Hamilton Park Health Care Center Ltd. v. 1199 Seiu United Healthcare Workers East , 817 F.3d 857 ( 2016 )


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  •                                       PRECEDENTIAL
    UNITED STATES COURT OF APPEALS
    FOR THE THIRD CIRCUIT
    _____________
    No. 15-2595
    _____________
    HAMILTON PARK HEALTH CARE CENTER LTD,
    Appellant
    v.
    1199 SEIU UNITED HEALTHCARE WORKERS EAST
    ________________
    On Appeal from the United States District Court
    for the District of New Jersey
    (D.C. Civil Action No. 3-13-cv-00621)
    District Judge: Honorable Mary L. Cooper
    ________________
    Submitted Under Third Circuit LAR 34.1(a)
    February 29, 2016
    Before: AMBRO, JORDAN, and SCIRICA, Circuit Judges
    (Opinion filed: April 1, 2016)
    David Jasinski, Esquire
    Jennifer C. Van Syckle, Esquire
    Rebecca D. Winkelstein, Esquire
    Jasinksi, P.C.
    60 Park Place, 8th Floor
    Newark, NJ 07102
    Counsel for Appellant
    Katherine H. Hansen, Esquire
    William S. Massey, Esquire
    Gladstein, Reif & Meginniss, LLP
    817 Broadway, 6th Floor
    New York, NY 10003
    Counsel for Appellee
    ________________
    OPINION OF THE COURT
    ________________
    AMBRO, Circuit Judge
    Hamilton Park Health Care Center filed a petition to
    vacate an arbitration award in a dispute with the 1199 SEIU
    United Healthcare Workers East union. The District Court
    denied the petition and confirmed the award. On appeal,
    Hamilton Park asserts that the Court erred by approving a
    multi-year arbitration award when the parties’ collective
    bargaining agreement (“CBA”) only contemplated a single-
    year award. Because the parties consented at arbitration to a
    multi-year award, we affirm this portion of the Court’s order.
    2
    Hamilton Park also argues that, even if a multi-year
    award is permissible, the Court should have severed a
    provision authorizing a new round of arbitration at a later
    date. We agree; thus we reverse and remand as to this portion
    of the order.
    I. Background
    Hamilton Park is a long-term care facility that was
    previously a member of a multi-employer bargaining group.
    Morris Tuchman, Esq. represented the group (referred to as
    “Tuchman Homes”) in negotiations with 1199 SEIU, which
    was the exclusive bargaining agent for the group’s employees
    (subject to exceptions not at issue here).1 In 2008, Tuchman
    Homes and the union agreed to a CBA beginning on March
    13 of that year and extending through February 28, 2013. The
    CBA gave the union the option to reopen negotiations in
    November 2011 to bargain for new wages, hours, and general
    terms and conditions of employment for the CBA’s last year
    (February 28, 2012–February 28, 2013). If the union
    exercised its right to reopen and the parties did not agree to
    terms by February 28, 2012, they could submit any
    unresolved items to binding interest arbitration.2
    1
    We use “Tuchman Homes” to refer to the bargaining group,
    and we use “Tuchman” to refer to Mr. Tuchman.
    2
    In interest arbitration, the parties ask the arbitrator “to set
    new terms and conditions of employment.” Lodge 802, Int’l
    Bhd. of Boilermakers, Iron Shipbuilders, Blacksmiths,
    Forgers & Helpers, AFL-CIO v. Pa. Shipbuilding Co., 
    835 F.2d 1045
    , 1046 (3d Cir. 1987). By contrast, in rights
    arbitration, which is not at issue here, the arbitrator’s role “is
    to resolve disputes involving the interpretation or application
    3
    The CBA provides that it cannot be changed “unless in
    writing, and signed by the authorized representatives of the
    parties.” It also says that the arbitrator cannot “add to,
    subtract from, or otherwise amend or modify the terms of this
    Agreement.” Although the CBA only authorizes interest
    arbitration for the contract’s last year, it does not expressly
    bar any other types of arbitration. Finally, the CBA empowers
    the arbitrator to “determine his jurisdiction” and grant “all
    appropriate remedies.”
    In November 2011, the union invoked its right to
    reopen negotiations. The parties reached an impasse, and they
    submitted the unresolved issues to arbitration. One of the
    main sticking points was the 4.5 percentage point increase in
    contributions that was necessary to maintain the level of
    health benefits that employees received. The union wanted
    Tuchman Homes to cover the entire increase, but the latter
    opposed paying any of it. During a hearing on March 26,
    2012, the arbitrator, Martin Scheinman, Esq., suggested that
    the parties consider allowing him to fashion a multi-year
    award that went beyond the scope of the February 28, 2012–
