By the Court, HARDESTY, J.:
Appellant laid off certain firefighters claiming that it lacked the money necessary to continue paying their salaries and benefits. The district court enjoined appellant from implementing its decision while respondents pursued arbitration of their grievance disputing that appellant lacked the money to support the positions. In this appeal, we must determine whether respondents' grievance is arbitrable where the parties recited in their collective bargaining agreement appellant's statutory right to lay off any employee due to a lack of funds. Because we conclude that the underlying grievance is not arbitrable under the parties' collective bargaining agreement and thus, there is no authority under NRS Chapter 38 for the district court's injunctive relief decision, we reverse the district court's order.
In May 2014, the City of Reno decided to lay off 32 firefighters after the City learned that its application to renew a federal grant, which had funded those positions, had been denied. Pursuant to Article 2 of the collective bargaining agreement (CBA) between the City and the International Association of Firefighters, Local 731, the City based its decision on its budget shortfalls — a "lack of funds" — and the need to allocate money to other areas. Article 2 of the CBA provides that certain rights, including the right to lay off any employee due to lack of work or lack of funds, are not subject to mandatory bargaining and are reserved to the City without negotiation. Before the layoffs occurred, the International Association of Firefighters, Local 731, and the 32 firefighters who would be laid off (collectively, IAFF) challenged the City's decision by filing a grievance using the grievance procedure of the CBA, asserting that there was no lack of funds to support the City's decision to lay off the firefighters.
Recognizing that the layoffs were set to occur and that the arbitrator lacked authority to enjoin the layoffs pending arbitration, the IAFF filed the underlying complaint in the district court, alleging four claims for relief: anticipatory breach of contract, breach of the implied covenant of good faith and fair dealing, injunctive relief, and declaratory relief. The complaint asserted that the layoffs violate the CBA, which governs the terms and conditions of the firefighters' employment, and that the City had sufficient discretionary funds and revenue to continue the firefighters' employment. The IAFF also filed a motion for preliminary injunctive relief under NRS Chapter 38. The City moved to dismiss the complaint for lack of jurisdiction due to the IAFF's failure to exhaust contractual and administrative remedies.
The district court concluded that it was empowered to rule on the request for injunctive relief to ensure that the arbitration of the IAFF's grievance was not frustrated pursuant to its statutory authority under NRS 38.222 and its authority to administer equity in civil actions under Article 6, Section 14 of the Nevada Constitution. Based on that conclusion, the district court granted the IAFF's request for a preliminary injunction and enjoined the City from proceeding with the layoffs while the IAFF exhausts its contractual grievance and administrative remedies.
The City filed this appeal from the district court's preliminary injunction order, and concurrently moved the district court to stay the preliminary injunction pending resolution of the appeal. The district court denied the City's request to stay the injunction while the City pursued this appeal, but granted without prejudice the City's motion to dismiss the IAFF's breach of contract and declaratory relief claims based on the IAFF's failure to exhaust its administrative remedies. The district court did not dismiss the injunctive relief claim, however, and the preliminary injunction remains in effect.
To resolve this appeal, we must address whether the district court had jurisdiction to grant the injunctive relief requested by the IAFF. The City contends that the district court lacked jurisdiction to grant injunctive relief because the underlying dispute regarding the propriety of the layoffs is governed by NRS Chapter 288 and thus, falls within the exclusive jurisdiction of the Employee-Management Relations Board (EMRB).
In its order granting injunctive relief, the district court focused on the contractual remedies sought by the IAFF and concluded that it had authority under NRS 38.222 to grant a preliminary injunction while the parties pursued arbitration of the dispute. That statute, part of the Uniform Arbitration Act of 2000, provides that before an arbitrator is authorized and able to act in a dispute, the district court "may enter an order for provisional remedies to protect the effectiveness of the arbitral proceeding to the same extent and under the same conditions as if the controversy were the subject of a civil action." NRS 38.222(1). The IAFF initiated arbitration under Article 24 of the CBA, which allows the IAFF to submit a grievance to
Arbitration is a favored means of resolving labor disputes. Port Huron Area Sch. Dist. v. Port Huron Educ. Ass'n, 426 Mich. 143, 393 N.W.2d 811, 814 (1986). In Nevada, disputes concerning the arbitrability of a subject matter are resolved under a presumption in favor of arbitration. Clark Cnty. Pub. Emps. Ass'n v. Pearson, 106 Nev. 587, 591, 798 P.2d 136, 138 (1990). Courts should therefore "order arbitration of particular grievances `unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute.'" Id. (quoting Int'l Ass'n of Firefighters, Local # 1285 v. City of Las Vegas, 104 Nev. 615, 620, 764 P.2d 478, 481 (1988)). In cases involving broadly worded arbitration clauses, when there is no express provision excluding a particular grievance from arbitration, only the "most forceful evidence of a purpose to exclude the claim from arbitration can prevail." Id. (internal quotation omitted).
Nevertheless, "[l]abor arbitration is a product of contract, and, therefore, its legal basis depends entirely upon the particular contracts of particular parties." Port Huron, 393 N.W.2d at 814. And as a matter of contract, "a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit." AT & T Techs., Inc. v. Commc'ns Workers of Am., 475 U.S. 643, 648, 106 S.Ct. 1415, 89 L.Ed.2d 648 (1986) (internal quotation omitted). An arbitrator's jurisdiction to resolve a dispute concerning the interpretation of a collective bargaining agreement derives from the parties' advance agreement to submit the disputed matter to arbitration. Id. at 648-49, 106 S.Ct. 1415; see also Port Huron, 393 N.W.2d at 814-15 (explaining that an arbitrator possesses no general jurisdiction to resolve disputes concerning the interpretation of a collective bargaining agreement independent of the terms of the contract itself). Thus, despite the presumption of arbitrability, the arbitrator's jurisdiction derives from contract and the arbitrator is limited to resolving disputes over the terms of that contract. We must, therefore, look to the language of the CBA between the City and the IAFF to determine whether the dispute here is subject to arbitration. See Port Huron, 393 N.W.2d at 815 ("Parties consenting to arbitration pursuant to written agreements consent to arbitrate within the framework of the terms and conditions of such agreements.").
