SEIU v. City & Co. of SF
Filed 6/28/12 SEIU v. City & Co. of SF CA1/5
California
Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or
relying on opinions not certified for publication or ordered published, except
as specified by rule 8.1115(b). This
opinion has not been certified for publication or ordered published for
purposes of rule 8.1115.
IN
THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIRST
APPELLATE DISTRICT
DIVISION
FIVE
and Appellant,
A132757
(City and
Super.
Service
Employees International Union, Local 1021 (SEIU) appeals from an order denying
its petition to compel arbitration of
a grievance filed on behalf of one of its members. SEIU contends it did not waive its right to
arbitrate because it timely served an arbitration demand on the employer, even
though SEIU did nothing to pursue the arbitration during the next 19 months,
while the member pursued the employer in litigation. We will affirm the order.
I. FACTS AND PROCEDURAL HISTORY
Howard
Mitchell was a member of SEIU while employed as a security guard by respondent,
the City and County of
Francisco, Fine Arts Museum.
At the time, SEIU and the City and County
of San Francisco were parties to
a collective bargaining agreement
effective July 1, 2006,
through June 30, 2009
(CBA).
A.
The Parties’ Collective Bargaining
Agreement and Grievance Procedure
Article
IV, Part A of the CBA sets forth a grievance procedure that applies to “any
dispute which involves the interpretation or application of, or compliance with
[the CBA], discipline or discharge.”
Only the union has the right on behalf of a disciplined or discharged
employee to pursue a grievance.
The
grievance procedure consists of four potential steps, which are pursued in
order if the dispute is not resolved by an employee’s informal discussion with
his or her supervisor. In Step I, the
union submits a written statement of the grievance to the employee’s immediate
supervisor. If the grievance is not
resolved, in Step II the union submits a written grievance to the employee’s
department head, who must respond in writing, and the parties meet to resolve
the matter. If the grievance still is
not resolved, in Step III the union submits the matter to the Employee
Relations Director, who must respond in writing. If the grievance remains unresolved, the
union may submit the grievance to final and binding arbitration. Where, as here, the grievance pertains to the
termination of an employee, the union must submit the grievance initially at
Step II or, at the union’s option, Step III.
The
CBA places time limits on the grievance process and underscores the importance
of those limits. Paragraph 530
states: “The parties have agreed upon
this grievance procedure in order to ensure the swift resolution of all
grievances. It is critical to the
process that each step is followed within the applicable timelines.” Paragraph 531 provides, “All time limits
referred to in this section are binding on each party.” Paragraph 532 reads in part: “Failure by the Union
to follow the time limits, unless mutually extended, shall cause the grievance
to be withdrawn. Failure by the City to
follow the time limits shall serve to move the grievance to the next step.”
As
to grievances concerning the termination of employment, as in this case,
special deadlines apply. Paragraph 549
provides: “The parties agree to use
their best efforts to arbitrate grievances appealing the termination of
employment within ninety (90) days
of the Union
grievance challenging the termination of employment within ninety (90) days of the request for arbitration, unless it
is not possible under the circumstances.”
(Italics added.)
To
facilitate the timely commencement of arbitration in this context, the CBA sets
forth the following procedure: the union
may file a termination grievance initially at Step II or, at the union’s option, Step III, no later than 15 days
after the effective date of the termination; the City’s response is due within
15 days after the union’s filing; the union’s submission to Step IV arbitration
from a Step III response is due no later than 15 days from its receipt of the City’s response; and the
grievance proceeds to Step IV arbitration if the City fails to timely respond
to the union’s Step III submission. In
addition, SEIU and the City agreed to establish a standing termination
arbitration panel with prescheduled arbitration dates for each arbitrator.
