Monee Nursery v. Int'l Union Eng 150 ( 2003 )

In the
United States Court of Appeals
For the Seventh Circuit
____________
No. 02-3656
MONEE NURSERY & LANDSCAPING COMPANY,
Plaintiff-Appellant,
v.
INTERNATIONAL UNION OF OPERATING ENGINEERS,
LOCAL 150, AFL-CIO,
Defendant-Appellee.
____________
Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 01 C 571—Charles R. Norgle, Sr., Judge.
____________
ARGUED FEBRUARY 25, 2003—DECIDED NOVEMBER 7, 2003
____________
Before POSNER, COFFEY, and WILLIAMS, Circuit Judges.
WILLIAMS, Circuit Judge. Monee Nursery & Landscaping
Company (“Monee”) brought suit in federal court pursuant
to the Labor Management Relations Act, 29 U.S.C. § 185,
seeking to vacate an arbitrator’s decision that Monee
violated a collective bargaining agreement (“CBA”) with
International Union of Operating Engineers, Local 150,
AFL-CIO (“Local 150”). The district court ruled that the
arbitrator acted within his authority when he found Monee
improperly used non-union members to perform work
covered by the CBA, and it enforced the arbitration award.
2 No. 02-3656
We agree with the district court that the arbitrator acted
within his authority in interpreting the CBA, and we
affirm.
I. BACKGROUND
Monee is a tree, brush, and foliage nursery and landscap-
ing contractor operating in the southwest suburbs of
Chicago. Local 150 is a labor organization representing
individuals who operate heavy equipment at landscaping
and construction sites including Monee’s. Monee and Local
150 were parties to a CBA that required Monee to use bar-
gaining unit members of Local 150 to operate heavy
equipment at landscaping work sites and to follow certain
wage, benefit, and grievance procedures. The CBA between
Monee and Local 150 consisted of a “Memorandum of
Agreement” that also incorporated by reference the stan-
dard Illinois and Indiana Landscaping Contractors Labor
Agreement (“Master Agreement”).
In April 1992, a Local 150 representative approached
Monee employees at a job site in Merrillville, Indiana,
where heavy equipment was in use and asked to see their
union cards. None of Monee’s employees were able to pro-
duce a union card, and work was stopped at the site. After
discussions between the parties, Local 150 agreed to issue
a temporary permit to one of Monee’s employees, and work
at the site continued.
In November 1993, a Local 150 representative visited a
Monee work site in Barrington, Illinois, and again re-
quested to see employee union cards. A Monee employee
operating heavy equipment was unable to produce a card
and stated that he was not a member of the union. As a
result, Local 150 filed a written grievance against Monee on
November 17, 1993, for its use of a non-union employee to
operate heavy equipment. That same month, Local 150 sent
No. 02-3656 3
an Arbitration Demand Letter (“scope letter”) to the
American Arbitration Association (“AAA”) requesting arbi-
tration of the grievance.
Monee responded to the request for arbitration by filing
an action in Illinois state court seeking to enjoin the arbi-
tration, claiming that a valid CBA did not exist between the
parties. During the course of the litigation in state court,
representatives from Local 150 visited Monee work sites in
the spring of 1994, the fall of 1994, and on three separate
occasions during the summer and fall of 1999. During each
of the visits, Local 150 representatives observed Monee
employees operating heavy equipment. On all of the visits
Local 150 representatives asked Monee employees to
present their union cards, and none of the employees were
able to do so. Neither the Local 150 representatives nor the
union filed additional written grievances with Monee at the
time of the incidents. On September 25, 1996—66 days
before a December 1, 1996, automatic renewal of the
CBA—Monee sent a letter to Local 150 seeking to terminate
their CBA. The Illinois state court ultimately determined
the CBA was enforceable, and the Illinois appellate court
affirmed that determination.
With the years of protracted litigation over the validity of
the CBA completed, Local 150 resubmitted a scope letter to
the AAA in November 1998, and the grievance went to
arbitration in 2000. An arbitrator found that Monee had
violated the CBA and sustained the grievance. Monee was
ordered to pay the union $133,168 based on nonpayment of
fringe benefit plans and the underpayment of wages from
the date Local 150 filed the grievance to the date of the
arbitration award.
