Eagle Systems And Services, Inc. v. International Association of Machinists, District Lodge 725

Filing 25

ORDER signed by District Judge John A. Mendez on 12/15/16: The Court GRANTS WITH PREJUDICE 7 Motion to Dismiss and GRANTS Union's Counter Motion to Confirm the Arbitration Award. The Court also GRANTS Union's request for attorneys fees and orders Union to file documents required under Local Rule 293 within twenty days of the date of this Order to assist the Court in determining the reasonable amount of attorneys' fees to be awarded. (Kaminski, H)

Download PDF
1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 11 EAGLE SYSTEMS AND SERVICES, INC., No. 2:16-cv-02077-JAM-EFB 12 Plaintiff, 13 v. 14 15 INTERNATIONAL ASSOCIATION OF MACHINISTS, DISTRICT LODGE 725, ORDER GRANTING DEFENDANT’S MOTION TO DISMISS AND COUNTER MOTION TO CONFIRM ARBITRATION AWARD 16 Defendant. 17 18 This case involves a dispute about an arbitration award. 1 19 Plaintiff Eagle Systems and Services, Inc. (“Eagle”) filed its 20 complaint to vacate an arbitration award under the Labor 21 Management Relations Act (“LMRA”). 22 International Association of Machinists, District Lodge 725 23 (“Union”) moves this Court for an order dismissing Eagle’s 24 complaint under Fed. R. Civ. P. 12(b)(6) and counter-moves for an 25 order confirming the arbitration award. ECF No. 1. Defendant ECF No. 7. Eagle 26 27 28 1 This motion was determined to be suitable for decision without oral argument. E.D. Cal. L.R. 230(g). The hearing was scheduled for November 15, 2016. 1 1 2 3 opposes Union’s motion and counter motion. I. ECF No. 19. FACTUAL ALLEGATIONS AND PROCEDURAL BACKGROUND Eagle and Union entered into a collective bargaining 4 agreement (“CBA”). 5 CBA requires Eagle to provide full-time and part-time pilot and 6 loadmaster instructors for the C-17 Training System Program at 7 the Travis Air Force Base in Fairfield, California (“bargaining- 8 unit employees”). 9 bargaining-unit employees. 10 CBA, attached to Complaint as Exhibit 1. Exh. 1 at 6. The Union represents these Id. Except in emergencies, the CBA prohibits non-bargaining-unit 11 employees (i.e., Eagle employees not covered by the agreement) 12 from performing work typically performed by the bargaining unit. 13 Id. at 17. 14 a bargaining unit employee to be laid off, displaced or excluded 15 from overtime.” 16 Nor can a non-bargaining-unit employee’s work “cause Id. at 18. The CBA also includes a grievance procedure resulting in 17 final and binding arbitration. 18 arbitrator’s decision “shall be final and binding on all 19 parties,” provided the arbitrator does not “add to, subtract 20 from, modify or in any way change” CBA provisions. 21 Id. at 10-12. Under the CBA, the Id. at 12. After executing the CBA with Union, Eagle modified a 22 subcontract it already had with L-3 Communications Link 23 Simulation & Training Division (“L-3”). 24 attached to Complaint as Exhibit 3. 25 subcontract, Eagle provided five full-time equivalent pilot 26 instructors at Travis Air Force Base. 27 L-3 hired a Site Manager to perform bargaining-unit work, the 28 Modified Subcontract reduced the staff by one full-time 2 Modified Subcontract, Under the original Compl. at 3. But, because 1 equivalent instructor. 2 part-time pilot instructors, which also precluded the remaining 3 bargaining-unit employees from working overtime. 4 Exh. 3 at 6-8. So, Eagle terminated two Compl. at 5. Union filed a grievance, alleging that Eagle violated the 5 CBA when an L-3 Site Manager began performing bargaining-unit 6 work and when Eagle terminated two bargaining-unit employees. 7 Grievance Statement, attached to Complaint as Exhibit 4. 8 parties could not resolve their differences, so Union submitted 9 the matter to arbitration. 10 The Compl. at 5. Meanwhile, Union filed an Unlawful Labor Practice Charge 11 against Eagle with the National Labor Relations Board (“NLRB”), 12 alleging that Eagle violated several provisions under the 13 National Labor Relations Act (“NLRA”) by transferring work out of 14 the bargaining unit and terminating two bargaining-unit 15 employees. 16 the Regional Director declined to issue a complaint. 