B. Mitchell’s
Termination, Grievance, and Request for Arbitration
By
letter dated July 11, 2008,
the Director of Human Resources for the Fine Arts Museum notified Mitchell that
it was treating his continuing absence from work as an abandonment of his
position and recording it as an “automatic resignation,” effective July 15, 2008. According to the letter, the museum had
invited Mitchell to correct his “AWOL status” in letters of May 9, June 5, June
27, and July 8, 2008, and
Mitchell failed to appear at a meeting on July 11, 2008, to address the situation, notwithstanding a
warning that the museum would proceed with an automatic resignation. The letter further advised that the museum
was acting pursuant to Civil Service Commission Rule 122.11.1, and
paragraph 171 of the CBA, which provide for automatic resignation for employees
absent from duty without proper authorization for more than
five continuous working days.
On
August 19, 2008 – more than
a month after the effective date of Mitchell’s termination – SEIU submitted a
written grievance to the museum’s human resources director regarding Mitchell’s
automatic resignation. By this letter,
SEIU invoked Step II of the grievance procedure, alleging that Mitchell was
actually on authorized medical leave and attempting to meet with human
resources. The grievance sought
reinstatement of Mitchell’s employment “with all rights including but not
limited to pay grade, seniority, benefits and leave rights.”
By
letter of August 26, 2008,
the museum sent its Step II response, denying SEIU’s request for reinstatement
because Mitchell had been given approximately six months to provide an authorization
note from his physician but failed to do so.
SEIU
invoked Step III of the grievance procedure by letter dated September 15, 2008, to Martin Gran,
the City’s Employee Relations Director.
SEIU’s letter repeated the contentions in SEIU’s letter of August 19, 2008. The City does not claim that it responded to
this letter.
By
letter dated October 7, 2008,
SEIU wrote to Gran and invoked Step IV arbitration, based on the City’s failure
to respond to SEIU’s Step III letter.
The October 7 letter repeated the contentions set forth in SEIU’s
letters of August 19 and September 15.
On
December 18, 2008, the City sent a written response to SEIU’s October 7 letter,
addressed to SEIU’s attorney Kristina Hillman, stating as follows: “The Employee Relations Division is in
receipt of SEIU, Local 1021’s letter moving the above-referenced matter to
arbitration. [¶] The next
arbitration panel is #14 (Brand, Matt, Cossack, Askin, Nevins, Harris and
Kanowitz). Please contact Deputy City
Attorney Janet Richardson at [telephone no.] to select an arbitrator and
schedule this matter. [¶] Please be
advised that the City reserves all rights it may have regarding this matter,
including but not limited to, procedural issues and arbitrability. The City Attorney’s office will review the
file and make the final determination of these issues.”
SEIU
did not respond to the City’s December 2008 letter. Barbara Gorin, a legal secretary at the law
firm representing SEIU, submitted a declaration in the trial court averring
that she could not find a copy of the City’s December 2008 letter in the office
files, the letter would have been given to her if the office had received it,
and to the best of her knowledge she never received it. At any rate, no one from SEIU or its attorneys
contacted Richardson to proceed
with the arbitration.
C. Mitchell’s
Pursuit of a Lawsuit Instead of Arbitration
In
January 2009, represented by private counsel, Mitchell filed a lawsuit in
superior court entitled Howard L.
Mitchell v. City & County of San Francisco, San Francisco Fine Arts Museums, case number CGC 09-484232. In his lawsuit, Mitchell challenged his
termination and asserted causes of action for disability discrimination and
retaliation under the California Fair Employment and Housing Act (Gov. Code,
§§ 12900 et seq.) and a cause of action for wrongful termination.
the City failed to accommodate his disability and failed to interact with him
regarding his disability.
The
City mounted a defense against Mitchell’s lawsuit. It engaged in discovery, including service of
a records subpoena on SEIU on March
12, 2009, in response to which SEIU produced records on May 13, 2009 and December 21, 2009. The City also responded to discovery propounded
by Mitchell, including form interrogatories, special interrogatories, demands
for production of documents, and requests for admission.
On
August 20, 2010, the City
filed a motion for summary judgment.
Rather than opposing the motion, Mitchell voluntarily dismissed the
lawsuit in pro per on October 18,
2010.
