P&A Construction Inc v. International Union of Operati

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
____________
No. 20-1634
____________
P&A CONSTRUCTION INC.; UTILITY SYSTEMS INC.,
Appellants
v.
INTERNATIONAL UNION OF OPERATING ENGINEERS
LOCAL 825;
UNITED STEEL PAPER AND FORESTRY RUBBER
MANUFACTURING
ENERGY ALLIED INDUSTRIAL AND SERVICE
WORKERS INTERNATIONAL
UNION LOCAL 15024 AFL-CIO
____________
On Appeal from the District Court for the
District of New Jersey
(D.C. No. 2:19-cv-18247)
District Judge: Susan D. Wigenton
____________
Argued April 22, 2021
Before: AMBRO, KRAUSE, and PHIPPS, Circuit Judges
(Filed: November 18, 2021)
Othiamba N. Lovelace [ARGUED]
Ronald L. Tobia
Tobia & Lovelace
5 Sicomac Road
Suite 177
North Haledon, NJ 07508
Counsel for Appellant
Gregory J. Hazley
Alexander Hemsley, III
Richard F.X. Regan [ARGUED]
DeCotiis FitzPatrick Cole & Giblin
61 South Paramus Road
Suite 250
Paramus, NJ 07652
Counsel for Appellee Local 825
Nathan L. Kilbert [ARGUED]
United Steelworkers of America
Five Gateway Center
60 Boulevard of Allies
Room 807
Pittsburgh, PA 15222
David A. Tykulsker
David Tykulsker & Associates
161 Walnut Street
Montclair, NJ 07042
2
Counsel for Appellee Local 15024 AFL-CIO
____________
OPINION OF THE COURT
____________
KRAUSE, Circuit Judge.
In a typical collective bargaining agreement (“CBA”), a
single employer and a single union contract to arbitrate
disputes over specified terms and conditions of employment,
and their contract is enforceable in federal court under the
Labor Management Relations Act (“LMRA”). See 29 U.S.C.
§ 185(a); United Steelworkers of Am. v. Warrior & Gulf Nav.
Co., 363 U.S. 574, 577–79 (1960). Today we address a much
less typical situation and weigh in on an open question in our
Circuit: Does the LMRA authorize a district court to compel
joint arbitration between an employer and two separate labor
unions, each of which has its own CBA with the common
employer, when those unions claim the same work under their
respective CBAs?1 We conclude that joint arbitration is
1
The parties, like some courts, use the term “tripartite”
arbitration, while others, perhaps more accurately, describe it
as “joint” arbitration between more than two parties. Compare,
e.g., Columbia Broad. Sys., Inc. v. Am. Recording & Broad.
Ass’n, 414 F.2d 1326, 1329 (2d Cir. 1969), with Laborers’
Union N. Am., Local No. 309 v. W.W. Bennett Const. Co., Inc.,
686 F.2d 1267, 1273 (7th Cir. 1982). We have used both terms
in the past. See Trenton Metro. Area Local v. U.S. Postal Serv.,
636 F.3d 45, 47 (3d Cir. 2011) (referring to “tripartite
3
available under the LMRA as a general matter, either before or
after the bipartite arbitration award at issue has become final.
As a result, we must also consider whether Appellants here,
which are two at least nominally separate companies, can
invoke that general rule. Because we conclude they cannot on
this record, we will affirm the District Court’s order denying
joint arbitration.
I. Factual & Procedural Background
In 1972, P&A Construction, Inc., which builds roadway
and utility projects, signed a CBA with United Steelworkers
Local 15024. But in the early 1980s, according to P&A’s
Secretary-Treasurer Benedita Barrows, Local 825 Operating
Engineers pressured P&A to employ them instead, so P&A
created Utility Systems, Inc. (“Utility”) to hire Local 825
workers. Utility signed a CBA with Local 825.
That resolved one problem, but it gave rise to another.
From 2016 to 2018, Utility subcontracted a number of
construction projects to P&A, which used its workers from
arbitration”); Window Glass Cutters League of Am. v. Am. St.
Gobain Corp., 428 F.2d 353, 355 (3d Cir. 1970) (referring both
to “tripartite arbitration” and to “joint arbitration”). We adopt
the latter convention here. While we retain “tripartite
arbitration” where it appears in quotations, we note that
“tripartite arbitration” in this context is not to be confused with
its meaning in the context of choosing a three-arbitrator panel.
See Note, The Use of Tripartite Boards in Labor, Commercial,
and International Arbitration, 68 Harv. L. Rev. 293, 293–94
(1954).
4
Local 15024 on those jobs. But Utility’s CBA with Local 825
required it to use only Local 825 workers, and Utility could
only subcontract work if the subcontractor also agreed to abide
by the terms of Utility’s CBA with Local 825. Relying on
those provisions, Local 825 brought multiple grievances
against Utility, alleging that its subcontracting to P&A violated
their CBA. In October 2018, Local 825’s grievances
proceeded to arbitration, where Local 825 sought only money
damages.
At that point, Utility and P&A found themselves in a
quandary. P&A feared that if Local 825’s arbitrator ruled that
Utility’s subcontractors must use Local 825 workers, that
might force P&A to violate its CBA with Local 15024, which
requires P&A to use Local 15024 workers. P&A and Utility
therefore tried to bring both unions to the same table by filing
an LMRA suit in the District Court and requesting an order
compelling joint arbitration with both employers and both
unions.
There was just one problem: P&A is not a party to
Utility’s CBA with Local 825, and Utility is not a party to
P&A’s CBA with Local 15204. So P&A and Utility sought to
persuade the District Court that it could and should compel
joint arbitration in this circumstance, and that P&A and Utility
qualified as a single or joint employer under the LMRA, by
analogy with the single and joint employer doctrines under the
National Labor Relations Act (“NLRA”). In the alternative,
they requested arbitration under the so-called Harmony
Agreement—a contract between Local 15024’s parent union,
the United Steelworkers International (“USW”), and Local
825’s parent union, North America’s Building Trades Union
5
(“NABTU”), which allows for the arbitration of jurisdictional
disputes between the USW and NABTU.
The District Court rejected each of those arguments. It
accepted that it could enforce joint arbitration under the LMRA
but determined that it would be inappropriate here because
there was insufficient risk that P&A and Utility would face
conflicting arbitration awards simultaneously granting the
same jobs to both Local 825 and Local 15024. P&A Const.,
Inc. v. Int’l Union of Operating Eng’rs Local 825, No. 19-cv-
18247, 2020 WL 773128, at *3 (D.N.J. Feb. 18, 2020). It also
determined, after assessing the record of the employers’
histories and relationship with each other, that P&A and Utility
could not be deemed a single or joint employer. Id. Finally, it
denied arbitration under the Harmony Agreement because “no
party to this litigation is a party to the Harmony Agreement.”
