Teamsters Local 287 could not willfully decide a contract made during a union strike was a done deal. The U. S. Supreme Court kept in force the no strike rule Granite Rock counted on to prevent any losses in work for customers. The decision held the two contracting parties to their written promises signed on July 2, 2004, without allowing the two parties to reach an agreement on terms.
Granite Rock’s Lost Opportunity
A strike began by Local 287 in San Jose on June 9, and stopped on the day Granite Rock made the new collective bargaining agreement, started again July 6, forcing Granite Rock to tread slow in its work building for customers. The company takes pride in completing its work, like the still standing Gilroy City Hall and Wells Fargo Building built after the 1906 earthquake in San Francisco devastated the city. Without the union workers, no headway could be made .
The union left the table after agreeing to a no strike rule. But considered the rule not in force until the members ratified the contract by vote. The company said the members ratified the contract by vote on July 2.
The Teamsters State New Terms
George Netto, the local’s business representative, at the end of the negotiation on the new CBA on July 2, asked for a separate agreement to hold the union harmless for any damages the strike caused the company. Granite Rock did not agree, and held the union responsible for violating the no strike rule when it went on strike again to protest this refusal.
Hard as a rock in their position against paying strike damages, and concerned about that one rule, the union workers stayed away from work and refused to end the strike. The union said ratification occurred on August 22, when the members voted to approve. Following the International Brotherhood of Teamster’s instructions, the local members did not return until September 13.
Sharing The Losses
No one sided remedy was acceptable to Granite Rock. The company went to the court to ensure the costs were measured on scales that have a large weight on the union’s side. The ratification date was no minute detail.
Without a contract with an arbitration clause on the day the company sued the union for striking, the company did not feel compelled to arbitrate.
The Supreme Court rattled the union’s confidence in formal law making between citizens, commonly called free bargaining and contract. The justices verified there was evidence from a union member the contract was ratified on July 2, as Granite Rock claimed. Netto could not resolve a better deal for members by negotiating an amendment with the company representative for an agreement that did not exist.
“Arbitration is strictly ‘a matter of consent,'” the Court said, citing the 1989 case Volt Information Sciences, Inc. v. Board of Trustees of Leland Stanford Junior Univ.. The union’s own argument that the contract did not stop them from striking because the union did not ratify the agreement until long after the strike began on July 6, on August 22, was taken by the Court as a reason to decide “there was no CBA.”
Netto also could not rely on an unratified agreement to ask for arbitration to settle the ratification dispute. Justice Thomas cited the Volt case, stating the federal policy favoring arbitration simply shows CBAs are “upon the same footing as other contracts.” The parties must agree to arbitrate. An invalid CBA left Local 287 without a chance at arbitration. The Court said no mutual agreement to arbitrate was proven.
The failure to agree on ratification delayed any opportunity to settle the strike dispute out of court.
Walled Into Disagreement
A written agreement, without a mutual affirmation the drafted contract was right down to the letter, was taken as genuine and finished by the company. The Court decided in Granite Rock v. Teamsters a court can step in to decide a strike dispute the union wants to arbitrate.
The National Association of Manufacturers got the answer they requested in their brief. Do not force the company to arbitrate a contract formation dispute without the company knowing their signature gives them reliable protection from a no strike clause that was part of the deal. Forced arbitration, they say, “threatens to undermine the process of collective bargaining itself.”
Local 287 could neither count on the arbitration agreement nor continue negotiations to give them an opportunity to add their own protection against strike damage suits. Members had to return to work at Granite Rock without resolving their differences on protections.