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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Classified Employees Association v. Matanuska-Susitna Borough School District (04/03/2009) sp-6353

Classified Employees Association v. Matanuska-Susitna Borough School District (04/03/2009) sp-6353, 204 P3d 347

     Notice:   This opinion is subject to correction  before
     publication  in  the  Pacific  Reporter.   Readers  are
     requested to bring errors to the attention of the Clerk
     of  the  Appellate  Courts, 303  K  Street,  Anchorage,
     Alaska 99501, phone (907) 264-0608, fax (907) 264-0878,
     e-mail corrections@appellate.courts.state.ak.us.


            THE SUPREME COURT OF THE STATE OF ALASKA

CLASSIFIED EMPLOYEES )
ASSOCIATION, ) Supreme Court No. S- 12606
)
Appellant, ) Superior Court No. 3PA-06- 1408 CI
)
v. ) O P I N I O N
)
MATANUSKA-SUSITNA BOROUGH ) No. 6353 April 3, 2009
SCHOOL DISTRICT, MATANUSKA-)
SUSITNA SCHOOL BOARD, and)
CHIEF SCHOOL ADMINISTRATOR)
ROBERT DOYLE, )
)
Appellees.)
)
          Appeal  from the Superior Court of the  State
          of  Alaska, Third Judicial District,  Palmer,
          Beverly W. Cutler, Judge.

          Appearances:   Helene M. Antel,  Palmer,  for
          Appellant.   David  M.  Freeman,   Scott   M.
          Kendall,  Holmes  Weddle  &  Barcott,   P.C.,
          Anchorage, for Appellees.

          Before:    Fabe,  Chief  Justice,   Matthews,
          Eastaugh, Carpeneti, and Winfree, Justices.

          MATTHEWS, Justice.
          FABE,  Chief  Justice,  with whom  CARPENETI,  Justice,
joins, dissenting.

I.   INTRODUCTION
          The  Matanuska-Susitna Borough School District  decided
to   provide  custodial  services  for  its  schools  through  an
independent   contractor  rather  than  by  employing   custodial
workers.  The main question in this case is whether the Districts
outsourcing   decision   is  arbitrable  under   its   collective
bargaining  agreement with the Classified  Employees  Union.   We
conclude that it is not, primarily because no reasonable argument
has been made that outsourcing is prohibited under the agreement.
We therefore affirm the superior courts decision.
II.  FACTS AND PROCEEDINGS
     A.   The Parties and the Collective Bargaining Agreement
          The  Classified Employees Association (CEA) is a  union
that  represents  between six hundred and seven hundred employees
in the Matanuska-Susitna Borough School District (District) in  a
broad  range  of  clerical, administrative, maintenance,  special
education,  and  computer services positions.  The  CEA  and  the
District  are parties to a collective bargaining agreement  (CBA)
that defines the terms and conditions of employment applicable to
the CEAs members.  The agreement at issue was in effect from July
1,  2005,  to  June  30,  2008.  In  the  first  article  of  the
agreement,  the  CEA  and  the  District  state  their   aim   as
promot[ing]  harmonious  and cooperative  relations  between  the
employer  and  the  employees.  The agreement  also  attempts  to
provide  a basis for the adjustment of matters of mutual interest
covered by this agreement by means of amicable discussion.
          Article XI of the agreement outlines the procedures for
dealing  with  grievances  made by  employees.   A  grievance  is
defined as
          a claim by an employee based upon an event or
          condition  which  affects the  conditions  or
          circumstances  under which an employee  works
          caused  by  misinterpretation or  inequitable
          application    of   District   policies    or
          procedures  on  personnel  matters   directly
          pertaining  to  these  conditions  or  circum
          stances,  and/or the terms of this  Agreement
          and amendments thereof.
          
