# Service Employees International Union v. County of Napa

> California Court of Appeal · December 19, 1979 · 99 Cal. App. 3d 946

URL: https://www.frixlaw.com/law-library/cases/9727392

## Case

- **Full name:** SERVICE EMPLOYEES INTERNATIONAL UNION, LOCAL 614, SEIU, AFL-CIO, Plaintiff and Appellant, v. COUNTY OF NAPA, Defendant and Respondent
- **Court:** California Court of Appeal
- **Decided:** December 19, 1979
- **Citations:** 99 Cal. App. 3d 946; 160 Cal. Rptr. 810; 1979 Cal. App. LEXIS 2387
- **Precedential status:** Published
- **Opinion:** Dissent by Grodin
- **Judges:** Elkington, Grodin
- **Cited by:** 4 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/9727392

## Opinion text

GRODIN, J.
I respectfully dissent. The majority’s conclusion is bottomed on two alternative propositions: (1) that principles ordinarily applicable to determining arbitrability of disputes in California may for some reason be inapplicable to disputes in the public sector; and (2) that even if applicable those principles do not require arbitration of this particular dispute. I believe both propositions are wrong.
I
It is of course true that arbitration is ordinarily a matter of agreement between the parties (cf. so-called “Judicial Arbitration,” Code Civ. Proc., § 1141.10 et seq.) and that when one of the parties to an agreement which contains an arbitration clause refuses to arbitrate on the ground that the particular dispute lies outside the scope of that clause, the determination of that issue is ordinarily for the court. The rule is otherwise where the parties have expressly provided that the arbitrator is to determine issues of arbitrability as well (cf. Steelworkers *959 v. Warrior & Gulf Co. (1960) 363 U.S. 574, 583, fn. 7 [ 4 L.Ed.2d 1409, 1418 , 80 S.Ct. 1347 ]), but no such provision appears here. Accordingly, it was entirely appropriate for the trial court to undertake preliminary determination as to arbitrability. 1 The question is what standards govern that determination.
When a court is called upon to consider a claim of nonarbitrability, two principles apply. The first of these is found in the California Arbitration Act itself. 2 Code of Civil Procedure section 1281.2 provides that in a proceeding to compel arbitration, once a court finds that an agreement to arbitrate exists, “an order to arbitrate.. . may not be refused on the ground that the petitioner’s contentions lack substantive merit.” The legislative history underlying this provision makes clear that its purpose was to eliminate from California law the so-called Cutler-Hammer doctrine (after a decision by the New York courts in International Ass’n of Machinists v. Cutler-Hammer (1947) 271 App.Div. 917 [ 67 N.Y.S.2d 317 ] (affd., 297 N.Y. 519 [ 74 N.E.2d 464 ]), to the effect that arbitration should be denied if the meaning of the provision sought to be arbitrated is “beyond dispute.” That doctrine, as the California Law Revision Commission observed in the report which formed the basis of the current statute, would “permit the courts to resolve the very questions that the parties have agreed to submit to the decision of the arbitrators.” (Law Revision Commission’s Recommendation and Study Relating to Arbitration (Dec. 1960) p. G6.) It would, moreover, provide an incentive to delay. (id., at pp. G37-G38.)
