Judge Randolph M. Hammock, Case Number: 24STCP00664, Date: 2024-09-06 Tentative Ruling

Petitioner International Union of Operating Engineers Local 501 brings this petition to compel arbitration against Respondent Pundir Group, Inc. Petitioner alleges that it and Respondent were parties to a written collective bargaining agreement (“CBA”), which includes a provision requiring binding arbitration. Respondent opposes the petition.

Petitioner has submitted various objections to evidence. This Court is unaware of any legal authority which requires a court to rule on evidentiary objections on a motion, except as to a motion for summary motion/adjudication (CCP § 437c (q)] or a special motion to strike (CCP § 425.16 (b)(2)); see also, Sweetwater Union High School Dist. v. Gilbane Building Co. (2019) 6 Cal.5th 931, 947-949.)

California has a strong public policy in favor of arbitration as an expeditious and cost-effective way of resolving disputes. The Federal Arbitration Act (“FAA”) also manifests a policy favoring arbitration. (Morgan v. Sundance, Inc. (2022) 142 S.Ct. 1708, 1713.) “Even so, parties can only be compelled to arbitrate when they have agreed to do so.” (Avila v. S. California Specialty Care, Inc. (2018) 20 Cal. App. 5th 835, 843.) “The party seeking to compel arbitration bears the burden of proving the existence of a valid arbitration agreement.” (Id.) An arbitration agreement is a contractual agreement. “General contract law principles include that ‘[t]he basic goal of contract interpretation is to give effect to the parties’ mutual intent at the time of contracting. [Citations.] ... The words of a contract are to be understood in their ordinary and popular sense.” [Citations.] (Garcia v. Expert Staffing W., 73 Cal. App. 5th 408, 412–13.)

“[T]he petitioner bears the burden of proving the existence of a valid arbitration agreement by the preponderance of the evidence . . . .” (Giuliano v. Inland Empire Personnel, Inc. (2007) 149 Cal.App.4th 1276, 1284). “In determining whether an arbitration agreement applies to a specific dispute, the court may examine only the agreement itself and the complaint filed by the party refusing arbitration [citation]. The court should attempt to give effect to the parties' intentions, in light of the usual and ordinary meaning of the contractual language and the circumstances under which the agreement was made.” (Weeks v. Crow (1980) 113 Cal.App.3d 350, 353). “Doubts as to whether an arbitration clause applies to a particular dispute are to be resolved in favor of sending the parties to arbitration. The court should order them to arbitrate unless it is clear that the arbitration clause cannot be interpreted to cover the dispute.” (California Correctional Peace Officers Ass'n v. State (2006) 142 Cal.App.4th 198, 205).

“[A] party opposing the petition bears the burden of proving by a preponderance of the evidence any fact necessary to its defense. [Citation.] In these summary proceedings, the trial court sits as a trier of fact, weighing all the affidavits, declarations, and other documentary evidence, as well as oral testimony received at the court's discretion, to reach a final determination.” (Giuliano v. Inland Empire Personnel, Inc. (2007) 149 Cal.App.4th 1276, 1284).

“If a court of competent jurisdiction, whether in this State or not, has ordered arbitration of a controversy which is an issue involved in an action or proceeding pending before a court of this State, the court in which such action or proceeding is pending shall, upon motion of a party to such action or proceeding, stay the action or proceeding until an arbitration is had in accordance with the order to arbitrate or until such earlier time as the court specifies. . . .” (CCP § 1281.4.)

As an initial matter, there is no dispute that a written agreement to arbitrate exists. (Gamboa v. Ne. Cmty. Clinic (2021) 72 Cal. App. 5th 158, 165 [“Petitioner has the initial burden of producing “prima facie evidence of a written agreement to arbitrate the controversy.”) The question is whether the agreement covers the dispute here.

Petitioner is a party to a Collective Bargaining Agreement (“CBA”) with Respondent. (Petition 5, Exh. A.) The agreement applies to “the operation of the specified Glenn M. Anderson Federal Building, 501 W. Ocean Blvd., Long Beach, California and Santa Ana Federal Building, 34 Civic Center Plaza, Santa Ana, California.” (Id. p. 1.)

