• Arbitration Decision Under CBA May Not Preclude OSHA Retaliation Suit
  • December 31, 2003 | Author: Helene J. Wasserman
  • Law Firm: Ford & Harrison LLP - Los Angeles Office
  • In Taylor v. Lockheed Martin Corporation (Cal.App. 2d Dist., 11/17/03), the California Court of Appeal for the Second Appellate District reversed the decision of the Santa Barbara County Superior Court and held that where a collective bargaining agreement (CBA) does not clearly and unmistakably provide for arbitration of a covered employee's statutory claims, an arbitration decision under the CBA does not preclude a lawsuit claiming statutory retaliation.

    Taylor worked for Lockheed as a rocket engine mechanic. He was a member of the International Association of Machinists, with which Lockheed had a CBA. That CBA provided for the arbitration of employment grievances. Taylor was discharged after he refused to obtain counseling following discipline for threatening two fellow employees. Taylor believed his discharge was racially motivated and in retaliation for an earlier complaint he filed with California's Division of Occupational Safety and Health (OSHA.) He sued Lockheed claiming: (1) wrongful termination in violation of the public policies set forth in California Labor Code Sections 1102.5 and 6310, (2) retaliatory discharge in violation of those same statutes, (3) race discrimination in violation of California's Fair Employment and Housing Act, and (4) wrongful termination in violation of public policy.

    The trial court dismissed Taylor's state law claims because they arose on a federal enclave and, thus, were barred. The appeals court affirmed that holding to the extent it barred all of Taylor's claims except his claim for retaliatory discharge in violation of OSHA, finding that OSHA was passed expressly to permit California to enforce worker safety regulations in situations when the federal government did not exercise that jurisdiction.

    In the meantime, Taylor filed a grievance with the IAM, which proceeded to arbitration. The arbitrator ruled that Taylor had been terminated for just cause. Lockheed then asked the trial court in the Labor Code suit to dismiss the complaint, arguing that the labor arbitrator's finding of just cause was binding and that Taylor was precluded from arguing to the contrary. The trial court granted Lockheed's motion.

    The appeals court reversed. First the court thoroughly analyzed United States Supreme Court and California authority addressing the circumstances under which an arbitration clause in a CBA precludes civil lawsuits arising from actions subject to arbitration under a CBA. The court held that, because the CBA did not clearly and unmistakably provide for binding arbitration of an employee's statutory claims under the Labor Code and because the arbitration was not conducted in a manner that allowed for full litigation and fair adjudication of Taylor's Labor Code claim, dismissal of the case was improper.

    The appeals court explained that this holding is entirely consistent with two similar California Court of Appeal decisions. In Camargo v. California Portland Cement Co., the court concluded that a prior labor arbitration decision should not be given collateral estoppel effect absent a clear and unmistakable waiver of the employee's right to sue. Similarly, the court in Vasquez v. Superior Court, held that a mandatory arbitration clause in a CBA is not binding as to statutory discrimination claims absent a clear and unmistakable waiver.

    Because Taylor's claim arose under Labor Code Section 6310, which is similar to California's anti-discrimination statute in that it authorizes an individual right of action that is not necessarily coextensive with the terms of a CBA, the appeals court held that the policy rationale of the other California courts in deciding this issue was applicable.

    Lockheed urged the court to follow the reasoning in Kelly v. Vons Companies, Inc., which held that an adverse finding in a labor arbitration is binding as to an employee's common law tort claims in a subsequent lawsuit against the employer. The court in Lockheed rejected this argument, distinguishing Kelly on the basis that Kelly did not involve statutory claims.

    The entire area of mandatory arbitration of employment-related disputes is in a state of flux in California, both in and outside of the unionized setting. In one of his final acts as California's Governor, Gray Davis vetoed AB 1715, which would have made it unlawful for an employer to mandate arbitration of employment discrimination claims. However, court decisions frequently modify the requirements of mandatory arbitration programs employers seek to implement. Hence, it is essential that, before implementing any mandatory arbitration program in a non-unionized setting, employers seek advice from employment counsel.