Vectrus Systems Corporation v. Teamsters Local 631 ( 2020 )

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NOT FOR PUBLICATION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.
4