The
City’s records indicate that the City Attorney’s Office incurred $99,916.75 in
attorney fees and $5,717.06 in costs defending the lawsuit. After the dismissal, the City filed a memorandum
of costs for $2,995. SEIU paid the
City’s cost bill on Mitchell’s behalf.
D. SEIU’s
Renewed Attempt to Arbitrate
On
May 20, 2010 – about 17 months after the City’s December 2008 letter inviting
Hillman to select an arbitrator and schedule the arbitration and over a year
after Mitchell filed his lawsuit – SEIU’s counsel Hillman wrote to Deputy City
Attorney Richardson, advising she was formally requesting arbitration and
requesting Richardson to send her “the appropriate panel for which to select an
Arbitrator on this case.”
On
June 21, 2010, Richardson
wrote to Hillman and advised her that the City would not proceed to arbitration
because the City had “closed its file in this matter due to the union’s failure
to pursue” the case after the City’s December 2008 letter.
On
July 1, 2010, Hillman sent a
letter to Richardson, asserting the
arbitration was timely because SEIU had timely invoked Step IV arbitration in
its October 7, 2008
letter. Hillman asked Richardson
to contact Hillman’s assistant, Gorin, to select an arbitrator.
Richardson
wrote to Hillman on August 3, 2010,
noting that Hillman had not explained SEIU’s delay in responding to the City’s
December 2008 letter. Richardson
advised that the City maintained its position in regard to the proposed
arbitration.
By
letter dated August 13, 2010,
Hillman replied that the parties’ failure to select an arbitrator did not
constitute an abandonment of the grievance.
She again instructed Richardson
to contact Gorin to select an arbitrator.
On September 21, 2010,
Gorin sent an email to Richardson,
asking Richardson to contact her to
select arbitrators on a number of pending arbitration matters, including
Mitchell’s.
On
November 1, 2010, Richardson
wrote to Hillman and reiterated that the City would not proceed to arbitration
because SEIU had failed to pursue arbitration for nearly two years. On November 15, Hillman threatened to file a
petition to compel arbitration. On
December 15, Richardson advised
Hillman that her November 15 correspondence did not change the City’s
position.
E. SEIU’s
Petition to Compel Arbitration
On
January 27, 2011, SEIU
filed a petition to compel arbitration in this case.
In
opposition to the petition, the City argued that SEIU had waived any right to
pursue arbitration based on (1) “its failure to comply with the contractual
requirement that it proceed to arbitration in 90 days,” (2) Mitchell’s pursuit
of a separate civil action, which the City claimed evidenced “inconsistent
acts” by SEIU, and (3) SEIU’s alleged willful misconduct in not seeking
arbitration for 17 months.
F.
Denial of Petition
In
May 2011, the trial court denied the petition, finding that SEIU “failed to
make a timely demand for arbitration or ensure arbitration occurred within the
ninety-day period provided for in [the CBA].”
This
appeal followed.
II. DISCUSSION
Code
of Civil Procedure section 1281.2 provides in part: “On petition of a party to an arbitration
agreement alleging the existence of a written agreement to arbitrate a controversy
and that a party thereto refuses to arbitrate such controversy, the court shall
order the petitioner and the respondent to arbitrate the controversy if it
determines that an agreement to arbitrate the controversy exists, unless it
determines that: [¶] (a)
waived by the petitioner; or [¶] (b) Grounds exist for the revocation
of the agreement.” (Italics added.)
In
denying SEIU’s petition, the court found that SEIU failed to make a timely
demand for arbitration or ensure that it occurred within 90 days as required by
the CBA. Although the court did not
expressly use the word “waiver” in its order, it is clear that this was the
inference the court derived from its factual findings, since “waiver” under
Code of Civil Procedure section 1281.2 was the basis for the City’s argument
that the petition should be denied, and waiver was addressed at the
hearing. Indeed, in this appeal SEIU
asserts that “the only issue properly
before the trial court was whether Local 1021’s conduct resulted in a ‘waiver’
of the right to arbitrate.” (Italics
added.) We therefore determine whether
the record supports the conclusion that SEIU’s right to compel arbitration
under the Code of Civil Procedure was waived.