    February 28, 2013 jurisdiction provided by the CBA. The
    purpose of this would be to spread out increased employer
    contributions over a longer period of time. As Scheinman
    recounted in the award he ultimately issued, the parties
    “tentatively” agreed to the request for expanded jurisdiction.
    He said that, in subsequent ex parte meetings, they firmly
    committed to this plan. Specifically, he said that “[b]oth sides
    agreed my jurisdiction permitted a multi-year Award, at my
    discretion.” However, these agreements were never in
    writing.
    of terms and conditions of employment that the parties have
    themselves agreed to in their contract.” 
    Id. at 1047
    .
    4
    In November 2012, Scheinman issued a multi-year
    award that extended through June 2016. It dealt with, among
    other topics, wages and health benefits contributions. With
    respect to the dispute over health benefits, the award called
    for a 2 percentage point increase in employer contributions at
    the outset followed by a further 2.5 percentage point increase
    in March 2014.
    Scheinman also included a provision allowing the
    union to reopen negotiations for the contract’s last year (June
    30, 2015–June 30, 2016) and to submit any resulting disputes
    to binding interest arbitration. The effect of Scheinman’s
    award was to create what courts frequently call a “second
    generation” interest arbitration agreement. See, e.g., Globe
    Newspaper Co. v. Int’l Ass’n of Machinists, 
    648 F. Supp. 2d 193
    , 198 (D. Mass. 2009). As the name implies, this refers to
    a scenario where an arbitrator uses his authority to decide a
    particular dispute to impose a requirement, not previously
    agreed upon by the parties, to arbitrate future disputes.
    Scheinman did not address why he included the second
    generation interest arbitration provision. Nor did he ever
    conclude that the parties consented to it. He did, however,
    explain his reasoning for including a reopener provision. He
    said he “followed the parties’ format,” derived from the
    2008–2013 CBA, of permitting the union to reopen
    negotiations for the contract’s last year. In both the 2008–
    2013 CBA and Scheinman’s award, the reopener and
    arbitration provisions work in tandem (reopening followed, if
    need be, by arbitration). It appears that Scheinman presumed
    that the parties, having once (in the 2008–2013 CBA) elected
    to resolve disputes through interest arbitration, would
    continue to choose that model for future disputes.
    Hamilton Park responded to the award by filing a
    petition in the District Court to vacate it. The crux of its
    5
    argument was that Scheinman exceeded his authority under
    the CBA by issuing a multi-year award instead of confining
    himself to the year ending February 28, 2013 and by inserting
    a second generation interest arbitration provision. Hamilton
    Park’s position was that it did not provide oral consent for
    Scheinman’s actions and that, even if it had, it would be
    insufficient because the CBA requires written authorization.
    In support of the contention that it never provided
    consent, Hamilton Park submitted to the Court a letter its
    counsel had written to Tuchman along with an unsigned
    declaration from Tuchman that was attached to the letter. The
    letter stated that Hamilton Park’s counsel had spoken with
    Tuchman and prepared the declaration on his behalf based on
    that discussion. It closed by asking Tuchman to execute the
    declaration, which asserted that he “never consented to any
    modification of the CBA authorizing Scheinman to issue an
    award beyond one year.” However, Hamilton Park later
    informed the Court that Tuchman refused to sign the
    declaration.
    Hamilton Park also submitted declarations from its
    chief financial officer, Donald Wuertz, and from Jacqueline
    Cousins, an administrator at Cranford Health and Extended
    Care, another member of the Tuchman Homes multi-
    employer bargaining group. The declarations said that neither
    the group as a whole nor Hamilton Park individually gave
    Scheinman or Tuchman authorization for a multi-year award.
    But they are silent on whether Tuchman, as the group’s
    representative, authorized Scheinman to issue such an award.
    II. Jurisdiction and Standard of Review
    The District Court had jurisdiction under 
    9 U.S.C. § 10
    and 
    9 U.S.C. § 11
    , and we have jurisdiction per 
    9 U.S.C. § 16
    (a)(1)(D) and 
    28 U.S.C. § 1291
    . “When reviewing a
    6
    district court’s denial of a motion to vacate an arbitration
    award, we review its legal conclusions de novo and its factual
    findings for clear error.” Whitehead v. Pullman Grp., LLC,
    
