(CN) - The Supreme Court on Thursday reversed a 9th Circuit decision that sent a labor-strike dispute between a local Teamsters union and their employer to arbitration. The court ruled that because no binding contract existed at the time of the strike, the issue of damages suffered by the employer is for the court to decide.
In June 2004, a local division of International Brotherhood of Teamsters initiated a strike against Granite Rock after their collective-bargaining agreement expired. The union sparked the strike after reaching an impasse with Granite in negotiations over a new contract.
A new agreement was reached a month later but the union refused to be held responsible for any strike damages Granite suffered during the negotiation period. When Granite said it would pursue damages, the union revived the strike company-wide, leading to a dispute regarding when and if the new bargaining agreement had ever been ratified.
Granite filed a federal suit against the union seeking damages for breach of the contract's "no-strike" clause and asking for an injunction against the ongoing strike because it claimed the harm dispute should be arbitrated under the new bargaining agreement. The union insisted that there was no agreement because it had never been ratified, giving no basis to Granite's claims.
The district court ruled not to send the issue to arbitration, but the 9th Circuit Court of Appeals reversed. The appeals panel ruled that the ratification-date dispute was a matter for an arbitrator to resolve under the arbitration clause in the bargaining agreement.
The Supreme Court reversed, ruling that the ratification date "requires judicial resolution here because it relates to [the union's] arbitration demand in a way that required the District Court to determine the agreement's ratification date in order to decide whether the parties consented to arbitrate the matters the demand covered," Justice Clarence Thomas wrote.
Justices Sonia Sotomayor and John Paul Stevens joined in a partial dissent, stating that "the parties clearly agreed in the [collective bargaining agreement] to have this dispute resolved by an arbitrator, not a court."