Article  XI  sets out the stages in the grievance  process.   The
fourth  and final stage of the process allows for the parties  to
submit  the  issue  to  arbitration if the  issue  has  not  been
resolved  by  the grievants department director or administrator,
the  superintendent, or by mediation.  Under the terms of Article
XI the decision of the arbitrator shall be final and binding upon
both  parties.  The arbitrator can add nothing to,  nor  subtract
anything from the Agreement between the parties or any policy  of
the School Board.
          Article  XIII, the Savings Clause, indicates  that  the
Labor  Agreement contains the full and complete agreement between
the parties on all subjects upon which the parties did bargain or
could  have bargained.  The article continues that the  Agreement
terminates  all prior agreements and understandings made  between
the   parties.   The  agreement  contains  no  clause  describing
specific powers that are reserved to management.
     B.   Bargaining History
          In  1993  the District attempted to add a provision  to
the  collective  bargaining agreement which  stated  that   [t]he
parties  expressly agree that nothing in this Agreement shall  be
construed  as  prohibiting  the District  from  contracting  with
independent  contractors for activity drivers.  The CEA  did  not
agree  to  this language and the clause was not included  in  the
contract;  however,  the CEA consented to a change  to  the  1993
agreement that allowed for outsourcing bus drivers if an activity
bus  driver  resigns, transfers, or takes a long  term  leave  of
absence.
          The  2005-2008  agreement does not have  any  provision
dealing with the outsourcing of activity drivers (or any specific
provisions for outsourcing) because, according to the  CEA,   the
outsourcing  of  activity bus drivers was  not  successful.   But
apparently  the  question  of outsourcing  was  a  much-discussed
subject  during  the  negotiations for the  2005-2008  agreement.
Robert Johnson, who was a member of the Districts bargaining team
and the school board in 2004, stated that [o]utsourcing was [a] .
.  .  key  issue[]  for both the District  and  the  CEA  in  the
negotiations.   He said that the District wanted to  be  able  to
outsource CEA work in the new agreement but the CEA members didnt
want to change the way things had been done in the past and asked
for  the Districts assurances that bargaining unit work would not
be outsourced.  Johnson claimed that the District gave assurances
that  work  would not be outsourced,1 although [t]he parties  did
not   come  up  with  contract  language  to  commemorate   their
agreement.
     C.    The Districts Decision To Outsource and Initial  Court
Proceedings
          In  December 2005 the District advertised that it would
consider  proposals for Custodial Services and Light Duty  School
maintenance for specified facilities within the School  District.
NANA  Management Services submitted a proposal, and the  District
entered into a contract with NANA.  In March 2006 the CEA filed a
grievance against the District under the CBA.  CEA specified that
the  nature of the grievance was that [t]he proposed contracting-
out  of  bargaining  unit work constitutes  a  violation  of  the
parties[]  written and express verbal agreement on  the  subject.
It  also  alleged  that  the District has violated  its  duty  to
negotiate  on  mandatory subjects in good  faith.   Although  the
Matanuska-Susitna School Board debated a motion to terminate  the
contract  with NANA, the motion failed.  The District  then  went
ahead  with  the contract, replacing its custodial  workers  with
contract employees from NANA.
          The  parties,  in  anticipation of future  arbitration,
selected  an  arbitrator and set a hearing date  of  October  25,
2006.   But  before  the  CEAs  claim  reached  arbitration,  the
District  withdrew  from  the  grievance  process,  claiming  the
grievance  issues [were] non-arbitrable and stating its intention
to  take  the matter to superior court for a declaratory judgment
that outsourcing was not arbitrable.
          In  response, the CEA filed suit to force the  District
to   participate  in  the  grievance  proceeding,  including  the
arbitration  hearing . . . scheduled for October 25,  2006.   The
CEA  also alleged that state law, AS 14.14.060(f), prohibits  the
outsourcing  of  school  district custodial  work  and  sought  a
declaratory  judgment to that effect.  The  District  denied  the
CEAs  allegations  and  counterclaimed,  asking  for  [a]n  order
          declaring as a matter of law that the grievance is based on a
managerial  decision that is not a matter for  arbitration  under
the  CBA.  The District later moved for declaratory judgment:  in
its memorandum in support of declaratory judgment, it argued that
the  CBA  did  not  include an agreement to  arbitrate  decisions
related to outsourcing and that such decisions were not a  matter
of  mandatory bargaining under Alaska law.  In its opposition  to
the  Districts motion and cross-motion for declaratory  judgment,
the  CEA stressed [t]he presumption in favor of arbitration  that
has been cited with favor by the Alaska Supreme Court on numerous
occasions.  It argued that the grievance clause of the collective
bargaining  agreement  should  be interpreted  to  encompass  the
decision by the District to outsource custodial services.   There
were further replies and responses by each party.
          On  October  24, 2006, Superior Court Judge Beverly  W.
Cutler  decided  in favor of the District as  a  matter  of  law,
treating  the  parties  filings as motions for  summary  judgment
because  the  parties had stipulated that there  are  no  genuine
issues  of  material fact in dispute.  The court  also  concluded
that  AS  14.14.060(f) does not prohibit the  school  board  from
privatizing  its custodial services.  Accordingly,  the  superior
court declined to grant the declaration sought by the CEA.
     D.     The  Superior  Courts  Decision  and  the  Motion  To
Reconsider
          The  superior  courts memorandum of  decision  did  not
attempt  to  address each and every point raised in  the  parties
briefing.  After ruling that the question of arbitrability was  a
question  for the courts to resolve, the superior court  declared
it was persuaded by the Districts reasoning.  The court said that
the  grievance clause of the CBA left no doubt that  it  was  not
intended  to  apply to disputes over decisions to  privatize  the
custodial   workforce.   The  court  in   particular   found   it
implausible that the decision to outsource could be considered  a
dispute  about  the conditions under which employees  work.   The
court  stated  that [t]he plain language of the clause  indicates
that  the  parties designed it to address grievances by employees
related  to  unfair  treatment by the District  relating  to  the
wages, hours and conditions of employment.  It concluded that the
CEAs  interpretation of the contract was overbroad and found  the
power to outsource was within the Districts overarching power  to
manage  the economical well-being of the boroughs school  system.
Accordingly, the superior court granted the Districts request  to
vacate the scheduled October 26 arbitration.
          The  CEA filed a motion to reconsider, arguing that the
court  failed  to  give  weight to the presumption  in  favor  of
arbitrability, that it too narrowly interpreted the CBA, and that
it  ignored  the  bargaining history between  the  parties.   The
superior court denied the motion for reconsideration.
          The CEA appeals.
III. STANDARD OF REVIEW
          The  question  of whether an issue is arbitrable  is  a
question of law subject to de novo review.2  We adopt the rule of
law  that  is most persuasive in light of precedent, reason,  and
policy.3  We will affirm a lower courts grant of summary judgment
          if there are no genuine issues of material fact and the movant is
entitled to judgment as a matter of law.4  We draw all reasonable
inferences in favor of the non-moving party.5
IV.  DISCUSSION
     A.   The Superior Courts Grant of Summary Judgment
          In  its  Memorandum  of Decision on  Cross-Motions  for
Summary  Judgment,  the superior court wrote that  [t]he  parties
have stipulated that there are no genuine issues of material fact
in  dispute and that after careful consideration it appears  that
the District is entitled to judgment as a matter of law.  We have
been  unable  to find a stipulation in the record to  the  effect
that there are no genuine issues of material fact.6  The superior
court, however, in its Order Denying Reconsideration, stated that
[t]he  court  notes  that the parties stipulated  there  were  no
genuine  issues  of  material  fact by  filing  their  respective
motions for summary judgment.
          If  the  superior  court assumed  that  there  were  no
genuine  issues  of  material  fact because  both  parties  filed
respective motions for summary judgment, this assumption was  not
necessarily correct.  Each movant could believe that if  the  law
it  advocated were accepted there would be no issues of  material
fact  standing in the way of a favorable judgment.  At  the  same
time,  each  could  believe  that if  the  law  were  not  as  it
advocated, the opponent would not be entitled to summary judgment
because  of  the existence of material facts.  Although  the  CEA
does  not  explicitly make this point, it asserts that there  are
facts  (especially those relating to bargaining history) that  it
believes  the  court should have considered in its  ruling.   The
District, in its brief, disputes the significance and weight that
should be accorded to the facts which the CEA cites.
          The superior court also remarked in its reconsideration
order  that  there  are no genuine issues of material  fact  with
regard  to  the  purely legal question of whether  the  grievance
clause   of   the  parties  CBA  contemplates  a   dispute   over
outsourcing.   This  statement provides a surer  ground  for  the
courts  grant of summary judgment.  In this opinion we  too  deal
solely  with  the purely legal question of whether the  Districts
decision to outsource is arbitrable as a matter of law.
     B.   The Presumption in Favor of Arbitrability
          The   CEA   stresses  the  presumption  in   favor   of
arbitrability   in  its  briefs.   The  CEA  writes   that   this
presumption  means  that the burden of  proof  is  on  the  party
seeking to avoid arbitration and that the superior court erred in
not  resolving its doubts about whether the issue was  arbitrable
in  favor of arbitration.  However, the District replies that the
CEA  has  misread  the presumption: it is not  merely  a  blanket
presumption  in  favor  of  arbitration  come  what  may,  but  a
presumption that only applies when the contract that provides for
arbitration  is ambiguous.  The District avers that the  contract
in  question in this case leaves no doubt that outsourcing is not
a matter for arbitration.
          We  have ruled that there is a presumption in favor  of
arbitrability.   In University of Alaska v. Modern  Construction,
Inc.,  we noted that the common law and statutes of Alaska evince
          a strong public policy in favor of arbitration.7  In the same
case, we observed that this presumption represented a change from
an  earlier  attitude  that was mainly hostile  [to  arbitration]
until  a  change  in  judicial  philosophy  and  the  advent   of
commercial arbitration statutes combined to change public  policy
on the desirability of arbitration.8  As a result of the shift in
policy,  we  held in Modern Construction that ambiguous  contract
terms  should be construed in favor of arbitrability  where  such
construction  is  not obviously contrary to the parties  intent.9
We  have  also endorsed the United States Supreme Courts standard
that [a]n 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 to an interpretation  that
covers  the  dispute.   Doubts should be  resolved  in  favor  of
coverage.10   As we summed up the presumption in Ahtna,  Inc.  v.
Ebasco  Constructors,  Inc.,  [a]ny  ambiguity  with  regard   to
arbitrability is to be construed in favor of arbitration.11
          But the presumption in favor of arbitration is limited.
Arbitration is a creature of contract, and if there are terms  in
a  contract that either exclude arbitration or indicate  that  an
issue  should not be subject to arbitration, then requiring  that
the  matter  be  sent to arbitration would be inappropriate.   As
this court put it in Lexington Marketing Group v. Goldbelt Eagle,
LLC,  [b]ecause arbitration is a matter of contract, parties  can
only be compelled to arbitrate a matter where they have agreed to
do  so.12   Accordingly, if a dispute is not, under  a  plausible
interpretation,  covered  under  the  arbitration  clause  of   a
collective  bargaining  agreement, it should  not  be  arbitrated
because  a party cannot be required to submit to arbitration  any
dispute which he had not agreed so to submit.13
          As   this  discussion  implies,  arbitrability   is   a
threshold  question  for the court, not  the  arbitrator.14   One
reason  for  this division of authority is [b]ecause  arbitrators
have  such broad discretion, it is often problematic for them  to
decide  their own jurisdiction, for if they are wrong, there  may
be  essentially no review.  This is so because the superior court
reviews  an arbitrators decision under a standard giving  extreme
deference to the arbitrator.15  A court should determine  that  a
claim  is  arbitrable,  if,  as  stated  above,  a  plausible  or
reasonably  arguable  case  for  arbitrability  has  been   made.
Conversely,  if  there  are no plausible or  reasonably  arguable
grounds  supporting arbitrability, it is the duty of a  court  to
decline to order arbitration.
     C.   Interpreting the Grievance Clause
          1.   Outsourcing  may  be an event or  condition  which
               affects  the  conditions  or  circumstances  under
               which an employee works.
               
