12.13 - 1. The Steelworkers Trilogy—Arbitrability In The Private Sector

• Jurisdiction: New York

1. The Steelworkers Trilogy—Arbitrability
in the Private Sector

The ground rules governing labor arbitration in the private sector are those set forth by the U.S. Supreme Court in 1960 in the “Steelworkers Trilogy.”⁵⁴⁵⁵ The first principle of the Steelworkers Trilogy is that judicial inquiry at the prehearing stage is limited to determining whether the claim sought to be arbitrated involves a subject that falls within the parties’ agreement to arbitrate.⁵⁴⁵⁶ Second, if there is a doubt as to whether a matter falls within the agreement to arbitrate, that very question should be submitted to arbitration for an answer.⁵⁴⁵⁷ Finally, an arbitration award may not be set aside by a court even if the court feels that the arbitrator incorrectly decided the submitted issue.⁵⁴⁵⁸

One of the Steelworkers Trilogy’s key holdings is its rejection of the so-called Cutler-Hammer doctrine developed by the New York courts,⁵⁴⁵⁹ which held that an issue was not arbitrable because the claim was clearly nonmeritorious. The U.S. Supreme Court specifically rejected any judicial attempt to go beyond the question of whether the parties agreed to arbitrate. It held that, once that agreement is found, there should be no inquiry into the claim’s merits. That inquiry is within the province of the arbitrator to decide.⁵⁴⁶⁰

In Litton Financial Printing Division v. National Labor Relations Board,⁵⁴⁶¹ the U.S. Supreme Court refused to extend the presumption of arbitrability, set forth in the Steelworkers Trilogy, in the context of an expired collective bargaining agreement.⁵⁴⁶² Pursuant to federal law, only post-contract expiration issues which “arise under” an expired collective bargaining agreement are arbitrable.⁵⁴⁶³ In Litton, the union grieved and sought to arbitrate layoffs which occurred after the collective bargaining agreement’s expiration. The Court found that because the grievances did not “involve rights which accrued or vested under the agreement or rights which carried over after the expiration of the agreement . . . as continuing obligations under the contract,” the grievances were not arbitrable, despite the inclusion of a broad arbitration provision in the contract.⁵⁴⁶⁴

In Granite Rock Co. v. International Brotherhood of Teamsters,⁵⁴⁶⁵ the Supreme Court clarified that the presumption of arbitrability only applies where it reflects and derives its legitimacy from a judicial conclusion that arbitration of a particular dispute is what the parties intended because their express agreement to arbitrate was validly formed and is legally enforceable and best construed to encompass the dispute.⁵⁴⁶⁶ A dispute had arisen as to the date of the collective bargaining agreement’s ratification. The issue was who (a court or an arbitrator) should decide the ratification date issue. The Court held that, as with the question of whether an arbitration agreement exists, the question of when it was formed must be resolved by a court rather than an arbitrator because a court may only order arbitration when it is “satisfied that the parties agreed to arbitrate that dispute.”⁵⁴⁶⁷ The Court reasoned that, in order to satisfy itself that an agreement exists, a court must resolve any questions concerning the agreement’s formation.⁵⁴⁶⁸

Subject to this exception for expired agreements, the Supreme Court has long recognized the value of arbitration in resolving disputes pursuant to CBAs and has interpreted the federal policy enunciated in the Taft-Hartley Act⁵⁴⁶⁹ specifically to favor arbitration of contractual grievances. In the Steelworkers Trilogy, the Supreme Court held that an agreement to arbitrate between the parties must exist to justify the submission of a dispute to arbitration.⁵⁴⁷⁰ The Court further held that, to be enforced, the award had to derive its essence from the contract language rather than from the arbitrator’s “own brand of industrial justice.”⁵⁴⁷¹ It is against this private sector background that public sector labor arbitration has developed.

The U.S. Supreme Court has held that a broad arbitration clause in a collective bargaining agreement did not constitute a “clear and unmistakable” waiver of an employee’s rights to sue pursuant to the ADA.⁵⁴⁷² Wright, the employee in the case, was a member of the International Longshoremen’s Association which, through its union hall, supplied workers to South Carolina stevedore companies. After he was injured while working for one of those firms, Wright sued for disability compensation and settled for $250,000. He returned to the union hall for work and was hired several times. But when a stevedore company discovered he had previously sued for disability, it refused to hire him. The union suggested that Wright sue pursuant to the ADA, which he did. The district court granted the defendants’ motion for summary judgment on the grounds that Wright had not exhausted his grievance and arbitration remedies pursuant to the collective bargaining agreement. The U.S. Court of Appeals for the Fourth Circuit affirmed.

The Supreme Court stopped short of reconciling two of its earlier decisions concerning the effect of an arbitration clause on a federal statutory right. Instead, it ruled simply that the arbitration clause in question was too ambiguous to constitute a waiver. The two cases, between which the Court noted “there is obviously some tension,” are Alexander v. Gardner-Denver Co.,⁵⁴⁷³ which held that an employee did not waive his right to a title VII cause of action by first employing the collective bargaining agreement’s grievance and arbitration procedures, and Gilmer v. Interstate/ Johnson Lane Corp.,⁵⁴⁷⁴ which held that a federal statutory right could be waived pursuant to a collective bargaining agreement.

The arbitration clause in Wright covered “ ‘[a]ny dispute concerning or arising out of the terms and/or conditions of this Agreement, or dispute involving the interpretation or application of this Agreement.’ ”⁵⁴⁷⁵ The agreement also stated, “ ‘[i]t is the intention and purpose of all parties hereto that no provision or part of this Agreement shall be violative of any Federal or State Law.’ ”⁵⁴⁷⁶ The Court cited past decisions in which it had found that a union contract could waive statutory rights but noted that those decisions also required the waiver to be “clear and unmistakable.”⁵⁴⁷⁷ The same standard, said the Court, should apply to a collective bargaining agreement’s waiver of the federal right to sue for employment discrimination. Reserving its opinion on whether a clear and unmistakable waiver of statutory rights in the area of employment discrimination...