On or about March 20, 2023, Respondent terminated its employee Ronald Thompson. (Petition, ¶ 7.) Under the CBA, “[t]he Employer has the right to discharge employees coming under the terms of this Agreement for just and sufficient cause. However, the discharge of any employee is subject to the grievance procedure, as hereinafter provided.” (Petition, Exh. A, Article IX, ¶ E.) The CBA defines “grievance” as “a dispute between the Employer, an employee covered hereby, or the Union, involving the interpretation or application of the terms of this Agreement.” (Petition, Exh. A, Article XV, ¶ A.) The grievance procedure includes arbitration.

On or about March 22, 2023, Petitioner filed a timely grievance alleging that Respondent violated the CBA by terminating Mr. Thompson without cause. (Id. ¶ 9, Exh. B.) Thereafter, the parties engaged in grievance procedures required by the CBA. (Id. ¶ 10.) Then, on or about August 8, 2023, Counsel for Petitioner, Justin Crane (“Petitioner’s Counsel”), submitted a request for arbitration to the Federal Mediation and Conciliation Service (“FMCS”) pursuant to Article XVC of the CBA. (Id. ¶ 10.) Respondent has refused to engage in arbitration. (Id. ¶¶ 11-13.)

In opposing arbitration, it is Respondent’s position that the underlying dispute falls outside the scope of the Collective Bargaining Agreement. Respondent contends that Mr. Thompson worked in the federal building pursuant to a Federal Contract between Respondent and GSA.

Pursuant to the Federal Contract between Respondents and the Government, all employees must “receive a favorable suitability determination, security clearance, and/or meet all security requirements, prior to reporting to work or performing work under this contract” from the Federal Government. (K. Pundir Decl., Exh. B, p. 101 § H.1.) The Federal Contract also states that “Employees that cannot obtain a favorable security determination, security clearance, or meet security requirements, will not be allowed to work in the Government building" and that the GSA “has full and complete control over granting, denying, withholding or terminating clearances for employees.” (Id. at § H.1.)

Respondent presents evidence that Mr. Thompson was “involved in an incident where a tenant was entrapped in an elevator for over ninety minutes.” (K. Pundir Decl. ¶ 4.) Following a meeting with GSA on March 6, 2023, GSA informed Respondent “that, if Mr. Thompson were to be accepted back to work by the Company, they would exercise their rights under Section H.4 of the Federal Contract, and they would not allow his return. They also stated that the GSA would not grant Mr. Thompson the security clearance and a government issued badge required to enter and perform work at the Building.” (Id. ¶ 5.) Thereafter, on March 20, 2023, Respondent terminated Mr. Thompson. (Id. ¶ 6.) Even once learning of the petition to compel arbitration, on June 4, 2024, Samantha Shintaku, a Senior Property Manager at GSA, emailed Kapil Pundir to reaffirm that “GSA will exercise its right under Section H.1 and H.2 of the BPA to not allow Ron Thompson to work or be assigned to work under the contract.” (Id. ¶ 7, Exh. C.)

Thus, Respondent argues that the federal government has exercised its exclusive right to discharge Mr. Thompson, and therefore Respondent has no power to reassign him. In other words, Respondent contends that “given Mr. Thompson’s inability to obtain clearance from the Federal Government, his termination is not within the CBA’s scope.” (Opp. 5: 20-21.) “The CBA only covers terminations where Pundir Group has exercised its right to discharge, not where required by contract or law. (Opp. 6: 22-23.)

Here, the court finds that the dispute falls within the scope of the CBA. The arbitration procedure applies to any grievance. Respondents’ contentions in opposing arbitration go to the merits of the termination or dispute, not the arbitrability of the dispute. The fact that the federal government is purportedly banning Mr. Thompson from returning to the premises is a defense Respondent can raise before the arbitrator—but it does not take the dispute out of arbitration entirely.

Accordingly, a written agreement to arbitrate that covers the dispute exists here. (See Vianna v. Doctors’ Management Co. (1994) 27 Cal.App.4th 1186, 1189 [noting that “arbitration agreements should be liberally interpreted, and arbitration should be ordered unless the agreement clearly does not apply to the dispute in question”].)