    811 F.3d 116
    , 119 n.23 (3d Cir. 2016).
    III. Discussion
    “There is a strong presumption under the Federal
    Arbitration Act [“FAA”] in favor of enforcing arbitration
    awards.” Brentwood Med. Assocs. v. United Mine Workers of
    Am., 
    396 F.3d 237
    , 241 (3d Cir. 2005) (internal citation
    omitted). We review them under an “extremely deferential
    standard,” the application of which “is generally to affirm
    easily the arbitration award.” Dluhos v. Strasberg, 
    321 F.3d 365
    , 370 (3d Cir. 2003). This deference, of course, is subject
    to certain limitations. Indeed, “[e]ffusively deferential
    language notwithstanding, the courts are neither entitled nor
    encouraged simply to ‘rubber stamp’ the interpretations and
    decisions of arbitrators.” Matteson v. Ryder Sys. Inc., 
    99 F.3d 108
    , 113 (3d Cir. 1996).
    For instance, the FAA gives district courts the
    authority to vacate awards where arbitrators “exceeded their
    powers, or so imperfectly executed them that a mutual, final,
    and definite award upon the subject matter submitted was not
    made.” 
    9 U.S.C. § 10
    (a)(4). Also subject to vacatur are
    awards that “do[] not draw [their] essence from the terms of
    the collective bargaining agreement,” Jersey Nurses Econ.
    Sec. Org. v. Roxbury Med. Grp., 
    868 F.2d 88
    , 88 (3d Cir.
    1989), that result from an arbitrator’s “own brand of
    industrial justice,” Citgo Asphalt Ref. Co. v. Paper, Allied-
    Indus., Chem. & Energy Workers Int’l Union Local No. 2-
    991, 
    385 F.3d 809
    , 816 (3d Cir. 2004) (internal quotation
    marks omitted), or that are contrary to “a well-defined and
    dominant public policy,” Exxon Shipping Co. v. Exxon
    Seamen’s Union, 
    993 F.2d 357
    , 360 (3d Cir. 1993) (internal
    7
    quotation marks omitted). With respect to the last category,
    because we are dealing with a CBA between a union and an
    employer, the public policy considerations embodied in the
    National Labor Relations Act (“NLRA”) are particularly
    relevant. Moreover, district courts can modify awards in cases
    where “arbitrators have awarded upon a matter not submitted
    to them, unless it is a matter not affecting the merits of the
    decision upon the matter submitted.” 
    9 U.S.C. § 11
    (b).
    There are two aspects of the arbitration award that
    Hamilton Park asks us to review. The first is the issuance of a
    multi-year award. Because the CBA only authorizes a single-
    year award, Hamilton Park would be on solid footing if it had
    not separately agreed to expand Scheinman’s jurisdiction. But
    it did reach such an agreement, and it is bound by it.
    The other issue is the inclusion of a second generation
    interest arbitration provision. Here, by contrast, there is no
    evidence that Hamilton Park consented to what Scheinman
    included. Because this portion of the award violates the
    principles of both the FAA and the NLRA, it cannot stand.
    A. Multi-year award
    Hamilton Park’s main contention is that there is no
    authority in the CBA for Scheinman to issue an award that
    goes through June 2016. This is true but ultimately not
    dispositive. That is because parties are permitted to “agree to
    allow an arbitrator to go beyond the express terms of the
    collective bargaining agreement.” High Concrete Structures,
    Inc. of N.J. v. United Elec. Radio & Mach. Workers of Am.,
    Local 166, 
    879 F.2d 1215
    , 1218 (3d Cir. 1989). Here,
    Scheinman found that the parties made such an agreement.
    Specifically, his award states that “[b]oth sides agreed” to a
    “multi-year Award, at my discretion.”
    8
    Meanwhile, Hamilton Park has presented no evidence
    sufficient to demonstrate that the agreement did not exist. The
    only evidence it produced shows that neither it nor other
    members of the bargaining group authorized Tuchman or
    Scheinman to issue a multi-year award. But there is no
    competent evidence that Tuchman did not agree to the longer
    award on behalf of the bargaining group.
    That evidence might have come in the form of a signed
    declaration from Tuchman. But, as discussed, Tuchman
    declined to sign it. We do not assume that Tuchman’s refusal
    to sign the declaration is necessarily the same as a repudiation
    of its contents. Indeed, we note that counsel for Hamilton
    Park represented to the District Court that Tuchman, though
    he refused to sign the document, “did not deny that he did not
    authorize Arbitrator Scheinman to issue an award beyond one
    year.” On appeal, Hamilton Park vigorously challenges the
    arbitration award but fails to mention—even once—that
    Tuchman refused to sign a declaration that counsel had
    submitted to the District Court. The Magistrate Judge found
    the circumstances surrounding the declaration to be
    “troubling[].” No doubt. And even more troubling is
    Hamilton Park’s failure to acknowledge the incident in its
