Case 3:18-cv-01953-AJB-BLM Document 1 Filed 08/22/18 PageID.

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1 SEYFARTH SHAW LLP

Holger G. Besch (SBN 193362)
2 E-mail: hbesch@seyfarth.com
Timothy M. Fisher (SBN 272392)
3 E-mail: tfisher@seyfarth.com
601 South Figueroa Street, Suite 3300
4 Los Angeles, California 90017-5793
Telephone: (213) 270-9600
5 Facsimile: (213) 270-9601
6 Attorneys for Petitioner
COSTCO WHOLESALE CORPORATION
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9 UNITED STATES DISTRICT COURT
10 SOUTHERN DISTRICT OF CALIFORNIA
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601 SOUTH FIGUEROA STREET, SUITE 3300
LOS ANGELES, CALIFORNIA 90017-5793

12 COSTCO WHOLESALE Case No. '18CV1953 BEN BLM

SEYFARTH SHAW LLP

CORPORATION
ATTORNEYS AT LAW

13 PETITION TO VACATE
Petitioner, ARBITRATION AWARD
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v.
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INTERNATIONAL BROTHERHOOD OF
16 TEAMSTERS, LOCAL NO. 542
17 Respondent.
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PETITION TO VACATE ARBITRATION AWARD

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1 Petition Costco Wholesale Corporation (“Costco”) hereby alleges and complains

2 against Respondent the International Brotherhood of Teamsters, Local No. 542 (the
3 “Union”) follows:
4 INTRODUCTION
5 1. By this Petition and the accompanying Motion to Vacate Arbitration Award
6 (“Motion”), incorporated herein by reference, Costco petitions the Court for an order
7 vacating a May 21, 2018 arbitration award issued by Arbitrator David Hart on the
8 grievance brought by the Union concerning Costco’s termination of employee James
9 Diaz (“Diaz”) for Diaz’s conduct in dealing cocaine to Costco employees on Costco
10 premises. Costco brings this Petition and the accompanying Motion under Section 301of
11 the Taft-Hartley Act, 29 U.S.C. § 185 as amended (the “LMRA”), the Federal Arbitration
601 SOUTH FIGUEROA STREET, SUITE 3300
LOS ANGELES, CALIFORNIA 90017-5793

12 Act (“FAA”), 9 U.S.C. §§ 10 and 12, and the California Arbitration Act (“CAA”),
SEYFARTH SHAW LLP
ATTORNEYS AT LAW

13 California Code of Civil Procedure section 1285 et seq.

14 PARTIES
15 2. Costco is a Washington corporation with its principal place of business in
16 Issaquah, Washington. Costco operates retail/wholesale warehouses in 45 states and is
17 engaged in interstate commerce. It has been recognized as one of the most employee-
18 friendly companies in the United States. Costco has 38 unionized warehouses in
19 California covered by a collective bargaining agreement between Costco and the
20 California Teamsters, covering the period February 1, 2016 to January 31, 2019
21 (“CBA”).
22 3. The Union is a labor organization under Section II of the Labor Management
23 Relations Act, 29 U.S.C. § 152. The Union is one of six Teamsters locals that represent
24 Costco employees covered by the CBA. The Union has an office at 4666 Mission Gorge
25 Place, San Diego, CA 92120 and represents Costco employees at Costco’s warehouse in
26 Carlsbad, California, where Diaz was employed.
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PETITION TO VACATE ARBITRATION AWARD

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1 JURISDICTION AND VENUE

2 4. This Court has subject matter jurisdiction over this matter pursuant to the
3 LMRA and pursuant to 28 U.S.C. §§ 1331 and 1337. Venue is proper because the
4 Union’s duly authorized officers or agents are engaged in representing or acting for
5 employee members within the Southern District of California, and the arbitration award
6 at issue was made within the Southern District of California. 29 U.S.C. § 185(a), (c); 9
7 U.S.C § 10(a).
8 TIMELINESS
9 5. This Petition and the accompanying Motion are timely because they were
10 filed and served within three months and within 100 days of the arbitration award at
11 issue. See 9 U.S.C. 12 (notice of motion to vacate award under FAA must be served
601 SOUTH FIGUEROA STREET, SUITE 3300
LOS ANGELES, CALIFORNIA 90017-5793

12 within three months after the award is filed or delivered); Cal. Civ. Proc. Code § 1288
SEYFARTH SHAW LLP
ATTORNEYS AT LAW

13 (petition to vacate award under CAA must be filed and served within 100 days of service
14 of a signed copy of award); San Diego County District Council of Carpenters of United
15 Brotherhood of Carpenters & Joiners of America v. Cory, 685 F.2d 1137, 1139 (9th Cir.
16 1982) (CAA’s 100 day limitation period applies to petitions under LMRA because the
17 LMRA does not contain a separate limitations period)
18 GROUNDS FOR RELIEF
19 6. As set forth in further detail in the accompanying Motion, the arbitration
20 award must be vacated on several grounds.
21 7. The arbitrator exceeded his authority under the CBA by imposing the
22 concept of “double jeopardy,” as against the plain language of the CBA, which contains
23 no such concept. Consequently, the arbitration award does not “draw its essence” from
24 the CBA.
25 8. The arbitrator further exceeded his authority by refusing to hear evidence
26 concerning Diaz’s criminal activity in the workplace, confining the hearing solely to the
27 issue of double jeopardy, failing to follow the required process for issuing an award, and
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1 conducting ex parte communications with the Union and Diaz, in an apparent role of self-
2 appointed mediator, making unauthorized cash settlement offers to Diaz.
3 9. To the extent the arbitration award directs Costco to reinstate Diaz (which is
4 not clear), it directs reinstatement of a cocaine dealer to a safety sensitive position and
5 thereby violates well-established public policy.
6 10. The award does not specify the remedy, and thus it is fatally indefinite such
7 that it cannot be enforced.
8 PRAYER
9 WHEREFORE, Costco prays for judgment as follows:
10 1. That the May 21, 2018 arbitration award be vacated; and
11 2. That Costco be awarded such other and further relief as the Court may deem
601 SOUTH FIGUEROA STREET, SUITE 3300
LOS ANGELES, CALIFORNIA 90017-5793

12 appropriate and proper.

SEYFARTH SHAW LLP
ATTORNEYS AT LAW

13 DATED: August 21, 2018 Respectfully submitted,

14 SEYFARTH SHAW LLP
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16 By: /s/ Holger G. Besch
Holger G. Besch
17 Timothy M. Fisher
Attorneys for Respondent
18 COSTCO WHOLESALE
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