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Arbitration Ordered on Job-Preference Accord

The 4th Circuit upholds the district court order requiring the parties to arbitrate the United Mine Workers’ limited job-preference agreement with a coal company, as the appellate court concludes the coal company has not rebutted the ordinary presumption in favor of arbitrability.

Appellee UMW entered into a limited job-preference agreement with Peabody Coal Company. The agreement, which included an arbitration clause, also bound Peabody’s parent company and the parent company’s subsidiaries. Posing that the parent company – Peabody Holding Co. LLC – and a subsidiary – Black Beauty Coal – had shirked their obligations under the agreement, the union submitted a grievance to the arbitrator. The arbitrator found the matter was arbitrable but deferred a ruling on the merits.

Appellants Peabody Holding and Black Beauty responded to the arbitrator’s ruling by seeking a declaratory judgment in federal court that the dispute is not arbitrable. The union filed a counterclaim, requesting a declaratory judgment that appellants must proceed before the arbitrator. The district court entered judgment for the union. It first ruled that the arbitrator properly determined the arbitrability of the dispute. In the alternative, the court concluded the dispute was arbitrable, even if the arbitrator lacked authority to decide the arbitrability question. This appeal followed.

We affirm the district court judgment. As an initial matter, we find the court, not the arbitrator, must decide whether the dispute is arbitrable. The parties’ agreement lacks the requisite “clear and unmistakable” language evincing intent to arbitrate arbitrability. Exercising our independent judgment on the arbitrability question, we conclude appellants have not rebutted the ordinary presumption in favor of arbitrability. The parties must proceed to arbitration.

Judgment affirmed.

Peabody Holding Co. LLC v. United Mine Workers of America, Int’l Union (Diaz) No. 10-2134, Jan. 11, 2012; USDC at Alexandria, Va. (Brinkema) John R. Woodrum for appellants; Deborah Stern, UMW, for appellee. VLW 012-2-006, 17 pp.

VLW 012-2-006

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