Southwest Regional Council of Carpenters v. Drywall Dynamics, Inc.
2016 U.S. App. LEXIS 9205
| 9th Cir. | 2016Background
- Drywall Dynamics (employer) signed a Memorandum binding it to a Master Labor Agreement (MLA) with Southwest Regional Council of Carpenters (Union) and authorized a multi-employer association (WWCCA) to bargain on its behalf; the Memorandum also contained a limited window for unilateral withdrawal.
- The Union and WWCCA executed a 2009 Memorandum of Understanding (MOU) extending the MLA’s term to 2011 and applying only to WWCCA members who affirmatively agreed.
- Drywall issued multiple notices attempting to terminate its obligations (2008, 2009, 2010); the Union treated those notices as untimely because of the successor MLA and later the 2009 MOU.
- The Union filed a grievance; the Southern California Drywall Joint Adjustment Board (arbitration panel) concluded Drywall’s 2010 termination was untimely because the 2009 MOU extended the agreement and ruled Drywall bound by the MOU.
- Drywall sought vacatur in district court; the district court vacated the award, finding the arbitrator’s contract interpretation implausible (no evidence Drywall affirmatively agreed) and that the award violated public policy protecting voluntary multi-employer relationships.
- The Ninth Circuit reversed, holding the district court exceeded its narrow review authority and must defer to the arbitrator unless the award fails to construe the contract or violates an explicit, dominant public policy.
Issues
| Issue | Plaintiff's Argument (Union) | Defendant's Argument (Drywall) | Held |
|---|---|---|---|
| Whether arbitrator could decide the timeliness/termination question not expressly pleaded | Arbitrator may resolve procedural questions related to the grievance; scope decision reserved to arbitrator | Termination issue was procedurally barred and untimely, so panel exceeded its authority | Arbitrator properly decided scope/timeliness; district court must defer to panel on such procedural matters |
| Standard for judicial review of arbitrator’s contract interpretation | Award should be upheld if arbitrator construed or applied the contract | District court argued arbitrator’s interpretation was not "plausible" and could be rejected | Court rejects a separate "plausibility" merits review; review is binary—did arbitrator construe/apply the contract? If yes, defer |
| Whether the award violated public policy favoring voluntary multi-employer bargaining | Enforcement does not offend public policy because stability and private dispute-resolution policies weigh in favor of arbitration | Award undermines public policy protecting employers’ voluntary association membership and right to withdraw | Public-policy vacatur requires an explicit, well-defined, dominant policy; competing policies (stability, private arbitration) preclude vacatur here |
| Claim that award violated employee free choice (NLRA §8(f)/§9(a)) | Not raised as primary by Union; arbitration outcome stands | Award effectively locked employees into representation without majority support, violating employee choice | No record evidence before arbitrator to prove lack of majority; courts may not make independent factual findings; argument insufficient to vacate award |
Key Cases Cited
- United Steelworkers of Am. v. Am. Mfg. Co., 363 U.S. 564 (1960) (arbitration central to collective-bargaining dispute resolution)
- United Steelworkers of Am. v. Warrior & Gulf Nav. Co., 363 U.S. 574 (1960) (grievance machinery gives meaning to agreements; industry practices part of agreement)
- United Steelworkers of Am. v. Enterprise Wheel & Car Corp., 363 U.S. 593 (1960) (arbitrator may not dispense his own brand of industrial justice)
- United Paperworkers Int’l Union v. Misco, Inc., 484 U.S. 29 (1987) (courts should not overturn awards because arbitrator misread contract)
- Stead Motors of Walnut Creek v. Auto. Machinists Lodge No. 1173, 886 F.2d 1200 (9th Cir. 1989) (en banc) (nearly unparalleled deference to labor arbitrators)
- E. Associated Coal Corp. v. United Mine Workers, 531 U.S. 57 (2000) (public-policy vacatur limited to awards contrary to explicit, well-defined, dominant policy)
- Charles D. Bonanno Linen Service, Inc. v. NLRB, 454 U.S. 404 (1982) (discusses voluntary nature of multi-employer bargaining and competing stability interest)
- Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79 (2002) (procedural questions about arbitration are presumptively for arbitrator)