A. Waiver
A
finding of waiver is usually reviewed for substantial evidence. (
Medical Center v. PacifiCare of California (2003) 31 Cal.4th 1187, 1196 (
only one inference may reasonably be drawn, the issue is one of law and the
reviewing court is not bound by the trial court’s ruling.’ [Citation.]”
(Ibid.; Platt Pacific, Inc. v. Andelson (1993) 6 Cal.4th 307, 319 (
“[b]ecause the essential facts are undisputed.”
Under either standard of review, we would reach the same disposition in
this appeal.
title="">[3]
As
used in Code of Civil Procedure section 1281.2, the term “waiver” may be used
“ ‘as a shorthand statement for the conclusion that a contractual right to
arbitration has been lost.’ ” (
at p. 1195, fn. 4.) It does not require
proof of a voluntary relinquishment of a known right, but may arise from a
party’s failure to perform an act it was required to perform, regardless of the
party’s intent to relinquish the right.
(Ibid.; Platt Pacific, supra, 6 Cal.4th at pp. 314-319.) Nonetheless, because California law reflects
a strong public policy favoring arbitration, “waivers are not to be lightly
inferred and the party seeking to establish a waiver bears a heavy burden of
proof.” (St. Agnes Med. Ctr., at p. 1195; Doers v. Golden Gate Bridge etc. Dist. (1979) 23 Cal.3d 180,
189.)
Factors
to consider in deciding whether there has been a waiver include: (1) whether the party’s actions were
inconsistent with the right to arbitrate; (2) whether “ ‘the
litigation machinery has been substantially invoked’ and the parties ‘were well
into preparation of a lawsuit’ before the party notified the opposing party of
an intent to arbitrate;” (3) whether a party requested arbitration close to the
trial date or delayed for a long period before seeking a stay; (4) whether a
defendant seeking arbitration filed a counterclaim without requesting a stay;
(5) “ ‘whether important intervening steps [e.g., taking advantage of judicial
discovery procedures not available in arbitration] had taken place’”; and (6)
whether the delay affected, misled, or prejudiced the opposing party. (St. Agnes
Med. Ctr., supra, 31 Cal.4th at p. 1196; Sobremonte v. Superior Court (1998) 61 Cal.App.4th 980, 992 (
1. Acts
Inconsistent With the Right to Arbitrate
SEIU
did nothing for approximately 19 months to pursue arbitration after it invoked
the arbitration step on October 7, 2008.
The parties were to use “best efforts” to arbitrate within 90 days after
the union’s request, and to commence the arbitration within that time frame
“unless it [was] not possible under the circumstances.” Although the City invited SEIU to contact
Deputy City Attorney Richardson in December 2008 to select an arbitrator and
schedule the arbitration, and even set forth the names of the potential
arbitrators on the “next arbitration panel,” SEIU never responded. Instead, despite the City’s warning that it
reserved its rights as to “procedural issues and arbitrability,” the union
waited until Mitchell was well in the midst of his litigation against the City
to make a “formal request” for arbitration and ask the City to engage in the
process of selecting an arbitrator.
SEIU’s conduct was plainly inconsistent with enforcing a right to
arbitrate.
SEIU’s
arguments to the contrary are unpersuasive.
SEIU notes that its lawyers cannot find the City’s December 2008 letter
and do not think they received it.
However, SEIU’s obligation to pursue the selection process and to help
schedule the arbitration in a timely manner existed whether or not the City
sent any correspondence. Certainly SEIU
knew of its own October 2008 letter invoking Step IV arbitration and the contractual
provision calling for “best efforts” to arbitrate within 90 days. SEIU made no efforts.
SEIU
argues that the CBA places the burden of commencing arbitration within
90 days on both parties, and the
City did nothing to pursue the arbitration either. SEIU’s factual premise is incorrect, however,
in light of the City’s December 2008 letter – which the City at least
remember receiving it. The ball was
thereby placed in SEIU’s court, and SEIU did nothing. Moreover, it is SEIU that sought to compel arbitration; there being no evidence
that the City did anything to impede SEIU from pursuing arbitration, the issue
is what SEIU did to pursue the
arbitration, not what the City did.