17 Director’s Decision, attached to Complaint as Exhibit 6. 18 Union appealed the Regional Director’s decision, but the General 19 Counsel’s Office affirmed it. 20 Decision, attached to Complaint as Exhibit 9. ULP Charge, attached to Complaint as Exhibit 5. But Regional Then Office of the General Counsel’s 21 One day before the General Counsel’s Office issued its 22 affirmance, the arbitrator held a hearing on Union’s grievance. 23 Compl. at 7. 24 that Eagle violated the CBA. 25 Complaint as Exhibit 10. 26 reinstate any terminated bargaining-unit employees, to pay 27 overtime to those bargaining-unit employees who lost that 28 opportunity, and to take all other steps necessary to return to About one month later, the arbitrator concluded Arbitrator’s Decision, attached to He issued an award requiring Eagle to 3 1 2 the pre-violation status quo. Exh. 10 at 9-10. Eagle then filed its complaint in this Court to vacate the 3 arbitration award, alleging that the arbitrator exceeded his 4 authority, that the award does not draw its essence from the CBA, 5 that the award violates public policy, and that the award 6 conflicts with a prior NLRB ruling. 7 moves to dismiss Eagle’s complaint and counter-moves to confirm 8 the arbitration award. Compl. at 1. Union now 9 10 II. OPINION 11 A. Procedural Issue 12 In response to a complaint to vacate an arbitration award, 13 a party may simultaneously move to dismiss under Rule 12(b)(6) 14 and move to confirm the award. 15 United Bhd. of Carpenters, Local 45, No. 15-cv-05265, 2016 WL 16 1559712, at *1 (N.D. Cal. Apr. 18, 2016) (granting defendant’s 17 Rule 12(b)(6) motion to dismiss and “Counter-Motion” to confirm 18 arbitration award). 19 12(b)(6) motion to dismiss a complaint to vacate an arbitration 20 award, a court may, sua sponte, treat that motion as a motion to 21 confirm the award. 22 556 F. Supp. 2d 329, 332 (S.D.N.Y. 2008). 23 motion to dismiss a complaint to vacate an arbitration award is 24 essentially the same as a motion to confirm an award. 25 Fed. Fin. Corp. v. Carrion-Concepcion, No. 14-1019, 2016 WL 26 1328769, at *1 (D.P.R. Apr. 5, 2016) (“motion to dismiss ‘a 27 complaint to vacate or modify an award is functionally 28 equivalent to a motion to confirm an award’”) (internal See K&M Installation, Inc. v. Even when a party files only a Rule See Sanluis Devs., LLC v. CCP Sanluis, LLC, 4 That is because a See First 1 citations omitted); Gen. Elec. Co. v. Anson Stamping Co. Inc., 2 426 F. Supp. 2d 579, 595 (W.D. Ky. 2006) (finding that a motion 3 to dismiss is the “practical equivalent” of a motion to confirm 4 and treating it as such). 5 interests or a case’s procedural posture warrants treating a 6 motion to dismiss as a motion to confirm an arbitration award. 7 See Roy v. Buffalo Philharmonic Orchestra Society, Inc., 161 F. 8 Supp. 3d 187, 193 (W.D.N.Y. 2016). 9 Indeed, sometimes judicial economy The parties dispute whether it was procedurally proper for 10 Union to join its motion to dismiss with its counter motion to 11 confirm the arbitration award. Eagle says it was procedurally 12 improper for several reasons: (1) Union violated Rule 12(g) by 13 joining a Rule 12 motion and a non-Rule-12 counter motion; 14 (2) Union’s counter motion violated E.D. Cal. L.R. 230(e) by 15 bringing a motion against a complaint; (3) courts decide motions 16 to vacate or confirm awards under the LMRA on summary judgment; 17 and (4) it would be unduly prejudicial to decide Union’s counter 18 motion now because Eagle has not had the opportunity to fully 19 brief or provide evidence. 20 See Opp’n at 4-5. Conversely, Union maintains that it properly joined its 21 motion and counter motion. First, Union says, courts commonly 22 adjudicate motions to dismiss joined with motions to confirm 23 awards. 24 whether Eagle intended its complaint to operate as a motion. 25 Id. 26 because (i) L-3 is neither a party to this litigation nor the 27 CBA, and (ii) there are no factual issues, so the court may 28 decide the legal question on the pleadings. See Reply, ECF No. 20, at 1. Second, it was unclear And, third, ruling now would not prejudice Eagle or L-3 5 Id. at 1-2. 1 The Court finds that Union properly joined its motion to 2 dismiss with its counter motion to confirm the arbitration 3 award. 