AT&T Technologies, Inc. v. Communications Workers of America et al.
475 U.S. 643 (1986)
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Rule of Law:
The question of whether a collective-bargaining agreement requires parties to arbitrate a particular grievance is a matter for judicial determination. Unless the parties clearly and unmistakably provide otherwise, a court, not an arbitrator, must decide the threshold issue of arbitrability.
Facts:
- AT&T Technologies, Inc. (AT&T) and the Communications Workers of America (the Union) were parties to a collective-bargaining agreement.
- The agreement included a broad arbitration clause (Article 8) for disputes over contract interpretation, but also a management rights clause (Article 9) stating that termination of employment was a management function not subject to arbitration.
- Article 20 of the agreement set forth the procedure for employee layoffs when necessitated by a 'lack of work'.
- The Union filed a grievance challenging AT&T's decision to lay off 79 installers in Chicago, claiming there was no actual lack of work.
- Shortly after laying off the 79 workers, AT&T transferred a similar number of installers from other locations to the Chicago facility.
- AT&T refused the Union's demand to arbitrate the grievance, arguing that the layoff decision was a non-arbitrable management right under Article 9.
Procedural Posture:
- The Communications Workers of America (Union) sued AT&T Technologies, Inc. in the U.S. District Court for the Northern District of Illinois to compel arbitration of a layoff grievance.
- The District Court granted summary judgment for the Union, finding its contract interpretation 'arguable' and ordering AT&T to arbitrate.
- AT&T, as appellant, appealed the decision to the U.S. Court of Appeals for the Seventh Circuit.
- The Court of Appeals affirmed, holding that because deciding arbitrability would entangle the court in the merits of the dispute, the issue of arbitrability itself should be decided by the arbitrator.
- The U.S. Supreme Court granted certiorari.
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Issue:
Does a court, when asked to compel arbitration under a collective-bargaining agreement, have the duty to determine whether the parties agreed to arbitrate the specific dispute, or must it defer that question of arbitrability to the arbitrator?
Opinions:
Majority - Justice White
Yes. A court must determine whether the parties agreed to arbitrate the dispute. The question of arbitrability is undeniably an issue for judicial determination unless the parties clearly and unmistakably provide otherwise. The court's role is to act as a gatekeeper, enforcing the arbitration agreement as a contract without ruling on the merits of the underlying grievance. The Court reaffirmed four key principles from the Steelworkers Trilogy: 1) arbitration is a matter of contract, and a party cannot be required to arbitrate a dispute it has not agreed to submit; 2) the question of whether the parties agreed to arbitrate a particular grievance is for the court, not the arbitrator; 3) in deciding arbitrability, a court must not rule on the merits of the underlying claim; and 4) where a contract contains an arbitration clause, there is a presumption of arbitrability, and doubts should be resolved in favor of coverage. The Seventh Circuit erred by creating an exception that would require a court to refer the arbitrability question to the arbitrator if deciding it would entangle the court in the merits. This approach is incorrect because it confuses the gateway question of arbitrability with the substantive merits of the dispute, which are reserved for the arbitrator.
Concurring - Justice Brennan
Yes. A court must decide the issue of arbitrability. This concurrence clarifies that the Seventh Circuit's error was in thinking that determining arbitrability required resolving the merits of the parties' contractual disagreement. Citing Warrior & Gulf, the proper judicial inquiry is much simpler: a court must only determine if the parties agreed to submit disputes over a particular contract provision (here, Article 20) to arbitration. Given the standard arbitration clause, the answer must be yes unless there is an express provision excluding the grievance or 'the most forceful evidence' of an intent to exclude it. A court should not interpret a general management rights clause to make arbitrability dependent on the merits, as this would allow the exception to swallow the arbitration rule.
Analysis:
This decision solidifies the judiciary's role as the gatekeeper for arbitration. It clarifies that 'substantive arbitrability' (whether a particular type of dispute is arbitrable) is a question for courts, while 'procedural arbitrability' (questions about procedures once in arbitration) are for the arbitrator. By rejecting the lower court's entanglement-with-the-merits exception, the Supreme Court created a clear, bright-line rule that prevents arbitrators from unilaterally determining their own jurisdiction. This holding strengthens the principle that arbitration is a creature of contract and ensures that parties are not forced to arbitrate disputes they did not agree to submit, thereby preserving the integrity of both the judicial process and the arbitration system.
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