SEIU’s unreasonable inaction was inconsistent with enforcing a right to
arbitrate. (Engalla v. Permanente Med. Group, Inc. (1997) 15 Cal.4th 951,
983-984 (Engalla) [party’s delay in
choosing arbitrators, if unreasonable or undertaken in bad faith, could be
found to be a waiver of the right to compel arbitration].)
Also
inconsistent with enforcing a right to arbitrate was Mitchell’s decision to
litigate his discharge in court. Both
the proposed arbitration and the litigation related to Mitchell’s termination
and, more particularly, whether the City adequately communicated with Mitchell
regarding his disability: SEIU’s Step IV
letter of October 2008 asserted that Mitchell was on “authorized medical leave
and was attempting to meet with management about the leave;” Mitchell’s
complaint alleged that the City “failed
to properly interact with [Mitchell] about his disability” and failed to
adequately communicate with him concerning it.
In his litigation, Mitchell propounded discovery, forced the City to
divulge information in its discovery responses, and caused the City to incur
about $100,000 in legal expenses.
SEIU
does not debate the facts of Mitchell’s litigation, but argues that the
litigation cannot count as an act of SEIU
(as the party seeking to compel arbitration) inconsistent with SEIU’s right to
arbitrate the grievance, since SEIU was not a party to the lawsuit and the
litigation asserted causes of action not covered by the grievance.
We
disagree. In the first place, while it
might be SEIU’s right to invoke arbitration on Mitchell’s behalf under the CBA,
it is Mitchell who would benefit from the enforcement of that right. SEIU filed the grievance on behalf of
Mitchell, as the CBA requires. While
SEIU urges that the grievance merely seeks to vindicate its own contractual
rights under the CBA, the bottom line is that SEIU sought relief on behalf of
Mitchell, and sought no relief on behalf of itself or anyone else. The sole beneficiary of an arbitral award in
this case would be Mitchell, not SEIU or any of its other members. Under the circumstances of
conclude that the right to arbitrate Mitchell’s grievance was lost due in part
to Mitchell’s litigation.
Furthermore,
the reason that acts inconsistent with arbitration create a waiver resides in the
fact that those acts adversely affected the party opposing the arbitration (the City), regardless of what those acts
say about the party seeking to enforce the arbitration (SEIU). In other words, the significance of
Mitchell’s litigation against the City lies in the cost the City incurred, the
information Mitchell gleaned by discovery, and the delay the City suffers in
the resolution of Mitchell’s termination.
Whether or not Mitchell’s litigation might be attributed to SEIU for any
other purpose, it should be considered in deciding whether the arbitration of
Mitchell’s grievance must now be compelled.
At
any rate, Mitchell’s litigation should be considered in the waiver analysis
because, based on the record, Mitchell’s litigation explains SEIU’s failure to pursue the arbitration. SEIU was aware of the lawsuit, since it
responded to a document subpoena issued by the City in the litigation. After SEIU had promptly advanced the
grievance to Step IV arbitration, its failure to do anything to pursue the grievance
for 19 months suggests, in light of this knowledge, that SEIU’s inaction
was calculated to allow Mitchell to pursue his litigation. SEIU has never demonstrated otherwise,
remaining steadfastly mute about the reason for its delay despite repeated inquiries
by the City, the proceedings in the trial court, and this appeal.