          Under  the CBA only grievances may be arbitrated.   The
grievance clause defines grievance as
          a claim by an employee based upon an event or
          condition  which  affects the  conditions  or
          circumstances  under which an employee  works
          caused  by  misinterpretation or  inequitable
          application    of   District   policies    or
          procedures  on  personnel  matters   directly
          pertaining    to    these    conditions    or
          circumstances,  and/or  the  terms  of   this
          Agreement and amendments thereof.
          
          The  superior court determined that the CEAs claim  was
not  arbitrable  because  outsourcing  could  not  plausibly   be
characterized  as  an  event  or  condition  which  affects   the
  condition and circumstance under which an employee  works.   In
the  courts  words, [t]he plain language of the clause  indicates
that  the  parties designed it to address grievances by employees
related  to  unfair  treatment by the District  relating  to  the
wages, hours and conditions of employment.
          We  are  not  so  sure  that this reading  is  correct.
Outsourcing,  which  in this case involved laying  off  custodial
workers  in  order to replace them with services  provided  by  a
contractor,  is plausibly an event that affects the circumstances
under  which employees work.  When a custodial employees  job  is
outsourced, the conditions and circumstances under which he works
are affected because the worker is no longer employed.  Something
may  affect  the  conditions  or  circumstances  under  which  an
employee  works without itself being a condition or  circumstance
under which the employee works.16
          We   therefore  decline  to  rule  that  the  Districts
decision  to  outsource is not arbitrable  because  it  does  not
affect  the  conditions  or circumstances under  which  employees
work.
          2.   The  Districts  decision to outsource  was  not  a
               misinterpretation or inequitable application of  a
               term of the agreement.
               
          The  question  presented  is  whether  the  arbitration
clause in the CBA between the District and the CEA can reasonably
be  interpreted in such a way that allows the Districts  decision
to  be  arbitrated.  The grievance clause permits the arbitration
of claims based on an event or condition affecting the conditions
or circumstances under which an employee works in two situations:
first,  where  those  events  or  conditions  are  caused  by   a
misinterpretation or inequitable application of District policies
and  procedures on personnel matters, and second, where they  are
caused  by a misinterpretation or inequitable application of  the
terms  of  the CBA.  We conclude that the CEAs alleged  grievance
does not fit either of these situations.
          We address first the possibility that the CEAs claim is
based   on   the   Districts  misinterpretation  or   inequitable
application of the terms of the agreement.  The CEA points to  no
term  in  the  contract that the District has  misinterpreted  or
inequitably applied.  And indeed it is hard to see how it  could.
There  is  no  clause in the CBA discussing outsourcing,  nor  is
there a clause which specifies the rights of management, both  of
which  would  be  plausible candidates for  misinterpretation  or
inequitable application.17
          The  CEAs  argument about a possible oral side contract
          between the CEA and the District regarding outsourcing is
unavailing.   Alaska Statute 23.40.210(a), a  subsection  of  the
Public  Employment Relations Act (PERA), requires that collective
bargaining  agreements be in writing.18  We think the  subsection
acts as a kind of specialized statute of frauds, under which oral
agreements  are  not  permitted.  Thus,  if  there  was  an  oral
agreement   between  the  parties  it  would  be  invalid   under
subsection .210(a).
          To the extent subsection .210(a) may be seen instead as
a  sort of statutory parol evidence rule, it could be argued that
evidence of an oral agreement regarding outsourcing could be used
to  interpret  ambiguous  terms of the CBA  that  are  reasonably
susceptible to an interpretation that outsourcing is prohibited.19
Oral agreements can be so used with respect to integrated written
contracts that are subject to the parol evidence rule.20  But  no
benefit to the CEA is gained from this possibility, because there
are no clauses in the CBA that even hint at a ban on outsourcing.
          The  District has referred us to a case which  in  some
respects  resembles  the present one.  In Local  Union  No.  483,
International Brotherhood of Boilermakers v. Shell Oil  Co.,  the
district court refused to require arbitration of complaints  that
arose when an employer decided to contract out work on a refinery
renovation project.21  Under the collective bargaining  agreement
arbitration  was  limited  to  complaints  arising  out  of   the
interpretation or application of the agreement.22   The  district
court  found  that the agreement did not prohibit  or  limit  the
practice  of  contracting  out.23  On appeal  the  circuit  court
affirmed, stating with reference both to a prior case24  and  the
case before it:
          [F]undamentally the question  decided  there,
          and  here,  is  that  where  arbitration   is
          limited   in  the  bargaining  agreement   to
          questions   involving  the  application   and
          interpretation  of  the  agreement,  and  the
          agreement does not limit the freedom  of  the
          employer to contract out work, a court should
          not compel arbitration.[25]
          
          As  did  the court in Local Union No. 483, we  conclude
that  arbitration may not be compelled here under the portion  of
the grievance clause that permits arbitration of claims caused by
the  misinterpretation or misapplication of the CBA  because  the
CBA  does  not  forbid or limit outsourcing.  The dissent  offers
several  other  federal circuit opinions that are said  to  reach
contrary results.26  We believe that these cases mainly represent
differences  in how settled principles should be applied  because
most  of  them advert to the need for a threshold finding  as  to
whether  a particular grievance raises a question concerning  the
interpretation of the collective bargaining agreement.27  This is
not  to  say  that  all federal labor law cases  decided  by  the
circuit courts are necessarily consistent either in principle  or
in spirit with our opinion in the present case.28  But our opinion
is consistent with the United States Supreme Court case relied on
by the dissent, AT&T Technologies, Inc. v. Communications Workers
          of America.29
          In  AT&T  the collective bargaining agreement  provided
that  differences  arising with respect to the interpretation  of
this  contract  or  the  performance of any obligation  hereunder
would  be  arbitrated  but  expressly excluded  from  arbitration
certain  management  prerogatives.30  One article  provided  that
subject  to the limitations contained in the provisions  of  this
contract,  but  otherwise not subject to the  provisions  of  the
arbitration  clause, the employer could exercise such  management
functions as hiring, placing, and terminating employees.31  Still
another section, Article 20, provided for layoffs [w]hen lack  of
work necessitates layoff.32  The employer laid off its installers
at  a  particular  location  and the  union  sought  arbitration,
claiming  that because there was no lack of work at the  location
the  layoffs  would  violate Article 20.33   The  district  court
ordered arbitration, concluding that the unions interpretation of
Article 20 was at least arguable. 34  The circuit court affirmed,
noting that it understood the district court to have ordered  the
arbitrator to decide the threshold issue of arbitrability.35   On
certiorari, the United States Supreme Court reversed.36
          The   Supreme   Court  began  with   familiar   general
principles: arbitration is a matter of contract and only disputes
that  the parties have agreed to submit to arbitration should  be
arbitrated;  questions of arbitrability are for  the  courts;  in
deciding  arbitrability courts should not rule on the  merits  of
the  underlying controversy; and there is a presumption in  favor
of  arbitrability.37  The Court then turned to the policy reasons
underlying the need for courts to determine arbitrability:
          The  willingness  of parties  to  enter  into
          agreements  that provide for  arbitration  of
          specified   disputes  would  be   drastically
          reduced,  however, if a labor arbitrator  had
          the  power  to determine his own jurisdiction
          .  .  . .  Were this the applicable rule,  an
          arbitrator   would  not  be  constrained   to
          resolve  only those disputes that the parties
          have   agreed   in  advance  to   settle   by
          arbitration, but, instead, would be empowered
          to  impose  obligations outside the  contract
          limited   only   by  his  understanding   and
          conscience.[38]
          
