Ten locals of an international labor union filed a petition to compel arbitration of a dispute with an employer concerning the meaning and effect of a provision in their collective bargaining agreements. The disputed provision requires the employer to continue to make trust fund contributions on behalf of employees who initially work within the bargaining unit but are subsequently transferred to a newly opened store outside the unit. The district court, 550 F. Supp. 1251 (D.C.Cal.1982), granted the petition to compel arbitration. The employer, alleging primarily that the provision is contrary to law and public policy, appeals. We hold that the disputed provision is susceptible to interpretation in a manner that would render it lawful. We affirm.

Alpha Beta Company operates a chain of retail supermarkets. Alpha Beta and ten locals of the United Food and Commercial Workers International Union, AFL-CIO (Local Unions), entered into a series of collective bargaining agreements covering the existing stores within the geographical jurisdiction of the respective Local Unions.

Under the agreements, numerous trust funds that provide health and welfare, pension, and vacation benefits to the employees, were created. The agreements provide that:

Notwithstanding any language to the contrary contained in this Agreement ..., it is agreed that this Agreement shall have no application whatsoever to any new food market or discount center until fifteen (15) days following the opening to the public of any such new establishment.... The Employer shall staff such new or reopened food market with a combination of both current employees and new hires.... Employees, who are thus transferred, upon whom contributions are made to the various trust funds shall continue to have contributions to the several trust funds made on their behalf in the same manner and in the same amount per hour as such contributions were made prior to their transfer. (emphasis added).1

In 1981, Alpha Beta opened a new store in Pinole, California, within the geographical jurisdiction of one of the petitioners.2 About 30 employees, all of whom were represented by one of the Local Unions at the time, were transferred to the Pinole store from stores covered by the collective bargaining agreements. Prior to their transfer Alpha Beta had made trust fund contributions on behalf of those employees, as required by the agreements.

The Local Unions claimed that Alpha Beta was required, by virtue of the collective bargaining agreements, to continue to make the trust fund contributions on behalf of the employees transferred to the Pinole store. Alpha Beta disagreed. The parties were unable to settle their differences. The Local Unions sought to submit the dispute to arbitration in accordance with the arbitration provisions of the collective bargaining agreements. Alpha Beta refused to do so. Under section 301 of the Labor Management Relations Act (LMRA), 29 U.S.C. Sec. 185 (1976), the Local Unions petitioned the district court to compel arbitration. Following a motion for summary judgment by the Local Unions, the district court granted the petition. Because the district court's granting of a petition to compel arbitration under a collective bargaining agreement is a final decision under 28 U.S.C. Sec. 1291 (1976), Goodall-Sanford, Inc. v. United Textile Workers, 353 U.S. 550, 551-52, 77 S. Ct. 920, 920-21, 1 L. Ed. 2d 1031 (1957), we have jurisdiction over this appeal.3ARBITRABILITY OF THE DISPUTE

Alpha Beta makes two substantive arguments in support of vacating the arbitration order. First, Alpha Beta argues that the collective bargaining agreements do not provide for arbitration of the particular dispute at issue. Second, it argues that the provision of the contract requiring continued contributions is contrary to law and public policy. In addressing both arguments, we must keep in mind the teachings of the Supreme Court's famous Steelworkers Trilogy, which strongly endorses the national labor policy favoring informal resolution of labor disputes through arbitration.4

1. Arbitration of the Dispute under the Collective Bargaining Agreement

When faced with a petition to compel arbitration, a court must decide whether the collective bargaining agreement provides for arbitration of the particular dispute. See John Wiley & Sons, Inc. v. Livingston, 376 U.S. 543, 547, 84 S. Ct. 909, 913, 11 L. Ed. 2d 898 (1964); Alpha Beta Co. v. Retail Store Employees Union Local 428, 671 F.2d 1247, 1250 (9th Cir.1982). However,

[t]he function of the court is very limited when the parties have agreed to submit all questions of contract interpretation to the arbitrator. It is confined to ascertaining whether the party seeking arbitration is making a claim which on its face is governed by the contract. Whether the moving party is right or wrong is a question of contract interpretation for the arbitrator.