Article 24 sets forth the grievance procedure by which an individual or the union may seek resolution of a dispute "concerning [the] interpretation, application, or enforcement of the terms of this Agreement." By its very language, the grievance procedure only applies to the terms of the CBA, and therefore it cannot apply to matters outside the CBA's scope. Arbitration, as the last step of the grievance process in the CBA, is similarly limited to disputes that fall within the scope of the CBA. See City of Reno v. Reno Police Protective Ass'n, 118 Nev. 889, 894, 59 P.3d 1212, 1216 (2002) (noting that when a collective bargaining agreement is at issue, the arbitrator's award must be based on that agreement); see also United Steelworkers of Am. v. Warrior & Gulf Navigation Co., 363 U.S. 574, 584, 80 S.Ct. 1347, 4 L.Ed.2d 1409 (1960) (explaining that if an act is specifically excluded from the grievance procedure in the collective bargaining agreement or from arbitration
The IAFF's grievance asserts that the City violated the CBA when it "gave layoff notices to Local 731 members when there is no lack of funds or lack of work." That action is discussed in Article 2 of the CBA. Article 2 concerns "Management Rights" that "are not within the scope of mandatory bargaining and which are reserved to the local government employer without negotiation." Included in these rights is the local government employer's "right to reduce in force or lay off any employee because of lack of work or lack of funds, subject to paragraph (v) of subsection 2, of NRS 288.150." The fact that the parties expressly agreed in Article 2 to reserve that right to the City without negotiation is the most forceful evidence that layoffs for lack of funds is not a decision subject to mandatory bargaining and therefore falls outside the scope of the CBA, which encompasses the bargained-for terms between the parties. To interpret Article 2 otherwise and require arbitration over the City's decision to lay off employees based on a lack of funds would be inconsistent with the language of the provision, and would render meaningless the City's agreed upon reservation of that right. The language of Article 2 itself provides the requisite evidence of the parties' intent to exclude from arbitration the IAFF's grievance challenging the City's layoff decision. Pearson, 106 Nev. at 590, 798 P.2d at 137 ("Whether a dispute is arbitrable is essentially a question of construction of a contract."); State v. Second Judicial Dist. Court, 125 Nev. 37, 44, 199 P.3d 828, 832 (2009) (explaining that "[i]n interpreting a contract, we construe a contract that is clear on its face from the written language, and it should be enforced as written").
We further note that the reduction in force due to lack of funds is excluded from mandatory bargaining and reserved to the local government employer without negotiation by law. See NRS 288.150(3)(b) (reserving to the local government employer "[t]he right to reduce in force or lay off any employee because of lack of work or lack of money" subject to mandatory bargaining over the procedures for reduction in workforce as delineated in NRS 288.150(2)(v)); see also Grievance Arbitration Between Haw. Org. of Police Officers v. Haw. Cnty. Police Dep't, 101 Haw. 11, 61 P.3d 522, 529-31 (Haw.Ct. App.2002). The IAFF argues that by merely incorporating language almost identical to NRS 288.150(3) in Article 2 of the CBA, the parties subjected the City's decision to lay off employees due to a lack of funds to arbitration. We do not agree. Because the arbitration clause does not encompass the matters listed in Article 2, it would exceed the arbitrator's powers under the CBA to assume arbitral jurisdiction over the IAFF's grievance challenging the City's determination that a lack of funds required the reduction in force, which the parties agreed was a reserved management right not subject to negotiation. See Int'l Ass'n of Firefighters, Local 1285 v. City of Las Vegas, 107 Nev. 906, 910, 823 P.2d 877, 879 (1991) (recognizing that if an arbitrator's award relies on an interpretation that contradicts the express language of the collective bargaining agreement, the arbitrator's action exceeds his or her authority); see also Port Huron, 393 N.W.2d at 814-15 (noting that an arbitrator's jurisdiction to resolve a dispute over a collective bargaining agreement is derived exclusively from the agreement itself). Thus, the IAFF's grievance is not subject to arbitration under Article 24 and the reduction in force due to lack of funds instead remains within the City's sole discretion in the first instance.
Here, the district court erroneously rejected the City's contractual non-negotiable right to make budget-related reduction in force decisions by concluding that such an interpretation of Article 2 "would essentially mean public employees subject to NRS 288.150 have no ability to bargain over the procedures for reduction in the workforce" because any such bargaining over procedures "would be trumped by the City's exclusive ability to determine a lack of work or funds exists." The district court appears to conflate
Having concluded that the IAFF's grievance alleging a violation of Article 2 is not a dispute that the parties agreed to submit to arbitration pursuant to the terms of the CBA, see AT & T, 475 U.S. at 651, 106 S.Ct. 1415 (noting that if an arbitrator was free to impose obligations outside the collective bargaining agreement, the result would be "antithetical to the function of a collective-bargaining agreement as setting out the rights and duties of the parties"), we now address the IAFF's argument that the question of arbitrability should be left to the arbitrator to decide, subject to judicial review.
Accordingly, we conclude that the district court lacked authority to rule on the request for injunctive relief and the preliminary injunction was thus entered in error. We therefore reverse the district court's order.
We concur: GIBBONS, C.J., and PARRAGUIRRE, CHERRY, PICKERING, DOUGLAS and SAITTA, JJ.