Based  on  these  policy reasons the Court found that  the  lower
courts  had  erred  in ordering the parties to arbitrate  without
first determining arbitrability:
          It  is  the  courts  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.   If  the
          court   determines  that  the  agreement   so
          provides,  then it is for the  arbitrator  to
          determine the relative merits of the  parties
          substantive interpretations of the agreement.
          It  was for the court, not the arbitrator, to
          decide  in  the  first instance  whether  the
          dispute    was   to   be   resolved   through
          arbitration.[39]
          
The Court stated that the issue on remand
          is  whether, because of express exclusion  or
          other forceful evidence, the dispute over the
          interpretation of Article 20 of the contract,
          the  layoff provision, is not subject to  the
          arbitration  clause.  That issue should  have
          been  decided  by  the  District  Court   and
          reviewed  by the Court of Appeals; it  should
          not have been referred to the arbitrator.[40]
          
          As  in  AT&T,  it is the duty of the judiciary  in  the
present  case  to  interpret the CBA  to  determine  whether  the
parties intended to arbitrate the issue of outsourcing.  We  have
concluded  that they did not, for the reasons already  expressed.
In   addition,  PERAs  limited  provision  for  binding  interest
arbitration   arbitration  that  resolves  impasses  in  contract
formation   provides  further forceful  evidence  that  requiring
arbitration here would be improper.
          PERA  governs  collective bargaining between  units  of
state  and  local  government and their employees.41   Subsection
.200(a) of the act defines three classes of employees: (1)  those
whose services are indispensable, (2) those whose services may be
briefly  suspended, and (3) those whose services may be suspended
for  long  periods  of time without adverse effects.42   The  CEA
represents  employees of the third class, (a)(3).  PERA  provides
that (a)(1) employees may not strike, but they may compel binding
arbitration  of  disputes  that arise in  negotiating  collective
bargaining  agreement  terms.  Employees in  classes  (a)(2)  and
(a)(3) may strike.43  In Alaska Public Employees Assn v. City  of
Fairbanks44 we explained that (a)(2) and (a)(3) employees lack the
ability to compel binding interest arbitration:
          So,  although the legislature has taken  from
          the  (a)(1) employees their right to  strike,
          it   has  given,  as  a  quid  pro  quo,  the
          statutory   right   to   compulsory   binding
          arbitration.  Since  the  class  (a)(2)   and
          (a)(3)  employees have the right  to  strike,
          they do not have this arbitration right.[45]
          
          Since  interest  arbitration for  (a)(3)  employees  is
distinctly  not  state policy, care must be taken to  distinguish
cases  where  grievances are sought to be arbitrated  from  cases
where   the  arbitration  objective  is  to  amend  a  collective
bargaining  contract by adding a provision that it cannot  fairly
be said to contain.  Because the CBA simply does not speak to the
subject of outsourcing, the CEAs complaint is of the latter type.
          In  summary, there are a number of forceful  indicators
pointing  to the conclusion that the question whether outsourcing
is  prohibited by the CBA should not be arbitrated.  One  is,  as
indicated   above,  because  interest  arbitration   for   (a)(3)
          employees is not provided by PERA.  Two others are contained in
the collective bargaining agreement itself.  Clause (4)(b) of the
arbitration  clause provides that the arbitrator can add  nothing
to, nor subtract anything from, the agreement between the parties
or  any  policy of the school board.  The agreement  goes  on  to
state  that  the written collective bargaining agreement  is  the
whole  of the parties agreement, bargaining on new terms may  not
be  compelled  during  the term of the  agreement,  and  no  side
agreements survive.  Article XIII.B provides:
               It  is  agreed that this Labor Agreement
          contains  the  full  and  complete  agreement
          between  the  parties on  all  subjects  upon
          which  the parties did bargain or could  have
          bargained.  Neither party shall be  required,
          during   the  term  of  this  Agreement,   to
          negotiate  or  bargain upon any other  issue.
          This    Agreement   terminates   all    prior
          agreements and understandings, and  concludes
          collective bargaining for this Agreement.
          
Finally,  PERA  itself  makes  clear that  collective  bargaining
agreements  must be in writing, meaning that when we address  the
question  whether a dispute plausibly involves the interpretation
or  application of a term of an agreement, we look to the written
agreement.  Here, the written agreement is silent on the  subject
of outsourcing.
          3.   The  Districts  decision to outsource  was  not  a
               misinterpretation or inequitable application of  a
               District policy or procedure.
               