*960 The second principle applicable to the judicial role in cases such as this is that there exists a strong presumption in favor of arbitrability, to the effect that an order to arbitrate should not be denied “unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute. Doubts should be resolved in favor of coverage [and in] the absence of any express provision excluding a particular grievance from arbitration. . only the most forceful evidence of a purpose to exclude the claim from arbitration can prevail. . . . ” The quoted language is from an opinion of the United States Supreme Court in Steelworkers v. Warrior & Gulf Co., supra, 363 U.S. at pages 582-585 [4 L.Ed.2d at pp. 1417-1419], one of three companion cases involving labor arbitration and known collectively as the Steelworkers Trilogy. Though state courts are not obligated to apply federal principles to agreements not covered by federal law (cf. Teamsters Local v. Lucas Flour Co. (1962) 369 U.S. 95 [ 7 L.Ed.2d 593 , 82 S.Ct. 571 ]), the principles announced in the trilogy cases have in effect been absorbed into California law (Posner v. Grunwald-Marx, Inc. (1961) 56 Cal.2d 169 [ 14 Cal.Rptr. 297 , 363 P.2d 313 ]; O’Malley v. Wilshire Oil Co. (1963) 59 Cal.2d 482, 490-491 [ 30 Cal.Rptr. 452 , 381 P.2d 188 ]). Indeed, while the United Sta000tes Supreme Court in the trilogy cases based its opinions in part upon the unique characteristics of collective bargaining agreements, California courts have applied trilogy principles more generally to commercial arbitration as well. 3 The state’s Supreme Court, for example, in Morris v. Zuckerman (1968) 69 Cal.2d 686, 690 [ 72 Cal.Rptr. 880 , 446 P.2d 1000 ], cited O’Malley v. Wilshire Oil Co., supra, 59 Cal.2d 482 , for the proposition that “any doubts as to the meaning or extent of an arbitration agreement are for the arbitrators and not the court to resolve,” and it has been observed that Morris “appears to have eliminated any distinction in the degree of strictness with which arbitration agreements in commercial contracts should be construed as against those in collective bargaining agreements.” (Lesser Towers, Inc. v. Roscoe-Ajax Constr. Co. (1969) 271 Cal.App.2d 675, 696 [ 77 Cal.Rptr. 100 ].) The *961 “positive assurance” test for determining arbitrability seems thus firmly embedded in California law. (See, in addition to Morris v. Zuckerman, supra, 69 Cal.2d 686 , Cook v. Superior Court (1966) 240 Cal.App.2d 880, 886 [ 50 Cal.Rptr. 81 ] [citing O’Malley for the proposition that “‘“Doubts as to whether the arbitration clause applies are to be resolved in favor of coverage”’”]; East San Bernardino County Water Dist. v. City of San Bernardino (1973) 33 Cal.App.3d 942, 953 [ 109 Cal.Rptr. 510 ] [“in the absence of an express provision removing a particular issue from arbitration. .. only a clear-cut expression to exclude a claim from arbitration can prevail”]; Lewsadder v. Mitchum, Jones & Templeton, Inc. (1973) 36 Cal.App.3d 255, 259 [ 111 Cal.Rptr. 405 ] [“every intendment will be indulged to give effect to such proceedings”]; Lesser Towers, Inc. v. Roscoe-Ajax Constr. Co., supra, 271 Cal.App.2d at p. 695 [“If there is any doubt as to whether an arbitration provision in an agreement covers a given controversy, it should be resolved in favor of coverage”].)
My colleagues concede that the trilogy presumption “has effectively become a part of California law,” but they suggest that there is “much doubt” as to whether its principles are applicable to agreements in the public sector. I would have thought that any doubt on that question was removed by the Supreme Court’s decision in Taylor v. Crane (1979) 24 Cal.3d 442 [ 155 Cal.Rptr. 695 , 595 P.2d 129 ], in which the city argued that the arbitrator exceeded his authority by deciding issues beyond the scope of the arbitration clause, 4 and the court responded as follows: “As a rule, courts defer to arbitrators in determining the extent and meaning of arbitration agreements. (Morris v. Zuckerman (1968) 69 Cal.2d 686, 690 . . ..) Although an award may be vacated if the arbitrator has exceeded his powers (Code Civ. Proc., § 1286.2), ambiguities in the scope of arbitration are resolved in favor of coverage. (Morris v. Zuckerman, supra, 69 Cal.2d at p. 690; East San Bernardino County Water Dist. v. City of San Bernardino (1973) 33 Cal.App.3d 942, 953 . . . .)” (Id., at p. 450, italics added.) The underlined language, together with the authorities cited in its support, makes clear in my mind that the presumption of arbitrability applicable generally to arbitration in California is applicable in the public sector as well.
*962 Indeed, since California applies the same presumption of arbitrability to all arbitration agreements, refusal to apply that presumption to public sector labor arbitration would be anomalous. While the trilogy cases sought to distinguish collective bargaining agreements from commercial agreements in order to isolate the hostility which some courts displayed toward commercial arbitration, that hostility is entirely antithetical to the affirmative approach which California courts have displayed toward arbitration in general. (E.g., Madden v. Kaiser Foundation Hospitals (1976) 17 Cal.3d 699, 706 [ 131 Cal.Rptr. 882 , 552 P.2d 1178 ].) What is involved is not simply a public policy favoring arbitration, since parties are ordinarily free to decide whether or not they wish to arbitrate, but rather a policy designed to assure the parties the benefit of their bargain. To the extent that a party can avoid or delay arbitration through judicial procedures, the value of arbitration may be lost.
