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Supreme Court rules federal courts can decide when bargaining agreement was formed

By Hillary Stemple

[JURIST] The US Supreme Court [official website; JURIST news archive] on Thursday ruled [opinion, PDF] in Granite Rock Co. v. International Brotherhood of Teamsters [Cornell LII backgrounder; JURIST report] that federal courts have jurisdiction to determine if a collective bargaining agreement (CBA) was formed between parties. The court also ruled that § 301(a) of the Labor Management Relations Act (LMRA) [text] supports a federal cause of action only for breach of contract claims and not claims of tortious interference of contract. The US Court of Appeals for the Ninth Circuit affirmed [opinion, PDF] the district court's dismissal of a claim against the International Brotherhood of Teamsters (IBT) for tortious interference with a CBA between Granite Rock and Local Union 287. The US Court of Appeals for the Ninth Circuit had reversed the district court with respect to whether a federal court has jurisdiction to determine when a CBA was formed, holding that the issue should be determined in arbitration. Justice Clarence Thomas, delivering the opinion of the court, affirmed with regards to the tort claim, but reversed the Ninth Circuit with regard to jurisdiction over the CBA, holding:

[A] court may order arbitration of a particular dispute only where the court is satisfied that the parties agreed to arbitrate that dispute. To satisfy itself that such agreement exists, the court must resolve any issue that calls into question the formation or applicability of the specific arbitration clause that a party seeks to have the court enforce. Where there is no provision validly committing them to an arbitrator, these issues typically concern the scope of the arbitration clause and its enforceability. In addition, these issues always include whether the clause was agreed to, and may include when that agreement was formed. ...This simple framework compels reversal of the Court of Appeals judgment because it requires judicial resolution of two questions central to [respondent's] arbitration demand: when the CBA was formed, and whether its arbitration clause covers the matters [respondent] wishes to arbitrate.

Justice Sonia Sotomayor, joined by Justice John Paul Stevens, filed a separate opinion concurring in part and dissenting in part.

During oral arguments, counsel for the petitioner argued for a plain meaning [JURIST report] interpretation of the LMRA, calling the enforcement of contracts the "central mission of the statute." Counsel for the respondent argued that the petitioner was advocating a drastic change in the way labor issues were settled. Monday's ruling is likely to have broad implications in future labor and contract negotiations.

Full post as published by JURIST - The Paper Chase on June 24, 2010 (boomark / email).