          The  CEA  points out that the language of the grievance
clause is broader than one that merely allows grievances based on
a violation or misinterpretation of specific terms of a contract.46
Under  the  CBA a claim based on an event or condition  affecting
conditions   of   employment  caused  by   misinterpretation   or
inequitable  application of District policies  or  procedures  on
personnel  matters is grievable and arbitrable.  The CEA  argues,
albeit  briefly and in a conclusory fashion, that  the  Districts
decision  to  outsource  is a policy that  is  being  inequitably
applied  to the workers who have lost their bargaining unit  jobs
as  a result of outsourcing.47  The CEAs argument is not that the
outsourcing  policy  is  inequitable on  a  case-specific  basis;
rather,   the   CEA   argues  that  outsourcing   is   inherently
inequitable.  But this amounts to an attack on the policy itself.
The  CBA makes clear that the merits of any policy of the  school
board may not be altered by the arbitrator.  Clause IV(B) of  the
grievance  procedure of the CBA provides:  The  arbitrator  shall
limit  himself  to the issue submitted to him and shall  consider
nothing else.  He can add nothing to, nor subtract anything  from
the  Agreement  between the parties or any policy of  the  School
Board.   The same conclusion is inherent in the grievance  clause
itself.   Only misinterpretations or inequitable applications  of
policies  may be grieved, not the policies themselves.  Thus  the
CEAs  challenge  to  the outsourcing policy  is  not  subject  to
          arbitration.48
          If  the  Districts  outsourcing policy  were  allegedly
applied inequitably, as for example by eliminating only the  jobs
of politically disfavored employees, a claim so charging would be
arbitrable.  But to the extent job loss is merely the  result  of
the  outsourcing policy, no arbitrable claim is presented because
permitting  arbitration  for job losses  that  are  the  inherent
result of an outsourcing policy would be to allow a challenge  to
the  existence of the policy itself.  This is not permitted under
the CBA.
          For  the above reasons we conclude that the outsourcing
question  presented  by the CEA is not arbitrable.   To  use  the
language employed by the United States Supreme Court in AT&T,  to
leave  that  question  to  the arbitrator  under  the  facts  and
circumstances of this case would be to empower the arbitrator  to
impose  obligations  outside the contract  limited  only  by  his
understanding and conscience.49
     D.   There Is No Statutory Bar Against Outsourcing Custodial
Work.
          The  CEA  sought a declaration from the superior  court
that  AS  14.14.060(f)  prohibits the District  from  outsourcing
custodial services.  The particular language relied on by the CEA
is  contained  in  the  first sentence of  subsection  (f):   The
borough school board shall provide custodial services and routine
maintenance  for school buildings and shall appoint,  compensate,
and  otherwise  control personnel for these  purposes.   The  CEA
interprets  this statute to require school districts  to  provide
custodial  services  through employees  of  the  school  district
rather  than by contracting for such services through independent
contractors.
          The   District  argued  in  the  superior  court   that
outsourcing of custodial services is consistent with the statute:
The  statute  does  not mandate how the District  can  or  should
provide the custodial services; it does not say the District must
directly  employ  members  of CEA and that  it  cannot  hire  the
services  to  be accomplished by non-employees.50   The  superior
court adopted the Districts reasoning.
          The  language  of  the sentence in  subsection  .060(f)
relied on by the CEA is ambiguous with respect to whether  it  is
meant  to  limit school districts to providing custodial services
through  school  district employees.  If there  were  legislative
history  indicating  such  an objective  we  might  construe  the
statute  as  prohibiting the outsourcing of  custodial  services.
But there is no such evidence.
          The language of AS 14.14.060(f) on which the CEA relies
is part of a statute originally enacted in 1972.51  The objective
of  the  statute was to provide for the allocation  of  functions
between borough school boards and borough assemblies.52  The first
sentence of AS 14.14.060(f) taken in the context of the  rest  of
the language of that subsection, and the context of the whole  of
AS  14.14.060,  suggests that its objective was  merely  to  make
clear  that borough school boards rather than  borough assemblies
would  have  the responsibility to provide, pay for, and  control
the provision of custodial services for school buildings.
          We  therefore agree with the rationale accepted by  the
superior court and affirm the superior courts refusal to issue  a
declaratory judgment declaring that the outsourcing of  custodial
services is prohibited by AS 14.14.060(f).53
V.   CONCLUSION
          For  the  above reasons, the decision of  the  superior
court is AFFIRMED.
FABE,   Chief  Justice,  with  whom  CARPENETI,  Justice,  joins,
dissenting.
          The   courts  decision  today  rests  entirely  on  its
determination that, contrary to the contentions of the Classified
Employees  Association  (CEA), the parties collective  bargaining
agreement  (CBA)  cannot plausibly be read to prohibit  or  limit
outsourcing  by  the Matanuska-Susitna Borough  School  District.
Because   I   believe   that  the  determination   whether   CEAs
interpretation  of the CBA is plausible should  be  made  by  the
arbitrator, not by the court, I disagree with the court and would
reverse the superior courts decision not to compel arbitration.
          CEA  claims  that  the  Districts outsourcing  decision
violated  the parties CBA.  Under the CBAs grievance  arbitration
clause,   employee   grievances  alleging  misinterpretation   or
inequitable  application of the terms of the CBA are arbitrable.1
CEAs  claim  that  outsourcing violates the  terms  of  the  CBA,
whether   meritorious  or  wildly  improbable,  is  a   grievance
regarding  the proper interpretation of the CBA and is  thus  the
type of grievance that the parties have agreed to arbitrate.
          The court concludes otherwise first by determining that
the CBA cannot reasonably be interpreted to prohibit outsourcing,
then by reasoning that therefore CEAs complaint about outsourcing
does  not actually involve interpretation of the CBA, and finally
by   concluding  that  CEAs  complaint  is  thus   not   actually
encompassed  by  the arbitration clause.2  But in  doing  so  the
court directly hinges its decision regarding the arbitrability of
CEAs claim on its own view of the merits of CEAs claim  something
that  is  not  generally  appropriate in  the  context  of  labor
arbitration.
          The  court  is correct that the threshold  question  of
whether a claim is arbitrable is one for the courts, not for  the
arbitrator.3   A court confronting this question must  determine,
keeping  in  mind  the  presumption in favor  of  arbitrability,4
whether   there  is  a  plausible  interpretation  of  the   CBAs
arbitration clause (taking into account any exclusionary clauses)
that  covers  the type of claim presented.  But in doing  so  the
court should not examine the plausibility of the claim itself.
          Where,  as here, the CBAs arbitration clause explicitly
covers  all  claims  alleging  misinterpretation  or  inequitable
application of the terms of the CBA, and there is no exclusionary
clause, the courts role is limited to deciding whether the claim,
on  its face, concerns the proper interpretation of the CBA.  The
court  concludes  here that CEAs grievance does not  concern  the
proper interpretation of the CBA.5  But CEA contends that the CBA
prohibits  outsourcing  asserting, among other things,  that  the
CBAs silence regarding outsourcing means that outsourcing is  not
permitted.  While perhaps practically or legally incorrect,  this
claim inescapably involves interpretation of the CBA.  Though the
court  finds  CEAs  interpretation of the CBA  untenable,  it  is
nonetheless  an interpretation of the CBA.  And choosing  between
competing  interpretations of the CBA is precisely the  task  the
parties have agreed to put in the hands of the arbitrator.
          Because  the  instant  case does  not  fall  under  the
National Labor Relations Act,6 we need not necessarily adopt  the
          reasoning of federal labor law cases; however, as the court
seemingly  acknowledges,7 such cases are nonetheless instructive.
In  AT  &  T  Technologies,  Inc. v.  Communications  Workers  of
America,  the United States Supreme Court reviewed and reaffirmed
various basic legal principles pertaining to the arbitrability of
labor  disputes, including that in deciding whether  the  parties
have  agreed  to submit a particular grievance to arbitration,  a
court  is  not to rule on the potential merits of the  underlying
claims  and  that [w]hether arguable or not, indeed  even  if  it
appears  to the court to be frivolous, the unions claim that  the
employer has violated the collective-bargaining agreement  is  to
be  decided, not by the court asked to order arbitration, but  as
the parties have agreed, by the arbitrator.8
          The  court  notes that CEA points to  no  term  in  the
contract to support its position and that furthermore there is no
clause  in  the CBA discussing outsourcing.9  But the  fact  that
CEAs claim that outsourcing violates the CBA may not be plausible
and  is not necessarily supported by any specific language in the
CBA  does  not  mean  that  it is not  arbitrable.   In  Building
Materials & Construction Teamsters Local No. 216 v. Granite  Rock
Co.,  a  case  that we have recently cited,10 the  Ninth  Circuit
found  that  a unions claim that an employer violated an  implied
term  of  a  CBA was arbitrable under an arbitration clause  that
covered  only  disputes  arising under  the  CBA,  regardless  of
whether  the  unions  claim was plausible  or  supported  by  any
language in the CBA.11  Though the employer argued that  the  CBA
could  not be reasonably interpreted to contain the implied  term
that  provided the basis for the unions claim, the Ninth  Circuit
reasoned  that [t]he district court was not required to determine
whether  the  unions claim rested on a plausible reading  of  the
agreement12  and that once the court determines that the  parties
dispute  concerns the proper interpretation of the agreement,  it
has no business weighing the merits of the grievance, considering
whether  there  is equity in a particular claim,  or  determining
whether  there  is particular language in the written  instrument
which will support the claim. 13
          Similarly,  in International Brotherhood of  Electrical
Workers, Local 1228 v. WNEV-TV, New England Television Corp., the
First Circuit concluded that a unions claim  maintaining that  an
employer  had violated the parties CBA by eliminating an employee
lounge    was   arbitrable  under  an  arbitration  clause   that
encompassed  all  complaints, disputes or  questions  as  to  the
interpretation,  application or performance of  the  CBA.14   The
First  Circuit came to this conclusion despite the fact that  the
trial  court found that there was no language in the CBA creating
a  duty  to  provide or maintain such a lounge.15  The  court  in
WNEV-TV recognized that
          [w]hat  one  man considers frivolous  another
          may   find  meritorious,  and  it  is  common
          knowledge  in  industrial  relations  circles
          that grievance arbitration often serves as  a
          safety   valve  for  troublesome  complaints.
          Under these circumstances it seems proper  to
          read  the  typical arbitration  clause  as  a
          promise to arbitrate every claim, meritorious
          or  frivolous,  which the  complainant  bases
          upon  the contract. The objection that equity
          will not order a party to do a useless act is
          outweighed   by   the  cathartic   value   of
          arbitrating even a frivolous grievance and by
          the    dangers    of    excessive    judicial
          intervention.[16]
          
