United Food & Commercial Workers Union, Locals 197, 373, 428, 588, 775, 839, 870, 1119, 1179 and 1532 by United Food & Commercial Workers Intern. Union, AFL-CIO v. Alpha Beta Co.

Decision Date10 September 1984
Docket NumberAFL-CI,P,No. 82-4718,82-4718
Citation736 F.2d 1371
Parties116 L.R.R.M. (BNA) 3277, 39 Fed.R.Serv.2d 651, 101 Lab.Cas. P 11,119, 5 Employee Benefits Ca 1897 UNITED FOOD & COMMERCIAL WORKERS UNION, LOCALS 197, 373, 428, 588, 775, 839, 870, 1119, 1179 AND 1532 chartered by UNITED FOOD & COMMERCIAL WORKERS INTERNATIONAL UNION,etitioners-Appellees, v. ALPHA BETA COMPANY, Respondent-Appellant.
CourtU.S. Court of Appeals — Ninth Circuit

Russell Richeda, Bunch & Andrews, San Francisco, Cal., for petitioners-appellees.

Henry Telfeian, McLaughlin & Irvin, San Francisco, Cal., for respondent-appellant.

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

Before TANG, SWYGERT, * and REINHARDT, Circuit Judges.

REINHARDT, Circuit Judge:

Ten locals of an international labor union filed a petition to compel arbitration of a dispute with an employer concerning the meaning and effect of a provision in their collective bargaining agreements. The disputed

provision requires the employer to continue to make trust fund contributions on behalf of employees who initially work within the bargaining unit but are subsequently transferred to a newly opened store outside the unit. The district court, 550 F.Supp. 1251 (D.C.Cal.1982), granted the petition to compel arbitration. The employer, alleging primarily that the provision is contrary to law and public policy, appeals. We hold that the disputed provision is susceptible to interpretation in a manner that would render it lawful. We affirm.

FACTS

Alpha Beta Company operates a chain of retail supermarkets. Alpha Beta and ten locals of the United Food and Commercial Workers International Union, AFL-CIO (Local Unions), entered into a series of collective bargaining agreements covering the existing stores within the geographical jurisdiction of the respective Local Unions.

Under the agreements, numerous trust funds that provide health and welfare, pension, and vacation benefits to the employees, were created. The agreements provide that:

Notwithstanding any language to the contrary contained in this Agreement ..., it is agreed that this Agreement shall have no application whatsoever to any new food market or discount center until fifteen (15) days following the opening to the public of any such new establishment.... The Employer shall staff such new or reopened food market with a combination of both current employees and new hires.... Employees, who are thus transferred, upon whom contributions are made to the various trust funds shall continue to have contributions to the several trust funds made on their behalf in the same manner and in the same amount per hour as such contributions were made prior to their transfer. (emphasis added). 1

In 1981, Alpha Beta opened a new store in Pinole, California, within the geographical jurisdiction of one of the petitioners. 2 About 30 employees, all of whom were represented by one of the Local Unions at the time, were transferred to the Pinole store from stores covered by the collective bargaining agreements. Prior to their transfer Alpha Beta had made trust fund contributions on behalf of those employees, as required by the agreements.

The Local Unions claimed that Alpha Beta was required, by virtue of the collective bargaining agreements, to continue to make the trust fund contributions on behalf of the employees transferred to the Pinole store. Alpha Beta disagreed. The parties were unable to settle their differences. The Local Unions sought to submit the dispute to arbitration in accordance with the arbitration provisions of the collective bargaining agreements. Alpha Beta refused to do so. Under section 301 of the Labor Management Relations Act (LMRA), 29 U.S.C. Sec. 185 (1976), the Local Unions petitioned the district court to compel arbitration. Following a motion for summary judgment by the Local Unions, the district court granted the petition. Because the district court's granting of a petition to compel arbitration under a collective bargaining agreement is a final decision under 28 U.S.C. Sec. 1291 (1976), Goodall-Sanford, Inc. v. United Textile Workers, 353 U.S. 550, 551-52, 77 S.Ct. 920, 920-21, 1 L.Ed.2d 1031 (1957), we have jurisdiction over this appeal. 3

ARBITRABILITY OF THE DISPUTE

Alpha Beta makes two substantive arguments in support of vacating the arbitration order. First, Alpha Beta argues that the collective bargaining agreements do not provide for arbitration of the particular dispute at issue. Second, it argues that the provision of the contract requiring continued contributions is contrary to law and public policy. In addressing both arguments, we must keep in mind the teachings of the Supreme Court's famous Steelworkers Trilogy, which strongly endorses the national labor policy favoring informal resolution of labor disputes through arbitration. 4

