Service Employees International Union v. County of Napa

99 Cal. App. 3d 946, 160 Cal. Rptr. 810, 1979 Cal. App. LEXIS 2387

• Court: California Court of Appeal
• Decided: December 19, 1979
• Docket: Civ. 44500
• Status: Published

Opinions

Opinion

ELKINGTON, Acting P. J.

The instant appeal was taken by the above named plaintiff (Union) from a judgment of the superior court denying a writ of mandate which would have compelled the County of Napa (County) to arbitrate a “grievance” of one of its members, a County civil service employee, who will hereafter be designated as the “employee.”

We have considered the record, the briefs of the respective parties, and also the learned dissent of our esteemed colleague. We conclude, for the reasons we now state, that the judgment of the superior court was without error, and that it must be affirmed.

The basis issue of the appeal is whether the evidence before the superior court, under apposite law, required issuance of such a writ as was sought by the Union.

The trial’s evidence established the following.

The Union had been the recognized representative of the County’s civil service employees, including the employee.

The County had provided by ordinance for “merit salary step increases” for certain of its civil service employees whose performance evaluations were found to be satisfactory. Those whose performance was found unsatisfactory were denied the increase. It was further provided that: “No step increase shall be deemed automatic, but shall be given only for performance of satisfactory service, on the recommendation of department heads. ...” (Italics added.)

An ordinance of the County had provided for discipline for misconduct of civil service employees, subject to review under certain administrative procedures.

During each of the years 1975, 1976 and 1977, the occasional denial of merit salary step increases had been a source of much dispute between the Union and the County.

Also, during each of those years, under the Meyers-Milias-Brown Act (Gov. Code, § 3500 et seq.) the County and the Union had “met and conferred” on matters of their mutual concern. Following each session the parties entered into a “Memorandum of Understanding” which was approved by the County’s legislative body and thus became a binding agreement. (See Glendale City Employees’ Assn., Inc. v. City of Glendale (1975) 15 Cal.3d 328, 337 [124 Cal.Rptr. 513, 540 P.2d 609] [cert. den., 424 U.S. 943 (47 L.Ed.2d 349, 96 S.Ct. 1411)].) That document will hereafter be termed the Agreement.

At the first of the parties’ “meet and confer” sessions in 1975 an understanding was reached, and the Agreement provided, for “binding arbitration” of civil service employee “grievances” that were not resolved by the previously provided “administrative steps.” And it was further agreed:

“For a grievance to be reviewable [by arbitration], it must involve a disagreement over the interpretation, application, or compliance with the terms of the Memorandum of Understanding; or involve a disciplinary action or a discharge of a permanent employee.” (Agreement, § 7.1; italics added.)

When the parties held their 1976 “meet and confer” session the County “proposed a definition of the term discipline.” (“[A]t the table the question of merit increases denials was never spoken about” as discipline or otherwise.) An acceptable definition was reached “as a result of negotiations. ...” It follows:

“‘Discipline’ consists of dismissal, suspension, letter of reprimand, demotion, or reduction in class or salary.” (Italics added.)

The above noted provisions were continued in effect by the parties’ 1977 Agreement.

In none of the sessions, or their resulting Agreements, was it provided, or suggested, that the County’s denial of a merit salary step increase constituted imposition of discipline, or should follow or was otherwise related to the imposition of such discipline.

Thereafter the employee was denied a merit salary step increase because his work performance evaluation was found unsatisfactory by the County. His “grievance” was rejected at the several administrative levels. The Union then, for the first time, contended that such a denial was arbitrable under the Agreement. The supportive theory was that the Agreement required, as a condition precedent to the denial, a “letter of reprimand” or “disciplinary action.”

Upon the County’s rejection of the requested arbitration, the instant mandate proceedings were commenced. The Union sought thereby an order compelling the County “to submit to arbitration the issue of whether or not the Memorandum of Understanding and the ordinance or resolution adopting the Memorandum of Understanding compel the taking of disciplinary actions such as a Letter of Reprimand prior to invoking any adverse personnel action such as the declination of a step increase.”