          The  Second  Circuit  in Procter &  Gamble  Independent
Union  of Port Ivory, N.Y. v. Procter & Gamble Manufacturing  Co.
rejected   a  companys  contention,  similar  to  the   Districts
contention  in  this  case, that arbitration  should  be  refused
because  none of the alleged grievances were specifically covered
by  any particular provision of the agreement and the arbitration
clause  bound it only to the arbitration of grievances having  to
do with the interpretation or application of any provision of the
CBA.17  The Second Circuit held that the unions grievances, which
included   a   complaint  about  outsourcing,  were   arbitrable,
reasoning  that  the  interpretation  or  construction   of   the
agreement  by  the  Board of Arbitration is the  very  thing  the
parties  bargained  for.18  The Procter  &  Gamble  Manufacturing
court  did not examine whether or not the unions claims had merit
or were grounded in any specific language in the CBA.
          Similarly, in International Union of Electrical,  Radio
&  Machine  Workers v. General Electric Co., the  Second  Circuit
held that a unions complaint about an employers subcontracting of
work  was  arbitrable  under an arbitration  clause  encompassing
disputes  about the interpretation or application of a  provision
of the CBA, despite the employers argument that the CBA contained
no  express provisions regarding subcontracting and the fact that
the   union   had  unsuccessfully  attempted  to  negotiate   for
provisions   limiting  subcontracting.19   The   Second   Circuit
remarked:
          What the company has done . . . is to attempt
          to  persuade us to decide that the  grievance
          is  not  arbitrable because the grievance  is
          groundless   inasmuch  as  [no]   substantive
          provision   of   the  collective   bargaining
          agreement, according to the company,  forbids
          or  restricts subcontracting.  But whether  a
          certain   brand   of   company   conduct   is
          prohibited  by  a provision of  a  collective
          bargaining  agreement  will  always  be   the
          ultimate question which the grievance  itself
          will present . . . .  For us to yield to  the
          urgings   of  the  company  and   decide   it
          ourselves  would be to ignore the  admonition
          contained  in  the Warrior & Gulf  case  that
          courts  should  not become entangled  in  the
          construction of the substantive provisions of
          a labor agreement.[20]
          
          As  the  court  points  out, the above-cited  cases  do
          indeed advert to the need for a threshold finding as to whether a
particular   grievance   raises   a   question   concerning   the
interpretation of the collective bargaining agreement.21  But the
court here goes beyond simply making a threshold determination as
to  whether  CEAs claim involves interpretation of the  CBA   the
court  examines  the  merits  of  CEAs  interpretation  and  then
concludes that because CEAs interpretation is not reasonable,  it
is  not actually an interpretation.  Such reasoning puts the cart
before  the  horse and thus is not in line with  the  predominant
federal approach.
          The court cites two Seventh Circuit cases in support of
its  decision: Local Union No. 483, International Brotherhood  of
Boilermakers  v. Shell Oil Co. and Independent Petroleum  Workers
of  America, Inc. v. American Oil Co.,22 on which Local Union No.
483  relies.23   Each of these cases held that where  a  CBA  was
silent  with regard to outsourcing, arbitration of an outsourcing
dispute  could not be compelled under an arbitration clause  that
limited    arbitration   to   questions    arising    from    CBA
interpretation.24   However, Local Union No. 483 and  Independent
Petroleum  Workers  appear  to  be outliers,  and  the  continued
validity of their approach has been questioned.25  Moreover,  the
court in Independent Petroleum Workers, on which Local Union  No.
483  relies,  held  that  the unions claims  were  foreclosed  by
collateral estoppel, making it unclear whether its discussion  of
their arbitrability was simply dicta.26
          Additionally,  in  both  Local  Union   No.   483   and
Independent  Petroleum  Workers  the  Seventh  Circuit   actually
considered  the  bargaining history between the  parties  in  the
course  of  concluding that the CBAs did not prohibit outsourcing
(and  thus  that  outsourcing  disputes  were  not  arbitrable)27
something  the  court here seems unwilling  to  do  despite  CEAs
entreaties.28  And in both of these cases the bargaining  history
between the parties was the opposite of the bargaining history in
the  instant  case   that is, in both of these cases  the  unions
repeatedly  tried  and  failed to negotiate  for  CBA  provisions
specifically  prohibiting outsourcing,29 whereas in  the  instant
case  there  is  evidence that the employer tried and  failed  to
negotiate    for    CBA   provisions   specifically    permitting
outsourcing.30  Accordingly, to the extent that these  two  cases
relied  on  bargaining  history to  interpret  the  CBAs  silence
regarding outsourcing, they are importantly distinguishable  from
the instant case.31
          Coupled  with  the  strong  presumption  in  favor   of
arbitrability,  which  is  accurately set  forth  in  the  courts
opinion,32  the many cases admonishing against delving  into  the
merits  of a unions claim in order to determine its arbitrability
suggest  that the court has chosen to take a distinctly  minority
approach  by  resting its decision on a preliminary determination
that CEAs interpretation of the CBA is implausible.
          The court attempts to bolster its decision to take this
minority  approach  by  pointing out that the  Public  Employment
Relations Act (PERA)33 does not give CEAs employees the power  to
compel  binding  interest arbitration.  But this  is  irrelevant.
CEA  seeks  only  grievance arbitration, which the  parties  have
          specifically contracted for, not interest arbitration.  CEA
claims  that  the  Districts  outsourcing  violates  the  parties
existing  CBA   it  does not seek to compel arbitration  for  the
purpose of renegotiating the terms of the CBA.  The court  thinks
that  CEAs  interpretation of the CBA  is  implausible  and  thus
characterizes   CEAs   claim  not  as   a   dispute   about   the
interpretation of the CBA but as an effort to amend a  collective
bargaining  contract by adding a provision that it cannot  fairly
be  said to contain.34  But the fact that CEAs grievance involves
a  potentially implausible interpretation of a CBA does not  mean
that  its  request  for  grievance  arbitration  under  the  CBAs
arbitration  clause should be viewed as if it is  a  request  for
interest  arbitration  under PERA.  And  moreover,  as  discussed
above, the question whether or not CEAs interpretation of the CBA
is plausible is a question for the arbitrator, not for the courts
our  decision  regarding the arbitrability of CEAs  claim  simply
should not turn on our assessment of its relative merits.
          As  the  court  points out, under the CBAs  arbitration
clause  the arbitrator can add nothing to, nor subtract  anything
from  the  CBA.35   Accordingly, an  arbitrator  evaluating  CEAs
outsourcing  grievance  would  be  limited  to  examination   and
interpretation of the parties existing CBA and would not have the
power to modify the CBA.  Thus limited, an arbitrator might  well
conclude, as the court has concluded, that CEAs interpretation of
the CBA is implausible and that the CBA simply does not speak  to
the  subject of outsourcing.36  But that determination  would  be
one  for  the  arbitrator to make because the  interpretation  or
construction of the [CBA] by the [arbitrator] is the  very  thing
the parties bargained for.37
          Therefore, I respectfully dissent.
_______________________________
     1    The District disputes this assertion.

     2     Lexington Mktg. Group v. Goldbelt Eagle, LLC, 157 P.3d
470, 472 (Alaska 2007).

     3     Id.  (quoting  Guin  v. Ha, 591 P.2d  1281,  1284  n.6
(Alaska 1979)).

     4     Id.  (quoting  Alakayak v. British  Columbia  Packers,
Ltd., 48 P.3d 432, 447 (Alaska 2002).

     5    Id. (quoting Alakayak, 48 P.3d at 447).

     6    The District alludes to a stipulation in its brief, but
provides no citation to the record.

     7     522  P.2d 1132, 1138 (Alaska 1974) (citation omitted);
accord  Dept  of Pub. Safety v. Pub. Safety Employees  Assn,  732
P.2d  1090, 1093 (Alaska 1987) (common law and statutes of Alaska
support presumption in favor of arbitration).

     8     Modern Construction, 522 P.2d at 1138 n.19 (collecting
earlier cases and scholarly articles).

     9    Id. at 1138; accord Lexington Mktg., 157 P.3d at 476.

     10    Ahtna, Inc. v. Ebasco Constructors, Inc., 894 P.2d 657,
662  n.7 (Alaska 1995) (quoting United Steelworkers v. Warrior  &
Gulf Navigation Co., 363 U.S. 574, 582-83 (1960)).

     11    894 P.2d at 662.

     12     157  P.3d 470, 477 (Alaska 2007) (citing AT&T Techs.,
Inc. v. Commcns Workers of Am., 475 U.S. 643, 648 (1986)).

