At&T Technologies, Inc. v. Communications Workers

Background

A company (AT&T Technologies) and the union representing telephone equipment installers disagreed about 79 layoffs at a Chicago base. The union filed a grievance under their collective-bargaining contract, but the company refused to arbitrate, saying its management rights excluded such disputes. The union sued in federal court to compel arbitration. The District Court and the Seventh Circuit ordered arbitration of whether the dispute was arbitrable.

Reasoning

The Court addressed who must decide if the parties actually agreed to arbitrate the dispute. Relying on longstanding precedents, the Court explained that arbitration is a matter of contract and that judges must determine arbitrability unless the parties have clearly and unmistakably agreed to let the arbitrator decide. The Court reiterated that courts should not decide the merits of the underlying grievance and that doubts favor arbitration. The Court vacated the Seventh Circuit’s decision and remanded for the lower courts to decide arbitrability.

Real world impact

The ruling requires federal judges to decide whether a labor contract covers a particular grievance before sending that question to an arbitrator, unless the contract unmistakably assigns that power to the arbitrator. This affects unions, employers, and courts by making judges apply the contract-language standard and, where necessary, the bargaining history on remand. The decision does not resolve the merits of the layoff dispute and leaves the final outcome to further proceedings.

Dissents or concurrances

Justice Brennan, joined by two Justices, agreed with the judgment and emphasized on remand that courts should look only for explicit contract exclusions or the most forceful bargaining-history evidence before denying arbitration.