At the trial’s commencement the Union, while maintaining that mandate was an appropriate procedure, nevertheless requested that the matter be alternatively considered as if it had filed a petition to compel arbitration under the California Arbitration Act as well. Although the trial court appears to have then denied the motion, it and the parties nevertheless proceeded to a trial and determination of the issue whether or not such arbitration should be compelled. Neither of the parties contends that the procedure was otherwise, nor does either claim resulting prejudice.

The superior court ruled that the Agreement did not provide for arbitration of such a dispute. The court also stated: “If the phrase, ‘merit or a step increase’ is to mean anything as the term is used in [the] Ordinance, it means that a step increase shall not be automatic but rather is a kind of reward that is to be earned. To withhold it is not an affirmative act of discipline. It is only a determination that a reward has not been earned. Merit salary increases mean more than the passage of a period of time within which an employ [jzc] was not discharged.” (Italics added.)

Judgment was entered accordingly. The instant appeal is from that judgment.

The Union first contends that: “The petition for writ of mandamus is an appropriate remedy.”

As we have pointed out, the parties and the trial court did, in effect, treat the Union’s mandate petition as a petition to compel arbitration which, at least ordinarily, is the more appropriate remedy. We shall also so treat it, for the County has pointed out no resulting prejudice from the procedure followed and we ourselves observe none. And, as will next be seen, the Union here concedes that the trial court considered and determined the issue whether the Union and the employee were entitled under the Agreement to arbitration of the underlying dispute.

The Union’s remaining and principal contention is that the superior court erred by itself determining that the employee’s dispute was not arbitrable instead of submitting the issue of its arbitrability to an arbitrator.

The Union agrees that when one of the parties to a contract which contains an arbitration clause refuses to arbitrate on the ground that the particular dispute lies beyond the scope of that clause, the determination of the issue is ordinarily for the court, and not the arbitrator. (Accord Code Civ. Proc., § 1281.2; Steelworkers v. Warrior & Gulf Co. (1960) 363 U.S. 574, 582 [4 L.Ed.2d 1409, 1417, 80 S.Ct. 1347].)

The Union and our dissenting colleague also concede that the Agreement contains no “express language directly supportive of the Union’s position” that the parties had agreed to arbitrate. Instead, as our colleague has said: “The problem arises from the fact that it does not. Rather, the Union alleged in its petition that in the negotiation of the memorandum of understanding the parties ‘determined to establish a system of disciplinary measures which may be taken by management including the letter of reprimand,’ and that in doing so the parties ‘contemplated that employees would not suffer by adverse personnel action except by the employment by management of the disciplinary procedures set forth in the Memorandum of Understanding.’ Thus, the Union seems to be contending for an obligation either expressed orally in the negotiations or implied from the negotiations, past practices, or relationship of the parties.’’ (Italics added.)

The Union’s reliance is upon what has come to be known as the Steelworkers Trilogy. It consists of the nation’s high court’s cases: Steelworkers v. American Mfg. Co. (1960) 363 U.S. 564 [4 L.Ed.2d 1403, 80 S.Ct. 1343]; Steelworkers v. Warrior & Gulf Co., supra, 363 U.S. 574; and Steelworkers v. Enterprise Corp. (1960) 363 U.S. 593 [4 L.Ed.2d 1424, 80 S.Ct. 1358]. The Steelworkers Trilogy has effectively become a part of California law. (See Posner v. Grunwald-Marx, Inc. (1961) 56 Cal.2d 169 [14 Cal.Rptr. 297, 363 P.2d 313], passim; O’Malley v. Wilshire Oil Co. (1963) 59 Cal.2d 482 [30 Cal.Rptr. 452, 381 P.2d 188], passim.)

