Minneapolis-St. Paul v. Northwest ( 2004 )

United States Court of Appeals
For the Eighth Circuit
No. 03-3082
*
Minneapolis-St. Paul Mailers Union, * Appeal from the United
Local #4, * States District Court
* for the District of
Plaintiff - Appellant, * Minnesota
*
v. *
*
Northwest Publications, Inc., doing *
business as St. Paul Pioneer Press, *
*
Defendant - Appellee. *
*
Submitted: May 13, 2004
Filed: August 13, 2004
Before WOLLMAN, BYE, and HAMILTON1, Circuit Judges.
HAMILTON, Circuit Judge:
1
The Honorable Clyde H. Hamilton, United States Circuit Judge for the United
States Court of Appeals for the Fourth Circuit, sitting by designation.
The Minneapolis-St. Paul Mailers Union, Local #4 (the Union) appeals the
district court’s2 order confirming in full an arbitration award in favor of Northwest
Publications, Inc., d/b/a St. Paul Pioneer Press (the Company). For reasons that
follow, we affirm.
I.
The Company publishes a daily newspaper entitled the “St. Paul Pioneer Press”
and employs members of the Union to perform various tasks in order to prepare the
newspapers for public sale and distribution. At issue in the present dispute between
the Union and the Company is work known as “insertion” or “inserting,” which is the
placing of sections of the paper and advertising flyers into other parts of the paper to
create a single package. At all times relevant to this case, the working relationship
between the Union and the Company was governed by a collective bargaining
agreement (the CBA) covering the period November 1, 1999 through October 31,
2004.
Several provisions of the CBA are particularly relevant to the issues on appeal.
The first is Section 6 of the CBA, which initially sets forth the Union’s jurisdiction as
follows:
The jurisdiction of the Union is defined as including all mailing room
work of the Publisher and includes all work appertaining to mailing, such
as addressing, tagging, jogging, stamping, labeling, bundling or
wrapping, preparing list or wrappers . . . stacking, folding, handling of
bundles or mail sacks, distributing, counting of papers (leaving or
returning), banding, strapping, tying, sacking, delivering papers to
chutes, inserting or dispatching of papers, envelopes or magazines,
whether done by hand or power machine . . . and the Publisher shall make
no other contract covering such work except as otherwise provided in
this agreement. . . .
The Honorable Ann D. Montgomery, United States District Judge for the
2
United States District Court for the District of Minnesota.
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All work within the jurisdiction of the Union shall be performed only by
journeymen, journeymen II, trainees and extras, except as otherwise
provided in this agreement.
Notwithstanding any other provision of this agreement, the Publisher
shall have the right to do the following:
A. To distribute newspapers and transaction sheets to the field
in any form or manner determined by management and to count and tie
newspapers in the field by persons not covered by this agreement.
However the Publisher’s right to tie newspapers in the field shall not be
construed as a right to prepare newspapers in the field for wholesale
redistribution to other distribution centers.
(J.A. 40).
The second relevant provision of the CBA is contained in Addendum No. 4.,
which has been in effect since November 21, 1978, as part of each of the sequential
collective bargaining agreements governing the parties’ relationship. Notably, there
is no dispute that Addendum No. 4 is part of the CBA presently at issue. Addendum
No. 4 provides as follows:
THIS AGREEMENT, made this 21st day of November, 1978, between
NORTHWEST PUBLICATIONS, INC., Publisher of the St. Paul Pioneer
Press and Dispatch and MINNEAPOLIS-ST. PAUL MAILERS’ UNION
#4, shall be attached to, and made part of, the present collective
bargaining agreement.
A. The intent of this Agreement is as follows:
1. The Publisher shall have no restrictions on his
method of bulk distribution other than the
inserting of a minimum of 40,000 complete
Sunday papers by Mailroom personnel
{40,000 changed to 20,000 effective 11-1-83}.
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2. The balance of the Sunday paper may be
distributed in a maximum of three separate
parts. Inserting {if any} into the three separate
parts will be done by Mailroom personnel.
3. In the event of any conflict between this
supplemental agreement and any provision of
the collective bargaining agreement between
Minneapolis-St. Paul Mailers’ Union #4 and
Northwest Publications, Inc. . . . the terms of
this supplemental agreement shall control. . . .
B. In recognition of the above agreement, the Publisher agrees to
provide the following benefits:
1. DENTAL PLAN
Effective the first month after signing of the
Agreement, the Publisher will contribute to a
Dental Plan, selected by the Union, a
maximum of $25 per month for all regular
situation holders in the Mailroom who elect to
enroll in the plan. The Publisher shall have no
liability in respect to the plan other than the
stated contribution {increased to $42.05 per
month effective 11-1-83}.