Monee subsequently brought suit in federal court, at-
tempting to vacate the arbitration award on the ground that
the arbitrator had exceeded his authority. Specifically,
Monee contended that the arbitrator erred by: (1) consider-
4 No. 02-3656
ing incidents beyond the single grievance filed on November
13, 1993; (2) considering matters after December 1, 1996,
the date Monee allegedly terminated the CBA; and (3)
awarding $133,168, which Monee viewed as excessive based
on the CBA and the evidence presented. On cross-motions
for summary judgment, the district court found that
Monee’s assertions were meritless and granted summary
judgment in favor of Local 150. Monee now appeals, raising
the same issues determined by the district court.
II. ANALYSIS
We begin by noting the deferential standard of review
that we apply to the review of an arbitrator’s award. Al-
though we review the district court’s decision to grant Local
150’s summary judgment motion de novo, Am. Postal
Workers Union, Milwaukee Local v. Runyon, 185 F.3d 832,
835 (7th Cir. 1999), a court’s examination of an arbitration
award itself is extremely limited. N. Ind. Pub. Serv. Co. v.
United Steelworkers of Am., 243 F.3d 345, 346-47 (7th Cir.
2001). The examination of an arbitral award centers on
whether the award “draws its essence” from the CBA. Id.
at 347. “Indeed our review is ‘close to nonexistent’ if the
arbitrator ‘interprets’ rather than ‘revises’ the collective
bargaining agreement.” Ladish Co., Inc. v. Int’l Ass’n of
Machinists & Aerospace Workers, Dist. No. 10, 966 F.2d 250,
252 (7th Cir. 1992) (citations omitted). If an arbitrator is
even arguably acting within the scope of his authority in
interpreting the CBA, his decision will be enforced. This
applies even if the “court is convinced he committed [a]
serious error” of fact or law in reaching his decision. Major
League Baseball Players Ass’n v. Garvey, 532 U.S. 504, 509
(2001) (per curiam).
No. 02-3656 5
A. Arbitrator’s Scope of Authority Under the CBA
First, in an apparent attempt to circumvent the deferen-
tial standard of review, Monee argues that the arbitration
award should be vacated because the arbitrator exceeded
the scope of his authority under the CBA by not limiting the
arbitration according to the single grievance filed by Local
150 in November 1993. Specifically, Monee contends that
the CBA expressly limited the authority of the arbitrator to
consider grievances presented in writing1 and that the
November 17, 1993, grievance letter filed by Local 150
references only a single incident. Therefore, according to
Monee, the CBA limited the issue to be considered by the
arbitrator to a single violation in 1993 and nothing more.
We disagree.
Monee is correct that the CBA requires grievances to be
presented in writing, but neither the grievance letter nor
the scope letter limits the grievance to a single incident.
The November 17, 1993, written grievance stated that
“[t]his Union shall continue to hold your company liable for
all back wages and fringe benefits lost by members of the
bargaining unit who would have worked had your company
honored our agreement.” Furthermore, the scope letter sent
by Local 150 to the arbitrator and Monee in 1993 and again
in 1998 identified the violation as continuing, and not
limited to just the single incident complained of in the
written grievance. It stated: “a dispute has arisen between
the Union and Monee Nursery Company over a grievance
filed by the Union regarding a continuing violation of
Article 1.” It was safely within the arbitrator’s scope of
authority to interpret the CBA to apply to incidents stem-
1
Article 8, Section 1 of the CBA states that in order for a griev-
ance to be valid it “must be reduced to writing . . . and presented
to the Company within two weeks following the occurrence of the
event giving rise to the grievance.”
6 No. 02-3656
ming from the same type of violation as was complained
of in the November 17, 1993, written grievance and the
December 1993 scope letter. See Runyon, 185 F.3d at 835(“[An] arbitrator’s interpretation of the scope of the issue
must be upheld so long as it is rationally derived from the
parties’ submission.”).
