656 F.3d 860
9th Cir.2011Background
- The Painters Union and four Nevada contractors disputed whether a card check under the CBA established Union majority status, triggering NLRA §9(a) bargaining duties.
- Two tracks: NLRB unfair labor practice charges against employers and a district-court petition to compel arbitration of the majority-status dispute under Article 4 of the CBA.
- The Board delayed due to vacancy; the Ninth Circuit initially affirmed dismissal of arbitration, then reheard after the Board’s August 2010 decision.
- Board found FSI acted in bad faith and ordered FSI to bargain; the J&R Flooring Employers were found to have acted in good faith reliance on their interpretation of Article 4.
- The Board refused to resolve contract-interpretation disputes, treating them as non-factual; the district court later dismissed and the Ninth Circuit remanded to arbitration, replacing the prior decision.
- This court ultimately held that the majority-status dispute is contractual and arbitrable under the CBA, and that all parties must arbitrate consistent with the Board’s bargaining order.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether J&R acted in bad faith regarding card check | Union argues J&R refused card check results in bad faith. | J&R contends its interpretation of Article 4 was reasonable and not bad faith. | Board supported good-faith reliance; affirmed. |
| Whether FSI’s refusal to honor the card check was bad faith | Union contends FSI refused in bad faith to bargain after card check. | FSI contends its position was not bad faith but a dispute over procedure or remedy. | Board’s finding of bad faith upheld; bargaining order enforced. |
| Whether the district court had jurisdiction to compel arbitration under LMRA §301 | Union argues contract requires arbitration of card-check disputes. | FSI/J&R argue representational matters belong to the Board; arbitration not appropriate. | District court jurisdiction affirmed; arbitration ordered for all parties. |
| Whether the arbitration should include all parties to avoid fragmentation | All parties should arbitrate to resolve the entire dispute coherently. | Fragmentation acceptable if necessary to address contract-specific questions. | Arbitration should include all signatories to avoid fragmentation. |
Key Cases Cited
- Phelps Dodge Magnet Wire Corp., 346 NLRB 949 (NLRB 2006) (sound arguable basis for contract interpretation supports non-intervention)
- NCR Corp., 271 NLRB 1212 (NLRB 1984) (employer interpretations with sound basis avoid Board resolution)
- NLRB v. Cheney Lumber Co., 327 U.S. 385 (Supreme Court 1946) (Board enforcement preserved unless outside authority)
- NLRB v. Gissel Packing Co., 395 U.S. 575 (Supreme Court 1969) (broad coverage of issues within arbitration scope)
- Sambo’s Rest., Inc., 641 F.2d 794 (9th Cir. 1981) (§10(e) exhaustion principles for objections to Board orders)
- Woelke & Romero Framing, Inc. v. NLRB, 456 U.S. 645 (Supreme Court 1982) (objections to Board orders must be raised timely to review)
- Carey v. Westinghouse Elec. Corp., 375 U.S. 261 (Supreme Court 1964) (avoid fragmentation through comprehensive arbitration encouraged)
- United Steelworkers v. Am. Mfg. Co., 363 U.S. 564 (Supreme Court 1960) (arbitration requires coverage when not excluded by contract)
- United Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574 (Supreme Court 1960) (all questions on which parties disagree come within arbitration unless excluded)
- United Steelworkers v. Enter. Wheel & Car Corp., 363 U.S. 593 (Supreme Court 1960) (court should enforce arbitral awards and interpret contracts accordingly)
- Textile Workers v. Lincoln Mills, 353 U.S. 448 (Supreme Court 1957) (emphasizes conciliatory measures through arbitration)
- Int’l Union of Painter and Allied Trades, Dist. 15, Local 159 v. J & R Flooring, Inc., 616 F.3d 953 (9th Cir. 2010) (board resolution and arbitration interplay in card-check disputes)