4 to confirm an award. 5 at *1; Gen. Elec., 426 F. Supp. 2d at 595. 6 v. Dist. Council of Painting and Allied Trades No. 36 to support 7 its argument that courts decide motions to vacate or confirm 8 arbitration awards under the LMRA on summary judgment, not the 9 pleadings. First, courts often treat motions to dismiss as motions See First Fed. Fin. Corp., 2016 WL 1328769 768 F.2d 1115 (9th Cir. 1985). Eagle cites Kemner Eagle’s reading of 10 Kemner is misplaced. 11 arbitration award and to confirm two others under the LMRA and 12 the Federal Arbitration Act. 13 to dismiss for lack of subject matter jurisdiction and for 14 failure to state a claim. 15 district court granted the defendant’s motion; the Ninth Circuit 16 reversed, confirming the first arbitration award and declining 17 to reach the remaining substantive issues. 18 easily distinguishable from the instant case and does not 19 support Eagle’s argument. 20 treat motions to dismiss as motions to confirm arbitration 21 awards, Eagle’s Rule 12(g) argument fails. 22 Kemner involved a complaint to vacate one Id. Id. at 1117. The defendant moved Without explanation, the Id. Kemner is Also, given that courts frequently Second, it is unclear whether Eagle intended its complaint 23 to operate as a motion to vacate the award, which undercuts 24 Eagle’s L.R. 230(e) argument. 25 to its complaint 95 pages worth of exhibits (including the CBA, 26 the Modified Subcontract, both NLRB rulings, and the 27 Arbitrator’s Decision), suggesting that Eagle wanted the Court 28 to treat its complaint as a motion. On the one hand, Eagle attached 6 See Exhs. 1, 3, 6, 9, 10. 1 On the other hand, Eagle requests leave to amend if the Court 2 dismisses the complaint. 3 need not resolve whether Eagle has filed a motion to vacate the 4 arbitration award because Eagle, in its opposition brief, “had 5 the opportunity to defend against [the Union’s counter motion] 6 and the enforcement of that [a]ward.” 7 at *1. Opp’n at 15. Nevertheless, the Court See K&M, 2016 WL 1559712 And Eagle did just that. 8 Lastly, ruling on Union’s counter motion will not prejudice 9 Eagle because the Court faces a legal question it can resolve on 10 the pleadings. 11 Court has the evidence it needs to decide the issues before it. 12 See Exhs. 1, 3, 6, 9, 10. 13 disregarding the arbitrator’s factual determinations, let alone 14 supplementing them with its own.” 15 v. Auto. Machinists Lodge No. 1173, Int’l Ass’n of Machinists & 16 Aerospace Workers, 886 F.2d 1200, 1207 (9th Cir. 1989) (en 17 banc). 18 that issue because L-3 is neither a party to this litigation nor 19 a signatory to the CBA. 20 21 Given the detailed record Eagle provided, this Indeed, “a court is barred from Stead Motors of Walnut Creek B. As for prejudice against L-3, the Court need not address Standard of Review The Steelworkers Trilogy recognizes the unique interplay 22 between arbitration and collective bargaining agreements. 23 United Steelworkers of Am. v. Am. Mfg. Co., 363 U.S. 564 (1960); 24 United Steelworkers of Am. v. Warrior & Gulf Navigation Co., 363 25 U.S. 574 (1960); United Steelworkers of Am. v. Enter. Wheel & 26 Car Corp., 363 U.S. 593 (1960). 27 explained, “the grievance machinery under a collective 28 bargaining agreement is at the very heart of the system of As the Supreme Court has 7 See 1 industrial self-government.” 2 This explains why, in the labor context, arbitration more than 3 merely resolves disputes: 4 the grievance machinery is actually a vehicle by which meaning 5 and content are given to the collective bargaining agreement.” 6 Id. 7 Warrior & Gulf, 363 U.S. at 581. “The processing of disputes through Eagle seeks to vacate the arbitration award under § 301 of 8 the LMRA. See Compl. at 1. Section 301 empowers this Court to 9 review an arbitration required under a collective bargaining 10 agreement. 11 (1960). 12 collective bargaining agreement context, courts reviewing labor 13 arbitration awards afford a “nearly unparalleled degree of 14 deference” to the arbitrator’s decision. 15 at 1205. 