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No appellate jurisdiction on order to arbitrate
May 22, 2005 by Ross Runkel at LawMemo

Sometimes a federal district court can make things so complex that a circuit court cannot review an order to arbitrate. So it was in Machinists Local 2121 v. Goodrich Corp (5th Cir 05/18/2005).

The union sued to compel arbitration of a dispute over retiree benefits in a collective bargaining agreement. The trial court granted partial summary judgment for the union; the 5th Circuit held that it lacked jurisdiction to review the trial court's order to arbitrate. The union actually made three claims: for (a) specific performance of the health care portion of the agreement, (b) specific performance of the arbitration clause, and (c) a declaration of rights under the agreement.

The 5th Circuit raised the question of its appellate jurisdiction on its own motion, and held that it lacked jurisdiction. (1) The trial court's order was not an appealable final order because it granted only part of the relief sought by the union. The trial court declined to address the declaratory judgment issue, closed the case administratively (the equivalent of a stay), and expressly retained jurisdiction. (2) The trial court stayed the case and ordered arbitration, and that is not an interlocutory injunction, and is not appealable under 28 USC 1292(a)(1). (3) The circuit court did not have appellate jurisdiction on the theory that the trial court wholly lacked jurisdiction. The employer argued that the union lacked standing under Labor Management Relations Act Section 301 because a union is limited to suing on behalf of "employees" and retirees are not employees. Without deciding that issue, the 5th Circuit ruled that the union had Section 301 standing because 52 retirees expressly authorized the union to represent them.

My view: I never heard of a case where a union can sue under Section 301 on behalf non-employees simply because the non-employees granted the union that authority. It would have been better for the 5th Circuit to address the issue of whether a union can sue under Section 301 on behalf of retirees.

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