2. HOSPITALIZATION
Effective with the first payroll deduction
following the signing of this agreement, the
Company contribution to the group hospital
plan specified in the first paragraph of Section
22 of the Collective Bargaining Agreement is
increased to 100%.
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Effective with the first payroll deduction
following signing of this Agreement, the
Publisher will pay the full cost of Group
Health {HMO} coverage for each employee so
enrolled up to an amount equal to 110% of the
premium required for the applicable coverage
in the group hospitalization plan specified in
Section 22 of the current Agreement.
3. ITU NEGOTIATED PLAN
The Publisher’s contribution to the ITU
Negotiated Pension Plan shall be increased by
1/2% effective May 1, 1978, for a maximum of
4-1/2%.
4. ONE DAY VACATION
Vacations may be taken one day at a time by
notifying the Chairman, subject to the approval
of the Foreman.
(J.A. 71-72) (emphasis added).
Also of relevance to the issues on appeal, the record contains an internal
memorandum of the Company in which a Company negotiator contemporaneously
summarized for management his understanding of the agreement which formally
became Addendum 4 (the 1978 Internal Memo). In relevant part, the 1978 Internal
Memo provides as follows:
The parties agreed also to a change in the concept of jurisdiction in that
the union stated the company must insert a minimum of 40,000
“Complete Sunday Papers.” In the exchanges on this subject it is
important to remember what the understandings of the parties were on
this 40,000 completes.
(1) This is the total liability of the Company.
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(2) The union stated it did not care to when [sic] these
completes were distributed.
(3) The Company can distribute the rest of its circulation
in any manner and to whomever it chooses so long as
it is not over three pieces.
It is clearly understood that management need not concern
itself that these completes be distributed to single copy
distributors.
(4) The union stated what it was giving to management
was “Bulk Delivery” as opposed to its current odd
counts etc. delivery.
(5) The union stated management attorneys should write
the language which would reflect this understanding.
Note: It is important that the language reflect this is a
modification of the union’s jurisdiction on inserting the
total product - and that its only obligation is to a number
(40,000 completes) and further the rest of the distribution
would be at the discretion of the company.
(J.A. 76-77).
Also of relevance in this appeal is the CBA’s clause providing that all
grievances first be presented to a Local Joint Standing Committee, and then if still
unresolved, to arbitration:
Section 7. Grievance Procedure. A local joint standing committee of
two representatives shall be selected by the Publisher and a like
committee of two shall be selected by the Union, and in case of a
vacancy, absence or refusal of either of such representatives to act,
another shall be appointed to serve in his/her stead. To this Local Joint
Standing Committee shall be referred all questions which may arise as
to the construction to be placed on any clause of this contract, or alleged
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violation thereof, all disputes regarding discharged employees, which
cannot be settled otherwise. . . . This Committee shall not have authority
to create new conditions or add new provisions to this contract nor shall
it have any authority with regard to interim openings. Should this Local
Joint Standing Committee be unable to agree within ten (10) days then
it shall refer the matter to a board of arbitration . . . . The decision of this
arbitration board on any matter referred to it shall be by majority vote and
shall be final and binding upon both parties.
(J.A. 41) (emphasis added).
We now turn to the historical facts giving rise to the present dispute. For over
thirty years, the Sunday edition of the St. Paul Pioneer Press was distributed to home
delivery carriers in bundles of separate sections, such that the newspapers were not
fully inserted when they left the mailroom. In early 1990, the Union learned that the
Sunday papers were being delivered to customers’ homes as fully-inserted single
packages, despite continuing to leave the printing facility in separate bundles. The
Union brought this issue to the attention of the Company, contending that any
insertion work done by home delivery carriers contravened the CBA.
The Company responded that the delivery persons were independent
contractors, as opposed to employees, who were making autonomous decisions to
insert the papers and deliver them as such, and over whom the Company had no
control. This dispute continued informally until the Union filed a formal grievance
in September 2000, claiming violations of the jurisdictional provision of the CBA,
Section 6, based on the Company’s alleged use of non-Union personnel to perform
insertion work. The grievance was submitted to the Local Joint Standing Committee,
which could not resolve the matter. Notably, the Company did not argue the
applicability of Addendum No. 4 in support of its position before the Joint Standing
Committee.