16 interpretation of the collective bargaining agreement and to his 17 factual findings, see id. at 1207, as well as the arbitrator’s 18 interpretation of the issue’s scope. 19 Cunningham, 866 F.2d 283, 285-86 (9th Cir. 1989). 20 See generally Enter. Wheel & Car Corp., 363 U.S. 593 But, because arbitration plays a critical role in the Stead Motors, 886 F.2d This deference applies to the arbitrator’s See Pack Concrete, Inc. v. Because “the parties have[e] authorized the arbitrator to 21 give meaning to” the CBA’s text, the Supreme Court has held that 22 a court cannot vacate an arbitration award simply because the 23 arbitrator misread the collective bargaining agreement. 24 Paperworkers Int’l Union, AFL-CIO v. Misco, Inc., 484 U.S. 29, 25 38 (1987). 26 collective bargaining agreement because he essentially functions 27 as the parties’ surrogate: 28 See Stead Motors, 886 F.2d at 1205 (internal citation omitted) United Indeed, an arbitrator cannot misinterpret a “[H]is award is their contract.” 8 1 2 (original emphasis). The Ninth Circuit has “taken this instruction to heart,” 3 reiterating that “even if we were convinced that the arbitrator 4 misread the contract or erred in interpreting it, such a 5 conviction would not be a permissible ground for vacating the 6 award.” 7 Inc., 823 F.3d 524, 530 (9th Cir. 2016) (internal citation and 8 quotation marks omitted). 9 arbitrator is even arguably construing or applying the contract Sw. Reg’l Council of Carpenters v. Drywall Dynamics, Simply put, “as long as the 10 and acting within the scope of his authority,” a court must 11 uphold the arbitration award. 12 (emphasis added). See Misco, 484 U.S. at 38 13 Likewise, courts give great deference to an arbitrator’s 14 factual determinations because “[t]he parties did not bargain 15 for the facts to be found by a court, but by an arbitrator 16 chosen by them.” 17 silly, factfinding ... is hardly a sufficient basis for 18 disregarding what the agent appointed by the parties determined 19 to be the historical facts.” 20 Misco, 484 U.S. at 45. “[I]mprovident, even Id. at 39. Finally, “an arbitrator’s interpretation of the scope of 21 the issue submitted to him is entitled to the same deference 22 accorded his interpretation of the collective bargaining 23 agreement.” 24 interpreting the submitted issue often requires interpreting the 25 collective bargaining agreement, “a job clearly for the 26 arbitrator.” 27 28 Pack Concrete, 866 F.2d at 285. Indeed, Id. at 285-86 (internal citation omitted). Despite these well-established principles, under § 301 of the LMRA, a court may vacate an arbitration award if (1) the 9 1 award does not draw its essence from the CBA; (2) the arbitrator 2 exceeds the issue’s scope; (3) the award violates public policy; 3 or (4) the award is procured by fraud. 4 State Warriors, 266 F.3d 979, 986 (9th Cir. 2001). 5 C. 6 7 See Sprewell v. Golden Analysis 1. The Award Draws Its Essence From The CBA Under controlling Supreme Court precedent, a court may 8 declare an arbitrator’s decision unenforceable only when the 9 arbitrator strays from interpreting and applying the collective 10 bargaining agreement and effectively “dispense[s] his own brand 11 of industrial justice.” 12 Garvey, 532 U.S. 504, 509 (2001) (internal citation and 13 quotation marks omitted). 14 from many sources, yet his award is legitimate only so long as 15 it draws its essence from the collective bargaining agreement. 16 When the arbitrator’s words manifest an infidelity to this 17 obligation, courts have no choice” but to declare the award 18 unenforceable. 19 The critical inquiry is simple: 20 construe the contract”? 21 “If so, the court’s inquiry ends,” id., provided the 22 arbitrator’s award does not ignore the contract’s “plain 23 language.” 24 Major League Baseball Players Ass’n v. An arbitrator may “look for guidance See Enter. Wheel & Car Corp., 363 U.S. at 597. “Did the arbitrator look at and See Drywall Dynamics, 823 F.3d at 532. Stead Motors, 886 F.2d at 1205 n.6. The parties dispute whether the arbitration award draws its 25 essence from the CBA. Eagle says it does not for two reasons. 26 First, the arbitrator’s decision that the Modified Subcontract 27 violated the CBA is not a plausible interpretation of the CBA 28 because the CBA’s plain language shows that it applied only to 10 1 Eagle. 