1. Arbitration of the Dispute under the Collective Bargaining Agreement

When faced with a petition to compel arbitration, a court must decide whether the collective bargaining agreement provides for arbitration of the particular dispute. See John Wiley & Sons, Inc. v. Livingston, 376 U.S. 543, 547, 84 S.Ct. 909, 913, 11 L.Ed.2d 898 (1964); Alpha Beta Co. v. Retail Store Employees Union Local 428, 671 F.2d 1247, 1250 (9th Cir.1982). However,

[t]he function of the court is very limited when the parties have agreed to submit all questions of contract interpretation to the arbitrator. It is confined to ascertaining whether the party seeking arbitration is making a claim which on its face is governed by the contract. Whether the moving party is right or wrong is a question of contract interpretation for the arbitrator.

United Steelworkers v. American Manufacturing Co., 363 U.S. 564, 567-68, 80 S.Ct. 1343, 1346-47, 4 L.Ed.2d 1403 (1960) (emphasis added).

There is a strong presumption that a collective bargaining agreement containing a customary arbitration clause provides for arbitration of the dispute at issue: "An order to arbitrate the particular grievance should not be denied unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute. Doubts should be resolved in favor of coverage." United Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582-83, 80 S.Ct. 1347, 1352-53, 4 L.Ed.2d 1409 (1960) (emphasis added; footnote omitted); e.g., Brannon v. Warn Bros., Inc., 508 F.2d 115, 119 (9th Cir.1974). In light of this strong presumption, we consider whether the agreements before us provide for arbitration of this dispute.

The relevant agreement provides for the arbitration of disputes "involving or arising out of the meaning, interpretation, application or alleged violation of [the] Agreement." 5 Alpha Beta argues that, because The disputed provision expressly states that Alpha Beta will continue to make trust fund contributions on behalf of employees transferred to new stores, i.e., stores outside the bargaining unit. The sole apparent purpose of the disputed provision is to impose an obligation on the employer to make contributions on behalf of employees at a time when they are no longer in the bargaining unit. The Local Unions now seek to enforce that contract obligation through the arbitral process. Alpha Beta's argument that the dispute is not arbitrable because the transferred employees are no longer in the bargaining unit misses the point entirely. The dispute obviously arises out of the collective bargaining agreement, and equally obviously involves the "interpretation" or "application" of a disputed provision of that agreement. Moreover, the dispute clearly involves an "alleged violation of [the] Agreement."

the transferred employees are no longer in the collective bargaining unit and are no longer covered by the agreement, the dispute does not arise under the collective bargaining agreement. This argument is wholly without merit.

For the first time on appeal, Alpha Beta alleges that the Pinole store was not operated by Alpha Beta but was a joint venture between Alpha Beta and the Skaggs Drug Company; thus, according to Alpha Beta, a new entity, separate and independent from Alpha Beta, operated the new store. Therefore, the argument goes, the employees were "transferred" to a new employer. Alpha Beta now urges this point as an additional reason in support of its claim that the dispute did not arise under the collective bargaining agreement. Because Alpha Beta did not raise this point until appeal, we need not address it on the merits. See, e.g., Komatsu, Ltd. v. States Steamship Co., 674 F.2d 806, 812 (9th Cir.1982). 6

In summary, we find Alpha Beta's argument that the dispute does not fall within the terms of the collective bargaining agreement to be frivolous at best. We think it evident that the dispute involves or arises out of the interpretation, application or alleged violation of the collective bargaining agreements and is subject to arbitration.

2. The Lawfulness of the Disputed Provision

Alpha Beta argues that enforcement of the contract provision requiring continued contributions would infringe upon the Pinole employees' right to self-organization under section 7 of the Labor Management Relations Act (LMRA) (originally enacted as section 7 of the National Labor Relations Act), 29 U.S.C. Sec. 157 (1976). Therefore, Alpha Beta contends, the provision is unlawful and the district court erred in compelling arbitration of a dispute arising under it. According to Alpha Beta, by seeking to enforce the disputed provision the Local Unions are attempting to unlawfully represent the employees at the Pinole store. 7

We recognize that a court cannot compel arbitration if a contract clause on its face violates federal labor law or is contrary to federal labor policy. See W.R. Grace & Co. v. Local Union 759, 461 U.S. 757, 103 S.Ct. 2177, 2183-86, 76...

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