Id. at *4 n.7. This appeal followed.
II. Jurisdiction & Standard of Review
The District Court had jurisdiction under 29 U.S.C.
§ 185(a) and 28 U.S.C. § 1331. We have jurisdiction under 28
U.S.C. § 1291, which gives us authority over “final decisions
of the district courts.” Here, although P&A and Utility initially
sought additional forms of relief, they withdrew those requests
with prejudice in a joint stipulation of dismissal in the District
Court. Thus, as the parties confirmed at oral argument, there
are no remaining claims before the District Court, and its
February 18, 2020, order denying joint arbitration constitutes a
final order. See State Nat’l Ins. Co. v. County of Camden, 824
F.3d 399, 408 (3d Cir. 2016); DL Res., Inc. v. FirstEnergy Sols.
Corp., 506 F.3d 209, 216 (3d Cir. 2007).
6
Assuming a district court has authority to compel joint
arbitration, we review for abuse of discretion its decision
whether to do so. See Emery Air Freight, Corp. v. Int’l Bhd. of
Teamsters, Local 295, 185 F.3d 85, 91–92 (2d Cir. 1999).
III. Discussion
P&A and Utility seek to compel Local 825 and Local
15024 to participate in joint arbitration with them under the
LMRA, either (A) viewing P&A and Utility as single or joint
employers, or (B) under the auspices of the Harmony
Agreement, treating the commitments of the parent unions as
binding on Local 825 and Local 15024. We address these
issues in turn.
A. Joint Arbitration under the LMRA
To determine whether P&A and Utility are entitled to
an order compelling joint arbitration under the LMRA, we
must decide: (1) whether the LMRA generally authorizes
federal courts to order joint arbitration; (2) when joint
arbitration is available, i.e., only before or also after the
relevant bipartite arbitration award has become final; (3) how
a district court should decide whether to compel joint
arbitration in a particular case; and (4) who can seek to compel
joint arbitration—specifically, under what circumstances two
employers may be deemed a single or joint employer for
purposes of compelling joint arbitration with two or more of
their unions.
7
1. Whether joint arbitration is available under the
LMRA
To determine whether joint arbitration is enforceable
under the LMRA, the Supreme Court has instructed us to look
to the text of the statute, the “policy of th[at] legislation,” and
the broader “policy of our national labor laws” to derive “the
rule that will best effectuate the federal policy.” Textile
Workers Union of Am. v. Lincoln Mills of Ala., 353 U.S. 448,
456–57 (1957). Using those guideposts, the six Courts of
Appeals that have addressed the issue have concluded
unanimously that joint arbitration is enforceable under the
LMRA.2 Previously, we too have observed, although in
dictum, that “on a proper record a District Court clearly would
have the authority to provide for joint arbitration of a labor
dispute.” Window Glass Cutters of Am. v. Am. St. Gobain
Corp., 428 F.2d 353, 355 (3d Cir. 1970) (citing Columbia
2
See Columbia Broad. Sys., Inc. v. Am. Recording &
Broad. Ass’n (“CBS”), 414 F.2d 1326, 1329 (2d Cir. 1969);
Local No. 850, Int’l Ass’n of Machinists v. T.I.M.E.-DC, Inc.,
705 F.2d 1275, 1277–78 (10th Cir. 1983); U.S. Postal Serv. v.
Am. Postal Workers Union, 893 F.2d 1117, 1120 (9th Cir.
1990); Retail, Wholesale & Dept. Store Union, Local 390 v.
Kroger Co. (“Wholesale”), 927 F.2d 275, 281–82 (6th Cir.
1991); U.S. Postal Serv. v. Nat’l Rural Letter Carriers’ Ass’n,
959 F.2d 283, 286 (D.C. Cir. 1992); see also Laborers’ Int’l
Union N. Am., Local No. 309 v. W.W. Bennett Const. Co., Inc.,
686 F.2d 1267, 1278 (7th Cir. 1982) (citing CBS with approval
and observing that joint arbitration would have been available
had the appellant “allege[d] facts sufficient to support [] an
action” to “compel consolidation”).
8
Broad. Sys., 414 F.2d at 1328). Today, we adopt that view
precedentially. 3
Three features of “the policy of our national labor laws,”
Lincoln Mills, 353 U.S. at 456, convince us to join the
consensus.
First, joint arbitration advances the policy embodied in
the text of the LMRA: “that federal courts should enforce
[CBAs].” Id. at 455. The LMRA gives district courts
jurisdiction over “[s]uits for violation of contracts between an
employer and a labor organization,” 29 U.S.C. § 185(a), and
thus makes clear that an “agreement to arbitrate . . . contained
in [a CBA] should be specifically enforced” by the federal
courts, Lincoln Mills, 353 U.S. at 451. A CBA, however, is
“more than a contract”—it is a “generalized code” for a
“particular plant” that must “govern a myriad of cases which
the draftsmen cannot wholly anticipate.” Warrior & Gulf, 363
U.S. at 578–79. And, “to interpret such an agreement, it is
[sometimes] necessary to consider the scope of other related
collective bargaining agreements,” especially when they are
“resorted to for the purpose of settling a jurisdictional dispute
3
Our concurring colleague urges that we hold joint
arbitration unavailable under the LMRA because it is no longer
necessary in this era of reduced labor strife. As demonstrated
by this very case, however, the demand for joint arbitration is
hardly a thing of the past. And even if it were, our construction
of the statute may not shift with the prevailing winds of the
labor market. We are tasked with faithfully interpreting the
LMRA consistent with Supreme Court precedent, and we
fulfill that task today.
9
over work assignments.” Transp.-Commc’n Emps. Union v.
Union Pac. R.R. Co., 385 U.S. 157, 161 (1966). Joint
arbitration simply provides a forum in which to do so—
conjoining bipartite arbitrations in which “both unions ha[ve]
contracts with the same employer,” claim the same jobs, and
have arbitration provisions covering those jobs. CBS, 414 F.2d
at 1328. By holding the parties to their respective arbitration
agreements, but bringing them to the same table, the arbitrator
can “consider the scope of [the] related [CBAs],” id., and
determine the parties’ rights and obligations in an orderly and
consistent way.4
4
The principal concerns of our concurring colleague are
therefore unfounded. Allowing district courts to enforce joint
arbitration in appropriate circumstances does not compel
parties to arbitrate without consent; it simply brings parties
who have consented to arbitrate the same dispute with the same
employer to a single venue. CBS, 414 F.2d at 1328. And the
criteria that we (and the other Courts of Appeals) apply to
determine when joint arbitration is appropriate include, among
other things, the breadth of the arbitration provisions, the
existence of conflicting arbitration awards, and the
compatibility of the arbitration procedures in the two CBAs.