2 bind L-3 by requiring Eagle to reinstate terminated employees, 3 which necessarily requires L-3 to remove its Site Manager. 4 at 10. 5 Opp’n at 9. Second, the arbitrator modified the CBA to Id. Union disagrees, contending that Eagle’s “plausibility” 6 argument invokes the wrong standard. Mot. at 7. 7 arbitrator, Union says, needed only to arguably look at and 8 construe the CBA, and he did that. 9 the arbitrator also reviewed the Modified Subcontract to show Id. at 6-7. The Union adds that 10 that Eagle agreed to reduce staffing, which falls within the 11 submitted issue’s scope. 12 Court that it must afford great deference to the arbitrator’s 13 interpretation of the submitted issue’s scope. 14 Mot. at 9. Finally, Union reminds the Reply at 3-4. The Court concludes that the arbitration award draws its 15 essence from the CBA. 16 “The question is not ... whether the arbitrator’s interpretation 17 of the agreement was ‘plausible,’ ... but instead whether he 18 made any interpretation or application of the agreement at all.” 19 Drywall Dynamics, 823 F.3d at 531-32. 20 clearly looked at and applied the CBA. 21 First, Eagle proposes the wrong standard: Here, the arbitrator See Exh. 10 at 6, 9. Moreover, Eagle misconstrues the arbitrator’s decision. 22 Eagle says that the arbitrator “found that by virtue of L-3 23 reducing the scope of the number of instructors Plaintiff 24 provided at Travis Air Force Base and employing L-3’s own site 25 instructor to perform instructional duties, Plaintiff violated 26 the CBA.” 27 modified the CBA to bind L-3 because requiring Eagle to 28 reinstate terminated workers “necessarily requires” L-3 to Compl. at 8. Eagle also contends that the arbitrator 11 1 remove its Site Manager. 2 that the arbitrator targeted L-3, the arbitrator puts the onus 3 on Eagle. 4 persuaded that [Eagle] can vacate its accountability”; Eagle 5 “voluntarily negotiated a [CBA] with the Union”; Eagle 6 “negotiated with L3 to transfer work out of the bargaining 7 unit”; Eagle “violated the...CBA”). 8 simply an indirect consequence of the award, and Eagle’s own 9 language suggests the same. Opp’n at 10. Although Eagle suggests See Exh. 10 at 9 (“[T]he arbitrator has not been Any effect L-3 felt is See Opp’n at 10 (requiring Eagle to 10 reinstate terminated workers “necessarily requires L-3 to 11 remove” its Site Manager) (emphasis added). 12 Second, the award did not ignore the CBA’s plain language. 13 The CBA prohibits transferring bargaining-unit work from 14 bargaining-unit employees to non-bargaining-unit employees. 15 Exh. 1 at 17. 16 Eagle to pay overtime to the bargaining-unit employees who lost 17 that opportunity after the transfer, to reinstate terminated 18 workers, to make terminated workers whole, and to take other 19 steps necessary to return to the pre-violation status quo. 20 Exh. 10 at 9-10. 21 See The award enforces this prohibition by requiring See Finally, that the arbitrator looked to the Modified 22 Subcontract to show that Eagle voluntarily transferred 23 bargaining-unit work is insufficient grounds to vacate the award 24 because, ultimately, the award draws its essence from the CBA. 25 The parties asked the arbitrator to decide whether Eagle 26 violated the CBA when an L-3 Site Manager began performing 27 bargaining-unit work. 28 concluded that his assessment required analyzing primarily the See Exh. 10 at 3. 12 The arbitrator 1 CBA, but also the Modified Subcontract—to show that Eagle 2 voluntarily transferred bargaining-unit work. 3 permissible. 4 (concluding that arbitrator may “look for guidance from many 5 sources,” provided the award draws its essence from the 6 collective bargaining agreement). 7 words do not “manifest an infidelity” to his obligation to draw 8 the award’s essence from the CBA, see id., this Court affords 9 great deference to his interpretation of the issue’s scope. 10 11 This is See Enter. Wheel & Car Corp., 363 U.S. at 597 Because the arbitrator’s See Pack Concrete, 866 F.2d at 285. In short, the arbitrator addressed the submitted issue by 12 looking at and construing the CBA—that is all the law requires. 