    briefing.
    Hamilton Park places great emphasis on the lack of
    any writing memorializing the agreement to authorize a
    multi-year award. It argues that an oral agreement would
    violate the CBA, which requires any changes to be in writing
    and signed by authorized representatives. But we have held
    that, once parties are in front of an arbitrator, their decision to
    submit additional subjects to arbitration—even those beyond
    the scope of the CBA—need not be “express” and instead
    “may be based on other relevant . . . actions.” High Concrete
    Structures, 
    879 F.2d at 1219
    . Indeed, an agreement to allow
    an arbitrator to address particular issues “may be implied
    9
    from the conduct of the parties.” Teamsters Local Union No.
    764 v. J.H. Merritt & Co., 
    770 F.2d 40
    , 42 (3d Cir. 1985). In
    our case, the parties’ relevant conduct was to authorize
    Scheinman to enter a multi-year award. And the evidence of
    this is Scheinman’s acknowledgement of the agreement in his
    award.
    The CBA’s writing requirement thus does not get
    Hamilton Park relief from its agreement. For instance, in
    High Concrete Structures the employer argued that the
    arbitration award, which went beyond the terms of the CBA,
    violated both the clause declaring the agreement to be
    complete and final (i.e., an integration clause) and the
    provision preventing the arbitrator from changing the
    agreement’s terms. We disagreed, observing that nothing in
    the CBA expressly “prohibit[ed] the parties from agreeing to
    a submission which is broader.” 
    879 F.2d at 1219
     (“[I]n
    determining the arbitrator’s authority, the court must look not
    only at the text of the collective bargaining agreement but
    also at the agreed submission.”). Similarly, nothing in the
    CBA prohibited Hamilton Park and the union from agreeing
    to arbitrate additional issues.
    There are important policy considerations behind the
    rule from J.H. Merritt and High Concrete Structures.
    Specifically, there is a “strong federal policy favoring the
    speedy resolution of labor disputes through arbitration.” J.H.
    Merritt, 
    770 F.2d at 43
    . If a party, through its actions, were
    able to induce an arbitrator to issue an award outside the CBA
    and then challenge that award if it is unhappy with it, this
    policy would be frustrated. 
    Id.
     Hamilton Park, having agreed
    to go beyond the CBA, is bound by that determination.
    As a result, we cannot say that Scheinman “exceeded
    [his] powers” within the meaning of the FAA. See 
    9 U.S.C. § 10
    (a)(4). Nor does the award fail to “draw its essence from
    10
    the terms of the collective bargaining agreement,” Jersey
    Nurses, 
    868 F.2d at 88
    , because that requirement poses no
    obstacle where the parties agree to go beyond the scope of the
    CBA, High Concrete Structures, 
    879 F.2d at 1219
    .
    Meanwhile, there is no tension with a “well-defined and
    dominant public policy,” Exxon Shipping, 
    993 F.2d at 360
    (internal quotation marks omitted), as holding parties to their
    representations to an arbitrator by no means contravenes
    public policy. Finally, there are no concerns about an
    arbitrator meting out his “own brand of industrial justice,”
    Citgo Asphalt, 
    385 F.3d at 816
     (internal quotation marks
    omitted), or giving an award based on “a matter not
    submitted” for arbitration, 
    9 U.S.C. § 11
    (b), because here the
    evidence demonstrates that Scheinman had the parties’
    authorization.
    In one respect, however, the District Court erred in its
    analysis. Specifically, it determined that “the Court cannot
    challenge Arbitrator Scheinman’s finding that the parties
    consented to expanding his jurisdiction.” For this, the Court
    relied on the proposition that, as a general matter, we will not
    “reconsider the merits of an [arbitration] award even though
    the parties may allege that the award rests on errors of fact or
    on misinterpretation of the contract.” United Paperworkers
    Int’l Union, AFL-CIO v. Misco, Inc., 
    484 U.S. 29
    , 36 (1987).
    However, this analysis overlooks two considerations. The
    first is that courts are authorized to review challenges that go
    “to the making of the agreement to arbitrate.” Buckeye Check
    Cashing, Inc. v. Cardegna, 
    546 U.S. 440
    , 445 (2006) (internal
    quotation marks omitted). The second is that we can inquire
    into whether an award is obtained “through the arbitrator’s
    dishonesty.” Misco, 
    484 U.S. at 38
    . All of this goes to say that
    our deferential review of arbitration awards does not deprive
    Hamilton Park of the ability to establish that, contrary to
    Scheinman’s representations, it did not agree to a multi-year
    11
    award. The fatal flaw for Hamilton Park, however, is that it
    has not done so.
    B. Second generation interest arbitration provision