See discussion infra Section III.A.3. As a result, the prospect
for joint arbitration outside the scope to which the parties
consented, imposition of incompatible arbitration procedures,
or gamesmanship in the timing of arbitration or the selection
of arbitrator is negligible. See Emery, 185 F.3d at 92 (“tactical”
behavior by an employer seeking joint arbitration “militated in
favor of denying” its request under this framework).
10
Second, joint arbitration serves the LMRA’s policy goal
of “promot[ing] industrial stabilization through the collective
bargaining agreement.” Warrior & Gulf, 363 U.S. at 578.
Arbitration provisions in CBAs are a “major factor in
achieving industrial peace,” id., but when two unions have
“contracts with the same employer” and claim the same work
under those CBAs, there is a risk of competing arbitration
awards granting that work to different unions, which will only
increase conflict, CBS, 414 F.2d at 1328. In such cases, the
“national policy of furthering industrial peace by resort to
agreed-upon arbitration procedures” requires a process that can
bind all relevant parties and avoid conflicting awards. Id.Indeed, both employers and unions sometimes seek joint
arbitration, see, e.g., Wholesale, 927 F.2d at 277 (employer
proposing that a matter be submitted to joint arbitration); Air
Line Pilots Ass’n, Int’l v. U.S. Airways Grp., Inc., 609 F.3d
338, 339–40 (4th Cir. 2010) (union seeking multi-party dispute
Nor is bargained-for consent to joint arbitration a
panacea. See Concurrence at 9. While the inclusion of a joint
arbitration clause is certainly to be encouraged where a union
or employer can reasonably foresee conflicting obligations,
and its absence is another criterion that a district court may
consider, there are many circumstances where the parties may
have no reason to anticipate the need for such a provision, but
the district court nonetheless concludes that joint arbitration
“best effectuate[s]” the LMRA and meets the criteria we set
out below. See Lincoln Mills, 353 U.S. at 456–57; see
generally Sherrard L. Hayes, Jr., Comment, The Federal
Circuits’ Response to Conflicting Arbitration Awards in Labor
Disputes, 59 TENN. L. REV. 353, 364–65 (1992).
11
resolution under the Railway Labor Act), confirming that it
does not favor either side but rather provides a forum where all
parties can press their contractual claims without risk of
inconsistent awards. Allowing district courts to consolidate
bipartite arbitrations into a single joint proceeding thus furthers
the LMRA’s basic policy of settling disputes through
arbitration. CBS, 414 F.2d at 1328.
Third, in the context of the Railway Labor Act (“RLA”),
to which we look for guidance in fashioning a remedy under
the LMRA, see Emery, 185 F.3d at 90, the Supreme Court has
countenanced joint arbitration. In Transportation-
Communication Employees, for example, the Court held that
an employer and multiple labor unions can be compelled to
participate in joint arbitration under the RLA to “settl[e] a
jurisdictional dispute” between two unions that claim the same
work. 385 U.S. at 160–61.5 As the Second Circuit has
5
The concurrence discounts the relevance of
Transportation-Communication Employees on the grounds
that, unlike the LMRA, the RLA mandates a dispute-resolution
process and specifies that an Adjustment Board will serve as
the exclusive adjudicator. 29 U.S.C. § 185(a). But the Court’s
holding that the Adjustment Board should have ordered joint
arbitration was not predicated on the fact that a particular
dispute-resolution process was statutorily prescribed by the
RLA. Rather, the Court found that resolving two unions’
claims to the same work separately “without [] determining
which union ha[d] the right to perform the job” in a joint
proceeding would encourage a “merry-go-round situation,”
which was antithetical to the RLA’s purpose of promoting
12
reasoned, because LMRA disputes “parallel[] the type [of
dispute] involved in Transportation-Communication
Employees,” CBS, 414 F.2d at 1329, the remedy of joint
arbitration likewise should be afforded when appropriate in
light of “the nature of the problem” presented, Lincoln Mills,
353 U.S. at 457.
2. When joint arbitration is available
In this case, because the arbitrator has already made an
award in the arbitration proceeding between Utility and Local
825, see Utility Sys., Inc. v. Int’l Union of Operating Eng’rs
Local 825, No. 20-cv-14369, 2021 WL 1138138 (D.N.J. Mar.
24, 2021), appeal filed Apr. 28, 2021, we must also decide
when in the course of a labor dispute a party may seek joint
arbitration.
“prompt and orderly settlement of all disputes.”
Transportation-Communication Employees, 385 U.S. at 162.
That reasoning applies with full force in this case, as the
LMRA serves an identical purpose. See Warrior & Gulf, 363
U.S. at 578. And the fact that an arbitrator, rather than a board,
is given the exclusive authority to resolve arbitrable disputes
in the LMRA context is immaterial: Transportation-
Communication Employees held that—to avoid the risk of
competing arbitration awards granting the same work to
different unions—it is not only permissible but also
appropriate for the designated authority to arbitrate the
competing disputes of a single employer with two different
unions within the same arbitration proceeding.
Transportation-Communication Employees, 385 U.S. at 165.
13
Our sister circuits are divided on that question. On one
side, the Ninth Circuit holds that the strong federal policy in
favor of the finality of arbitration awards means that the
benefits of joint arbitration should not “be achieved at the cost
of overturning arbitrators’ bipartite awards after they have
been arrived at under [the parties’] collective bargaining
agreements.” La.-Pac. Corp. v. Int’l Bhd. Elec. Workers, Local
2294, 600 F.2d 219, 222, 226 (9th Cir. 1979). As a result, in
that Circuit, “[p]arties must request court intervention before
receiving conflicting awards.” Am. Postal Workers, 893 F.2d
at 1121. Put differently, both the parties and the district court
must anticipate the possibility of competing awards, and they
may only act preemptively.6 In contrast, the Second, Sixth, and
Tenth Circuits allow parties to seek joint arbitration even after
bipartite awards have become final. See Emery, 185 F.3d at
6
It is unclear how the Ninth Circuit’s rule would treat
the timing of the motion to compel here. American Postal
Workers suggests that because P&A and Utility “request[ed]
court intervention before receiving conflicting awards,” 893
F.2d at 1121, they met the Ninth Circuit’s requirement. But in
Louisiana-Pacific, the Ninth Circuit was reviewing a case in
which the arbitrators had rendered bipartite awards and the
employers sued “to set aside th[o]se awards” and “obtain
tripartite arbitration,” 600 F.2d at 220, which is functionally
similar to the timing here, where we are reviewing P&A’s and
Utility’s request for joint arbitration after they have sued to set
aside a bipartite award, see Utility Sys., 2021 WL 1138138, at
*1, even though that request to set aside the award is pending
in a separate proceeding. We need not resolve that question,
however, because we conclude that joint arbitration is available
even after bipartite awards have become final.
14
92; Wholesale, 927 F.2d at 280; T.I.M.E.-DC, 705 F.2d at
1278. Those courts, in our view, have the better of the
argument.
