The opinion of the court was delivered by: SAUNDRA BROWN ARMSTRONG
This is an action brought by plaintiff Winery, Distillery and Allied Workers, Local 186 ("Union") to compel arbitration of a dispute with defendant Guild Wineries and Distilleries ("Guild"). The case is presently before the Court on the Guild's motion for summary judgment. After having read the papers submitted and considered the arguments of the parties, and being fully informed, the Court finds that the Guild's motion for summary judgment should be granted.
The parties in this action entered into a collective bargaining agreement on August 11, 1986. On July 31, 1989, the collective bargaining agreement expired. After the expiration, the parties continued negotiations regarding a new collective bargaining agreement. However, no additional agreement was ever executed.
In August, 1991, the Guild announced that it was selling its operations to Canandaigua Wine. The sale was completed on October 1, 1991.
The Union asserts that a provision of the collective bargaining agreement committed the Guild to providing lifetime health insurance to its union employees and their spouses. After the sale of its operations, however, the Guild ceased all funding of health insurance plans for its former employees. The collective bargaining agreement also contained an arbitration clause. The Union seeks to arbitrate whether the Guild has a continuing obligation to pay for its former employees' health insurance.
A. STANDARD FOR SUMMARY JUDGMENT
Motions for summary judgment are governed by Rule 56 of the Federal Rules of Civil Procedure. The principal question for the Court to decide is whether, after viewing the evidence in the light most favorable to the opposing party, there is a genuine issue of material fact. FDIC v. New Hampshire Ins. Co., 953 F.2d 478 (9th Cir. 1991). The non-moving party must produce evidence sufficient to support a jury verdict in its favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). If the non-moving party fails to establish a genuine issue of material fact, and the moving party is entitled to judgment as a matter of law, then summary judgment is appropriate. Fed. R. Civ. P. 56(c).
B. LEGAL STANDARD REGARDING POST-EXPIRATION ARBITRATION
There is no statutory or common-law requirement mandating arbitration of labor disputes. Litton Financial Printing v. N.L.R.B., 115 L. Ed. 2d 177, 111 S. Ct. 2215, 2222 (1991). Instead, arbitration is only compelled when required by contract terms. Id. Whether a collective bargaininq agreement requires a particular grievance to be submitted to arbitration is a matter to be determined by the court. Id. at 2226. Thus, a party is not required to "arbitrate the arbitrability issue." Id. (citing AT&T Technologies, Inc. v. Communications Workers of America, 475 U.S. 643, 651, 89 L. Ed. 2d 648, 106 S. Ct. 1415 (1986).
In Nolde Brothers, Inc. v. Bakery and Confectionery Workers Union, 430 U.S. 243, 51 L. Ed. 2d 300, 97 S. Ct. 1067 (1977), the Supreme Court considered whether an arbitration clause has effects after the expiration of the collective bargaining agreement. In Nolde, an employer closed its business shortly after the expiration of a collective bargaining agreement. The employer refused to pay severance wages required by the contract.
The Court held that a dispute that arises under the contract is subject to the contract's arbitration clause even after the contract expired. The Court characterized the severance pay as deferred compensation. Because the severance pay accrued and vested during the contract period, the Court reasoned that the dispute was subject to the arbitration clause. In reaching its conclusion, the Court established a strong presumption in favor of arbitration even after the expiration of the contract.
This presumption was seriously weakened by the Court's recent decision in Litton Financial Printing v. N.L.R.B., 115 L. Ed. 2d 177, 111 S. Ct. 2215 (1991). The Court came close to reversing Nolde when it stated that if "parties who favor labor arbitration during the term of a contract also desire it to resolve post-expiration ...