    The next issue is Scheinman’s inclusion of a second
    generation interest arbitration provision, which allows the
    union to force arbitration on any disputes that arise during
    negotiations over the award’s last year (June 30, 2015–June
    30, 2016). This is not a question of Scheinman’s authority to
    issue an award covering the year ending June 30, 2016.
    Rather, it is purely a question of the remedy that he imposed.3
    And unlike with the extension of jurisdiction to encompass a
    multi-year award, Scheinman did not find that the parties
    agreed to a new arbitration provision. Because Hamilton Park
    did not consent to the provision, its inclusion is contrary to
    both the FAA and the NLRA. Although this is a matter of
    first impression for us, we join the company of several of our
    sister courts that have found second generation interest
    arbitration provisions to be impermissible without mutual
    consent.
    As a starting point, under the FAA arbitration “is
    strictly a matter of contract.” Bel-Ray Co. v. Chemrite (Pty)
    Ltd., 
    181 F.3d 435
    , 444 (3d Cir. 1999). As a result, a basic
    premise is that we “initially must find that there is a valid
    agreement to arbitrate.” Century Indem. Co. v. Certain
    Underwriters at Lloyd’s, London, 
    584 F.3d 513
    , 523 (3d Cir.
    2009). And “[i]f a party has not agreed to arbitrate, the courts
    have no authority to mandate that [it] do so.” Bel-Ray, 181
    3
    The parties gave Scheinman the authority to impose all
    “appropriate remedies.” The key word, of course, is
    “appropriate.” We must therefore determine whether the
    arbitration provision is permissible.
    12
    F.3d at 444. Where a party has not executed an express
    agreement to arbitrate, we must therefore discern whether any
    “traditional principles of contract and agency law” can make
    it nonetheless bound by an arbitration provision. E.I. DuPont
    de Nemours & Co. v. Rhone Poulenc Fiber & Resin
    Intermediates, S.A.S., 
    269 F.3d 187
    , 194 (3d Cir. 2001)
    (internal quotation marks omitted).
    Here, the initial contract was the CBA. The parties
    subsequently enlarged Scheinman’s authority under the oral
    agreement to permit a multi-year award. However, neither the
    CBA nor the oral agreement contemplated the arbitration of
    disputes for the year starting June 30, 2015. Nor did Hamilton
    Park, through its conduct, imply that it agreed to such a
    provision. It certainly was permitted—similar to what it did
    when it consented to the longer award—to agree to a new
    arbitration provision. But there is no evidence that it did.
    To the extent Scheinman attempted to infer Hamilton
    Park’s consent by reference to the arbitration provision in the
    2008–2013 agreement, that inference was flawed. Under this
    reasoning, Hamilton Park’s agreement to arbitrate disputes
    for that contract’s last year (February 28, 2012–February 28,
    2013) means that it would consent to having the same
    arrangement in place for the new award’s last year (June 30,
    2015–June 30, 2016). But neither Scheinman in his award nor
    the union on appeal has identified any principle of contract or
    agency law that would require a party to arbitrate in the future
    merely because it has agreed to do so in the past.
    The District Court notes that Hamilton Park, in
    agreeing to a multi-year award, never expressly “defin[ed] the
    boundaries” of Scheinman’s discretion and never objected
    during the arbitration process to the inclusion of the second
    generation interest arbitration provision. But this gets things
    backwards. Our starting principle is not that parties can be
    13
    forced to arbitrate unless they agree otherwise, but rather that
    “[i]f a party has not agreed to arbitrate, the courts have no
    authority to mandate that [it] do so.” Bel-Ray, 
    181 F.3d at 444
    . And even assuming there might be circumstances where
    a lack of objection can signal consent, this is not one of them.
    There is no evidence that Hamilton Park had any reason to
    suspect prior to the issuance of the award that it would
    contain a second generation interest arbitration provision. A
    party cannot object to what it cannot reasonably foresee.
    Apart from being untethered from the principles
    embodied in the FAA, the second generation interest
    arbitration provision also conflicts with the NLRA’s public
    policy considerations. Under the NLRA, employers and
    unions are required to bargain over “wages, hours, and other
    terms and conditions of employment.” Brockway Motor
    Trucks, Div. of Mack Trucks, Inc. v. NLRB, 
    582 F.2d 720
    , 725
    (3d Cir. 1978) (internal quotation marks omitted). On these
    subjects, the parties have an obligation to negotiate in good
    faith. NLRB v. Wooster Div. of Borg-Warner Corp., 
    356 U.S. 342
    , 349 (1958). By limiting mandatory bargaining to these
    topics, the NLRA embodies the public policy that, for all
