SAN FRANCISCO (LN) — A Northern District of California judge on Monday dismissed Concord Toyota’s petition to vacate a labor arbitration award, ruling the arbitrator did not exceed his authority by interpreting the collective bargaining agreement to require five days of paid sick leave in accordance with California law.
U.S. District Judge Araceli Martínez-Olgún granted Teamsters Local 315’s motion to dismiss, rejecting Concord Toyota’s arguments that the arbitrator dispensed his own brand of industrial justice by adding terms to the contract and ignoring grievance timeliness deadlines.
The dispute centered on Section 37.1 of the collective bargaining agreement, which states: “The Employer shall provide sick leave in accordance with California law and local ordinance.”
Concord Toyota denied bargaining unit member Stephen Smith’s request for two additional days of paid sick leave after he had exhausted three days in early 2024. At the time, California Labor Code § 246 had been amended to increase the statutory minimum from three to five days of paid sick leave per year.
The Union filed a grievance, and the parties submitted the matter to binding arbitration. Arbitrator Anthony Miller sustained the grievance, ordering the employer to provide five days of paid sick leave and make employees whole for losses dating back to Jan. 1, 2024.
Concord Toyota filed the petition to vacate in October 2025, arguing the arbitrator exceeded his powers in three respects: disregarding timeliness limits in the CBA’s grievance procedure, adding terms to the CBA by applying future changes to law, and granting relief to employees of a different union.
The court first rejected the Union’s procedural challenge that service on the Union’s attorney was untimely. Under the Federal Arbitration Act, notice must be served on the adverse party or his attorney within three months. The court found service on the Union’s attorney on the final day of the statutory period was timely.
On the merits, the court found the employer failed to state a cognizable legal theory for vacatur. The Ninth Circuit permits vacatur only if the award does not draw its essence, the arbitrator exceeds his powers, the award is contrary to public policy, or it was procured by fraud.
Regarding timeliness, the court noted that procedural questions are subject to arbitration. The employer argued the grievance was filed after the deadline because the union had learned of the employer’s interpretation of the sick leave provision in a prior grievance. The court found the employer offered no authority establishing that a prior grievance waived the timeliness of a later one, and the arbitrator’s analysis of the issue fell within his authority.
On the claim that the arbitrator added terms to the CBA, the court quoted the arbitrator’s finding that the employer’s proposed interpretation would require adding words to the contract. The court found the arbitrator’s interpretation of Section 37.1 was a thorough consideration of the bargaining history and language, not an addition of new terms.
The court also dismissed the claim that the arbitrator exceeded his authority by granting relief to Machinists employees. The petition cited no portion of the award referencing the Machinists Automotive Trades District Lodge No. 190, and the remedy imposed tracked the specific issue submitted to the arbitrator.
The court denied the employer’s request for leave to amend, finding the petition could not be saved by factual amendment because the legal theories failed as a matter of law.
The case is dismissed with prejudice.