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Subsequently, in September 2001, the matter went to arbitration before a single
neutral arbitrator (the Arbitrator).3 The stipulated issue statement presented the
following questions to the Arbitrator: “Did the Company violate its jurisdictional
agreements with Local 4 by having inserting work performed at distribution centers
by non-union personnel? If so, what is the appropriate remedy?” (J.A. 19).
In contrast to its case before the Joint Standing Committee, before the
Arbitrator, the Company argued the applicability of Addendum No. 4 to resolve the
insertion work dispute. Specifically, the Company argued that, under the plain terms
of Addendum No. 4, the Company had the right to hire non-Union employees to
perform any insertion work over 20,000 (previously 40,000) complete Sunday papers
per week and the insertion work associated with making up the separate parts
described in paragraph A.2. of Addendum No. 4.
Notably, the Union raised no objection to the Company’s introduction of
Addendum No. 4 as part of its case before the arbitrator. On the question of whether
Addendum No. 4 resolved the insertion work dispute, the Union argued that it did not,
and, in fact, argued that Addendum No. 4 supported its position. According to the
Union, the reference to 20,000 papers in Addendum No. 4 refers to newspapers that
will only be used for single-copy sales. Additionally, the Union argued that if
Addendum No. 4 truly means what the Company says it means, the Company would
have argued the applicability of Addendum No. 4 during the earlier stages of the
dispute. Also noteworthy is the fact that the Union raised no objection before the
Arbitrator to the Company’s introduction of the 1978 Internal Memo as part of its
case.
3
The parties waived the provision in the CBA calling for a five-person board
of arbitration.
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On February 24, 2002, the Arbitrator issued his Opinion and Award in which
he denied the Union’s grievance. According to the Arbitrator, “[o]n its face, Section
6 appears to reserve to the bargaining unit all mailing room work, which included the
inserting of newspapers, without regard to the location of its performance.” (J.A. 26).
The Arbitrator determined, however, that although Section 6 may have originally
reserved all insertion work to the bargaining unit, the Union relinquished a substantial
amount of such work to the Company’s discretion via Addendum No. 4 in exchange
for significant economic concessions by the Company. In this regard, the Arbitrator
specifically found that “[w]hat the Union retained was the right to fully insert the
20,000 (40,000 originally) complete Sunday newspapers specified in the Addendum
as well as all of the insertion work associated with making up the separate parts
described in paragraph A.2. of Addendum No. 4.” (J.A. 28-29). The Arbitrator found
that Addendum No. 4 permitted the Company to hire non-Union employees to perform
the balance of any other insertion work needed.
In rejecting the Union’s argument that the 20,000 papers (40,000 originally)
referred only to single-copy sales, the Arbitrator relied upon the complete absence of
any language in Addendum No. 4 restricting “the use or distribution of the 20,000
Sunday papers that must be fully inserted by bargaining members.” (J.A. 27). The
Arbitrator also relied upon the explicit statement in Addendum No. 4 that the
Company “‘shall have no restrictions’” on the method of bulk distribution. Id.
Moreover, the Arbitrator also stated that the 1978 Internal Memo bolstered his
reading of Addendum No. 4. Indeed, the Arbitrator found the 1978 Internal Memo “is
not only the best evidence of the Addendum’s negotiated intent, on this record, it is
the only meaningful evidence of bargaining history; no contrary documentary evidence
of bargaining history was introduced and none of the witnesses who testified at
arbitration were participants in that round of bargaining.” Id. The Arbitrator further
explained as follows:
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While the internal memo represents the view of the Company’s
negotiators and is not signed by any Union official, a careful reading of
the memo and the Addendum reveals two important considerations
regarding the reliability and accuracy of the memo. First, the Addendum
clearly reflects that the Company traded significant economic
concessions in return for the jurisdictional modification; it provided a
dental plan, increased pension contributions, and increased
hospitalization benefits. The magnitude of these benefits strongly
suggests that the jurisdictional change was also intended to be a
substantial concession to the Company. Second, the content of the memo
closely parallels the content of the Addendum, which the Union did sign;
in other words, what the memo says were the terms of the settlement
actually turned out to comprise the terms of the Addendum. For
example, the memo says that the ability to take vacations a day at a time
were one of the terms of settlement. A provision allowing for day at a
time vacation appears as the final benefit of the Addendum. For another
example, the memo says a dental plan would be provided as part of the
trade-off. The Addendum text provides for a dental plan as it was
described in the memo. The same is true of the increased pension and
hospitalization benefits; they appear in the text of the Addendum as they
were described in the memo. This strongly suggests that the memo was
a true reflection of the parties’ intent in the negotiations for the
Addendum.