We align here with the majority because
“[c]ircumstances could arise in which the later arbitration was
not anticipated at the time the first arbitration was conducted,
or in which it was unclear at the outset that the remedy or award
in the arbitrations would impose conflicting obligations.”
Emery, 185 F.3d at 92. In addition, as the Sixth Circuit has
emphasized, see Wholesale, 927 F.2d at 280, the Supreme
Court has allowed joint arbitration under the RLA even after a
bipartite award has become final because only joint arbitration
can provide true finality and avoid the “merry-go-round” of
each union pursuing conflicting bipartite awards, Transp.-
Commc’n Emp., 385 U.S. at 162.
In short, a party may seek joint arbitration either before
or after bipartite arbitration awards have become final.7 The
upshot for this case is that the timing of the existing arbitration
award in favor of Local 825 does not provide a ground to deny
P&A’s motion to compel.
7
In some cases, though, the “firm federal policy [in
favor of] the finality of a labor arbitrator’s decision,”
Louisiana-Pac. Corp., 600 F.2d at 223, may weigh against
compelling joint arbitration. We discuss this issue further in
Section III.A.3 below.
15
3. What criteria should a district court consider
The next question is how a court, confronted with a
motion to compel joint arbitration, should go about deciding
whether it is “a suitable remedy” on the facts presented. Am.
Postal Workers, 893 F.2d at 1120. What criteria can help guide
its exercise of discretion?
While the ultimate question is whether joint arbitration
will enforce the parties’ CBAs and “further[] industrial peace,”
CBS, 414 F.2d at 1328, the Second Circuit in Emery compiled
a non-exhaustive list of factors to consider:
(i) the breadth of the relevant arbitration
provisions; (ii) the existence (or likelihood) of
conflicting arbitration awards; (iii) the
compatibility of the arbitration procedures in the
two collective bargaining agreements; (iv) the
retrospective or prospective nature of the
awards; and (v) whether the employer should
have known of the potential conflict in its
incipiency and should have acted to prevent it[,
as well as] [o]ther factors [that the district court
finds] relevant[.]
185 F.3d at 91 (citations omitted). The other Courts of Appeals
apply these “Emery factors” in substance, if not in name, and
we will adopt them as well, with two qualifications.
First, as a threshold matter, the party seeking joint
arbitration must demonstrate a “contractual nexus . . . as to both
(a) the parties and (b) the subject matter,” i.e., the jobs at issue.
Am. Postal Workers, 893 F.2d at 1120. This prerequisite stems
16
from the general rule that “a party cannot be required to submit
to arbitration any dispute which [it] has not agreed [] to
submit,” Warrior & Gulf, 363 U.S. at 582, so “[b]efore
tripartite arbitration may be ordered,” the district court must
assure itself that “the parties involved . . . have a duty to engage
in separate bipartite arbitration over the subject matter
involved,” United Indus. Workers v. Kroger Co., 900 F.2d 944,
947 (6th Cir. 1990).
Second, “the existence (or likelihood) of conflicting
arbitration awards,” Emery, 185 F.3d at 91, carries particular
weight in the equitable analysis, and in many cases it will be
dispositive. That is because the “national policy” embodied in
the LMRA is the goal of “furthering industrial peace by resort
to agreed-upon arbitration procedures,” CBS, 414 F.2d at 1328,
and as we have explained, inconsistent arbitration awards are
only likely to increase conflict, not “to promote industrial
stabilization,” Warrior & Gulf, 363 U.S. at 578. Joint
arbitration therefore becomes increasingly appropriate as the
likelihood grows that there will be competing arbitration
awards granting the same work to different unions “to the
exclusion of [each] other.” Wholesale, 927 F.2d at 281.8
8
The likelihood of conflicting awards may also be
influenced by the prospective or retrospective nature of the
relief that is sought in arbitration. An employer can
simultaneously comply with two inconsistent but retrospective
awards, even if it would prefer not to pay two sets of workers
for just one job. But requests for prospective relief can
“place[ the employer] in the impossible position of having to
comply with both awards coextensively.” T.I.M.E.-DC, 705
17
Having clarified the factors relevant to the court’s
decision on whether to compel joint arbitration, Emery, 185
F.3d at 91, we next consider who may move to compel and
whether the District Court here erred in denying that relief.
4. Who may seek to compel joint arbitration
While joint arbitration is generally available under the
LMRA and the existence of a bipartite award here does not
justify denying P&A and Utility’s motion, this is not a typical
joint arbitration case in which “the two competing unions each
had broad arbitration agreements with the same employer.”
Bennett Const., 686 F.2d at 1274. Rather, P&A and Utility are,
at least nominally, separate companies. We must therefore
consider (a) whether they can still establish the “contractual
nexus” required for joint arbitration, Am. Postal Workers, 893
F.2d at 1120, and, if so, (b) whether the overall equities favor
it.
a. The contractual nexus requirement
At the threshold, P&A and Utility have failed to
establish the necessary “contractual nexus” connecting “the
parties” and “the subject matter.” Id. As for the parties, “in
every case [where courts have allowed joint arbitration,] the
two competing unions each had broad arbitration agreements
with the same employer,” Bennett Const., 686 F.2d at 1274, but
F.2d at 1276 (quoting the district court’s factual findings). For
that very reason, the Sixth Circuit permits joint arbitration even
after a bipartite award has become final. See Wholesale, 927
F.2d at 281.
18
here, Local 825 only had a CBA with Utility, and Local 15024
only had a CBA with P&A. Local 825, in other words, did not
agree to arbitrate with P&A, nor did Local 15024 with Utility.
See Warrior & Gulf, 363 U.S. at 582. As for “the subject
matter,” Am. Postal Workers, 893 F.2d at 1120, Local 825 only
claimed jobs from Utility, while Local 15024 only claimed
jobs from P&A, so there was not a true “jurisdictional dispute”
between two unions claiming the same work, see CBS, 414
F.2d at 1328–29.
As a result, P&A and Utility can only seek joint
arbitration if they are considered a single or joint employer for
purposes of the LMRA. They fit that description, they contend,
if we apply the definitions of “single employer” and “joint
employer” that the courts and the National Labor Relations
Board have developed under the NLRA. See N.L.R.B. v.
Browning-Ferris Indus. Pa., Inc., 691 F.2d 1117, 1121 (3d Cir.
1982). In that context, “two nominally separate entities”
constitute a “single employer” where there is “(1) functional
integration of operations; (2) centralized control of labor
relations; (3) common management; and (4) common
ownership.” Id. at 1122. And two companies will be found to
be “joint employers” where “one employer[,] while contracting
in good faith with an otherwise independent company, has
retained for itself sufficient control of the terms and conditions
of employment of the employees who are employed by the
other employer.” Id. at 1123.
