9th Circuit Grants Court Power To Enforce Arbitration Clauses In Code-Of-Conduct Agreement

IMMIGRANTS & EMPLOYMENT

Immigrants' Employment Rights and Remedies

9TH CIRCUIT GRANTS COURT POWER TO ENFORCE ARBITRATION CLAUSES IN CODE-OF-CONDUCT AGREEMENT
Immigrants' Rights Update, Vol. 17, No. 7, November 24, 2003

In a recent decision, the Ninth Circuit Court of Appeals reversed a district court's dismissal of a union complaint to compel arbitration between the union and an employer concerning alleged contractual violations during an organizing drive. At issue was whether section 301 of the Labor Management Relations Act (LMRA) gave the federal court or the National Labor Relations Board (NLRB) jurisdiction over a code-of-conduct agreement between the union and the employer. The Ninth Circuit's decision rested upon determining whether the union's complaint invoked a "primarily representational or primary contractual" dispute. Determining that the primary issue to be decided in the case-the arbitrability of the alleged violations of the labor agreement-is a contractual and not representational matter, the appellate court reversed the District Court for the Central District of California and entered an order compelling arbitration of the alleged contractual violations.

The Service Employees International Union, Local 399 (SEIU) and St. Vincent Medical Center had entered into an agreement setting forth, among other things, guidelines that would govern the parties' conduct during an organizing drive. The agreement also provided that disputes arising from the agreement would be resolved through arbitration. The SEIU then embarked on an organizing drive at St. Vincent. Pursuant to an option in the agreement, the union requested that the NLRB administer the secret ballot representational election at St. Vincent. The election resulted in a majority of votes against the union, and the NRLB certified that no labor organization is the exclusive representative of St. Vincent's healthcare workers.

The SEIU then sent a letter to the employer, alleging that it had committed 18 violations of the agreement during the union's organizing drive, including: (1) encouraging workers to vote against unionizing; (2) having its supervisors wear anti-union buttons; (3) threatening workers with loss of benefits to discourage them from voting to unionize; and (4) making inflammatory religious appeals about their support for the union. The employer refused to recognize the applicability of the arbitration provision of the code-of-conduct agreement, stating that the provision did not apply because the NRLB ran the election. When the SEIU filed a complaint to compel arbitration in district court, the employer argued that the district court lacked jurisdiction because the issue involved a purely representational matter over which the NLRB has primary jurisdiction and thus the union's complaint was not subject to the court's jurisdiction under LMRA sec. 301. The judge in the district court ruled in favor of St. Vincent.

In overturning the district court's decision and ruling in favor of the SEIU, the Ninth Circuit found that the heart of the dispute involved a contractual rather than representational matter. Specifically, the court found that the issue in the case involves whether the employer's alleged violations during the organizing drive is a dispute that invokes the arbitration clause of the agreement. The court found that the dispute does not involve a representational matter because the interpretation of the agreement in this case does not depend entirely or even partially on "the question of whom the union represents." Indeed, the court recognized that its conclusion would be different if the SEIU had challenged the outcome of the election rather than alleged violations of a contract. Importantly, the opinion states, "Although this case concerns alleged violations of the Agreement's restrictions on the parties' behavior during an organizing drive before a representational election, the major issue cannot be characterized as primarily representational. A case does not fall on the NLRB's primary jurisdictional line merely by having 'representational overtones.'" The court also affirmed the principle of granting a strong preference for finding that an arbitration clause covers an asserted dispute.

SEIU v. St. Vincent Medical Center, 344 F.3d 977 (9th Cir. 2003).