Monee attempts to take another bite at the same apple by
reframing its argument to suggest that the arbitrator
exceeded his authority by applying the incorrect standard
to determine whether Local 150’s grievance was a contin-
uing violation spanning 1993-2000. In order to discern
whether Monee’s violation was continuing, the arbitrator
asked whether the “action that flow[ed] from the error [was]
what prompt[ed] the grievance and [was] the matter
properly in arbitration,”2 and he explained that a continu-
ing violation is one in which the act complained of may be
said to be repeated.3 This court, when determining whether
a subsequent incident was properly part of a continuing
violation, has asked whether it was “based upon” the earlier
action. Metz v. Tootsie Roll Indus., 715 F.2d 299, 305 (7th
Cir. 1983) (quoting Local Lodge No. 1424, Int’l Ass’n of
2
While the continuing violation doctrine most often arises when
a plaintiff seeks to connect an earlier violation to a present one in
order to overcome a statute of limitations hurdle, see Heard v.
Sheahan, 253 F.3d 316, 319 (7th Cir. 2001), in this case, the con-
cept of continuing violation is more akin to the common under-
standing of the words used. The continuing violation in the pres-
ent case is, simply put, a violation of the CBA by Monee that was
ongoing.
3
Monee cites employment discrimination cases for the proposi-
tion that, because Local 150’s spot inspections occurred several
years apart, the violation cannot be considered continuing. How-
ever, Monee provides no cases that adopt this formulation of the
continuing violation doctrine in this context, and we decline to do
so here.
No. 02-3656 7
Machinists v. N.L.R.B., 362 U.S. 411, 422-23 (1960)). As the
standard employed by the arbitrator strikes us as quite
similar to the one endorsed by this court, we see no reason
to quibble with his conclusion.
Moreover, it is clear that Monee was on notice that the
violation was ongoing. Carl Quanstrom, the owner of
Monee, admitted that at no point between 1993 and the
hearing had Monee used union members to perform the
work at issue or paid union-scale wages or benefits to his
employees. The arbitrator pointed to the history of the
dispute before the Illinois appellate court to note that “it
strains credulity to believe the Employer was not on notice
that the Union continued to demand the use of the bar-
gaining unit personnel to perform bargaining unit work.”
Characterizations of the issue in the original November
1993 written grievance (“this Union shall continue to hold
your company liable”) and in the December 1993 scope
letter (“a dispute has arisen . . . regarding a continuing
violation”) also supports this conclusion. See Runyon, 185
F.3d at 835 (“Parties to an arbitration may stipulate the
issues they want determined and increase or limit the
arbitrator’s contractual authority by their express submis-
sion.”) (citation omitted). We see no reason to reject the
arbitrator’s formulation of the grievance as a continuing
violation, and find that he was acting within his scope of
authority under the CBA when he considered incidents
beyond the one referenced in the November 1993 grievance
letter.
B. Termination of the CBA
Next, Monee contends that the arbitrator’s determination
of liability through 2000 was also improper because Monee
had terminated the CBA when it wrote to Local 150 on
September 25, 1996, 66 days before the CBA would have
been automatically renewed. The arbitrator found that
8 No. 02-3656
Monee’s letter did not provide timely notice and thus did
not properly terminate the agreement. At the center of the
argument is a conflict between the Memorandum of Agree-
ment, which required 90 days’ notice in writing to cancel
the CBA and the Master Agreement, which was incorpo-
rated by the Memorandum of Agreement and only required
60 days’ notice. The arbitrator concluded that although the
Memorandum of Agreement incorporated by reference the
terms of the Master Agreement, it clearly created a differ-
ent termination provision and had been specifically agreed
to by the parties. Thus, the arbitrator enforced the 90-day
provision in the Memorandum of Agreement and found
Monee’s attempt to cancel untimely. “Because the parties
have contracted to have disputes settled by an arbitrator
chosen by them . . ., it is the arbitrator’s view of the facts
and of the meaning of the contract that they have agreed to
accept.” United Paperworkers Int’l Union, AFL-CIO v.
Misco, Inc., 484 U.S. 29, 37-38 (1987); Ladish, 966 F.2d at
253. Given the great deference with which the courts review
arbitrators’ interpretations of contract provisions, we find
no error in the arbitrator’s determination that the 90-day
notice period in the Memorandum of Agreement controls.