United Steelworkers v. American Manufacturing Co., 363 U.S. 564, 567-68, 80 S. Ct. 1343, 1346-47, 4 L. Ed. 2d 1403 (1960) (emphasis added).

There is a strong presumption that a collective bargaining agreement containing a customary arbitration clause provides for arbitration of the dispute at issue: "An 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 of an interpretation that covers the asserted dispute. Doubts should be resolved in favor of coverage." United Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582-83, 80 S. Ct. 1347, 1352-53, 4 L. Ed. 2d 1409 (1960) (emphasis added; footnote omitted); e.g., Brannon v. Warn Bros., Inc., 508 F.2d 115, 119 (9th Cir.1974). In light of this strong presumption, we consider whether the agreements before us provide for arbitration of this dispute.

The relevant agreement provides for the arbitration of disputes "involving or arising out of the meaning, interpretation, application or alleged violation of [the] Agreement."5 Alpha Beta argues that, because the transferred employees are no longer in the collective bargaining unit and are no longer covered by the agreement, the dispute does not arise under the collective bargaining agreement. This argument is wholly without merit.

The disputed provision expressly states that Alpha Beta will continue to make trust fund contributions on behalf of employees transferred to new stores, i.e., stores outside the bargaining unit. The sole apparent purpose of the disputed provision is to impose an obligation on the employer to make contributions on behalf of employees at a time when they are no longer in the bargaining unit. The Local Unions now seek to enforce that contract obligation through the arbitral process. Alpha Beta's argument that the dispute is not arbitrable because the transferred employees are no longer in the bargaining unit misses the point entirely. The dispute obviously arises out of the collective bargaining agreement, and equally obviously involves the "interpretation" or "application" of a disputed provision of that agreement. Moreover, the dispute clearly involves an "alleged violation of [the] Agreement."

For the first time on appeal, Alpha Beta alleges that the Pinole store was not operated by Alpha Beta but was a joint venture between Alpha Beta and the Skaggs Drug Company; thus, according to Alpha Beta, a new entity, separate and independent from Alpha Beta, operated the new store. Therefore, the argument goes, the employees were "transferred" to a new employer. Alpha Beta now urges this point as an additional reason in support of its claim that the dispute did not arise under the collective bargaining agreement. Because Alpha Beta did not raise this point until appeal, we need not address it on the merits. See, e.g., Komatsu, Ltd. v. States Steamship Co., 674 F.2d 806, 812 (9th Cir.1982).6

In summary, we find Alpha Beta's argument that the dispute does not fall within the terms of the collective bargaining agreement to be frivolous at best. We think it evident that the dispute involves or arises out of the interpretation, application or alleged violation of the collective bargaining agreements and is subject to arbitration.

Alpha Beta argues that enforcement of the contract provision requiring continued contributions would infringe upon the Pinole employees' right to self-organization under section 7 of the Labor Management Relations Act (LMRA) (originally enacted as section 7 of the National Labor Relations Act), 29 U.S.C. Sec. 157 (1976). Therefore, Alpha Beta contends, the provision is unlawful and the district court erred in compelling arbitration of a dispute arising under it. According to Alpha Beta, by seeking to enforce the disputed provision the Local Unions are attempting to unlawfully represent the employees at the Pinole store.7

We recognize that a court cannot compel arbitration if a contract clause on its face violates federal labor law or is contrary to federal labor policy. See W.R. Grace & Co. v. Local Union 759, 461 U.S. 757, 103 S. Ct. 2177, 2183-86, 76 L. Ed. 2d 298 (1983); Kaiser Steel Corp. v. Mullins, U.S. 72, 77, 83-84, 102 S. Ct. 851, 855, 859-60, 70 L. Ed. 2d 833 (1982). However, a conflict between an arbitrator's decision and federal labor law "is necessarily speculative when the arbitrator has yet to rule." Hospital & Institutional Workers Union Local 250 v. Marshal Hale Memorial Hospital, 647 F.2d 38, 42 (9th Cir.1981); see Carey v. Westinghouse Electric Corp., 375 U.S. 261, 272, 84 S. Ct. 401, 409, 11 L. Ed. 2d 320 (1964). Such conflicts "can be resolved when they become manifest in an action to enforce the award. The mere possibility of conflict, however, is no barrier to arbitration." Hospital & Institutional Workers, 647 F.2d at 42 (citing Carey v. Westinghouse Electric Corp., 375 U.S. at 272, 84 S.Ct. at 409).8

