Teamsters Union Local 287 v. Frito-Lay, Inc.

Two issues concerning the arbitrability of a labor agreement confront us on this appeal. We must determine the effect of Article 15 Section 4 of the agreement, reserving the right not to arbitrate, and whether the transfer of work is a management right not subject to the grievance and arbitration procedure under Article 3. After considering the entire agreement we conclude that Article 15 Section 4 does not prevent arbitration, but we remand to the district court the question of whether the management rights clause precludes arbitration.

FACTS

Frito-Lay, Inc. (Frito-Lay) employs members of Teamsters Union Local 287 (Union) at its San Jose, California production plant and warehouse. Frito-Lay and the Union signed a collective bargaining agreement effective March 30, 1986. Frito-Lay then transferred some of its transportation work to a plant and traffic center in Kern County, California. In January 1987, Frito-Lay laid off six Union drivers because of the work transfer.

The Union filed a grievance and later requested arbitration of the dispute. Frito-Lay initially refused to arbitrate, but in subsequent letters to the Union, Frito-Lay stated that it was willing to arbitrate but…