Intention to Arbitrate Grievances Concerning Layoffs on a ''Lack of Work'' Determination
In AT&T Technologies, Inc. v. Communications Workers of America, 475 U.S. 643, 649, 89 L. Ed. 2d 648, 656, 106 S. Ct. 1415, 1418 (1986), the Supreme Court highlighted four principles in determining whether parties to a collective bargaining agreement intended to arbitrate grievances concerning layoffs predicated on a "lack of work" determination by the company. AT&T, 475 U.S. 643, 89 L. Ed. 2d 648, 106 S. Ct. 1415.
The Supreme Court set forth the following four principles:
(1) arbitration is a matter of contract and a party cannot be required to submit any dispute to arbitration which he has not agreed so to submit;
(2) unless the parties clearly and unmistakably provide otherwise, the question of whether the parties agreed to arbitrate is to be decided by the court and not the arbitrator;
(3) a court is not to rule on the potential merits of the underlying claims when deciding whether the parties have agreed to submit a particular dispute to arbitration;
(4) an order to arbitrate the particular grievance should not be denied unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute. AT&T, 475 U.S. at 648-50, 89 L. Ed. 2d at 655-57, 106 S. Ct. at 1418-19.
Applying these principles, the Supreme Court held that it was the trial court's "duty to interpret the agreement and to determine whether the parties intended to arbitrate grievances concerning layoffs predicated on a 'lack of work' determination by the Company." AT&T, 475 U.S. at 651, 89 L. Ed. 2d at 657, 106 S. Ct. at 1420.
In Johnson v. Noble, 240 Ill. App. 3d 731, 732-33, 608 N.E.2d 537, 181 Ill. Dec. 464 (1992), the plaintiff brought an action against the defendants on various grounds, including breach of contract and breach of fiduciary duties.
The complaint alleged that there were two contracts between the parties, one oral and one written. Johnson, 240 Ill. App. 3d at 732.
The plaintiff alleged that the breach of contract and fiduciary duty counts emanated from the alleged oral agreement, which did not contain the arbitration clause. Johnson, 240 Ill. App. 3d at 732.
Defendants sought to compel arbitration pursuant to the FAA on the breach of contract and breach of fiduciary duty counts, which was denied by the trial court. Johnson, 240 Ill. App. 3d at 732.
The appellate court affirmed, applying the law set forth by our supreme court in Donaldson, 124 Ill. 2d at 445 ("if it is apparent that the issue sought to be arbitrated is not within the ambit of the arbitration clause, the court should decide the arbitrability issue in favor of the opposing party, because there is no agreement to arbitrate").
The appellate court held that the breach of contract and breach of fiduciary duty claims were not within the ambit of the arbitration clause because "the arbitration clause arose in a contract entered into between the same parties subsequent to the oral agreement and independent of it." Johnson, 240 Ill. App. 3d at 734-35.
In Board of Managers of Chestnut Hills Condominium Ass'n. v. Pasquinelli, Inc., 354 Ill. App. 3d 749, 822 N.E.2d 12, 290 Ill. Dec. 730 (2004), a condominium association sued a developer alleging various breach of contract and breach of warranty claims. the developer moved to stay the proceedings pending submission of all claims to arbitration. Pasquinelli, 354 Ill. App. 3d at 750.
The circuit court dismissed one claim and stayed the remaining claims pending arbitration. Pasquinelli, 354 Ill. App. 3d at 750.
The appellate court reversed the circuit court's decision, holding that the association's claims were not subject to arbitration because the factual allegations of the plaintiff's complaint sought redress for a series of defects that were not covered under the arbitration agreement. Pasquinelli, 354 Ill. App. 3d at 757.
The court explained, "Parties to an agreement are bound to arbitrate only those issues they have agreed to arbitrate, as shown by the clear language of the agreement and their intentions expressed in that language, and that an arbitration agreement will not be extended by construction or implication." Pasquinelli, 354 Ill. App. 3d at 754-55.