(CN) - Heeding a reversal from the Supreme Court, the 9th Circuit on Friday sent a labor-strike dispute between a local Teamsters union and their employer back to a San Jose federal judge for further proceedings.
Last year, the high court reversed a 9th Circuit decision that ordered the dispute to arbitration. Since no binding contract existed at the time of the strike, it is up to the courts to decide the issue of damages suffered by the employer.
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 companywide, leading to a dispute regarding when and if the new bargaining agreement had ever been ratified.
Granite sued the union in District Court, seeking damages for breach of the contract's "no-strike" clause and asking for an injunction against the ongoing strike. 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 trial court declined to send the issue to arbitration, but the 9th Circuit reversed. A three-judge 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 in June 2010. 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."
Subscribe to Closing Arguments
Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.