In an attempt to give breath to its lifeless argument,
Monee contends that the Illinois appellate court “deter-
mined” that Monee cancelled the CBA in 1996 and that the
60-day deadline controlled. The appellate court did not
make the finding Monee claims. Although the court men-
tioned in its recitation of the facts that the Master Agree-
ment required a 60-day notice to cancel the agreement, it
explicitly stated that “neither of the parties took . . . action
to terminate the contract.”4 Monee Nursery & Landscaping
4
We find Monee’s mischaracterization of the Illinois appellate
court’s decision troubling, and we remind it, as we did in oral ar-
gument, that an intentional misstatement of law before a court is
a serious offense that violates Rule 3.3(a) of the Model Rules of
(continued...)
No. 02-3656 9
Co. v. Local 150 Int’l Union of Operating Eng’rs, 740 N.E.2d
94 (Ill. App. Ct. 1998) (unpublished opinion).
C. Calculation of Damages
Lastly, Monee lodges multiple complaints regarding the
arbitrator’s calculation of the damages due to Local 150.
Most of Monee’s arguments rehash issues already contested
or are presented in such a conclusory manner as to be
difficult to evaluate and close to waiver. Further, as with an
arbitrator’s interpretation of a contract, we employ an
extremely deferential standard of review to damages
calculations. “[W]here it is contemplated that the arbitrator
will determine remedies for contract violations that he
finds, courts have no authority to disagree with his honest
judgment in that respect.” Misco, 484 U.S. at 38. Monee’s
main complaints, simply put, are that the arbitrator cal-
culated wages for an eight-hour day rather than a four-hour
day, and that the arbitrator based his calculations on the
period between November and May when little to no
landscaping services are performed. We examine each of
these issues in turn.
First, Monee argues that, since Article 4, Section 1 of the
CBA states that “a regular employee who reports for work
and is assigned to work on Monday through Friday shall be
4
(...continued)
Professional Conduct (“a lawyer shall not knowingly make a false
statement of material fact or law to a tribunal”) and can lead to
sanctions under Rule 11(c) of the Federal Rules of Civil Procedure.
See Teamsters Local No. 579 v. B&M Transit, Inc., 882 F.2d 274,
280 (7th Cir. 1989) (“While a court must not sanction a party for
a reasonable misconstruction of case law, a party is not entitled
to deliberately ignore or misstate case law.”) (internal citations
omitted).
10 No. 02-3656
granted a minimum of four (4) hours of work or four (4)
hours of pay per day,” damages should only be awarded for
four hours per day. But this provision does not limit employ-
ees’ wages to four hours of pay, and it is obviously silent as
to the number of hours actually worked by Monee employ-
ees. The arbitrator based his calculation of damages on the
provision in the CBA that requires landscaping equipment
operators to receive a specified hourly rate and Monee’s
citation to Section 1 gives us no reason to disturb the
arbitrator’s wage calculation.
Monee also argues that the arbitrator’s award should
be vacated because he based the award on a November
through May period rather than on a May through Novem-
ber period. The arbitrator’s reference to November through
May is likely a scrivener’s error, as the common period for
landscaping services to be rendered is May through Novem-
ber. Even if we are mistaken, as long as the “arbitrator is
even arguably construing or applying the contract and
acting within the scope of his authority, that a court is
convinced he committed serious error does not suffice to
overturn his decision.” Garvey, 532 U.S. at 509. The award
of damages was well within the scope of the arbitrator’s
authority; therefore, we enforce the arbitrator’s decision
with respect to damages.5
5
Local 150 also filed a motion under Rule 38 of the Federal Rules
of Appellate Procedure seeking sanctions for what it views to be
Monee’s frivolous appeal. Although not meritorious, Monee’s
appeal is not so frivolous as to be the type where “the result is
foreordained by the lack of substance to the appellant’s argu-
ments,” Mars Steel Corp. v. Cont’l Bank N.A., 880 F.2d 928, 938
(7th Cir. 1989), and Local 150 has not provided any evidence that
Monee continued to litigate this case in bad faith or for the
purpose of harassment or sheer obstinacy. See Reid v. United
States, 715 F.2d 1148, 1154-55 (7th Cir. 1983). Local 150’s motion
is DENIED.
No. 02-3656 11
III. CONCLUSION
For the reasons stated above, we AFFIRM the district
court’s judgment and ENFORCE the arbitration award.
A true Copy:
Teste:
________________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—11-7-03