13 See Drywall Dynamics, 823 F.3d at 531-32 (concluding that if the 14 arbitrator interpreted or applied the CBA, then “the court’s 15 inquiry ends”). 16 on this ground. 17 2. The Court will not vacate the arbitration award The Award Does Not Violate Public Policy 18 There exists a very limited public policy exception to the 19 general rule requiring courts to enforce arbitrators’ decisions 20 that interpret and apply collective bargaining agreements. 21 W.R. Grace & Co. v. Local Union 759, Int’l Union of United 22 Rubber, Cork, Linoleum & Plastic Workers of Am., 461 U.S. 757, 23 766 (1983). 24 application of the more general doctrine, rooted in common law, 25 that a court may refuse to enforce contracts that violate law or 26 public policy.” 27 28 See This narrow exception involves “a specific Misco, 484 U.S. at 42. When evaluating whether to vacate an award on public policy grounds, the court engages in a two-step inquiry. 13 First, the 1 court must determine that an “explicit,” “well defined and 2 dominant” public policy exists. 3 The policy must arise from “the laws and legal precedents,” and 4 cannot “be the product of the parties’ or the courts’ general 5 considerations of supposed public interests.” 6 F.2d at 1210 (internal citation and quotation marks omitted). 7 The Ninth Circuit has held that “[t]he public policy set forth 8 in the NLRA represents well defined and dominant public policy.” 9 Van Waters & Rogers, Inc. v. Int’l Bhd. of Teamsters, W.R. Grace, 461 U.S. at 766. Stead Motors, 886 10 Chauffeurs, Warehousemen & Helpers of Am., Local Union 70, 913 11 F.2d 736, 742 (9th Cir. 1990) (internal quotation omitted). 12 second step requires the court to find that the identified 13 policy specifically militates against relief provided by the 14 arbitration award. 15 The See Stead Motors, 886 F.2d at 1213-14. As evidenced by this limited inquiry, courts should 16 cautiously vacate an arbitration award on public policy grounds 17 “because the finality of arbitral awards must be preserved if 18 arbitration is to remain a desirable alternative to courtroom 19 litigation.” 20 Union, Local 1877, AFL CIO, 530 F.3d 817, 823 (9th Cir. 2008) 21 (internal citation and quotation marks omitted). 22 See Aramark Facility Servs. v. Serv. Emps. Int’l The parties dispute whether the arbitration award violates 23 public policy under the NLRA. Eagle says it does for three 24 reasons. 25 requiring that all pilot and loadmaster instructors comprise the 26 bargaining unit infringes on L-3 employees’ § 7 rights to make 27 their own choices about representation. 28 the arbitrator infringed on the NLRB’s primary jurisdiction by First, the award violates § 8(a)(1)-(2) because 14 Compl. at 9. Second, 1 modifying the bargaining unit’s scope when it included L-3 2 employees in its analysis. 3 maintains that the award violated the NLRA’s anti-featherbedding 4 provisions under § 8(b)(6) by requiring Eagle to pay people for 5 services they cannot perform. Id. at 9-10. And, third, Eagle Id. at 10. 6 Union argues that the award does not violate NLRA policy 7 because Eagle has not alleged that the award conflicts with an 8 explicit, well-defined, and dominant public policy, i.e. Eagle 9 has not alleged facts establishing that the award imposed 10 binding obligations on L-3, extended rights or obligations of 11 union members to L-3 employees, or required Eagle to pay workers 12 who have not provided a “bona fide offer of competent 13 performance.” 14 Reply at 4. The Court agrees with Union, but for a slightly different 15 reason. Because the NLRA qualifies as “explicit, well defined 16 and dominant public policy,” see Van Waters, 913 F.2d at 742, 17 the issue turns on whether the NLRA militates against the relief 18 provided by the arbitrator’s award. 19 at 1213-14. 20 employees, so it does not violate § 7 or § 8(a)(1)-(2). 21 does the award require Eagle to pay the Site Manager for work it 22 can no longer perform, so the award does not violate § 8(b)(6). 23 Cases like the one here reaffirm the principle that courts 24 should cautiously vacate an arbitration award on public policy 25 grounds—otherwise arbitration will not “remain a desirable 26 alternative to courtroom litigation.” 