Some Courts of Appeals have imported a “single
employer” theory from the NLRA context to resolve issues in
19
LMRA cases.9 But we do not need to decide the relevance of
the NLRA for joint arbitration under the LMRA today because,
9
Specifically, some courts have borrowed the “single
employer” and the “alter ego” theories from the NLRA context
to hold non-signatories to the terms of a CBA in LMRA cases.
See, e.g., Sheet Metal Workers v. Arizona Mech. & Stainless,
Inc., 863 F.2d 647, 651 (9th Cir. 1988); Carpenters Local
Union No. 1846 v. Pratt-Farnsworth, Inc., 690 F.2d 489, 511,
522 (5th Cir. 1982). Others use only the “alter ego” theory to
bind a non-signatory to the terms of a CBA under the LMRA.
See, e.g., Penntech Papers, Inc. v. N.L.R.B., 706 F.2d 18, 24
(1st Cir. 1983); Local Union No. 59 v. Namco Elec., Inc., 653
F.2d 143, 147 (5th Cir. 1981). In Laborers’ Int’l Union of
North Am. v. Foster Wheeler Corp., 868 F.2d 573 (3d Cir.
1989) (per curiam), we held that an “alter ego” theory could
allow a union to compel arbitration with both its employer and
its employer’s parent corporation under the LMRA, so we
remanded for factual findings regarding alter ego status, see id.
at 574, 576–77, and in American Bell, Inc. v. Federation of
Telephone Workers, we analyzed whether a non-signatory to a
CBA in an LMRA case was the alter ego of or a single
employer with the signatory company but found both theories
inapplicable on the facts presented. 736 F.2d 879, 886–89 (3d
Cir. 1984). As we noted in that case, there are many
“approach[es] to corporate veil piercing,” including, where
relevant, “a less precise notion that the corporations simply
acted interchangeably and in disregard of their corporate
separateness.” Am. Bell, 736 F.2d at 886–87 (quoting
Publicker Indus., Inc. v. Roman Ceramics Corp., 603 F.2d
1065, 1070 (3d Cir. 1979)). The First Circuit has likewise
20
even under the NLRA standard, P&A and Utility failed to
provide sufficient evidence that they are a single employer or
joint employers.
True, Barrows did state in her certification that she was
the Secretary-Treasurer of both P&A and Utility; that P&A
created Utility to hire Local 825; and that P&A had an
informal, unwritten “work-sharing agreement” in which Utility
employed Local 825 and P&A employed Local 15024 on
construction projects they performed together, App. 48–49.
P&A also said in a letter demanding arbitration with Local
15024 that Utility is “owned by the Principals of P&A,” App.
120, and Local 825’s Benefit Fund stated, while it was auditing
Utility, that P&A is a “related company” to Utility, App. 77.
But that record is insufficient to make a single or joint
employer finding.
As to single employer status, there was no evidence,
only allegations, regarding the “functional integration of
operations” and “centralized control of labor relations” at
Utility and P&A. Browning-Ferris, 691 F.2d at 1122. There
recognized, that an alter ego theory would use a uniquely
federal version of the veil-piercing test to suit “the purpose of
the federal statute,” which may mean that it “gives less respect
to the corporate form than does the strict common law alter ego
doctrine” in order to enforce the policy of our national labor
laws. Bhd. of Locomotive Eng’rs v. Springfield Terminal R.R.
Co., 210 F.3d 18, 26–27 (1st Cir. 2000) (quoting Town of
Brookline v. Gorsuch, 667 F.2d 215, 221 (1st Cir. 1981)).
While we acknowledge this ongoing discussion among the
Circuits, we do not have occasion to delve into it today.
21
was also no evidence of “common ownership,” id., aside from
a vague assertion in a letter to Local 15024 that Utility is
“owned by the Principals of P&A,” App. 120. And although
Barrows may be the Secretary-Treasurer of both P&A and
Utility, that is not enough to show “common management,”
Browning-Ferris, 692 F.2d at 1122, because she is only one
officer.
As to joint employer status, for the same reasons, there
was no evidence that either P&A or Utility “retained for itself
sufficient control of the terms and conditions of employment”
of the other company’s employees or “co-determine[d] those
matters governing the essential terms and conditions of
employment” for both of their respective labor unions. Id. at
1123. Thus, even if the single or joint employer theory from
the NLRA context is cognizable as a basis for compelling joint
arbitration under the LMRA, P&A and Utility still have failed
to establish the requisite “contractual nexus” here. Am. Postal
Workers, 893 F.2d at 1120. As a result, Local 825 was under
no obligation to arbitrate with P&A, and Local 15024 was
under no obligation to arbitrate with Utility.
Put another way, instead of a triangular relationship
between one employer and two unions, which could support
joint arbitration, this case involves two parallel lines, each of
which connects a different union with a different employer,
and those two lines never intersect. So the unions did not have
“a duty to engage in separate bipartite arbitration [with both
P&A and Utility] over the subject matter involved,” United
Indus. Workers, 900 F.2d at 947, which means that joint
arbitration was necessarily impermissible here.
22
b. The remaining equitable considerations
If there were any doubt, the other equitable
considerations also weigh against compelling joint arbitration
here. We cannot evaluate “the breadth of the relevant
arbitration provisions” or determine whether “the arbitration
procedures in the two collective bargaining agreements” are
“compatib[le],” Emery, 185 F.3d at 91, because the record does
not even contain a copy of P&A’s CBA with Local 15024.
There is also no realistic prospect for “conflicting arbitration
awards” because Local 825 only sought “retrospective” relief
in its arbitration with Utility. Id. And because Utility knew of
its contractual obligations to Local 825 when it subcontracted
to P&A, there is a strong argument that it “should have known
of the potential conflict in its incipiency and should have acted
to prevent it.” Id. Joint arbitration is thus not “a suitable
remedy,” Am. Postal Workers, 893 F.2d at 1120, in light of the
record and given “the nature of the problem” presented here,
Lincoln Mills, 353 U.S. at 457.10
10
P&A and Utility have asked that if we adopt the
Emery factors, we remand to the District Court so that they can
brief those factors. But P&A and Utility already had their bite
at that apple, as their briefing before the District Court cited
Emery, many of the cases on which Emery relied, and other
circuit cases on the appropriateness of arbitration. See DCD
6–1, at 6–7; Emery, 185 F.3d at 91. The equitable analysis
employed by the District Court was thus hardly a surprise. And
because P&A and Utility cannot establish the contractual
nexus requirement in any event, remand would be futile.
23
In short, in the absence of the requisite contractual
nexus, and with the Emery factors pointing in the unions’
favor, the District Court did not abuse its discretion by denying
P&A and Utility’s motion to compel joint arbitration under the
LMRA.
B. Harmony Agreement Arbitration
In the alternative, P&A and Utility seek to compel joint
arbitration under the Harmony Agreement. But they face two
obstacles, which are ultimately insurmountable.