Each of the Steelworkers Trilogy cases concerned, as does the case at hand, a negotiated labor-management agreement providing for arbitration of disputes over the interpretation or application of, or compliance with, the terms of the agreement. It was held that arbitration of disputes under such an agreement will be judicially ordered, unless it may be said “beyond dispute,” or “with positive assurance” that the contract is not “susceptible of an interpretation” that the parties had so agreed. In case of “doubt” resolution of the dispute will be ordered arbitrated (Warrior, 363 U.S., p. 583 [4 L.Ed.2d, p. 1418]), for both a “presumption” and “public policy” favor arbitration of labor disputes. And a collective bargaining agreement was held to be “more than a contract; it is a generalized code to govern a myriad of cases which the draftsmen cannot wholly anticipate.... It calls into being a new common law—the common law of a particular industry or of a particular plant. ... ‘[T]he words of the contract [are not] the exclusive source of rights and duties [in relation to arbitration].’. . .[II]. . .Gaps may be left to be filled in by reference to the practices of the particular industry and of the various shops. ...” (Warrior, 363 U.S., pp. 578-580 [4 L.Ed.2d, pp. 1414-1416]; fns. omitted.)

However, it will be noted that the Steelworkers Trilogy of cases relate to collective bargaining agreements between private corporations or persons. There is much doubt that they will apply to such an agreement of a state, or of one of its principal subdivisions, such as the County.

In Lodge 2424, Intern. Etc. v. United States (Ct.Cl. 1977) 564 F.2d 66, the Lodge endeavored to enforce arbitration against the government under the broad Steelworkers Trilogy principles. Finding those principles inapposite, the court held (pp. 71-72): “[The Steelworkers Trilogy] cases cited... all concern labor arbitration awards made in the context of private labor disputes. Those decisions focus on the Congressional intent, as reflected in the Labor-Management Relations Act, 29 U.S.C. § 141, et seq., 61 Stat. 136, that industrial labor disputes be settled by arbitration. However, the definition of ‘employer’ in the Labor-Management Act specifically excludes the United States, 29 U.S.C. §§ 142(3) and 152(2). Consequently, those cases, which limit judicial review and accord finality to decisions of arbitrators, including their construction of provisions of collective bargaining agreements, have no application to an arbitrator’s decision made pursuant to a collective bargaining agreement between the Government and a union.” (Italics added.) It is noted that the referred to definition of “employer” ex-eludes therefrom not only the United States, but also “any State or political subdivision thereof” (29 U.S.C. § 152) such as the County.

Similarly, New York’s highest court in Supt. of Schools v. Liverpool (1977) 42 N.Y.2d 509 [399 N.Y. Supp.2d 189, 369 N.E.2d 746], refused to apply Steelworkers Trilogy principles to the collective bargaining agreement of another public entity, a school district. The court stated (pp. 512, 513-514): “Because of the recognition that arbitration has been demonstrated to be a salutary method of resolving labor disputes, because of the public policy (principally expressed in the Federal cases) which favors arbitration as a means of resolving such disputes, and because of the associated available inference that the parties to a collective bargaining agreement probably intended to resolve their differences by arbitration, the courts have held that controversies arising between the parties to such an agreement fall within the scope of the arbitration clause unless the parties have employed language which clearly manifests an intent to exclude a particular subject matter. .. .In the field of public employment, as distinguished from labor relations in the private sector, the public policy favoring arbitration— of recent origin—does not yet carry the same historical or general acceptance, nor, as evidenced in part by some of the litigation in our court, has there so far been a similar demonstration of the efficacy of arbitration as a means for resolving controversies in governmental employment. Accordingly, it cannot be inferred as a practical matter that the parties to collective bargaining agreements in the public sector always intend to adopt the broadest permissible arbitration clauses. Indeed, inasmuch as the responsibilities of the elected representatives of the tax-paying public are overarching and fundamentally nondelegable, it must be taken, in the absence of clear, unequivocal agreement to the contrary, that the board of education did not intend to refer differences which might arise to the arbitration forum. Such reference is not to be based on implication." (Italics added; but contra, see Kaleva-Norman-Dickson Sch. D. v. Teachers’ Ass’n. (1975) 393 Mich. 583 [227 N.W.2d 500].)

The foregoing rationale seems particularly apposite to the case at bench.