27 Servs., 530 F.3d at 823. 28 arbitration award on public policy grounds. It does not. See Stead Motors, 886 F.2d The award imposes no burden on L-3’s Nor See Aramark Facility The Court declines to vacate the 15 1 3. 2 The Arbitrator Did Not Exceed His Authority An arbitrator does not exceed his authority if, in 3 addressing an issue submitted before him, he looks at and 4 construes the collective bargaining agreement. 5 Dynamics, 823 F.3d at 529-30. 6 exceeds his authority if he “dispense[s] his own brand of 7 industrial justice.” 8 9 See Drywall Stated differently, an arbitrator Garvey, 532 U.S. at 509. Eagle first argues that the arbitrator’s conclusion amounts to modifying the bargaining unit to include L-3 10 employees. 11 impermissibly interpreted the Modified Subcontract, a document 12 not at issue. 13 conclusion that only Eagle could provide instructors essentially 14 decided L-3’s rights and obligations. 15 Opp’n at 7. Eagle also argues that the arbitrator Id. at 7-8. And, third, the arbitrator’s Id. at 8-9. Conversely, Union argues that the arbitrator did not exceed 16 his authority. 17 CBA when it modified the subcontract falls within the issue’s 18 scope. 19 great deference to the arbitrator’s interpretation of scope. 20 Reply at 3-4. 21 The arbitrator’s ruling that Eagle violated the Mot. at 8. And, Union contends, the court must afford The Court finds that the arbitrator did not exceed his 22 authority. Again, Eagle misconstrues the arbitrator’s decision 23 by suggesting that the arbitrator targeted L-3. 24 (arbitrator’s conclusion “essentially decided L-3’s rights and 25 obligations”) (emphasis added). 26 imposes nothing on L-3, and suggesting that the award has 27 indirect effects on L-3 does not make this conclusion any less 28 true. See Opp. 7-9 As noted above, the award The arbitrator answered the issue submitted before him by 16 1 looking at and construing the CBA, and he issued his award 2 accordingly. 3 affords great deference to the arbitrator’s interpretation of 4 the issue’s scope. 5 Eagle has not shown that the arbitrator dispensed “his own brand 6 of industrial justice.” 7 arbitration award is not vacated on this ground. 8 4. See generally Exh. 10. Furthermore, the Court See Pack Concrete, 866 F.2d at 285. See Garvey, 532 U.S. at 509. In sum, The The Arbitrator’s Decision May Differ From The NLRB’s Ruling 9 10 In cases involving conflicting decisions between the NLRB 11 and an arbitrator, the Ninth Circuit provides guidance as to 12 which decision a district court gives precedence. 13 focuses on the NLRB’s conduct. 14 issue a complaint, then an arbitrator may take the case and 15 decide it differently than the NLRB. 16 Teamsters Local Union 595, 667 F.2d 1275, 1279-80 (9th Cir. 17 1982); see also Warehousemen’s Union Local No. 206 v. Cont’l Can 18 Co., Inc., 821 F.2d 1348, 1351 (9th Cir. 1987). 19 NLRB accepted the case on the merits and issued a decision and 20 order, and a subsequent arbitration “involving the same parties” 21 produces a conflicting award, the district court “need not 22 defer” to the arbitrator’s decision. 23 No. 1478 v. Stevens, 743 F.2d 1271, 1275 (9th Cir. 1984); see 24 also Cont’l Can, 821 F.2d at 1351. 25 The inquiry If the NLRB simply declined to See Edna H. Pagel, Inc. v. But, if the See Carpenters Local Union The parties dispute whether the Pagel rule or the Stevens 26 rule applies. Eagle argues that the Stevens rule should be 27 applied, see Opp’n at 14, whereas Union contends Pagal is the 28 controlling authority. See Mot. at 12-13. 17 1 The Court agrees with Union. The Pagal rule applies 2 because the NLRB’s Regional Director declined to issue a 3 complaint. 4 complaint, an arbitrator may take the case and decide it 5 differently. 6 the Stevens rule does not apply here because the NLRB did not 7 accept Union’s case on the merits and did not issue a decision 8 and order. 9 to vacate the arbitration award on this ground. See Exh. 6 at 1. When the NLRB refuses to issue a See Pagel, 667 F.2d at 1279-80. See Stevens, 743 F.2d at 1275. In other words, The Court declines 10 D. Attorneys’ Fees 11 Under the American rule, absent statutory or contractual 12 authorization, a prevailing litigant usually cannot collect 13 attorneys’ fees. 14 Soc’y, 421 U.S. 240, 247 (1975). 