First, Local 825’s and Local 15024’s parent unions are
parties to the Harmony Agreement. But Local 825 and Local
15024 are not. As a result, neither Local 825 nor Local 15024
can be forced to arbitrate under that agreement. See Warrior
& Gulf, 363 U.S. at 582 (“[A] party cannot be required to
submit to arbitration any dispute which [it] has not agreed so
to submit.”); In re Gen. Teamsters, Warehousemen & Helpers
Union, 265 F.3d 869, 874–75 (9th Cir. 2001) (“[F]ederal labor
law has steadfastly recognized the separation of the
International from its local affiliate.”).
Second, P&A and Utility, as non-signatories, have no
power to enforce the Harmony Agreement unless they can
establish that they are third-party beneficiaries. See
Restatement (Second) of Contracts § 304 (1981). But they
cannot make that showing because the record here is devoid of
any evidence that the parties to the Harmony Agreement
24
“intend[ed] to give [P&A and Utility] the benefit of the
promised performance.” Id. § 302.
The District Court therefore properly rejected the
Harmony Agreement as an alternative basis to compel
arbitration.
IV. Conclusion
For the foregoing reasons, we will affirm the order of
the District Court.
25
P&A Construction Inc. v. International Union of
Operating Engineers Local 825, No. 20-1634
PHIPPS, Circuit Judge, concurring in the judgment.
As commonly used by courts, the term, ‘tripartite
arbitration,’ is a euphemism for a court order compelling a
third party to participate in binding arbitration with the parties
to a collective bargaining agreement. Typically, as here, such
court-ordered arbitration presents itself as a solution to
jurisdictional disputes – disagreements between two rival
unions over a set of jobs with the same employer.1 The
rationale for resorting to this practice is not complicated: if all
three parties affected by the jurisdictional dispute – the
employer and the two feuding unions – are forced to the same
arbitration, that should increase the likelihood of a holistic
resolution that would award the disputed jobs to one union or
1
See Transportation-Communications Emps. Union (TCEU) v.
Union Pac. R.R. Co., 385 U.S. 157, 161 (1966) (“The ordinary
jurisdictional dispute arises when two or more unions claim the
right to perform a job which existed at the time their collective
bargaining contracts with the employer were made.”); Carey v.
Westinghouse Elec. Corp., 375 U.S. 261, 263 (1964)
(describing one species of jurisdictional disputes as “a
controversy as to whether certain work should be performed by
workers in one bargaining unit or those in another”); Trenton
Metro. Area Local of the Am. Postal Workers Union, AFL–CIO
v. U.S. Postal Serv., 636 F.3d 45, 54 (3d Cir. 2011) (describing
a “jurisdictional dispute” as “any dispute over which union’s
workers are properly staffed on a particular job”).
1
the other, but not both.2 By reducing the employer’s exposure
to double liability, tripartite arbitration tends to favor the
employer, especially if the jurisdictional dispute involves a
large number of jobs. But an employer that fears being caught
between dueling unions can achieve that same advantage more
predictably and without court intervention by including
consensual tripartite arbitration clauses in its collective
bargaining agreements with each union.3 Rather than leaving
it to employers and unions to account for those concerns
through the bargaining process – as this Circuit has done until
today4 – the Majority Opinion makes new law for this Circuit.
Under the common-law rule announced today, upon
satisfaction of a threshold nexus requirement and favorable
2
See TCEU, 385 U.S. at 161 (explaining that in resolving a
jurisdictional dispute, “it would be highly unlikely that each
[collective bargaining agreement] could be construed as giving
each union the right to be paid for the single job”).
3
See Sherrard L. Hayes, Jr., Comment, The Federal Circuits’
Response to Conflicting Arbitration Awards in Labor
Disputes: Split or Harmony Between the Sixth and Ninth
Circuits?, 59 Tenn. L. Rev. 353, 364 (1992) (“If an employer
negotiates for the inclusion of a tripartite arbitration clause in
each collective bargaining agreement, the problem may be
avoided altogether.”); Douglas Leslie, The Role of the NLRB
and the Courts in Resolving Union Jurisdictional Disputes,
75 Colum. L. Rev. 1470, 1498 (1975) (“The employer’s
solution – particularly where there are two unions having one
or more units in the same plant – lies in negotiating consensual
tripartite arbitration agreements.”).
4
See Trenton Metro. Area Local, 636 F.3d at 56 (giving effect
to consensual tripartite arbitration clauses).
2
consideration of multiple factors, a federal court may now
compel a third party to participate in arbitration under the terms
of a collective bargaining agreement that it did not join.
Despite the great care of the Majority Opinion, the test that
it sets forth is not particularly workable. The threshold nexus
determination is not made initially by an arbitrator, but rather
by a federal judge. By necessarily involving federal courts, the
nexus requirement undermines federal labor policy, the
guidepost for labor common law, which seeks to encourage
industrial self-governance without resort to courts.5 The
remainder of the Majority Opinion’s test – consideration of a
non-exhaustive list of factors, mostly of indeterminate weights
– makes it difficult to predict whether a federal court will, in
its discretion, order tripartite arbitration. It is also telling that
the new test does not permit tripartite arbitration here, in the
seminal case on this subject in this Circuit.
But even a rule that sparingly permits compelled tripartite
arbitration is a mistake. Compelled tripartite arbitration is
antithetical to the fundamental principle of labor arbitration
that an arbitrator’s authority derives from consent to the
grievance procedures in a collective bargaining agreement.
That principle emanates from statutory text, which authorizes
5
See United Steelworkers of Am. v. Warrior & Gulf Navigation
Co., 363 U.S. 574, 581 (1960) (“[T]he grievance machinery
under a collective bargaining agreement is at the very heart of
the system of industrial self-government.”).
3
suits for violations of labor contracts,6 which are predicated on
the consent of the parties.7 It is also imprudent for this Court
to authorize compelled tripartite arbitration because the
benefits from that process may be achieved by other more
efficient, predictable, and just means – bargained-for consent
to tripartite arbitration. Nor is now the time to make new
common law: this Circuit has endured long periods of far
greater labor strife without resort to compelled tripartite
arbitration. For these reasons, elaborated below, I respectfully
disagree with the Majority Opinion, and I concur only in the
judgment.
1. Compelled Tripartite Arbitration Is Inimical
to the Essential Role of Consent in Labor
Arbitration.
The legal foundation for labor arbitration rests on the
consent of parties to a collective bargaining agreement to be
6
See 29 U.S.C. § 185(a) (authorizing “[s]uits for violation of
contracts between an employer and a labor organization”
(emphasis added)).
7
Gateway Coal Co. v. United Mine Workers of Am., 414 U.S.