Thus, the Supreme Court has emphasized that:

[w]hether or not the Union's demands have merit will be determined by the arbitrator in light of the fully developed facts. It is sufficient for present purposes that the demands are not so plainly unreasonable that the subject matter of the dispute must be regarded as nonarbitrable because it can be seen in advance that no award to the Union could receive judicial sanction.

John Wiley & Sons, Inc. v. Livingston, 376 U.S. 543, 555, 84 S. Ct. 909, 917, 11 L. Ed. 2d 898 (1964) (emphasis added) (citing United Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582-83, 80 S. Ct. 1347, 1352-53, 4 L. Ed. 2d 1409 (1960)).

We therefore need only decide whether an arbitrator could interpret the disputed contract clause in a manner that would render it lawful. Only if all possible interpretations of the contract provision would result in a conflict between that provision and the Pinole store employees' rights would arbitration be precluded.9

It is far from clear how Alpha Beta's contributions to the trust funds on behalf of the transferred employees would interfere with the self-organizational rights of those, or any other, employees. Under section 7 of the LMRA, employees in a new unit of an employer's business have the right to self-organization, to choose whether to be represented by a union; they cannot be deprived of that right by the terms of a collective bargaining agreement. See NLRB v. Retail Clerks Local 588, 587 F.2d 984, 986-87 (9th Cir.1978); Sheraton-Kauai Corp. v. NLRB, 429 F.2d 1352, 1354 (9th Cir.1970).10 A union also cannot compel an employer to bargain over the terms of employment for employees that it does not represent. See Local No. 3-193 International Woodworkers v. Ketchikan Pulp Co., 611 F.2d 1295, 1298-99 (9th Cir.1980); NLRB v. Retail Clerks Local 588, 587 F.2d 984, 986-87 (9th Cir.1978); see also NLRB v. Pacific Erectors, Inc., 718 F.2d 1459, 1462 (9th Cir.1983) ("It is an unfair labor practice for an employer to sign a collective bargaining agreement recognizing a minority union as an exclusive bargaining representative." (citations omitted)).

Here, the Local Unions are only attempting to require the employer to continue to make trust fund contributions on behalf of transferred employees. Contrary to Alpha Beta's contentions, the disputed provision does not accord the Local Unions representational rights over the employees at the Pinole store, directly or indirectly.11

Although Alpha Beta asserts that enforcement of the contributions provision would interfere with the employees' right of self-organization, it never explains how or in what manner those rights would be affected. Ordinarily, the employer's payment of trust fund contributions for transferred employees under a pre-existing collective bargaining agreement would not seem to have any effect on the other employees' right to self-organization. As to the transferred employees, they have already been the beneficiaries of their unions' successful obtaining of benefits at their former work site. The abrupt termination of those protections might well have a far greater impact on the exercise of their self-organizational rights than would the continuation of those benefits. We see no merit to Alpha Beta's contention that the disputed provision demonstrates that the Local Unions "under the guise of contract interpretation [seek] to avoid self-determination of a bargaining agent by a substantial number of employees." Local No. 3-193 International Woodworkers v. Ketchikan Pulp Co., 611 F.2d 1295, 1299-1300 (9th Cir.1980).

The First Circuit Court of Appeals recently rejected an argument markedly similar to Alpha Beta's. In Courier-Citizen Co. v. Boston Electrotypers Union No. 11, 702 F.2d 273 (1st Cir.1983), the collective bargaining agreement required the employer to give priority to employees who had been laid off from work in the bargaining unit when hiring for jobs in a unit not represented by the union. The employer argued that the contract provision violated the LMRA and therefore that an arbitration award based on that provision could not be enforced. By bargaining to place its members in jobs outside the unit, the employer contended, "the Union ... illegally extended its representational rights beyond the bargaining unit it [was] certified to represent." Id. at 277. The First Circuit rejected this argument and held that the union attempted only "to obtain benefits for the employees it represents," rather than to represent employees outside the bargaining unit. Id. at 278; see id. at 277. We agree with the First Circuit's reasoning.

