Operating Engineers Local 3 v. Marathon Petroleum Company LP
- Alex Tse
- 3:22-cv-09057
- U.S. District Court · Northern District of California
- 4
In Operating Engineers Local 3 v. Marathon Petroleum, Judge Tse granted summary judgment and compelled arbitration over whether refinery work was covered.
Local 3 and the defendants to the project labor agreement, including Marathon Petroleum Company LP; the opinion does not identify the other defendant by name.
What happened
Operating Engineers, Local 3 v. Marathon Petroleum Company LP concerned whether a project labor agreement required arbitration of a dispute over work at a petroleum refinery. The dispute involved whether soils and materials inspection, testing, and building or construction inspection qualified as “Covered Work.”
Local 3 argued that the agreement required arbitration. The defendants argued that disputes against the refinery’s “Owner” were not arbitrable, that the parties did not intend to bind the Owner to arbitration, and that the agreement itself resolved the Covered Work issue. The court said those last arguments concerned the merits of the dispute, which the arbitrator—not the court—should address first.
Judge Alex G. Tse ruled that the agreement required the dispute to be arbitrated. He granted Local 3’s motion for summary judgment and compelled the defendants to arbitrate under the agreement’s grievance procedures. The court also denied the defendants’ motion to file a supplemental declaration.
The detailed version
- Operating Engineers Local 3 v. Marathon Petroleum Company LP · No. 3:22-cv-09057
- Alex Tse
- May 9, 2023
Background
The International Union of Operating Engineers, Local 3, brought one claim seeking to compel arbitration. The dispute concerns whether certain work at the defendants’ petroleum refinery—soils and materials inspection and testing and building or construction inspection—is “Covered Work” under the parties’ project labor agreement (PLA). The opinion states that the PLA is a collective-bargaining agreement.
The PLA says that any question arising during the agreement’s term involving its interpretation or application, other than jurisdictional disputes, is a grievance. The PLA establishes a four-step grievance process that ends in arbitration. The court also noted that no other steps in that process remained to be taken.
Arguments
The defendants argued that disputes against the “Owner” were not subject to arbitration. The court rejected that interpretation. It found that no PLA provision excludes disputes against the Owner and that the agreement’s cost provision expressly contemplates grievances brought against the Owner. That provision states that the Owner is not responsible for grievance costs unless the grievance is against the Owner.
The defendants also pointed to provisions allowing the Owner to receive notice of arbitration requests and to participate in resolving grievances. The court concluded that those provisions allow the Owner to monitor or participate in disputes involving other parties but do not allow the Owner to avoid arbitration when a grievance is brought against it.
The defendants relied on a declaration from a former employee involved in negotiating the PLA to argue that the parties did not intend for the Owner to arbitrate. The court found the PLA unambiguous and said the parties’ negotiations therefore did not affect its meaning. The court did not need to decide Local 3’s objection to that declaration. The defendants’ motion for leave to file a supplemental declaration responding to the objection was denied.
The defendants further argued that the PLA excluded the disputed work from “Covered Work” and gave them discretion to decide whether a nonunion subcontractor could perform it. The court characterized those as merits arguments requiring interpretation and application of the PLA’s substantive provisions. It held that those issues must be left to the arbitrator in the first instance.
Ruling
The court applied the strong presumption favoring arbitration in labor disputes. It held that the dispute involved the PLA’s interpretation and application and that the agreement required arbitration. Judge Alex G. Tse granted Local 3’s motion for summary judgment and compelled the defendants to arbitrate their dispute with Local 3 in accordance with Section 8 of the PLA.
Read the full 4-page opinion on CourtListener, the free public archive maintained by the Free Law Project.