368, 374 (1974) (“No obligation to arbitrate a labor dispute
arises solely by operation of law. The law compels a party to
submit his grievance to arbitration only if he has contracted to
do so.”); Warrior & Gulf, 363 U.S. at 582 (“The Congress . . .
has by [§] 301 of the Labor Management Relations Act,
assigned the courts the duty of determining whether the
reluctant party has breached his promise to arbitrate. For
arbitration is a matter of contract and a party cannot be required
to submit to arbitration any dispute which he has not agreed so
to submit.”).
4
bound by an arbitrator’s ruling. In an expression that it later
characterized as “[t]he first principle” of its labor arbitration
jurisprudence,8 the Supreme Court explained that “arbitration
is a matter of contract and a party cannot be required to submit
to arbitration any dispute which he has not agreed so to
submit.”9 The Supreme Court has reaffirmed that principle
repeatedly. It later declared that “[t]he law compels a party to
submit his grievance to arbitration only if he has contracted to
do so.”10 And again it tethered the labor arbitrator’s authority
to the consent of the parties: “arbitrators derive their authority
to resolve disputes only because the parties have agreed in
advance to submit such grievances to arbitration.”11
That core principle of consent to arbitration by itself
precludes compelled tripartite arbitration. Without giving its
consent, a third party should not be forced to arbitrate under a
collective bargaining agreement that it did not join. By
disregarding consent, compelled tripartite arbitration
eviscerates “not only [arbitration’s] legal root but also its
greatest source of strength, promoting as it does the
acceptability of awards by the parties.”12
8
AT&T Techs., Inc. v. Commc’ns Workers of Am., 475 U.S.
643, 648 (1986).
9
Warrior & Gulf, 363 U.S. at 582.
10
Gateway Coal Co., 414 U.S. at 374.
11
See AT&T Techs., Inc., 475 U.S. at 648–49 (citing Gateway
Coal Co., 414 U.S. at 374).
12
Merton Bernstein, Comment, Nudging and Shoving All
Parties to a Jurisdictional Dispute into Arbitration: The
5
Nor does an arbitrator have any authority over a
nonconsenting third party. One of the most important aspects
of an arbitration agreement is its method for selecting an
arbitrator.13 Resolution of a dispute may hinge on the identity
of the arbitrator.14 But in compelled tripartite arbitration, only
the two parties to the collective bargaining agreement have
specified the method for selecting the arbitrator. By forcing a
third party to arbitrate against its will in front of an arbitrator
that it had no role in selecting, compelled tripartite arbitration
adds another dimension to its offense against the consensual
nature of arbitration.
Dubious Procedure of National Steel, 78 Harv. L. Rev. 784,
786 (1965).
13
See Lefkovitz v. Wagner, 395 F.3d 773, 780 (7th Cir. 2005)
(Posner, J.) (“Selection of the decision maker by or with the
consent of the parties is the cornerstone of the arbitral
process.”).
14
See United Steelworkers of Am. v. Enter. Wheel & Car Corp.,
363 U.S. 593, 599 (1960) (explaining that the lenient standard
of judicial review for a labor arbitrator’s decision is based on
the fundamental principle that “[i]t is the arbitrator’s
construction which was bargained for”); Clyde W. Summers,
Labor Arbitration: A Private Process with a Public Function,
34 Rev. Jur. U.P.R. 477, 490 (1965) (“Because the parties view
the identity of the arbitrator as an important part of the process
and the choice of the two unions might be quite different, this
cannot be dismissed as a minor encroachment on their freedom
of contract. It is this which strips court ordered tri-partite
arbitration of its appeal.”).
6
The Majority Opinion neglects these deep problems and
instead references the lone instance in which the Supreme
Court has permitted an adjudicator to bind a third party in the
resolution of a jurisdictional dispute. But that case,
Transportation-Communications Employees Union (TCEU) v.
Union Pacific Railroad Co., 385 U.S. 157 (1966), is not really
an arbitration case at all. It involved a statutorily mandated
approach to resolving jurisdictional disputes in the context of
railroads and their employee unions. It did not involve the
Labor Management Relations Act but rather a separate statute,
the Railway Labor Act. Unlike the LMRA, the Railway Labor
Act specifies the process for resolving disputes “concerning
rates of pay, rules, or working conditions” between railroad
employers and labor unions.15 Under that process, either the
carrier or the union may petition to the appropriate division of
the National Railroad Adjustment Board to adjudicate the
dispute.16 The Adjustment Board consists of thirty-four
members, half selected by railroad carriers, the other half by
labor organizations.17 That is quite different from the LMRA,
which does not mandate any dispute-resolution process, does
not specify the adjudicator, and does not establish a process for
appointing adjudicators.18 In the absence of those conditions –
which are not present here – the Supreme Court has never
compelled a third party to participate in the resolution of a
jurisdictional dispute.
15
45 U.S.C. § 153(i).
16
See id.17
See id. § 153(a).
18
See 29 U.S.C. § 185(a).
7
Instead of looking to caselaw under the Railway Labor Act
for guidance on arbitration under the LMRA, the Federal
Arbitration Act provides a far superior source of jurisprudence.
The Supreme Court has endorsed this approach by recognizing
that “federal courts have often looked to the [Federal
Arbitration Act] for guidance in labor arbitration cases.”19
And, as in labor arbitration, a central principle of the Federal
Arbitration Act is that “[a]rbitration is strictly a matter of
consent.”20 Yet, as explained above, compelled tripartite
arbitration cannot be reconciled with the core principle of
consent. At most, unions with arbitration clauses in their
collective bargaining agreements consented to arbitrate with
the employer – not with each other.21 The lack of such consent
should foreclose compelled tripartite arbitration as a means of
resolving jurisdictional disputes under the LMRA.22
19
United Paperworkers Int’l Union, AFL-CIO v. Misco, Inc.,
484 U.S. 29, 40 n.9 (1987).
20
Lamps Plus, Inc. v. Varela, 139 S. Ct. 1407, 1415 (2019)
(quoting Granite Rock Co. v. Teamsters, 561 U.S. 287, 299
(2010)); see also Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp.,
559 U.S. 662, 681 (2010) (“[The Federal Arbitration Act]
imposes certain rules of fundamental importance, including the
basic precept that arbitration ‘is a matter of consent, not
coercion.’” (quoting Volt Info. Scis., Inc. v. Bd. of Trs. of
Leland Stanford Junior Univ., 489 U.S. 468, 479 (1989))).
21
See Summers, 34 Rev. Jur. U.P.R. at 489 (“The lack of
consent lies in the fact that each union agreed to arbitrate with
the employer but not with each other, and the employer agreed
to arbitrate with each union but not with both together.”).
22
See generally Bernstein, 78 Harv. L. Rev. at 785
(questioning whether the efficacy and efficiency interests
8
2. Compelled Tripartite Arbitration Is
Unnecessary, and It Has Adverse Side
Effects.