By enforcing the disputed provision, the Local Unions, like the union in Courier-Citizen, are attempting only "to obtain benefits for the employees [they] represent[ ]." Here, the provision ensures that the transferred employees will continue to receive trust fund benefits. As the bargaining representative of the employees within the unit, the Local Unions bargained for the disputed provision in order to afford them certain protections should Alpha Beta decide to transfer them to a new store outside the unit. The Local Unions negotiated for that provision when the employees, who later were transferred, were still employed within the bargaining unit. The Local Unions thus seek only to enforce rights of transferred employees--rights that arose under an agreement in force at their initial place of work.12

The disputed provision is similar in important respects to a variety of clauses in collective bargaining agreements that provide for the payment of benefits to employees who retire, quit or are discharged--clauses that require the payment of retirement, pension, severance, unemployment and other benefits to employees after they have left the bargaining unit. A provision requiring the continuance of trust fund contributions for transferred employees should be treated in a similar manner--as providing continuing benefits to employees who have left the bargaining unit--rather than as unlawfully according the union a right to represent those employees in the new bargaining unit.13

Unions are free to negotiate provisions designed to protect employees against involuntary transfer or against adverse consequences resulting from either voluntary or involuntary transfers. There is no reason in federal labor law or policy why employees may not be guaranteed that they will continue to receive most of the economic benefits they received prior to their transfer in the event that for any reason their work locale is changed. We recognize that there are some instances in which the affording of particular benefits might be unlawful, not because doing so constitutes a "sub rosa" effort to obtain representational rights, but for a wholly different reason. Benefits could not be continued or provided if doing so would create an irreconcilable conflict with, or adversely affect, the rights of the other employees in the unit to which the transfer is made. For instance, requiring super-seniority for transferred employees in the face of a collective bargaining agreement at their new unit that prohibited the granting of such seniority would be contrary to federal labor law. So, too, would a provision for continued representation by the transferred employees' former bargaining representative without a showing of majority status. See note 10 supra. However, these examples represent the exception to the rule.

Normally there is no conflict between the bargained-for rights of transferred employees and the rights of others in the unit to which they are transferred. There is no conflict for example with respect to the most important economic benefit--wages. The payment of wages to transferred employees at a higher, protected rate does not interfere with any rights of the other employees in the new unit. Collective bargaining agreements ordinarily set minimum wage rates, and do not prohibit payments in excess of the bargained-for levels. "Red circled" rates for employees who have been paid at a particular rate in the past are not unusual; nor are they thought to affect adversely the rights of other employees. As in the case of wages, there is also ordinarily no conflict with respect to most of the other economic benefits.14

Trust fund contributions may, however, pose particular problems in some instances--for instance, when there is already a bargained-for plan in effect at the new unit. Alpha Beta suggests that the continued making of contributions on behalf of the transferred employees after another union has been certified to represent employees at the Pinole store would interfere with the rights of the Pinole store employees. Implicit in this argument is the contention that a certified union has the right or obligation under federal labor law to bargain for a single health and welfare or other benefit plan covering all the employees in a bargaining unit, and that the fragmenting of employees into separate groups based on past employment history would have an adverse effect on the bargaining rights of the employees as a whole.15 There may be some merit to this argument. However, we need not resolve the issue here.

No other bargaining representative has been certified at the Pinole store.16 The arbitrator has not yet construed the disputed provision. In particular, he has not yet determined what its duration will be. An arbitrator could well find that the life of the provision is limited. He could, for example, construe the provision as requiring the employer to make the trust fund contributions for a reasonable period of time--a period long enough to allow the transferred employees to make satisfactory arrangements for new benefits. Alternatively, he could construe the provision as requiring contributions until either the expiration of the collective bargaining agreement or the certification of a bargaining agent at the Pinole store, whichever occurs earlier. We do not suggest that either of the above constructions is correct; nor do we suggest that any other construction would be unlawful. However, we conclude that both constructions we have suggested would avoid any possible conflict that might arise upon certification of a bargaining representative at the Pinole store, and both constructions would, in all other respects as well, be lawful.17

Having determined that the disputed provision is susceptible to a lawful interpretation, we must leave it to the arbitrator to decide on its proper construction. Then, if his award conflicts with federal law, it is, of course, subject to invalidation.