SEIU’s
reliance on Camargo v. Cal. Portland
Cement Co. (2001) 86 Cal.App.4th 995 (Camargo)
is misplaced. There, the plaintiff was a
member of a union that had entered into a collective bargaining agreement
providing for the resolution of grievances by binding arbitration. (Id.
at p. 998.) Plaintiff submitted her
grievances based on sex discrimination and sexual harassment to arbitration,
and the arbitrator ruled against her. (
Plaintiff then filed a lawsuit under California’s Fair Employment and
Housing Act (FEHA) and for intentional infliction of emotional distress. (Ibid.) The court of appeal ruled that the collateral
estoppel effect of the arbitrator’s decision did not preclude litigation of
Camargo’s FEHA claims. (
Although an arbitration decision might preclude subsequent lawsuits
based on the same issues, at least as to common law causes of action, the
arbitrator’s findings did not collaterally estop Camargo’s FEHA action, because
it was not adequately shown that the collective bargaining agreement provided
for arbitration of FEHA claims or that the arbitration procedures would have
afforded full litigation and fair adjudication of those claims. (Id. at
pp. 998, 1018-1019.)
hand. Camargo addressed whether a union member who arbitrates her
grievance is collaterally estopped from thereafter pursuing statutory claims in
litigation. At issue here, by contrast,
is whether a delay during which the union member pursued litigation against the
employer may constitute a waiver of the right to compel arbitration of the
grievance. As such, Camargo did not address the question before us. Furthermore, Camargo did not suggest any significance to the fact that a
grievance is filed by the union on the member’s behalf, while the member files
litigation on his own behalf. To the
contrary, Camargo treated the
arbitration of the grievance as belonging to the union member who was also attempting to litigate, not the union.
We
recognize that acts held to be inconsistent with the right to arbitrate are
usually acts performed without notice of an intent to arbitrate, while here
SEIU did request arbitration in October 2008.
(See, e.g., Guess, Inc. v.
Superior Court (2000) 79 Cal.App.4th 553, 558 [waiver found where moving
party answered complaint and participated in discovery without claiming a right
to arbitrate until three months later]; Law
Offices of Dixon R. Howell v. Valley
(2005) 129 Cal.App.4th 1076, 1098 [waiver found where pursuit of litigation for
15 months, without requesting arbitration, was “entirely inconsistent” with the
right to arbitrate].) However, even if a
party has timely demanded arbitration, it can thereafter act in such a manner
as to waive whatever right it might have purported to secure by its initial
demand. More specifically, what a party
does after claiming it wants to arbitrate can be so inconsistent with
arbitration that the party loses its right to later compel arbitration by judicial
enforcement. (See Code Civ. Proc.,
§ 1281.2, subd. (a).) To hold
otherwise would sanction a type of gamesmanship contrary to the very purpose of
arbitration: the union demands arbitration
but does nothing about it; the employee takes a shot at a lawsuit, obtains the
fruits of discovery, runs up the employer’s litigation costs, and ultimately
dismisses the case when he realizes he is going to lose; and the union gives
him a second bite at the apple by resurrecting arbitration 16 months after the
litigation began.
Under
the circumstances of this case, SEIU’s failure to do anything to pursue
arbitration for 17 months after the City’s response, while Mitchell litigated
with the City in court, is so substantially inconsistent with the arbitration
of the grievance that it vitiated SEIU’s earlier request for arbitration. The reasonable inference from the record is
that SEIU abandoned the arbitration it had initially requested, and only later
attempted to revive it after Mitchell had obtained discovery from the City and
ran up the City’s costs.
In
sum, SEIU’s over 17-month failure to pursue the requested arbitration of
Mitchell’s grievance concerning his termination, in light of Mitchell’s
litigation to obtain relief for his termination (and even without considering Mitchell’s litigation), constitutes acts
inconsistent with the enforcement of a right to arbitrate Mitchell’s grievance.
2. Substantially
Invoked the Litigation Machinery
The
City argues that Mitchell substantially invoked the litigation machinery by
filing his lawsuit against the City and propounding discovery. SEIU does not dispute that Mitchell’s actions
constituted substantial invocation of the litigation machinery; it contends
instead that Mitchell’s actions cannot be attributed to SEIU. For reasons stated ante, we disagree with SEIU on this point and conclude that
Mitchell’s substantial litigation activity may be factored into the waiver
analysis. Furthermore, although the
litigation activity occurred after SEIU’s initial arbitration notice in October
2008, it occurred during SEIU’s delay that negated such notice, and it
commenced before SEIU’s May 2010 renewed attempt to request arbitration and its
ensuing motion to compel.