Respondent next argues that even if the dispute falls within the scope of the CBA, that Petitioner was untimely in its request for arbitration. Respondent also suggests that this issue is a question for this court, and not the arbitrator, to decide. In related argument, Respondent argues that Petitioner waived the right to arbitrate. It is Petitioner’s position that these issues must be decided by the arbitrator.

The CBA is apparently silent on whether the timing issue should be within the purview of the arbitrator or court. There is also no delegation clause. (Nelson v. Dual Diagnosis Treatment Center (2022) 77 Cal.App.5th 643, 654 [“Under California law, it is presumed the judge will decide arbitrability, unless there is clear and unmistakable evidence the parties intended the arbitrator to decide arbitrability”].)

As first raised by Petitioner and discussed by the parties, in Howsam v. Dean Witter Reynolds, Inc. (2002) 537 U.S. 79, the Supreme Court of the United States addressed whether compliance with the National Association of Securities Dealers (NASD) rule requiring arbitration be initiated within 6 years was a question for the arbitrator or court. [FN 2] The court concluded that the question was one for the arbitrator. (Id. at 85 [“we find that the applicability of the NASD time limit rule is a matter presumptively for the arbitrator, not for the judge. The time limit rule closely resembles the gateway questions that this Court has found not to be ‘questions of arbitrability’.”].) This was based on part on the acceptance that “ ‘procedural’ questions which grow out of the dispute and bear on its final disposition”—such as a statute of limitations—"are presumptively not for the judge, but for an arbitrator, to decide.” (Id. at 84.)

But here, unlike in Howsam, the timing is a purely procedural issue. There is no indication that it “grows out of the dispute” or bears any relation to the merits of the case. (Id. at 84.) Instead, the question is simply whether Petitioner timely demanded arbitration after receiving notice its grievance was denied.

The CBA provides a multistep procedure in the event of a grievance. It goes as follows: “all grievances by employees shall first be presented informally to their Union Shop Steward, who shall receive such grievances and attempt to adjust them immediately with a designated Employer representative.” (Art. XV, ¶ A.) Where a grievance is “not adjusted in this manner,” the employee or union generally has 30 days after the occurrence giving rise to the grievance to present the grievance in writing to the Employer. (Art. XV, ¶ B.) For “discharge grievances,” however, the employee has only five working days after discharge to present a written grievance. (Id.)

“Written grievances which are not resolved or responded to within five (5) calendar days after the written grievance is filed with the Employer and the Union representative, may be submitted to arbitration, as provided in this Article, if the Union or the Employer desires to contest the grievance further.” (Id.) Written notice of the desire to arbitrate must be given “within fourteen calendar days after termination of the five (5) calendar-day period.” (Id.) However, the time limits “may be extended by mutual agreement between the Employer and the Union.” (Id.)

Here, Petitioner filed the grievance on March 22, 2023. (Spalding Decl. ¶ 10.) The parties held a formal grievance meeting on April 17, 2023. (Id. ¶ 13.) On April 30, 2023, Respondent provided formal written notice that Mr. Thompson’s grievance was denied. (Id. ¶ 16.) On May 18, 2023, Respondent received a written request for arbitration from the Union. (Id. ¶ 17.) Petitioner does not dispute this timeline.

Thus, there is no dispute that Petitioner did not make the written request “within fourteen (14) calendar days after termination of the five (5) calendar-day period” after the written grievance was filed. (Petition, Exh. A, Article XV, ¶ C.) Because the parties agreed that arbitration was “available only if” written notice was given within this period, Petitioner’s failure to do so means arbitration is now unavailable. (Id. ¶ C.)

It should be noted, however, that the CBA provides that the time limits “may be extended by mutual agreement between the Employer and the Union.” (Id.) But Petitioner has not argued that there was a mutual agreement to extent the 14-day time limit.

Judge of the Superior Court

FN 1 - Nothing in this ruling, per se, prevents the Petitioner and/or Mr. Thompson to file a new action (or perhaps even amend this action) to pursue any causes of action it or he may against Defendant, which will be heard and determined in the LASC, as opposed to binding arbitration, per the CBA at issue.

FN 2 - This was the only case authority cited by the moving party in support of its argument that the timing issue should be decided by the arbitrator.