Grievance not brought in "good faith" not subject to arbitration

In a case involving application of a somewhat unusual arbitration provision, the Fifth Circuit reversed a decision of the district court compelling arbitration.

 PACE Local 4-12 had sought to arbitrate two grievances. The first involved a claim that Exxon Mobil had improperly contracted out the loading and unloading of rail cars at its Baton Rouge facility. The second claimed that the employer had improperly eliminated two bargaining unit positions (although no unit employees were laid off).

The contract defined an “arbitrable grievance” as “a good faith claim … that the other party has violated a written provision of this agreement.”

The district court had ordered arbitration of the first grievance but declined to compel arbitration of the second. Reversing in part, the Fifth Circuit concluded that express language of the cba authorizing the company’s actions overcame a claim that it had breached another provision that the exercise of any right under the agreement be made “in a reasonable manner and in good faith”.

Recognizing that ordinarily a court should not address the merits of a grievance in determining arbitrability, the court concluded that the express language of the agreement authorizing the company to contract out the work precluded a finding that the grievance could be arbitrated in “good faith”. The court's opinion can be found  here .