3. Requested
Arbitration Close to Trial Date or Long Delay
SEIU
initially invoked Step IV arbitration in October 2008. For this reason, it could be said that SEIU’s
initial request to arbitrate did not
occur close to a trial date or after an undue delay. Literally speaking, this factor would not
apply.
The
point of this factor, however, is that the party who eventually asks the court
to compel arbitration should not have been lying in the proverbial weeds while the
opposing party continued to be embroiled in litigation. In this sense, the factor does apply. While SEIU’s October 2008 letter had put the
City on notice of SEIU’s intent to arbitrate as of October 2008, SEIU’s
inaction between then and the 90-day deadline under the CBA, and its continued
inaction for well over a year while Mitchell litigated, implicitly notified the
City that Mitchell was not pursuing the arbitration of his grievance.
its “formal request” to arbitrate, came only after a long and undue delay.
Furthermore,
“[c]ourts will consider the existence or absence of a reasonable explanation
for the party’s delay in asserting its arbitration right in making a
determination of waiver.” (
1100.) SEIU provides no explanation at
all for its delay in pursuing the arbitration between October 2008 and May
2010.
4. Significant
Discovery Had Taken Place in the Lawsuit
The
next factor is “ ‘whether important intervening steps [e.g., taking advantage
of judicial discovery procedures not available in arbitration] had taken place”
before seeking arbitration. (
at p. 1196.)
Here,
it is undisputed that the City and Mitchell engaged in substantial discovery
(with SEIU’s knowledge of at least some of it) in Mitchell’s litigation of his
discharge. Although this discovery occurred after SEIU invoked arbitration for
his grievance, it occurred at least in substantial part before SEIU’s May 2010
letter formally requesting arbitration, and entirely before SEIU sought to
compel arbitration.
5. The
Delay Prejudiced the City
SEIU’s
extended delay in pursuing arbitration of the grievance, while Mitchell used
the court to litigate his termination, prejudiced the City.
In
Mitchell’s lawsuit, which continued well past 90 days after the arbitration
demand, the City engaged in discovery, responded to discovery, filed a motion
for summary judgment, and incurred litigation expenses of approximately
$100,000.
Incurring court costs and legal
expenses is usually not in itself sufficient to demonstrate the prejudice
necessary for a finding of waiver. (
at p. 1203.) “Prejudice typically is
found only where the petitioning party’s conduct has substantially undermined
this important public policy or substantially impaired the other side’s ability
to take advantage of the benefits and efficiencies of arbitration.” (Id.
at p. 1204.)
Here,
the City’s prejudice went beyond mere litigation expense. A reasonable inference from the City’s having
to respond to Mitchell’s discovery is that the City provided Mitchell
information and insight into defenses and strategy that Mitchell (and SEIU)
would not have otherwise obtained. SEIU
does not contend otherwise.
Moreover,
even without considering the impact of the litigation, SEIU’s failure to pursue
the arbitration prejudiced the City in other ways. In the first place, the evidence presented to
the trial court was that SEIU typically seeks, and arbitrators ordinarily
award, back pay from the date of termination if the employee is reinstated, as
SEIU requests here. During the months
that SEIU did nothing to pursue the arbitration, Mitchell’s back pay claim
skyrocketed. Based on evidence presented
to the trial court, the City could be responsible for approximately $147,933
plus interest for back pay dating back to Mitchell’s termination date in July
2008. In short, by doing nothing to
pursue arbitration, SEIU has put Mitchell in a position where he can obtain a
significant monetary windfall, by which he would be paid not for his work, but
for SEIU’s delay.
In
addition, SEIU’s failure to pursue the arbitration for over 17 months
substantially undermined the City’s ability to obtain the benefits of
arbitration under the CBA. The CBA
specifically provides that the grievance procedure, of which Step IV
arbitration is a part, is intended to ensure the “swift resolution” of the grievance.