    other subjects, parties are “free to bargain or not to bargain,
    and to agree or not to agree.” 
    Id.
    The question of whether to require arbitration does not
    relate to any of the mandatory bargaining subjects. As a
    result, the NLRA allows parties to accept or reject an
    arbitration provision as they see fit. However, if arbitrators
    were free to do as Scheinman did here, parties would have no
    control over the continued inclusion of an arbitration
    provision. This would allow for an end-run around the
    NLRA’s public policy considerations.
    To see how this problem plays out in practice, we start
    with the undisputed premise that, because an arbitration
    14
    provision is not a mandatory subject of bargaining, Hamilton
    Park was under no obligation to agree to arbitration in the
    2008–2013 CBA. It is only because Hamilton Park reached a
    limited agreement—the inclusion of an arbitration provision
    in a single CBA—that Scheinman was involved in the case in
    the first instance. He then used this agreement to expand
    Hamilton Park’s arbitration requirements. If an arbitrator,
    once empowered to decide a particular dispute, could then
    require all future disputes to be arbitrated, a party that has
    once agreed to a limited arbitration provision could forever be
    held hostage to it. As the Fifth Circuit explained,
    a party . . . may find itself locked into that
    procedure for as long as the bargaining
    relationship endures. Exertion of economic
    force to rid oneself of the clause is foreclosed,
    for the continued inclusion of the term is for
    resolution by [the arbitrator, who is] an
    outsider. Parties may justly fear that the
    tendency of arbitrators would be to continue
    including the clause, for that is exactly what
    happened in this case.
    NLRB v. Columbus Printing Pressmen & Assistants’ Union
    No. 252, 
    543 F.2d 1161
    , 1169 (5th Cir. 1976).
    Because second generation interest arbitration
    provisions imposed without consent violate the contract law
    principles of the FAA and the public policy goals of the
    NLRA, we hold that they are unenforceable. As discussed,
    there is no evidence that Hamilton Park agreed to have such a
    provision. Hence it must be removed from Scheinman’s
    award.
    Our holding tracks the overwhelming consensus of
    federal courts. See, e.g., Local Union No. 666, Int’l Bhd. of
    15
    Elec. Workers, AFL-CIO v. Stokes Elec. Serv., Inc., 
    225 F.3d 415
    , 425 (4th Cir. 2000); Local 58, Int’l Bhd. of Elec.
    Workers, AFL-CIO v. Se. Mich. Chapter, Nat’l Elec.
    Contractors Ass’n, Inc., 
    43 F.3d 1026
    , 1032 (6th Cir. 1995);
    Am. Metal Products, Inc. v. Sheet Metal Workers Int’l Ass’n
    Local Union No. 104, 
    794 F.2d 1452
    , 1456–57 (9th Cir.
    1986); Sheet Metal Workers’ Int’l Ass’n, Local 14 v. Aldrich
    Air Conditioning, Inc., 
    717 F.2d 456
    , 459 (8th Cir. 1983);
    Columbus Printing, 
    543 F.2d at
    1169–7. See also Globe
    Newspaper, 
    648 F. Supp. 2d at 198
     (“It appears that every
    court to have considered this question has concluded that this
    type of second generation interest arbitration provision is
    unenforceable . . . .”).4
    *      *      *      *      *
    Our deference to an arbitrator’s award does not include
    the rubber stamping of a self-perpetuating arbitration
    provision that the parties did not agree to include. We
    therefore reverse the portion of the District Court’s order
    approving the inclusion of a new arbitration provision for
    disputes arising for the year starting June 30, 2015. We
    remand the case with instructions for the Court to void only
    the portion of the award providing for that arbitration. See,
    4
    The District Court notes that the typical case where a court
    voids a second generation interest arbitration provision occurs
    when the union insists on its inclusion. The Court correctly
    observes that there is no evidence that the union did so here,
    meaning that Scheinman may have included it on his own
    initiative. However, this has no bearing on our analysis. Even
    if the impetus for the provision comes from an arbitrator
    rather than a party, the result is the same: the imposition of a
    requirement to arbitrate. Unless both parties consent to that
    arrangement, it is unenforceable.
    16
    e.g., Buckeye Check Cashing, 
    546 U.S. at 445
     (“[A]n
    arbitration provision is severable from the remainder of the
    contract.”). We affirm the Court’s order in all other respects.5
    5
    In the event that the parties have already engaged in
    arbitration for the June 30, 2015–June 30, 2016 contract year,
    nothing in this opinion prevents them from raising to the
    District Court any arguments that may exist as to why any or
    all of the resulting award should be enforced notwithstanding
    the invalidity of the arbitration provision.
    17
    