* * *
As a result of the foregoing considerations, the arbitrator
concludes that the internal memo does accurately describe the parties’
intent underlying the jurisdictional change.
(J.A. 28).
In the United States District Court for the District of Minnesota, the Union filed
the present challenge to the Arbitrator’s Opinion and Award, pursuant to the Federal
Arbitration Act. 9 U.S.C. § 10(a). For the first time, the Union argued the Arbitrator
lacked contractual authority to consider Addendum No. 4 on the basis that the CBA
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required interpretive questions regarding Addendum No. 4 to first be exhausted before
the Joint Standing Committee.4 Additionally, the Union argued before the district
court that the Arbitrator erroneously considered the 1978 Internal Memo as such
document was not prepared by a neutral party and erroneously failed to consider
evidence of the parties’ past practices regarding insertion work.
On cross motions for summary judgment, the district court denied the Union’s
motion for summary judgment, granted the Company’s motion for summary judgment,
and confirmed the arbitration award. The Union noted this timely appeal. We have
jurisdiction pursuant to 9 U.S.C. § 16(a)(1)(D).
II.
On appeal, the Union initially argues the district court’s confirmation of the
arbitration award in favor of the Company (the Arbitration Award) should be reversed,
because the Arbitrator exceeded the scope of his contractual authority in considering
and relying on Addendum No. 4 without interpretive questions regarding Addendum
No. 4 having first been submitted to the Joint Standing Committee. Alternatively, the
Union argues the district court’s confirmation of the Arbitration Award should be
reversed, because it does not draw its essence from the CBA.
A. Scope and Standard of Review.
A district court’s scope of review of an arbitrator’s award is extremely limited
and deferential. Gas Aggregation Servs., Inc. v. Howard Avista Energy, LLC, 319
F.3d 1060, 1064 (8th Cir. 2003). Indeed, a district court must confirm an arbitration
award if it “draws its essence from the collective bargaining agreement” at issue,
United Steelworkers v. Enter. Wheel & Car Corp., 363 U.S. 593, 597 (1960). Titan
Indeed, in an extensive post-hearing brief submitted by the Union and
4
considered by the Arbitrator before the Arbitrator issued his final decision, the Union
raised no objection to the Arbitrator’s consideration of Addendum No. 4.
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Wheel Corp. v. Local 2048, Int’l Ass’n of Machinists, 253 F.3d 1118, 1119 (8th Cir.
2001). In other words, an arbitration award must be confirmed “[e]ven if the court is
convinced that the arbitrator committed serious error, so long as the arbitrator is even
arguably construing or applying the contract and acting within the scope of his
authority . . . .” Gas Aggregation, 319 F.3d at 1064 (internal quotation marks
omitted).
In reviewing the district court’s decision upholding an arbitration award, “[w]e
apply ordinary, not special, standards . . . .” MidAmerican Energy Co. v. International
Bhd. of Elec. Workers, 345 F.3d 616, 619 (8th Cir. 2003) (internal quotation marks
omitted) (on review from grant of summary judgment enforcing arbitration award).
Thus, we review a district court’s findings of fact for clear error
and conclusions of law de novo. Our review of the District Court’s
decision to grant summary judgment is de novo. We review the grant of
summary judgment de novo even though the enforcement of an
arbitration award is involved.
Judicial review of arbitration rulings is limited. Indeed, we have
observed that the decision of an arbitrator who has not exceeded his
contractual authority is almost always upheld.
Id. (internal quotation marks and citations omitted).
With these legal precepts and standard of review in mind, we turn to address the
Union’s arguments on appeal.
B. The Union’s Exhaustion Argument.
In support of its exhaustion argument, the Union relies upon language in Section
7 of the CBA requiring that “all questions which may arise as to the construction to
be placed on any clause of this contract” be referred to the Joint Standing Committee,
and if unresolved by such committee, the committee shall refer the matter to
arbitration. (J.A. 41). Because the parties never presented interpretive questions
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regarding Addendum No. 4 to the Joint Standing Committee in connection with the
Union’s formal grievance over insertion work, the Union argues the Arbitrator acted
beyond its contractual authority in considering and relying on Addendum No. 4.
We assume arguendo that, pursuant to Section 7 of the CBA, the Union had a
contractual right to insist that any interpretive questions regarding Addendum No. 4
first be submitted to the Joint Standing Committee for resolution before being
considered by the Arbitrator. Such an assumption, however, is of no aid to the Union,
because, we hold the Union waived such right by willingly and without reservation
allowing the Arbitrator to consider Addendum No. 4 in his resolution of its grievance.
