Lareau on Granite Rock Co. v. IBT, Local 287
Facts
Granite Rock Company (Granite Rock) and International Brotherhood of Teamsters, Local 287 (Local 287) were parties to a collective bargaining agreement that expired on April 30, 2004. During the negotiations for a successor agreement, Rome Aloise (Aloise), the administrative assistant to the General President of International Brotherhood of Teamsters (IBT), advised Local 287 that certain provisions of the expiring agreement were inadequate. Aloise also represented the interests of IBT and other local unions affiliated with IBT in the Granite Rock/Local 287 negotiations.
In early June, 2004, no new agreement having been reached between Granite Rock and Local 287, Local 287 went on strike. At 4:00 a.m. on July 2, 2004, Granite Rock and Local 287 reached tentative agreement on a successor contract that contained a broad arbitration clause requiring the parties to arbitrate [a]ll disputes arising under this agreement. Upon reaching the tentative agreement, George Netto (Netto), Business Representative for Local 287, told Granite Rock's CEO, Bruce Woolpert, that Netto would put the successor agreement to a vote among Local 287's members, would recommend ratification, and would cease picketing. Netto also requested a back-to-work agreement, spelling out the terms under which the parties would return to work, including liability for actions taken during the strike. However, the parties agreed to postpone discussion of a back-to-work agreement to a later date.
Local 287 members allegedly ratified the successor agreement, which also contained a no-strike clause, late on the morning of July 2, 2004. However, on July 5, 2004, Aloise and some Local 287 members called Granite Rock employees and instructed them not to return to work the next day. On July 6, 2004, Netto demanded a back-to-work agreement that would explicitly shield Local 287, its members, and IBT from any liability arising from the strike. Granite Rock refused to sign such an agreement, and Local 287 continued its strike. Throughout the strike, Aloise played an active leadership role, he sent letters to other local unions and employees encouraging their support, held meetings to discuss strategy, and sought to secure financial support for the strike. IBT gave benefits to Local 287 members as long as they did not return to work.
The Proceedings Below
Granite Rock subsequently sued IBT and Local 287 in the United States District Court for the Northern District of California under section 301(a) of the Labor Management Relations Act (LMRA) asserting that Local 287 breached the successor agreement and that IBT tortiously interfered with that agreement. Local 287 defended by asserting that the successor agreement had never been ratified and, therefore, did not exist. At the same time, it moved to compel arbitration of the entire dispute, including the issue of whether Granite Rock and Local 287 reached agreement on the successor contract. The district court dismissed the claim against IBT for failure to state a claim and denied Local 287's motion to compel arbitration of the contract formation issue. A jury later concluded that Local 287 had ratified the contract.
The Decision of the Ninth Circuit
Section 301(a) Jurisdiction
On appeal, the Ninth Circuit affirmed the dismissal of the claim against IBT but reversed on the contract formation issue, holding that it should be submitted to arbitration. With respect to Granite Rock's claim against IBT under section 301(a), the Ninth Circuit noted that any such claim must first be based on an alleged breach of contract between an employer and a labor organization,' and second, . . . the resolution of the lawsuit be focused upon and governed by the terms of the contract.' However, pointing to its decision in Painting & Decorating Contractors Association v. Painters & Decorators Joint Committee, Inc. [707 F.2d 1067 (9th Cir. Cal. 1983)] (Painters & Decorators), the appellate court observed that the first prong of this test did not require that the entity against which a section 301 claim is asserted be a signatory to a collective bargaining agreement. In Painters & Decorators, the Ninth Circuit held that a joint committee, created by a collective bargaining agreement to administer the terms of the agreement, could be sued under section 301(a) even though it was not a signatory to the agreement because the agreement created the Committee and governed its rights and duties.
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