15 attorneys’ fees “when the losing party has acted in bad faith, 16 vexatiously, wantonly, or for oppressive reasons.” 17 U.S. at 258-59 (internal citations and quotation marks omitted). 18 See Alyeska Pipeline Serv. Co. v. Wilderness But a court may assess Alyeska, 421 A court may find bad faith in several instances. Bad faith 19 may arise “in conduct that led to the lawsuit” or conduct 20 occurring during that suit. 21 (1973). 22 granting [the other party’s] clear legal rights necessitated 23 resort to legal action with all the expense and delay entailed 24 in litigation.” 25 v. W. Indus. Maint., Inc., 707 F.2d 425, 428 (9th Cir. 1983) 26 (internal citation omitted). 27 28 See Hall v. Cole, 412 U.S. 1, 15 Bad faith also occurs when a party’s “obstinancy in See Int’l Union of Petroleum & Indus. Workers Awarding attorneys’ fees in this second context “satisfies a dual purpose—deterrence and compensation.” 18 Id. The prospect 1 of attorneys’ fees “tends to deter frivolous dilatory tactics.” 2 Id. 3 having to vindicate clearly established rights in court.” 4 And the award compensates a party “for the added expense of Id. In the labor arbitration context, deterrence and 5 compensation considerations are especially apt. See Warrior & 6 Gulf, 363 U.S. 577-78. 7 seriously, encouraging district courts to award the party 8 seeking enforcement attorneys’ fees and reasonable costs because 9 “[e]ngaging in frivolous dilatory tactics not only denies the The Ninth Circuit takes this rule 10 individual prompt redress, it threatens the goal of industrial 11 peace.” 12 awarding attorneys’ fees lies within the district court’s 13 discretion. 14 W. Indus. Maint., 707 F.2d at 428. Nevertheless, Id. Each party argues that it is entitled to attorneys’ fees. 15 Union argues that it deserves attorneys’ fees because (1) Eagle 16 acted in bad faith given that the parties agreed to a grievance 17 arbitration procedure, yet Eagle still challenged the award, 18 causing unnecessary expense and delay; and (2) Eagle’s complaint 19 relies on “insubstantial arguments that fly in the face of well- 20 settled law concerning an arbitrator’s authority.” 21 15. 22 deserve attorneys’ fees because Union’s request is premature, 23 the American rule applies, and Union offered no evidence showing 24 that Eagle filed its complaint with ill-motive. 25 Second, Eagle claims that it deserves attorneys’ fees because 26 Union forced Eagle to oppose a “frivolous and procedurally 27 improper counter motion,” a motion brought in bad faith. 28 14-15. Conversely, Eagle raises two points. Mot. at 13- First, Union does not Opp’n at 15. Id. at In response, Union emphasizes that it has not “acted in 19 1 2 a way to impose costs unnecessarily.” Reply at 6. The Court grants Union’s request for attorneys’ fees, and 3 denies Eagle’s request. Eagle not only agreed “to secure a 4 prompt and fair disposition of grievances” and to “final and 5 binding” arbitration, see Exh. 1 at 6, 12, but also filed an 6 action with meritless claims. 7 Union properly filed its counter motion, the Court will not 8 grant Eagle attorneys’ fees on that basis either. 9 Eagle’s behavior is the sort of bad faith the Ninth Circuit held Furthermore, having ruled that In short, 10 justifies attorneys’ fees, especially in the labor arbitration 11 context, where such “frivolous dilatory tactics not only 12 denies...prompt redress,” but also “threatens...industrial 13 peace.” W. Indus. Maint., 707 F.2d at 428. 14 15 16 III. ORDER For the reasons set forth above, the Court GRANTS WITH 17 PREJUDICE Union’s Motion to Dismiss and GRANTS Union’s Counter 18 Motion to Confirm the Arbitration Award. 19 Union’s request for attorneys’ fees and orders Union to file 20 documents required under Local Rule 293 within twenty days of the 21 date of this Order to assist the Court in determining the 22 reasonable amount of attorneys’ fees to be awarded. 23 24 IT IS SO ORDERED. Dated: December 15, 2016 25 26 27 28 20 The Court also GRANTS

Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.

Why Is My Information Online?