It need not be emphasized that in a government such as ours all power is vested in the people and their chosen representatives. (See Cal. Const., art. II, § 1.) The state’s Constitution, article XI, section 1, subdivision (b), provides that each county’s “governing body shall provide for the number, compensation, tenure, and appointment of [z¿y] employees.” And article XI, section 11, subdivision (a), of that document states: “The Legislature may not delegate to a private person. . .power to.. .control. . .or interfere with county or municipal [matters} or to...perform municipal functions.” (All italics of this paragraph added.) We observe there no “presumption” or “public policy” that local entities surrender their constitutionally granted function of providing for the compensation and tenure of their employees to a private person arbitrator from whose decision there is ordinarily no appeal. (See Jones v. Kvistad (1971) 19 Cal.App.3d 836, 842-843 [97 Cal.Rptr. 100]; Shammas v. National Telefilm Associates (1970) 11 Cal.App.3d 1050, 1056 [90 Cal.Rptr. 119].)

No contrary implication is found in Taylor v. Crane (1979) 24 Cal.3d 442 [155 Cal.Rptr. 695, 595 P.2d 129]. There a city’s charter and a Meyers-Milias-Brown Act memorandum of understanding expressly authorized an arbitrator’s binding review of the city manager’s imposition of employee discipline, and it was so conceded by the city. In a disciplinary matter such an arbitrator reduced the penalty fixed by the city manager. The city’s contention on appeal was that although the arbitrator might have determined whether the employee was guilty of the charged misconduct and subject to discipline, he was without power to modify the penalty fixed by the city manager. The high court held that “[o}nce an arbitrator’s significant participation in the disciplinary process is accepted” by the parties, “public policy considerations” require that the arbitrator’s role be not “limited,” to the end that the dispute be resolved “quickly and inexpensively,” and that the judicial burden be “eased.” (24 Cal.3d, p. 452; italics added.) No indication is found that where a public entity, as here, has expressly agreed to arbitration in one area only of its employee relations, i.e., discipline for employee misconduct, “sound policy” and a “strong presumption” prefer a judicial construction that it has agreed to arbitration in all, or other, such areas.

Taylor v. Crane thus gives effect to the established rule iterated by Freeman v. State Farm Mut. Auto. Ins. Co. (1975) 14 Cal.3d 473, 481 [121 Cal.Rptr. 477, 535 P.2d 341], that while there is “zz strong policy in favor of enforcing agreements to arbitrate,. . . there is no policy compelling persons to accept arbitration of controversies which [ízí here} they have not agreed to arbitrate. ...” (Italics added.)

An additional issue appears to be presented by the Union, which we interpret and dispose of, as follows. Despite the clear holding of Glendale City Employees’ Assn., Inc. v. City of Glendale, supra, 15 Cal.3d 328, 334-335, that a Meyers-Milias-Brown Act memorandum of understanding becomes a “binding agreement” when approved by the public entity, the Union insists that the Agreement was more in the nature of a “legislative act” requiring, as a matter of law, that issues such as that before us be arbitrated. Reliance is placed upon City and County of San Francisco v. Cooper (1975) 13 Cal.3d 898 [120 Cal.Rptr. 707, 534 P.2d 403], an authority which we have carefully considered. Nothing is there found supportive of the argument. Treating, arguendo, the Agreement as a legislative act of the County, no requirement for arbitration of a merit salary step increase denial as a disciplinary grievance will be found therein. And we are advised of no rule of law requiring arbitration under a legislative act which does not, itself, so provide.

Furthermore, constitutional, statutory, and decisional law aside, we are of the opinion that no sound public policy would be served by judicial or legislative imposition upon an unwilling local public entity of an arbitrator whose discretion is beyond judicial or any review.

But we conclude further, that even were the Steelworkers Trilogy principles applicable to the case before us, they would nevertheless be of no avail to the Union.