In any event, the distinctive features of the collective bargaining agreement which arguably warrant special judicial restraint in determining arbitrability are for the most part present in the public sector as in the private. The state Supreme Court, following the lead of the United States Supreme Court, has recognized the “unique nature of the collective bargaining contract and . . . the vital and dynamic role of the arbitrator in the area of industrial relations.” (O’Malley v. Wilshire Oil Co., supra, 59 Cal.2d at p. 490 .) The labor agreement involves not a single transaction but a continuing, complex, multi-faceted relationship in which not all problems can be anticipated in advance. It is, in a sense, “more than a contract; it is a generalized code to govern a myriad of cases which the draftsmen cannot wholly anticipate. ... [It] covers the whole employment relationship. It calls into being a new common law—the common law of the particular industry or of a particular plant.” (Steelworkers v. Warrior & Gulf Co., supra, 363 U.S. at pp. 578-579 [ 4 L.Ed.2d at p. 1415 ]; see Posner v. Grunwald-Marx, Inc., supra, 56 Cal.2d at pp. 176-178.) The labor agreement “requires arbitration of claims that courts might be unwilling to entertain.” (Steelworkers v. American Mfg. Co. (1960) 363 U.S. 564, 567 [ 4 L.Ed.2d 1403, 1406 , 80 S.Ct. 1343 ]; Posner v. Grunwald-Marx, Inc., supra, at p. 176.) Where, as here, arbitration is over a matter that would be cognizable in court it “eases the burdens on courts while resolving disputes quickly and inexpensively.” (Taylor v. Crane, supra, 24 Cal.3d at p. 452 .) And, of course, labor arbitrators are typically selected by the parties on the basis of a background of knowledge and experience in labor relations that judges, by and large, do not possess. *963 Thus, “[w]hile all of the premises stated in the trilogy cases for judicial deferral may not be present in the public sector, certain crucial premises are: that effective labor relations requires a dynamic view of the collective agreement as establishing a process for resolution of a wide range of disputes, and that arbitration can be an effective method for resolving disputes quickly, peacefully, and in a manner most likely to be in accord with the ongoing relationship of the parties.” (Aaron, et al., Public-Sector Bargaining (1979) Judicial Response to Public-Sector Arbitration, p. 251.)
The fact that all governmental power is vested in the people and their chosen representatives seems to me, with all respect, to be completely beside the point. There is no question of intrusion upon governmental sovereignty involved in arbitration of a grievance arising out of an existing agreement. As the Supreme Court stated in Taylor v. Crane , “It has long been recognized that a city may agree to arbitrate any matter which could be the subject of civil suit.” ( 24 Cal.3d at p. 451 .) 5
The applicability of trilogy principles to the public sector has been recognized by nearly all state courts which have considered the question. 6 The aberrant decision of the New York Court of Appeal in Supt. of Schools, Liverpool (1977) 42 N.Y.S.2d 509 [ 399 N.Y.2d 189 , 369 N.E.2d 746 ], must be viewed against the background of a legal schism which exists in that state between commercial and labor arbitration—a schism foreign to California law, as discussed ante—and in light of subsequent opinions which appear to have eroded Liverpool’s nominal rejection of the trilogy presumption (e.g., South Colonie School v. Longo (1977) 43 N.Y.2d 136 [ 400 N.Y.S.2d 798 , 371 N.E.2d 516 ]). Federal policy is now reflected in the Civil Service Reform Act of 1978, 5 United States Code section 7101 et seq., which exceeds private sector deference to arbitrators in arbitrability matters by requiring that the *964 agreement itself contain procedures for resolving such questions ( 5 U.S.C.A. § 7121 (a)(1)). Arbitral awards are subject to review “on . . . grounds similar to those applied by Federal courts in private sector labor-management relations.” ( 5 U.S.C.A. § 7122 (a)(2).) Lodge 2424, Intern, etc. v. United States (Ct. Cl. 1977) 564 F.2d 66 , upon which the majority relies, involved review of an arbitrator’s award rather than an issue of arbitrability. The court quite properly observed that trilogy principles were not legally binding under the federal executive order which existed at the time, but even so the observation was unnecessary since the principles of review which the court brought to bear were perfectly compatible with trilogy principles. In any event, in light of the Civil Service Reform Act, the decision is no longer relevant precedent. It is fair to say that the position suggested by the majority is contrary both to relevant authority in California and to the great weight of current authority throughout the nation.