We hold that the arbitrator could interpret the provision in a way consistent with the Pinole store employees' section 7 rights. Because the parties agreed to arbitrate the dispute, and because there are lawful interpretations that an arbitrator could give the disputed clause, Alpha Beta was obligated to submit the dispute to arbitration.

PROCEDURAL CHALLENGES TO THE PETITION TO COMPEL ARBITRATION

Alpha Beta also challenges the district court's order and memorandum on two procedural grounds. We reject both.

Alpha Beta alleges that, because the Local Unions failed to join parties that are necessary for just adjudication of this action under Fed.R.Civ.P. 19(a),the district court erred in failing to dismiss the action.18 In particular, Alpha Beta claims that the district court should have ordered the Union Locals to join: (1) the employees who were transferred to the Pinole store; and (2) the Independent Alpha Beta Workers' Association (Independent), which Alpha Beta claims is the legitimate bargaining agent of the Pinole store employees.

We have emphasized that "[t]here is no precise formula for determining whether a particular nonparty should be joined under Rule 19(a).... Rule 19 gives a trail court considerable discretion and requires that several conflicting interests be balanced on a case-by-case basis." Bakia v. County of Los Angeles, 687 F.2d 299, 301 (9th Cir. 1982)(per curiam). Accordingly, we apply an abuse of discretion concerning joinder of parties under Rule 19. See id.

Here, Alpha Beta has made no showing that either the transferred employees or the Independent are necessary parties for a just adjudication of this action under Rule 19(a).

First, complete relief (arbitration) can be granted in this action without joinder of any parties. See 550 F. Supp. at 1255. Moreover, assuming that they have any interests implicated in this action, we cannot see how the failure to join the transferred employees or the Independent will "as a practical matter" at all impair, or even affect, their ability to protect those interests. Finally, as the district court recognized, see id., Alpha Beta has not demonstrated how granting a petition to compel arbitration of the dispute will subject it to a "substantial risk" of inconsistent obligations. Thus, the threshold definitional requirements for a necessary party under Rule 19(a) are not satified here.

Ordinarily, employees whose rights are the subject of an arbitration are not even parties to the arbitration itself. They are certainly not necessary parties to a proceeding in which the issue is only whether an arbitration should be conducted. See Local No. 3-193 International Woodworders v. Detchikan Pulp Co., 611 F.2d 1295, 1297 (9th Cir. 1980); Fibreboard Paper Products Corp. v. East Bay Union of Machinists, Local 1304 344 F.2d 300, 303, (9th Cir.), cert. denied, 382 U.S. 826,86 S.Ct. 61, 15 L. Ed. 2d 71 (1965). The Independent has not been certified as the representative of the employees at the Pinole store and has no legal status with respect to those employees. In some instances, a number of unions might be in the same position as the Independent is here; there might be three or four organizations seeking to represent the same bargaining unit. Without indicating any view as to whether a certified bargaining representative would be a necessary party,19 we conclude that organizations that are only competitors for future representational rights do not become necessary parties to a proceeding simply because the actual rights of employees in the bargaining unit are at stake.

We cannot hold that the Local Unions must join 30 transferred employees and an organization that does not represent those employees. Rather, we must conclude that the Independent and the transferred employees are not necessary parties. Cf. Kaiser v. Local No. 83, 577 F.2d 642 (9th Cir. 1978) (per curiam) (holding that employer is not an indispensable party in action brought by employee against union for breach of statutory duty of fair representation). The district court therefore did not abuse its discretion in denying the motion to dismiss under Fed. R. Civ. P. 19(a).

Second, because the summons served by the Local Unions did not comply with Fed.R.Civ.P. 4(b), Alpha Beta contends that the district court did not obtain personal jurisdiction over it. The summons stated that Alpha Beta had ten days to answer the complaint, rather than the twenty days provided for by Fed.R.Civ.P. 12(a). We agree with the district court that this claim is meritless.

