US Supreme Court Addresses Granite Rock Ratification Dispute

January 12, 2011 by Beeson Tayer & Bodine

Last June the U.S. Supreme Court issued a decision in Granite Rock v. IBT and Local 287. The dispute arose in June 2004, when Local 287 struck Granite Rock. The strike continued until August 22, the date when the members ratified the contract along with a return-to-work agreement. However, Granite Rock claimed the contract had been ratified some six weeks earlier, on July 2, and sued the Local for alleged breach of the no-strike clause and sued the IBT for encouraging the Local to continue striking after the alleged ratification. A jury found that the members had ratified a new contract on July 2. On appeal, the Ninth Circuit ruled the question of when the CBA was ratified was for an arbitrator to decide, rather than a jury. In addition, the Ninth Circuit ruled that Granite Rock had no federal claim for interference with the CBA.

The Supreme Court upheld the Ninth Circuit’s decision that Granite Rock could not sue the IBT for interfering with the CBA. The Court found that section 301(a) of the Labor Management Relations Act provides a federal cause of action for breach of contract only, and does not allow a suit against the International for “tortious interference” with a CBA.

Unfortunately, the high court decided the dispute over the ratification date was an issue of arbitrability for a court to decide, not an arbitrator. The Court reasoned that a party could not be compelled to arbitrate an issue arising under a collective bargaining agreement until the court determined that the contract had been ratified and became effective.

The case is not over yet. The Supreme Court remanded the case to the Ninth Circuit, where we are currently preparing briefs to address unresolved issues that will be determined by the appellate court. First, the Local argues that the judge, not a jury, should have decided when the contract was ratified. Second, the Local argues that the NLRB’s ruling in an earlier case that the Local unlawfully delayed ratification of the Granite Rock CBA until August 22 should control the question of when the CBA was actually ratified, and cannot be overridden by a court.

If the Local is successful in either of these arguments, the effect will be to nullify the jury’s decision. Even if the Local is not successful in either of these arguments, the question of damages for the strike will be decided by an arbitrator. We believe the Local Union will be in better hands with an experienced labor arbitrator, rather than with a jury.

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