II
The issue which the Union seeks to arbitrate, as the majority notes, is whether the memorandum of understanding requires the County to undertake some formal disciplinary action, such as a letter of reprimand, before it denies an employee a step increase on the basis of unsatisfactory performance. Section 7.1 of the memorandum of understanding provides for arbitration of grievances which “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.” (Italics added.) Thus, arbitrability of the issue is not precluded, as the trial court apparently thought, by a determination that a step increase does not constitute “disciplinary action.” Nor, contrary to the opinion of my colleagues, is this a situation where the parties have agreed to arbitration “in one area only” of employee relations. The agreement contains no language excluding any particular matters from the scope of arbitration. Thus, arbitrability turns upon whether the Union’s claim presents a “disagreement over the interpretation, application, or compliance with the terms of the Memorandum of Understanding.”
More precisely, in view of the above-stated principles, the question is whether the quoted language is “susceptible of an interpretation” as embracing that issue, or whether, on the other hand, it can be stated with “positive assurance,” and without intrusion upon the merits, that the parties did not intend to arbitrate such a dispute.
*965 The answer to that question would itself be beyond dispute if the agreement contained any express language directly supportive of the Union’s position. 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.
Whether or not the Union would have any chance of succeeding before an arbitrator on this contention is, contrary to the suggestion of my colleagues, not an issue before us. Nor is it our function now to speculate whether an award accepting that contention would be enforceable. (Cf. Taylor v. Crane, supra, 24 Cal.3d at p. 450 .) The only question is whether that contention raises a disagreement concerning “interpretation, application, or compliance.” I am of the opinion that it does.
Unless the parties otherwise agree (and this agreement contains no exclusionary language) the absence of an express provision supportive of a claim does not bar arbitrability any more than it would bar litigation in the absence of an arbitration clause. The implication of terms based on past practice or the relationship of the parties is a commonplace in contract law. (3 Corbin on Contracts (1951) § 561 et seq.) Its function in the context of a collective bargaining agreement is of even greater significance, since such an agreement is “more than a contract; it is a generalized code to govern a myriad of cases which the draftsmen cannot wholly anticipate.” (Steelworkers v. Warrior & Gulf Co., supra, 363 U.S. at p. 578 [4 L.Ed.2d at p. 1415].) Thus, the United States Supreme Court stated in Steelworkers v. American Mfg. Co., supra, 363 U.S. at page 568 [4 L.Ed.2d at p. 1407]: “The courts. . .have no business weighing the merits of the grievance, considering whether there is equity in a particular claim, or determining whether there is particular language in the written instrument which will support the claim.” (Italics added.) And in Warrior & Gulf, supra, where the union sought arbitration of a grievance involving subcontracting of work in the face of a contract silent on that subject, the court concluded in the penulti *966 mate paragraph of its decision; “The grievance alleged that the contracting out was a violation of the collective bargaining agreement. There was, therefore, a dispute ‘as to the meaning and application of the provisions of this Agreement’ which the parties had agreed would be determined by arbitration” (363 U.S. at p. 585 [4 L.Ed.2d at p. 1419], italics added.) Applying these principles, the Court of Appeals for the Ninth Circuit has reasoned that “explicit language in collective bargaining agreements covering each specific claim alleged to be arbitrable is not required. . . . [T]he complete silence of an agreement on the issues sought to be arbitrated is not sufficient evidence to meet the rigorous standard set by the Steelworkers Trilogy for a finding of nonarbitrability. [Citations.]” (International Ass’n of Machinists v. Howmet Corp. (9th Cir. 1972) 466 F.2d 1249, 1252 .) Here, as in Warrior & Gulf, the Union has alleged that particular conduct on the part of the employer was a violation of the agreement. There was, therefore, a disagreement over the interpretation, application, or compliance with the terms of the memorandum of understanding, and that disagreement should have gone to arbitration. I would reverse.
