor joining a party association is bound as an incident of membership, and the...