Federal Judiciary

Collective bargaining and labor disputes

By Akin Gump Supreme Court Practice Group

Below, Stanford Law School student Timothy Tatarka recaps oral argument in Granite Rock Co. v. International Brotherhood of Teamsters (08-1214). His analysis is also now available on the Granite Rock page on SCOTUSwiki.

On Tuesday, in Granite Rock Co. v. International Brotherhood of Teamsters (No. 08-1214), the Court heard argument on two issues arising from a 2004 disputed labor contract.  Garry Mathiason, counsel for the petitioner, Granite Rock Co., found little support on the Court for its claim that Section 301 of the Labor Management Relations Act (LMRA) creates a federal cause of action against an international union for tortious interference with a contract between an employer and a local union when the international union was not a party to the contract.  The second issue, which had been framed as whether a defendant labor union can compel arbitration in a suit for violation of the contract even while arguing that no contract was formed, instead largely became a debate about the retroactive effectiveness of provisions in the contract upon which the parties later agreed.  The result of this discussion was inconclusive.

On the Section 301 claim, Chief Justice Roberts expressed skepticism over Section 301?s ability to reach tortious interference claims because, in his words, ?of course 301(a) is limited to violations of contracts.?  This theme was picked up by several of his fellow Justices, including Justice Kennedy, who also acknowledged that Granite Rock?s strongest argument was that a state claim for interference with contract would be preempted by federal law, creating a ?vacuum? if Section 301 did not create such a cause of action.  Justice Kennedy, however, along with Justice Scalia, expressed skepticism over whether a state tort claim by a contracting party against a third party would be preempted.

Picking up on this point, several justices, including Chief Justice Roberts and Justices Kennedy and Ginsburg, pressed Peter Nussbaum, counsel for the International Brotherhood of Teamsters on whether there is a state law claim for contract interference and ? if so ? what remedy the employer would have for such a violation.  The International?s position was that federal labor law does preempt some state tort claims arising out of labor disputes to channel them to the National Labor Relations Board for analysis as unfair trade practices; in Section 301 Congress only carved out a narrow exception for contract claims.

On the question whether a contract between Granite Rock and Teamsters Local 287 was formed on July 2, 2004, the Court was particularly concerned about the effect of a December 17, 2004 contract which included retroactivity clauses, and of an NLRB decision which stated that the contract became effective on July 2.  Justices Ginsburg and Sotomayor pressed Mathiason on whether, given the NLRB?s decision, the only remaining question was whether the union had ratified the contract and made the ?no-strike? provision effective on July 2d ? a question that would be appropriate for arbitration.  Mathiason responded that the matter was an issue for the courts rather than for arbitration:  if the contract was not ratified on July 2, there was no meeting of the minds?that is, the employer wouldn?t have offered the union the same terms at a later time.

Robert Bonsall, representing the he Local, was similarly pressed by several justices regarding what they viewed as an apparent inconsistency in the Local?s position:  it was arguing in court that the arbitration clause of the contract was retroactive to July 2nd, while at the same time arguing to the arbitrator that the ?no-strike? clause was not retroactive.  Bonsall responded that arbitration clause in the final agreement made all disputes between the parties arbitrable, including past disputes, but that the retroactivity of the ?no-strike? provision was properly a matter for the arbitrator to decide.

Full post as published by SCOTUSBLOG on January 21, 2010 (boomark / email).