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Seiu, Local 2028 v. Rady Children's Hospital

December 12, 2008

SEIU, LOCAL 2028, PLAINTIFF,
v.
RADY CHILDREN'S HOSPITAL, SAN DIEGO, AND DOES 1 THROUGH 10, DEFENDANT.



The opinion of the court was delivered by: Honorable Barry Ted Moskowitz United States District Judge

ORDER GRANTING MOTION TO COMPEL ARBITRATION

Plaintiff SEIU, Local 2028 ("Local 2028") has filed a motion to compel arbitration. For the reasons discussed below, Local 2028's motion is GRANTED.

I. BACKGROUND

A. District Court Litigation

On June 28, 2007, Rady Children's Hospital ("Rady") commenced Case No. 07cv1193 BTM(AJB). In that case, Rady alleged that Local 2028 had ceased to exist as a result of a statewide SEIU restructuring plan and that the collective bargaining agreement ("CBA") between Local 2028 and Rady was therefore void. Rady also alleged that Local 2028 had effectively disclaimed its interest in the CBA and had unilaterally attempted to transfer its contract rights to SEIU, United Healthcare Workers - West ("UHW"), without complying with Section 1.05 of the CBA. Rady argued that due to the ineffective attempted assignment of rights, Rady had no contractual obligations toward UHW.

In the original complaint, Rady asserted a declaratory relief claim and a breach of contract claim. In an order filed on November 26, 2007, the Court granted motions to dismiss brought by Local 2028 and UHW. The Court held that this case, when "stripped to essentials," was representational and fell within the primary jurisdiction of the NLRB. See United Ass'n of Journeymen v. Valley Engineers, 975 F.2d 611, 614 (9th Cir. 1992). The Court explained, "Whether Local 2028 still exists after the merger with Local 221 and whether UHW has taken on the role of bargaining representative are questions that fall within the NLRB's exclusive jurisdiction."

Although the Court dismissed Rady's Complaint, the Court granted Rady leave to file an amended complaint. On December 20, 2007, Rady filed its First Amended Complaint ("FAC"). For the most part, the FAC alleged the same facts as the original complaint and reasserted the causes of action for declaratory relief and breach of contract. The FAC also asserted additional causes of action for fraud in the inducement and violation of 29 U.S.C. § 462.

Based on the filing of the First Amended Complaint, Local 2028 and UHW filed motions for Rule 11 sanctions or, in the alternative, attorney's fees under 28 U.S.C. § 1927. Subsequently, Rady made a motion to voluntarily withdraw the First Amended Complaint. Although the Court allowed Rady to voluntarily dismiss the First Amended Complaint, the Court granted the motions for sanctions on the ground that the breach of contract and declaratory relief claims were exactly the same as the claims that were previously dismissed by the Court. The Court also found that the additional claims "hinge[d] upon the determination of whether Local 2028 was and is a viable entity and the bargaining representative of the employees at Plaintiff's hospital." Accordingly, these claims also fell within the primary jurisdiction of the NLRB.

On March 14, 2008, Local 2028 commenced this action by filing a Petition to Compel Arbitration. Local 2028 seeks to compel arbitration of Local 2028's grievance, which was filed on or about November 16, 2007. The grievance alleges that Rady violated various provisions of the CBA by refusing to honor the recognition clause, denying access to Union representatives, denying employees the right to be represented by Union representatives, and threatening Union Stewards and employees who were engaged in exercising their contractual Union rights.

B. NLRB Proceedings

In 2007 and 2008, Local 2028 filed unfair labor practice charges ("ULPs") against Rady with the NLRB. In the ULPs, Local 2028 alleges that Rady has violated the NLRA by refusing to recognize and bargain with Local 2028 and by denying access to Local 2028's authorized representatives. (Exs. 1-4 to Overstreet Decl.)

On March 28, 2008, the NLRB issued an Order Consolidating Cases, Consolidated Complaint and Notice of Hearing ("NLRB Complaint"). (Ex. 6 to Overstreet Decl.) The NLRB Complaint alleges, among other things, that Rady refused to recognize and bargain with Local 2028 and refused to grant the Assistants to the Trustee of the Union access to Rady's facilities.

On April 11, 2008, Rady answered the NLRB Complaint. (Ex. 7 to Overstreet Decl.) Local 2028 requested that Rady withdraw the Answer and agree to arbitrate the underlying dispute. (Harland Decl. ¶ 3.) Rady refused on the ground that the "questions of representation [before the NLRB] are essential to your demand for arbitration." (Ex. C to Harland Decl.)

On June 17, 2008, Rady entered into a settlement agreement with the NLRB. (Overstreet Decl. ΒΆ 8.) Under the terms of the settlement agreement, Rady agreed that it would recognize and deal with Local 2028 and grant access to the ...


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