     13     AT&T Techs., 475 U.S. at 648 (quoting Warrior &  Gulf
Navigation, 363 U.S. at 582); accord Lexington Mktg., 157 P.3d at
477.

     14    See State v. Pub. Safety Employees Assn, 798 P.2d 1281,
1285  (Alaska 1990).  An exception to this rule applies when  the
contract clearly provides that the determination of arbitrability
is  for  the arbitrator.  Id.  The CBA in this case does  not  so
provide.   Where  a petition to enforce a CBA is filed  with  the
Alaska  Labor  Relations Agency, the agency has  jurisdiction  to
decide  arbitrability, subject to judicial review.  See Fairbanks
Fire  Fighters  Assn, Local 1324 v. City of  Fairbanks,  48  P.3d
1165, 1169-70 (Alaska 2002).

     15     Fairbanks Fire Fighters Assn, Local 1324, 48 P.3d  at
1169.

     16     The District seems tacitly to accept this possibility
when  it  writes  in  its brief that, [i]n  fact,  the  Agreement
specifically  includes procedures for transfers,  demotions,  job
sharing,  layoff  and  rehire,  reductions  in  force  and  other
negotiated  subjects  affecting the conditions  or  circumstances
under which an employee works.   (Emphasis added.)

     17     As the CEA notes, [t]he agreement does not contain  a
clause which expressly vests the District with broad authority to
contract  for  services, nor does it reserve to the District  all
rights  not  specifically limited by the agreement; there  is  no
management rights clause.

     18     AS 23.40.210(a) provides in part: Upon the completion
of negotiations between an organization and a public employer, if
a  settlement is reached, the employer shall reduce it to writing
in the form of an agreement.

     19    Even without the statutory requirement that collective
bargaining  agreements  be in writing, the  parol  evidence  rule
would  apply to the integrated agreement before the  court.   See
Air  Line Pilots Assn v. Midwest Express Airlines, 279 F.3d  553,
557-58 (7th Cir. 2002) (parol evidence rule applies to collective
bargaining agreements).

     20     See  Alaska  Diversified Contractors, Inc.  v.  Lower
Kuskokwim Sch. Dist., 778 P.2d 581, 583-84 (Alaska 1989).

     21    369 F.2d 526, 527 (7th Cir. 1966).

     22    Id.

     23    Id.

     24     Indep. Petroleum Workers of Am., Inc. v. Am. Oil Co.,
324  F.2d 903, 906 (7th Cir. 1963) (holding that where collective
bargaining agreement is silent on employers right to contract out
work  arbitration  may not be compelled under arbitration  clause
limited   to   questions   arising  from   the   application   or
interpretation of the agreement), affd per curiam by  an  equally
divided court, 379 U.S. 130 (1964).

     25    Local Union No. 483, 369 F.2d at 528-29.

     26    Dissent, Slip Op. at 26-30.

     27     For  example,  in Building Materials  &  Construction
Teamsters, Local 216 v. Granite Rock Co., 851 F.2d 1190 (9th Cir.
1988),  the court stated that once the court determines that  the
parties  dispute  concerns  the  proper  interpretation  of   the
agreement,  it  has  no  business  weighing  the  merits  of  the
grievance.   Id. at 1194 (quoting United Steelworkers of  Am.  v.
Am.  Mfg. Co., 363 U.S. 564, 568 (1960)).  This statement is  not
inconsistent  with our decision because we have  determined  that
the parties dispute does not concern the proper interpretation of
the agreement.  Here, as we have noted, the CEA points to no term
in the contract that the District has misinterpreted.  Supra page
12.   Similarly,  in International Union of Electrical,  Radio  &
Machine  Workers v. General Electric Co., 332 F.2d 485  (2d  Cir.
1964), although the collective bargaining agreement contained  no
express provisions regarding outsourcing, the court observed that
the  union  had  claimed that the subcontracting  proposed  there
violated   several   provisions  of  the  collective   bargaining
agreement:   the union certainly called into question the  proper
interpretation  to  be  accorded  several  provisions   of   this
collective bargaining agreement.  Id. at 487-90.  In the  present
case  CEA  has  not,  by contrast, called to  our  attention  any
clauses  of  the  collective  bargaining  agreement  that   might
reasonably be interpreted to prohibit outsourcing.  Likewise,  in
International  Brotherhood of Electrical Workers, Local  1228  v.
WNEV-TV,  New  England Television Corp., 778 F.2d  46  (1st  Cir.
1985),  the  court observed:  Once the district  court  made  the
threshold finding that plaintiffs claims appear[ed] to create  an
issue  sufficiently  substantial  to  require  submission  to  an
arbitrator, its judicial function was at an end.  Id. at 48.   We
decide here that no sufficiently substantial issue concerning the
CBAs meaning has been presented.

     28    We do not agree that a claim becomes arbitrable merely
based  on a general allegation that a policy of a public employer
violates  the terms of a collective bargaining agreement  without
any plausible reference to the terms of the agreement, express or
implied,  said  to  be  violated.  Were  we  to  rule  otherwise,
virtually  any policy, even if clearly within the province  of  a
democratically elected board or assembly, could be  made  subject
to the jurisdiction of an appointed labor arbitrator merely as  a
matter of pleading.

     29    475 U.S. 643 (1986).

     30    Id. at 645.

     31    Id.

     32    Id.

     33    Id. at 645-46.

     34    Id. at 646-47.

     35    Id. at 647.

     36    Id. at 648.

     37    Id. at 648-50.

     38     Id.  at  651 (quoting Archibald Cox, Reflecting  Upon
Labor Arbitration, 72 Harv. L. Rev. 1482, 1509 (1959)).

     39    Id.

     40    Id. at 652.

     41     See  generally  AS  23.40.070 et  seq.   Because  the
District  is  a unit of local government, the CBA is governed  by
Alaska state law and not federal labor law.  See 29 U.S.C. 152(2)
(2000);  Casey v. City of Fairbanks, 670 P.2d 1133, 1138  (Alaska
1983).

     42    AS 23.40.200(a).

     43    AS 23.40.200(b)-(d).

     44    753 P.2d 725 (Alaska 1988).

     45    Id. at 727.

     46     The standard form of arbitration clause has been said
to  be  one  that provides for the arbitration of  any  disputes,
misunderstandings, differences or grievances arising between  the
parties as to the meaning, interpretation and application of .  .
.  this  agreement.  United Steelworkers of Am. v. Am. Mfg.  Co.,
363  U.S.  564,  571  (1960) (Brennan, J., concurring)  (emphasis
added).

     47    CEAs entire argument on this point in its initial brief
is as follows:

               The Superior Courts decision thus is not
          plausible.   Even if the grievance  does  not
          raise  a contractual question, which it does,
          certainly the Districts decision to eliminate
          bargaining  unit  jobs as  a  consequence  of
          outsourcing raises a policy question  whether
          the  District has inequitably affected  their
          economic  interests  and  the  conditions  or
          circumstances  under  which  employees  work.
          Since  the  clause at issue in this  case  is
          broad  and  far  reaching, encompassing  both
          alleged  violations  of  the  agreement   and
          inequitable   policy   decisions    affecting
          employee  working  conditions,  the  Superior
          Court erred in concluding that accepting CEAs
          argument   would   require   the   court   to
          unreasonably  interpret the language  in  the
          grievance clause.
          
CEA  adds  the following observation on this point in  its  reply
brief:   On  the  other  hand,  Article  XI  (A)(3)  [defining  a
grievance]  is readily capable of being interpreted  to  cover  a
dispute about an outsourcing policy decision that eliminated  the
jobs of 112 employees.

     48     The CEA also argues that the superior court erred  in
concluding  that  outsourcing was  not  a  mandatory  subject  of
bargaining.   In light of our decision in this case  we  have  no
need to address this question.