The Steelworkers Trilogy cases additionally provide:

“[Arbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit.... [T]he judicial inquiry. . .must be strictly confined to the question whether the reluctant party did agree to arbitrate the grievance or did agree to give the arbitrator power to make the award. . . . ” (Warrior, 363 U.S., p. 582 [4 L.Ed.2d, p. 1417].) The arbitrator’s power “is legitimate only so long as it draws its essence from the collective bargaining agreement.” (Enterprise, 363 U.S., p. 597 [4 L.Ed.2d, p. 1428].) And arbitration will be ordered only when “the party seeking arbitration is making a claim which on its face is governed by the contract.” (American, 363 U.S., p. 568 [4 L.Ed.2d, p. 1407].)

California law is completely in accord.

The right to compel arbitration depends upon “the existence of a written agreement to arbitrate a controversy,” and a court may order arbitration only “if it determines that an agreement to arbitrate the controversy exists,...” (Code Civ. Proc., § 1281.2.)

“There is indeed a strong policy in favor of enforcing agreements to arbitrate, but there is no policy compelling persons to accept arbitration of controversies which they have not agreed to arbitrate.... ” (Freeman v. State Farm Mut. Auto. Ins. Co., supra, 14 Cal.3d 473, 481, italics added; Delta Lines, Inc. v. International Brotherhood of Teamsters (1977) 66 Cal.App.3d 960, 966 [136 Cal.Rptr. 345].)

“Arbitration is a matter of contract and a party cannot be required to arbitrate a dispute he has not agreed to submit.” (Pacific Inv. Co. v. Townsend (1976) 58 Cal.App.3d 1, 9 [129 Cal.Rptr. 489]; Unimart v. Superior Court (1969) 1 Cal.App.3d 1039, 1045 [82 Cal.Rptr. 249].) And, “it is the role of the court to determine whether a party resisting arbitration has agreed to arbitrate.” (Vernon v. Drexel Burnham & Co. (1975) 52 Cal.App.3d 706, 713 [125 Cal.Rptr. 147].)

“‘[T]he function of a court in deciding whether a dispute is subject to arbitration “is confined to ascertaining whether the party seeking arbitration is making a claim which on its face is governed by the contract. (Charles J. Rounds Co. v. Joint Council of Teamsters No. 42 (1971) 4 Cal.3d 888, 892 [95 Cal.Rptr. 53, 484 P.2d 1397]; Butchers’ Union Local 229 v. Cudahy Packing Co. (1967) 66 Cal.2d 925, 931 [59 Cal.Rptr. 713, 428 P.2d 849].)

From our foregoing discussion of the Steelworkers Trilogy holdings it appears that in doubtful cases a duty to arbitrate will be judicially decreed. But there will be no arbitration unless a contract therefor expressly so provides. And the contract will consist of the written agreement of the parties, as modified by such otherwise legally admissible extrinsic evidence, if any, as may be allowed in aid of its interpretation. Such extrinsic evidence may include such “common law” or “practices” or other matters as may be available to “fill in gaps” or throw light upon the intent of the parties to arbitrate the dispute at issue.

As we have pointed out, it is conceded that the Agreement did not expressly authorize arbitration of the employee’s dispute. Extrinsic evidence admitted in the superior court established no further oral, or collateral agreement. Nor did it establish custom, or practice, or “common law,” of the parties’ relationship “filling in the gaps,” thus indicating an intent to arbitrate. In other words, there was nothing before the court which directly, or impliedly, or inferentially, established or tended to establish, the existence of an agreement to arbitrate the subject grievance.

It was therefore without “doubt,” and “beyond dispute,” that the Agreement was not “susceptible of an interpretation” that the parties had agreed to arbitrate the employee’s dispute.

Certain authoritative holdings here bear emphasis. “[Arbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit.” (Warrior, 363 U.S., p. 582 [4 L.Ed.2d, p. 1417].) “[T]here is no policy compelling persons to accept arbitration of controversies which they have not agreed to arbitrate. . . . ” (Freeman v. State Farm Mut. Auto. Ins. Co., supra, 14 Cal.3d 473, 481.)

The judgment is affirmed.

Newsom, J., concurred.