The Arbitrability of Side and Settlement Agreements in the Collective Bargaining Context

Richard A. Bales

Abstract:

Collective bargaining agreements seldom resolve all sources of conflict between labor and management, so the parties to a collective bargaining agreement frequently sign side or settlement agreements to deal with these unanticipated issues.  If a dispute arises concerning the interpretation of a side or settlement agreement, it often is unclear whether that dispute must be resolved through the courts or through arbitration.  The federal circuit courts are split concerning the circumstances under which disputes regarding these side and settlement agreements are covered by the arbitration clause contained in the underlying bargaining agreement.  Two circuits – the Second  and Fourth  – have held that a dispute over the terms of the side or settlement agreement is arbitrable only if the subject matter of the side or settlement agreement is similar to that of the collective bargaining agreement.  Three circuits – the Third,  Seventh,  and Ninth  – have created a rebuttable presumption  that disputes involving a side or settlement agreement are arbitrable if the subject matter of the side or settlement agreement is within the scope of the arbitration clause of the collective bar-gaining agreement and if the parties have not otherwise excluded the subject from arbitration. 

This article argues that courts should adopt the “scope of the arbitration clause” approach to determining the arbitrability of side or settlement agreements.  Part II describes the historical evolution of the Supreme Court’s arbitration doctrines.  Part III presents the circuit split on the issue of the arbitrability of disputes involving side or settlement agreements.  Part IV analyzes the arguments on both sides of the issue.  It argues that the “scope of the arbitration clause” approach is the better approach because, compared to the alternative approach, it is more determinate, more consistent with Supreme Court precedent, more likely to reflect the intent of the parties, and more consistent with the Court’s ideological view of labor relations.  Part V concludes.

Keywords:
Suggested Citation:

Richard A. Bales, The Arbitrability of Side and Settlement Agreements in the Collective Bargaining Context, 105 W. Va. L. Rev. 575 (2003)

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