     49     AT&T Techs., Inc. v. Commcns Workers of Am., 475 U.S.
643, 651 (1986) (quoting Cox, supra note 38, at 1509).

     50    The District makes the same argument on appeal.

     51    Ch. 118,  8, SLA 1972.

     52    Thus the full text of AS 14.14.060(f) reads:

               The  borough school board shall  provide
          custodial  services  and routine  maintenance
          for   school  buildings  and  shall  appoint,
          compensate,  and otherwise control  personnel
          for  these  purposes.  The  borough  assembly
          through  the  borough  administrator,   shall
          provide  for  all  major rehabilitation,  all
          construction  and  major  repair  of   school
          buildings.  The recommendations of the school
          board shall be considered in carrying out the
          provisions of this section.
          
     53      Although  only  the  possible  application   of   AS
14.14.060(f) to outsourcing is at issue in the present  case,  we
note  that  in  Moore  v. State, Department of  Transportation  &
Public  Facilities,  875 P.2d 765 (Alaska  1994),  we  held  that
outsourcing was not categorically prohibited by the merit  system
provision in the Alaska Constitution, article XII, section 6,  or
by  the state statutes that were arguably applicable to the Moore
case.   Id.  at  770-71.  Noting the possibility that  abuses  of
privatization  might  occur, we observed  that  these  should  be
addressed  through  existing  contractual,  administrative,   and
judicial channels for case-by-case review of agency action.   Id.
at  773.  Moore is thus consistent with the conclusions we  reach
in  this  opinion that outsourcing is not prohibited by  law  and
inequitable applications of outsourcing are arbitrable on a case-
by-case basis.

1     The  CBAs  grievance arbitration clause is quoted  in  full
at Slip Op. at 11.

     2    Slip Op. at 12-20.

     3    Slip Op. at 10.

     4    Slip Op. at 8-10.

     5    Slip Op. at 15 n.27.

     6    See 29 U.S.C.  152(2) (2000).

7     See  Slip  Op. at 14-15 (citing Local Union No.  483,  Intl
Bhd.  of  Boilermakers v. Shell Oil Co., 369 F.2d 526  (7th  Cir.
1966)).

     8     475  U.S.  643,  649-50 (1986).  AT  &  T,  though  it
eloquently  summarizes  these  important  basic  principles,   is
factually distinguishable from the instant case in that  AT  &  T
involved  competing interpretations of an exclusionary clause  in
the  CBA  asserted by the employer to preclude arbitration  of  a
particular  dispute.   Id.  at  644-46.   Because  the  threshold
question  of  arbitrability must be decided  by  the  court,  the
AT  &  T  Court held that it was improper for the trial court  to
submit  to  the arbitrator the issue of the proper interpretation
of  the  CBAs arbitration and exclusionary clauses.  Id. at  651.
In this case, by contrast, it is not competing interpretations of
the CBAs arbitration clause or of an exclusionary clause that are
at  issue, but competing substantive interpretations of the  CBA.
Indeed,  the  AT  & T Court acknowledged that if the  arbitration
provisions were interpreted to cover the type of dispute at issue
it  would be for the arbitrator to determine the relative  merits
of the parties substantive interpretations of the agreement.  Id.

     9    Slip Op. at 12.

     10   Lexington Mktg. Group, Inc. v. Goldbelt Eagle, LLC, 157
P.3d 470 n.46 (Alaska 2007) (citing and quoting Granite Rock  for
the  proposition that [b]y providing that [a]ll disputes  arising
under  this agreement shall be resolved through arbitration,  the
parties  agreed  to  submit all grievances  to  arbitration,  not
merely  those  which  the  court will deem  meritorious   (second
alteration in original)).

     11   851 F.2d 1190, 1193-95 (9th Cir. 1988).

     12   Id. at 1194.

     13    Id.  (quoting United Steelworkers of Am. v.  Am.  Mfg.
Co., 363 U.S. 564, 568 (1960)).

     14   778 F.2d 46, 46-48 (1st Cir. 1985).

     15   Id. at 48.

16   Id.

     17   298 F.2d 644, 645 (2d Cir. 1962).

     18   Id. at 645-47.

     19   332 F.2d 485, 487-90 (2d Cir. 1964).

     20    Id.  at 489-90 (quoting United Steelworkers of Am.  v.
Warrior & Gulf Nav. Co., 363 U.S. 574, 585 (1960)).

21   Slip Op. at 15.

     22    Slip Op. at 14 (citing Local Union No. 483, Intl  Bhd.
of  Boilermakers v. Shell Oil Co., 369 F.2d 526 (7th Cir.  1966);
Indep.  Petroleum Workers of Am., Inc. v. Am. Oil Co.,  324  F.2d
903 (7th Cir. 1964), affd per curiam by an equally divided court,
379 U.S. 130 (1964)).

     23   369 F.2d at 528-29.

     24    Local  Union  No.  483, 369  F.2d  at  527-29;  Indep.
Petroleum Workers, 324 F.2d at 906-07.

     25    See Intl Bhd. of Elec. Workers, Local 21 v. Ill.  Bell
Tel.  Co.,  491  F.3d 685, 689-90 (7th Cir. 2007) (narrowing  and
limiting  Independent  Petroleum Workers,  stating  that  Supreme
Court  precedent  constrains  a broad  reading  of  Indep[endent]
Petroleum  Workers, which centered around parties with  a  unique
bargaining history and CBA); Mobil Oil Corp. v. Local 8-766, Oil,
Chem. & Atomic Workers Intl Union, 600 F.2d 322, 328-29 (1st Cir.
1979) (discussing Independent Petroleum Workers as limited to its
specific  facts  and its arbitrability reasoning  as  potentially
dicta);  Local 710, Intl Bhd. of Teamsters v. Montgomery  Ward  &
Co.,  708  F.  Supp. 209, 212 (N.D. Ill. 1989)  (questioning  and
limiting Independent Petroleum Workers).

     26   Indep. Petroleum Workers, 324 F.2d at 909.

     27    Local  Union No. 483,  369 F.2d at 528  (The  district
court  found  that the bargaining history between Shell  and  the
Union  shows  that the Union had sought without success  to  have
Shell   agree  to  a  provision  in  the  agreement  specifically
prohibiting  or limiting Shells right to contract out  work,  and
that each proposal was rejected by Shell and none included in the
agreement.  This finding has substantial support in the record.);
Indep. Petroleum Workers, 324 F.2d at 907 (The bargaining history
between  plaintiff and defendant relative to  the  right  of  the
latter  to  contract out work is much discussed  in  the  briefs.
Plaintiff  urges  that  such history is  irrelevant.   We  think,
however,   it   has  some  significance  and  may   properly   be
considered.).

     28   Slip Op. at 13-14.

     29     Local  Union  No.  483,   369  F.2d  at  528  (Shells
consistent refusal, in three bargaining agreements, to  agree  to
limit its freedom to contract out the work, the settlement of the
strike  and that issue without acceding to the Union demand,  and
the  Unions tacit acceptance of Shells position in its  December,
1962,  letter  distinguish contracting out cases in which  courts
have  compelled arbitration.); Indep. Petroleum Workers, 324 F.2d
at 907 ([P]laintiff for many years had sought the inclusion of  a
clause   in  the  collective  bargaining  agreement  specifically
prohibiting  or limiting the right of the defendant  to  contract
out  work.   On  each occasion the proposal was  rejected.   This
bargaining history while of course not controlling fortifies  the
conclusion which we have reached that plaintiffs claim is without
merit.).

     30   Slip Op. at 3-4.

     31    See 20 Richard A. Lord, Williston on Contracts   56:46
(4th ed. 2001) (discussing the importance of the parties specific
bargaining  history  to the courts decision in  Local  Union  No.
483).

     32   Slip Op. at 8-10.

     33   AS 23.40.070.

     34   Slip Op. at 18-19.

     35   Id.

     36   Id.

     37    Procter & Gamble Indep. Union of Port Ivory,  N.Y.  v.
Procter & Gamble Mfg. Co., 298 F.2d 644, 646 (2d Cir. 1962).

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