Appellant’s petition for a hearing by the Supreme Court was denied March 13, 1980. Bird, C. J., Tobriner, J., and Newman, J. were of the opinion that the petition should be granted.
While the Union in its brief does appear at one point to argue to the contrary, 1 do not believe it is accurate to characterize this argument as the Union’s “remaining and principal contention.” The major thrust of the Union’s argument is that the trial court incorrectly determined the arbitrability issue.
As the majority notes, a memorandum of understanding entered into pursuant to the Meyers-Milias-Brown Act (Gov. Code, § 3500 et seq.) and approved by the governing body of the public entity constitutes a binding agreement under Glendale City Employees’ Assn., Inc. v. City of Glendale (1975) 15 Cal.3d 328 [ 124 Cal.Rptr. 513 , 540 P.2d 609 ], (cert. den. 424 U.S. 943 [ 47 L.Ed.2d 349 , 96 S.Ct. 1411 ]), and therefore fits comfortably within the definition of “agreement” contained in the California Arbitration Act (Code Civ. Proc., § 1280, subd. (a)): “‘Agreement’ includes...agreements between employers and employees or between their respective representatives.” Thus, it seems quite clear that the Arbitration Act applies, and 1 read the majority opinion as being in accord with this proposition.
The majority concludes, and I agree, that while a petition to compel arbitration under the statute would have been the more appropriate procedure, the fact that the Union sought a writ of mandate should not preclude consideration of the merits. The procedure that was followed was virtually the same as that which would have been called for under the statute, and as the majority notes there is no showing of prejudice. (Cf. Robinson v. Superior Court (1950) 35 Cal.2d 379, 383 [ 218 P.2d 10 ]; Neal v. *960 State of California (1960) 55 Cal.2d 11, 16 [ 9 Cal.Rptr. 607 , 357 P.2d 839 ].) It is not entirely clear whether my colleagues consider the substantive law of the arbitration statute applicable to the merits. In my judgment, it is applicable on the ground that the proceeding should be treated as if it had been instituted under the statute.
The court in Posner did not confine itself to discussion of labor arbitration and in Swift-Chaplin Productions, Inc. v. Love (1963) 219 Cal.App.2d 110, 115 [ 32 Cal.Rptr. 758 , 5 A.L.R.3d 1001 ], the court observed: “While the facts of, and the policies underlying the Posner and O'Malley decisions and the federal cases upon which they rely, would make it possible to limit the application of the rules established in Posner to collective bargaining cases, the court apparently did not desire to do so
It is somewhat misleading to say that the agreement “expressly” authorized an arbitrator’s binding review of employee discipline, and that “it was so conceded by the city." The city conceded that the arbitrator had authority to decide whether the employee violated applicable regulations, but argued he did not have authority to decide whether discipline was proper if the employee did commit such a violation. (Taylor v. Crane, supra, 24 Cal.3d at p. 450 .)
I take it there is no question but that, in the absence of an arbitration clause, the Union could have filed an action contending that the County’s conduct violated the agreement, and that the court would have had jurisdiction over the action under Glendale City Employees’ Assn., Inc. v. City of Glendale, supra, 15 Cal.3d 328 . Whether the Union would have had any chance to succeed is, of course, a different question.
E.g., Board of Ed of Town of Greenwich v. Frey (1978) 174 Conn. 578 [ 392 A.2d 466, 468 ]; Pittsburgh, etc. v. City of Pittsburgh (1978) 481 Pa. 66 [ 391 A.2d 1318, 1320-1321 ; School Committee, etc. v. Pawtucket, etc. (1978) — R.I. — [ 390 A.2d 386, 389-390 ]; School Committee of Danvers v. Tyman (1977) 372 Mass. 106 [ 360 N.E.2d 877, 881 ]; Kaleva-Norman-Dickson Sch. D. of Manistee, etc. v. Kaleva-Norman-Dickson School Teachers' Ass'n (1975) 393 Mich. 583 [ 227 N.W.2d 500, 504 ].

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/9727392. Public record. Not legal advice.