Rule 4 is a flexible rule that should be liberally construed so long as a party receives sufficient notice of the complaint. See FTC v. Compagnie de Saint-Gobain-Pont-A-Mousson, 636 F.2d 1300, 1312 & n. 61 (D.C.Cir.1980); 4 C. Wright & A. Miller, Federal Practice & Procedure: Civil Sec. 1083, at 332-33 (1969). Even if the summons fails to name all of the defendants, see Vega Matta v. Alvarez de Choudens, 440 F. Supp. 246, 248-49 (D.P.R.1977), aff'd without opinion, 577 F.2d 722 (1st Cir.1978), or, as in the case before us, the summons specifies the incorrect time for filing of the answer, see A.C. Samford, Inc. v. United States, 226 F. Supp. 72, 75 (M.D.Ga.1963), dismissal is generally not justified absent a showing of prejudice, see Fed.R.Civ.P. 61; Newman v. Prior, 518 F.2d 97, 99 (4th Cir.1975). For this reason, a defendant's answer and appearance in an action "should be enough to prevent any technical error in form from invalidating the process." 4 C. Wright, A. Miller, & M. Kane, supra Sec. 1088, at 155 (Supp.1983); see Maricopa County v. American Petrofina, Inc., 322 F. Supp. 467, 469-70 (N.D.Cal.1971).

Alpha Beta answered the petition and argued its case before both the district court and this court. It failed to present any evidence suggesting that it was prejudiced in the least by the minor defect in the summons. Therefore, the district court was correct in holding that dismissal for insufficiency of process was not justified.

Accordingly, we affirm the district court's rulings that Alpha Beta's procedural objections do not warrant dismissal of the petition to compel arbitration.

The Local Unions seek an award of attorney's fees for this appeal on the ground that Alpha Beta's appeal is without justification and interferes with the effectuation of federal labor policy. As we recently recognized in affirming a district court's award of attorney's fees against an employer who refused to comply with an arbitration award,

[i]t is generally recognized that labor arbitration advances the goal of industrial stabilization.... Engaging in frivolous dilatory tactics not only denies the individual prompt redress, it threatens the goal of industrial peace. Therefore, the deterrence aspect of an award of attorneys' fees is particularly served where a party, without justification, refuses to abide by an arbitrator's award.

International Union of Petroleum & Industrial Workers v. Western Industrial Maintenance, Inc., 707 F.2d 425, 428 (9th Cir.1983) (citation omitted); see International Association of Machinists & Aerospace Workers, District 776 v. Texas Steel Co., 639 F.2d 279, 284 (5th Cir.1981). We believe that the policy concerns raised by frivolous or bad faith refusals to arbitrate or appeals of district court orders compelling arbitration are the same as those raised by frivolous or bad faith refusals to comply with an arbitration award. Accordingly, the award of fees is appropriate when a party frivolously or in bad faith refuses to submit a dispute to arbitration or appeals from an order compelling arbitration. However, although a number of Alpha Beta's arguments are "frivolous," its principal argument, that the disputed provision is unlawful, is not. We therefore hold that this appeal does not justify an award of fees under Fed.R.App.P. 38. See Todd v. Benal Concrete Construction Co., 710 F.2d 581, 584 (9th Cir.1983), cert. denied, --- U.S. ----, 104 S. Ct. 1274, 79 L. Ed. 2d 679 (1984); International Union of Petroleum & Industrial Workers, 707 F.2d at 430 (citing McConnell v. Critchlow, 661 F.2d 116, 118 (9th Cir.1981)).

We conclude that the collective bargaining agreements provide for arbitration of the dispute and that an arbitrator could arrive at a construction of the disputed provision that would be consistent with federal labor law and policy. We therefore hold that the district court was correct in granting the petition to compel arbitration. We also hold that the district court did not err in denying Alpha Beta's motion to dismiss for failure to comply with Fed.R.Civ.P. 19(a) and Fed.R.Civ.P. 4(b). Finally, we hold that Alpha Beta's principal argument is not frivolous and accordingly do not grant appellees' request for attorney's fees on appeal. The district court's memorandum and order is

AFFIRMED.