Vectrus Systems Corporation v. Teamsters Local 631

• Court: Court of Appeals for the Ninth Circuit
• Decided: June 11, 2020
• Docket: 19-16640
• Status: Unpublished

Opinion

FILED NOT FOR PUBLICATION JUN 11 2020 UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS

FOR THE NINTH CIRCUIT

VECTRUS SYSTEMS CORPORATION, No. 19-16640

Petitioner-Appellant, D.C. No. 2:18-cv-01345-JCM-VCF v.

TEAMSTERS LOCAL 631, MEMORANDUM*

Respondent-Appellee.

Appeal from the United States District Court for the District of Nevada James C. Mahan, District Judge, Presiding

Submitted June 9, 2020** San Francisco, California

Before: THOMAS, Chief Judge, and SCHROEDER and BRESS, Circuit Judges.

Vectrus Systems Corporation (“Vectrus”) appeals a district court order

denying its petition to vacate a labor arbitration award in favor of Teamsters Local

631 (the “Union”). Because the parties did not “clea[rly] and unmistakabl[y]”

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2). commit the question of arbitrability to the arbitrator, First Options of Chi., Inc. v.

Kaplan, 514 U.S. 938, 944 (1995) (citation omitted), we review the question of

arbitrability de novo. We affirm.

I

The arbitrator had the authority to arbitrate the dispute despite the fact that

the staffing determination that gave rise to the dispute occurred before the effective

date of the collective bargaining agreement. The undisputed evidence establishes

that Vectrus was a “perfectly clear” successor employer within the meaning of

NLRB v. Burns Int’l Sec. Servs., Inc., 406 U.S. 272, 294–95 (1972), rather than a

new employer, as it contends on appeal. Although a predecessor collective

bargaining agreement does not automatically bind a “perfectly clear” successor, it

may if the employer expresses an intent to be bound. See Resilient Floor Covering

Pension Tr. Fund Bd. of Trs. v. Michael’s Floor Covering, Inc., 801 F.3d 1079,

1099 (9th Cir. 2015). Here, Vectrus entered into a Bridge Agreement with the

Union, under which it promised to accept the terms and conditions of the

preexisting collective bargaining agreement, before formally staffing its

operations. Thus, Vectrus made it “perfectly clear” that it would retain a sufficient

number of predecessor employees to sustain the Union’s majority representative

status.

2 Under the circumstances presented here, Vectrus may not evade arbitration

on the ground that it distributed offer letters before the Bridge Agreement’s

effective date. Although the predecessor employer had distributed layoff notices to

the employees, the undisputed facts indicate that Vectrus decided which layoff

notices would remain effective when it began operations. There is no dispute that,

when it commenced operations, Vectrus was bound to the collective bargaining

agreement’s terms, including its arbitration provision. Under that provision, all

“dispute[s] regarding the interpretation and application of the provisions of this

Agreement filed by the Union . . . alleging a violation of the terms and provisions

of this Agreement” are arbitrable. That clause is sufficiently broad to encompass

the Union’s complaint that Vectrus reduced the workforce or recalled/rehired

employees in violation of the collective bargaining agreement’s seniority

provisions.

The fact that the Union filed its grievance before the Bridge Agreement’s

effective date does not alter this conclusion. Vectrus cites no compelling authority

to support its argument that the arbitrator lacked jurisdiction merely because the

Union chose to file its grievance in anticipation of Vectrus assuming control with a

reduced workforce, instead of waiting for that date to file.

II

3 The arbitration award should not be vacated for failure to draw its essence

from the collective bargaining agreement or as contrary to public policy. The

arbitration award drew its essence from the collective bargaining agreement.

Indeed, the arbitrator grounded his decision in his reading of specific provisions of

that agreement.

Assuming, arguendo, that the Service Contract Act, 41 U.S.C. §§ 6701–07,

and related regulations establish a well-defined public policy of granting

contractors discretion to staff their operations according to their own criteria, the

award is not contrary to that policy. Vectrus contracted that discretion away by

agreeing to be bound by the collective bargaining agreement as soon as it began

operations.

AFFIRMED.