(Italics added.) Forcing the City
to arbitrate the grievance now, after SEIU’s inaction and the litigation of
Mitchell’s causes of action in court, is contrary to both the CBA’s specific
intent and the general arbitral purpose of affording a speedy and inexpensive
means of resolving a dispute. It is
simply not what the City bargained for.
In
light of all of the foregoing, the right to compel arbitration of Mitchell’s
grievance was waived for purposes of Code of Civil Procedure section 1281.2.
B. SEIU’s
Remaining Arguments
SEIU
argues that the arbitrator, not the court, should determine whether SEIU timely
and adequately complied with the grievance procedure set forth in the CBA.
Obviously, however, the court may decide whether the
the court that very authority. (Code
Civ. Proc., § 1281.2; see Engalla,
supra, 15 Cal.4th at p. 982.)
SEIU’s
reliance on Napa Association of Public
Employees v. County of Napa (1979) 98 Cal.App.3d 263 (Napa Association) is misplaced.
There, the trial court’s finding of waiver was held erroneous because it
was based exclusively on the union’s failure to file the grievance within the time specified in the arbitration
agreement. (Id. at p. 268.) The court of
appeal explained that, in the absence
of proof of abandonment of the right to
arbitrate or substantial prejudice from the delay (so as to support a finding
of waiver), the issue of a party’s failure to file a timely grievance was for
the arbitrator. (Id. at pp. 270-271.) Here,
by contrast, the issue was not whether SEIU failed to file a timely grievance,
but whether it had waived arbitration by its undue delay in pursuing
arbitration.
title="">[6] And unlike Napa Association, in the matter before us there
arbitrate and substantial prejudice from the delay, as demonstrated
The
other cases on which SEIU rely are also inapposite. In Brock
v. Kaiser Foundation Hospital (1992) 10 Cal.App.4th 1790, it was held that
only the arbitrator has the authority to dismiss an arbitration for failure to
diligently pursue the matter to a hearing.
(Id. at p. 1808.) Brock
is distinguishable from the matter before us, since the case had already been
submitted to arbitration, and the litigation had already been stayed, when the
request for dismissal was made. In
(1964) 376 U.S. 543, the court held
that the arbitrator had to decide whether parties had exhausted their remedies
in the preliminary stages of the grievance process, before invoking
arbitration. (Id. at pp. 557-558.) That
question is not before us in this case.
Instead, the question is whether the right to compel arbitration has
been waived by SEIU’s unexplained 17-month delay in pursuing arbitration, in
light of the litigation pursued by Mitchell.
(See Engalla, supra, 15
Cal.4th at p. 982.)
Lastly,
SEIU argues that the CBA does not expressly provide that the union waives
arbitration if it fails to request a panel of arbitrators or complete the
arbitration within a specific timeframe.
We question that proposition, since the CBA specifically warns: “Failure by the Union to follow the time
limits, unless mutually extended, shall cause the grievance to be
withdrawn.” In any event, SEIU’s
argument misses the point. Whether a
court may find a waiver under Code of Civil Procedure section 1281.2 does not
depend on whether the arbitration agreement expressly provides that a waiver
must be found. SEIU’s failure to request
a panel of arbitrators, attempt to schedule the arbitration, or do anything to
pursue arbitration for over 17 months while Mitchell litigated his civil
lawsuit (with SEIU’s knowledge) and his potential back pay award skyrocketed,
justifies the conclusion that SEIU waived its right to compel arbitration under
the statute.
SEIU
has failed to demonstrate error in the trial court’s denial of its petition to
compel arbitration.
III. DISPOSITION
The
order is affirmed.
>
NEEDHAM,
J.
We concur.
SIMONS, Acting P. J.
BRUINIERS, J.
(A132757)
contends that the initial grievance was untimely, because SEIU was required to
submit the grievance within 15 days of the effective date of Mitchell’s
termination on July 15, 2008, but SEIU did not submit the grievance until
August 19, 2008. The City contends it
will pursue this argument “if the matter were to get to arbitration.”
the California Department of Fair Employment and Housing, which issued a right
to sue letter in September 2008.