There is also no practical need for court-ordered tripartite
arbitration. This Circuit recognizes that consensual tripartite
arbitration clauses are enforceable,23 and that rule gives
employers and unions the freedom to negotiate for tripartite
arbitration on terms of their own choosing.
Consistent with that flexibility, an employer may choose
whether to seek tripartite arbitration clauses in each of its
collective bargaining agreements. Such a clause may reduce
the employer’s exposure in potential jurisdictional disputes.
But to induce unions to agree to such a term, the employer will
likely have to use some of its bargaining leverage, with the
unions possibly obtaining more favorable terms in other
respects. Alternatively, an employer may determine that the
risk or the size of a jurisdictional dispute is minimal. In that
situation, the employer may not wish to expend its negotiation
capital to obtain the unions’ consent to tripartite arbitration.
Regardless of the employer’s choice, this Circuit’s prior
precedent respects that decision and has enforced consensual
tripartite arbitration clauses but has never mandated tripartite
arbitration in the absence of such terms.24
motivating compelled tripartite arbitration provide “a good
reason for cutting arbitration loose from its conventional basis
– agreement of the parties to resolve the dispute in a forum of
their own choice”).
23
See Trenton Metro. Area Local, 636 F.3d at 56.
24
See id.9
The common-law rule that the Majority Opinion
promulgates today upsets that dynamic in a way that harms
both unions and employers. A union that is forced into
tripartite arbitration loses its ability to obtain concessions that
the employer likely would make to secure its consent to
tripartite arbitration. That reality exacerbates the injustice of
tripartite arbitration: not only must a third-party union arbitrate
against its will before an arbitrator whom it did not choose, but
it also loses the opportunity to obtain favorable terms in
exchange for participating in tripartite arbitration. Making
matters worse, the potential for compelled tripartite arbitration
discourages employers from negotiating for consensual
tripartite arbitration clauses. Instead of bargaining for tripartite
arbitration, employers may seek to obtain it for free from courts
under the test formulated by the Majority Opinion.
For similar reasons, a common-law rule allowing
compelled tripartite arbitration is unfair to certain employers.
If an employer negotiated consensual tripartite arbitration
clauses, it likely spent negotiation capital to obtain those
clauses. Yet by today’s rule, other employers that did not
expend bargaining capital on consensual tripartite arbitration
clauses may still be able to compel tripartite arbitration. Thus,
today’s rule bestows a potential competitive advantage upon
employers that have not negotiated for tripartite arbitration
clauses.
Also, instead of fostering amicable labor relations, court-
ordered tripartite arbitration promotes gamesmanship.
Suppose an employer with two collective bargaining
agreements negotiated a very favorable arbitrator-selection
clause with one union but not the other. If a jurisdictional
dispute arises, that employer has a strong incentive to race to
10
federal court to compel tripartite arbitration under the terms of
the collective bargaining agreement with the favorable
arbitrator-selection clause. A similar situation may arise if one
union in a jurisdictional dispute negotiated a favorable
arbitrator-selection clause in its collective bargaining
agreement. That union may also hasten to court to compel
tripartite arbitration on the terms of its collective bargaining
agreement to obtain an advantage over its rival union, which
had no say in the selection of that arbitrator. As these examples
demonstrate, by permitting compelled tripartite arbitration, this
Circuit adds an element of gamesmanship to jurisdictional
disputes.
In sum, the side effects of court-ordered tripartite
arbitration undermine several important aspects of federal
labor policy. By contrast, bargained-for tripartite arbitration
clauses provide a predictable and efficient means of resolving
jurisdictional disputes – without the necessity of federal-court
involvement.
3. Current Labor Conditions Do Not Justify a
New Common-Law Rule Permitting
Compelled Tripartite Arbitration.
Finally, as to timing, there is absolutely no urgency to
green-light compelled tripartite arbitration in this Circuit.
Labor conditions are very different today than they were in
1947, when Congress enacted the LMRA,25 or in 1969, when
the Second Circuit first permitted compelled tripartite
25
Labor Management Relations (Taft-Hartley) Act, Pub. L.
No. 117-45, 61 Stat. 156 (1947).
11
arbitration.26 At the peak of labor unrest after the passage of
the LMRA, in 1952, there were 470 work stoppages of a
thousand or more workers, which combined had 2.7 million
workers on strike.27 Similarly, in 1970, the year after the
Second Circuit’s decision, there were 381 work stoppages
involving a thousand or more workers for a total of 2.4 million
workers on strike.28 Yet, last year, there were only eight work
stoppages involving over a thousand workers, for a total of
27,000 workers on strike.29 Nor was last year an aberration
from the recent trend – no more than twenty-five work
stoppages involving over a thousand employees have occurred
in any one year since 2001.30 The number of workers on strike
last year is 99% less than in 1952, at the peak of labor unrest
after the LMRA was passed (27,000 compared to 2.7 million),
and over 98% less than in 1970, the year after court-ordered
tripartite arbitration was first approved (27,000 compared to
2.4 million). This significant decrease in labor unrest
demonstrates that compelled tripartite arbitration is not
presently needed to alleviate labor tensions.
26
See CBS v. Am. Recording & Broad. Ass’n, 414 F.2d 1326(2d Cir. 1969).
27
See Work Stoppages: Annual Work Stoppages Involving
1,000 or More Workers, 1947–Present, U.S. Bureau of Labor
Statistics (Mar. 1, 2021)
https://www.bls.gov/web/wkstp/annual-listing.htm#annual-
listing.xlsx.f.4.
28
See id.29
See id.30
See id.12
The remaining policy justifications for compelled tripartite
arbitration have even less force under today’s market
conditions. The potential efficiencies generated by compelled
tripartite arbitration – which may be illusory given the
enhanced opportunities for gamesmanship – are not market-
altering and do not justify violating the fundamental principle
that parties must consent to arbitration.31 Nor are those
potential efficiencies unique to compelled tripartite arbitration;
consensual tripartite arbitration clauses can achieve the same
results more efficiently, fairly, and reliably.
A sense of perspective is important too. This Circuit has
endured far more volatile periods of labor strife without
authorizing compelled tripartite arbitration. If for no other
reason, a common-law rule permitting compelled tripartite
arbitration should be rejected out of respect for this Court’s
prior forbearance in those far more trying times of labor unrest.
***
Compelled tripartite arbitration is problematic in principle
and pernicious in practice. Nothing about the text of the
LMRA supports allowing courts to order tripartite arbitration
upon satisfaction of a threshold nexus requirement and a
favorable balancing of a multifactor test. Although this new
rule will permit compelled tripartite arbitration only in rare
circumstances not present here, for the reasons above, I would
categorically reject the doctrine, and therefore I concur only in
the judgment.
31
See Bernstein, 78 Harv. L. Rev. at 786 (“The root of consent
should be preserved in the face of all but the gravest threats of
national emergency.”).
13