Ninth Circuit Affirms Arbitration Award

The Ninth Circuit clarified the limited role courts play in reviewing labor arbitration awards. (Southwest Regional Council of Carpenters v. Drywall Dynamics, Inc. (9th Cir., May 19, 2016, No. 14-55250)2016 WL 2909241.) The court held the district court exceeded its narrow authority to determine whether an arbitrator’s award was based on the parties’ contract and whether it violated an “explicit, well-defined, and dominant public policy.”

Drywall Dynamics (“Drywall”), the employer, entered into a labor agreement with the Union, the Southwest Regional Council of Carpenters. Under the agreement, Drywall assigned its authority to bargain to a contractors’ association (“Association”). Years later, Drywall attempted to terminate the agreement, only to discover the Union and the Association had executed a Memorandum of Understanding (“MOU”) extending the term of the agreement. An arbitrator held Drywall was bound by the MOU. The district court, however, vacated the arbitration award, holding the arbitrator’s interpretation of the parties’ agreement was not “plausible” and “contrary to public policy.”

The Ninth Circuit reversed, emphasizing that an arbitration award must be upheld as long as the arbitrator even arguably construed or applied the contract. According to the court, the appropriate and singular question to ask when determining whether to enforce an arbitration award is: “Did the arbitrator look at and construe the contract, or did he not?” The district court should not have considered whether the arbitrator’s interpretation was “plausible.” Moreover, a court can only vacate an arbitration award if it runs contrary to explicit, well-defined, and dominate public policy.” The Ninth Circuit determined there were two “competing interests” – the employer’s interest to withdraw from a multiemployer unit and the interest in stable multiemployer units. Because there were competing interests, neither could be “dominant” policy.

This decision reaffirms the extremely deferential standard by which a court will review an arbitration award. 

Arbitrator Awards BART POA Nearly $1.1 Million Dollars in Illegal Subcontracting Grievance

The BART Police Officers’ Association secured an award of nearly $1.1 million for its members at arbitration. Arbitrator Ron Hoh ruled for BPOA, finding the Bay Area Rapid Transit District  subcontracted BPOA bargaining unit work in violation of the union's MOU.  

The Bay Area Rapid Transit District decided to replace the nearly forty year old fire alarm systems at seven stations on the San Francisco side of its operations.  The District entered into a contract with Blocka Construction Company to retrofit fire alarm systems at the stations.  When decommissioning the old alarms, the District circumvented the MOU between the District and BPOA by requiring Blocka to subcontract non-union security personnel to act as “Firewatch” while the decommissioned alarms were replaced.

As soon as the BPOA discovered this MOU violation, a grievance was filed demanding the positions immediately be provided to BPOA members along with traditional make-whole remedies. Knowing the MOU prohibits subcontracting, the District attempted to avoid its contractual obligations by supplanting the CSOs with security personnel disingenuously labeled “Firewatch.”  The District could not refute the evidence confirming that the jobs the District subcontracted out were actually jobs historically performed by CSOs.  The Arbitrator stated:

“[t]he evidence thus shows that CSO’s regularly monitor from fixed-site posts [at] various District locations for both safety and security reasons, including safety functions whose goal is to keep the public away from both stations and rail right-of-way at construction locations and when station and track related repairs and necessary.  In addition, their job description includes the duty of ‘monitor(ing) construction sites when contractors are not working at night’ - a major element of the station alarm replacement project involved here - and ‘report(ing) situations requiring...emergency assistance.’  It cannot be disputed that the existence of fires on District property ‘...require(s)...emergency assistance.’”

The District's Project Manager claimed the two positions are wholly unrelated.  But, Arbitrator Hoh admonished the District, stating:

“It is apparent that her (Patrice McElroy) decision during the grievance procedure that the fire watch duties were closest to those of the District Safety Monitor was founded upon less than fully necessary information...The duties involved here do not better fit those of Safety Monitors as claimed by the District.  The fire watch function has nothing to do with either ‘assist(ing) independent contractors in safety areas,’ serving as ‘liaison between the District and (contracted) construction crews’ or reporting to the District and/or those contractors any incidents, injuries or violations of safety work practices.’”

Mastagni Holstedt, APC is privileged to have represented BPOA and its members in obtaining the largest grievance arbitration award in BPOA’s history.  Sean Currin of Mastagni Holstedt, APC represented the BART POA in this matter.