AT&T Technologies, Inc. v. Communications Workers of America

PETITIONER: AT&T Technologies, Inc.
RESPONDENT: Communications Workers of America
LOCATION: Hardwick's Apartment

DOCKET NO.: 84-1913
DECIDED BY: Burger Court (1981-1986)
LOWER COURT: United States Court of Appeals for the Seventh Circuit

CITATION: 475 US 643 (1986)
ARGUED: Jan 22, 1986
DECIDED: Apr 07, 1986

ADVOCATES:
Laurence Stephen Gold - on behalf of the respondent
Lawrence Gold - for respondents
Rex E. Lee - on behalf of the petitioner

Facts of the case

Question

Media for AT&T Technologies, Inc. v. Communications Workers of America

Audio Transcription for Oral Argument - January 22, 1986 in AT&T Technologies, Inc. v. Communications Workers of America

Warren E. Burger:

We will hear arguments next in AT&T Technologies, Incorporated, against Communications Workers of America.

Mr. Lee, I think you may proceed whenever you are ready.

Rex E. Lee:

Thank you, Mr. Chief Justice, and may it please the Court, in our view this is a simple case that requires a simple solution.

The only reason the case is here is that the Court of Appeals committed an error which not even the respondents defend, and all that this Court need do and all that it should do is to reverse that error and remand the case so that the lower courts can perform the task that is properly theirs.

There is one question presented.

It concerns the correctness of the Seventh Circuit's holding that there is an exception to the foundational principal that before requiring arbitration of a collective bargaining agreement, the Court must first determine whether the parties agreed to arbitrate that issue.

In the Court of Appeals' view, the exception exists where the judge in order to decide whether there has been a promise to arbitrate, would have to consider any provision of the contract other than the arbitration clause.

The issue arose here because the petitioner laid off 79 installers at its Chicago based location.

The union claims that Article 20 of the collective bargaining agreement makes these layoffs arbitrary.

The company's answer is that Article 20 does not change Article 9's exclusion of all layoff decisions from issues that are to be arbitrated, and the company places particular emphasis on a prior judicial interpretation of this contract and other bargaining history.

Now, under those circumstances, were the parties in disagreement over whether there had been a promise to arbitrate?

What the lower courts should have done and what both parties and all three amici agreed that the lower courts should have done was to give the parties their judgment on that issue.

The issue is arbitrability, arbitrability is for the courts, and these courts should have decided it.

Had they done so, then no matter which way they decided it, this would have been in respondent's words a thoroughly uneventful case involving nothing more than the interpretation of one labor contract and eminently unworthy of review by this Court.

But that is not what happened.

Both the District Court and also the Court of Appeals would have sent the case directly to the arbitrator without performing their threshold duty of deciding whether the party ever intended this issue to be arbitrated.

The Seventh Circuit's view, this sidestepping of what it conceded was its normal duty, was required because of the interaction of two features of this case.

First, the parties have not clearly excluded the arbitrability issue from arbitration, and second, in order to determine arbitrability, the Court would have to consider not just the arbitration clause, Article VIII, but also two what the Court called substantive clauses, Articles IX and XX.

That decision is hopelessly inconsistent with this Court's holdings and opinions and also with the policy of encouraging arbitration.

I would like to examine just briefly each part of the lower court's two-part test.

The first is that the parties have not clearly excluded the arbitrability issue from arbitration.

That is just a flat misstatement of well settled law concerning who decides arbitrability.

This Court said in Warrier and Gulf not only that the Court decides arbitrability, but It went further and clarified the question of jurisdiction of the arbitrator will not be left to the arbitrator unless, and this is a quote,

"the claimant bears the burden of a clear demonstration of that purpose. "

The Court of Appeals ruling in this respect simply confuses the presumption of arbitrability with the question of who decides arbitrability.

Warrier and Gulf deals with both of these issues.

When the question is whether it is viewed as arbitrary, then the scales are weighted in favor of arbitration, but when the question is, who decides arbitrability, they are weighted in favor of the judge.

But it is the second part of the test that really demonstrates the mischief of the Court of Appeals' error.

It is disputed by no one that one of the main reasons over the past quarter-century since the Trilogy arbitration has gained such widespread acceptance in the labor field and has become so successful, is that following this Courts unequivocal assurance in Warrier and Gulf that the question of arbitrability is for the courts, employers have been willing to use arbitration because they have known that where it is really important for them to exclude a management function, or some other subject from arbitration, their agreements will be honored.

They know that the scales are weighted in favor of arbitrability, but they also know that they are judicial scales, and the presumption is not an irrebuttable one.