Embracing mediation as a way to avoid litigation is not a sure-fire solution as one employer recently learned. See Unite Here Local 30 v. Volume Services, Inc., No. 16-55528 (9th Cir. January 26, 2018). Mediation is often employed as an alternative method of dispute resolution for its perceived advantages over traditional lawsuits (e.g. it can be quicker, less expensive and less formal than a court-driven process). For these reasons and others, many labor unions and employers frequently choose mediation as an alternative to arbitration.

In a typical collective bargaining agreement (CBA), disputes may be sent to mediation if both parties agree to do so. And in some agreements, the mediator’s decision is binding rather than just advisory. Such was the case in Unite Here Local 30 v. Volume Services, Inc., No. 16-55528 (9th Cir. January 26, 2018). The question before the Court was whether, having agreed to binding mediation, the union could unilaterally declare the mediation non-binding and, when dissatisfied with the result, demand arbitration and thereby obtain a second bite of the apple. The court, with one judge dissenting, held the union could not.

The Court examined the language of the parties’ CBA and determined that it expressly provided that when selected by the parties, mediation was binding. The Court further determined that the CBA did not give either party the right to declare its binding mediation process was in fact non-binding. Invoking the well-known principle that parole evidence cannot be used to vary the unambiguous terms of a written contract, the Court held that the union did not have the right to arbitrate its grievance.

The decision illustrates how procedures to avoid litigation are only as good as the integrity of the parties to the agreement. It also demonstrates that, sometimes, the paper an agreement is written on may be ironclad even if not litigation-proof. Employers who adopt dispute resolution processes must be prepared to live with the consequences because a second chance is unlikely.