Document Info

Docket Number: 15-2595

Citation Numbers: 817 F.3d 857, 205 L.R.R.M. (BNA) 3645, 2016 U.S. App. LEXIS 5981, 2016 WL 1274463

Judges: Ambro, Jordan, Scirica

Filed Date: 4/1/2016

Precedential Status: Precedential

Modified Date: 11/5/2024

Authorities (22)

Globe Newspaper Co. v. International Ass'n of MacHinists , 648 F. Supp. 2d 193 ( 2009 )

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Brentwood Medical Associates v. United Mine Workers of ... , 396 F.3d 237 ( 2005 )

Exxon Shipping Company v. Exxon Seamen's Union , 993 F.2d 357 ( 1993 )

National Labor Relations Board v. The Columbus Printing ... , 543 F.2d 1161 ( 1976 )

American Metal Products, Inc., Cross-Appellee v. Sheet ... , 794 F.2d 1452 ( 1986 )

Jersey Nurses Economic Security Organization v. Roxbury ... , 868 F.2d 88 ( 1989 )

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Citgo Asphalt Refining Company v. The Paper, Allied-... , 385 F.3d 809 ( 2004 )

High Concrete Structures, Inc. Of N.J. v. United Electrical,... , 879 F.2d 1215 ( 1989 )

bel-ray-company-inc-v-chemrite-pty-ltd-lubritene-pty-ltd-ivor-h , 181 F.3d 435 ( 1999 )

eric-dluhos-v-anna-strasberg-mark-roesler-esquire-jane-doe-aka , 321 F.3d 365 ( 2003 )

United Paperworkers International Union v. Misco, Inc. , 108 S. Ct. 364 ( 1987 )

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