Slaney v. International Amateur Athletic Fed’n, 244 F.3d 580, 591 (7th Cir. 2001)
(“‘If a party willingly and without reservation allows an issue to be submitted to
arbitration, he cannot await the outcome and then later argue that the arbitrator lacked
authority to decide the matter.’”).
While the Union implies that it lacked the opportunity to object to the
Arbitrator’s consideration of Addendum No. 4, the record belies such an implication.
The record establishes that the Arbitrator gave the Union the opportunity to present
evidence or argument in rebuttal to the Company’s case, even allowing the Union to
submit a lengthy post-hearing brief. Neither in its rebuttal case nor in its post-hearing
brief did the Union cry prejudice from the timing of the Company’s introduction of
Addendum No. 4 or that the Arbitrator lacked the authority to consider Addendum No.
4. Indeed, during the last one and one-half days of the arbitration proceeding, the
Union argued Addendum No. 4 supported its position. These circumstances leave no
doubt the Union waived its contractual right to insist that any interpretive questions
regarding Addendum No. 4 be submitted to the Joint Standing Committee before being
considered by the Arbitrator.
C. The Union’s Argument That The Arbitration Award Does Not Draw Its
Essence From The CBA.
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Alternatively, the Union contends the Arbitration Award does not draw its
essence from the CBA because the Arbitrator relied solely on the 1978 Internal Memo,
a Company friendly document, to discern the parties’ intent as to the meaning of
Addendum No. 4. Additionally, the Union argues that in order to reach the decision
he did, the Arbitrator must have blatantly ignored Union-favorable evidence of past
practices regarding the insertion work.
The Union’s position is without merit on all points. While an arbitrator may not
amend a contract or contradict its express terms, he nonetheless “may look to sources
other than the collective bargaining agreement . . . to aid in his interpretation of the
contract . . . .” Keebler Co. v. Milk Drivers & Dairy Employees Union, Local No. 471,
80 F.3d 284, 288 (8th Cir. 1996). See also Iowa Beef Processors, Inc. v. Amalgamated
Meat Cutters & Butcher Workmen of N. America, AFL-CIO, 627 F.2d 853, 857 (8th
Cir. 1980) (“The arbitrator has a right to interpret and apply the contract and in doing
so to consider not only the formal agreement but collateral materials as well including
past prevailing practices in the company plant.”). Thus, the Arbitrator was not
prohibited from considering the 1978 Internal Memo to aid his interpretation of the
CBA. Moreover, the record shows that the Arbitrator did not rely exclusively on the
1978 Internal Memo as the Union asserts. Rather, after evaluating its credibility, the
Arbitrator relied on the document merely to bolster his understanding of the plain
language of the Addendum.
Additionally, as the district court aptly stated:
A review of the Award reveals that the Arbitrator thoroughly
considered the history of the dispute over insertion work and the parties’
attendant actions and interactions, the respective positions of the Union
and the Company and the pertinent language of the CBA and the
Addendum. See Award at 3-12. Even if the Court were to determine, as
the Union adamantly asserts, that the Arbitrator disregarded testimony as
to past practice and ultimately drew an incorrect conclusion, such would
not provide justification for overturning the Award. See Midwest Coca-
Cola Bottling Co. v. Allied Drivers, Local 792, 89 F.3d 514, 517, 518
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(8th Cir. 1996) (expressing that a difference of opinion regarding
interpretation is an insufficient ground for reversal of arbitrator’s award)
(citing Enterprise, 363 U.S. at 599). The role of judicial review is merely
to assess whether or not the decision of the arbitrator reflects an arguable
interpretation of the agreement. Gas Aggregation, 319 F.3d at 1064. If
so, even a belief that the arbitrator “has committed serious error” does
not permit a court to substitute its conclusion for that of the arbitrator.
Midwest, 89 F.3d at 517. The Award in this case establishes that,
pursuant to his contractual authority, the Arbitrator rendered a decision
based expressly on the terms of the relevant CBA provisions, viewed in
light of a document he found to be “the only meaningful evidence of
bargaining history.” Award at 10. Accordingly, the Award draws its
essence from the CBA between the Union and the Company.
(J.A. 346-47).
We find no flaw in the district court’s analysis. “An arbitrator’s paramount
obligation is to apply the parties’ agreement in a way that gives effect to their intent.”
Boise Cascade Corp. v. Paper Allied-Indus., Chem., and Energy Workers, Local 7-
0159, 309 F.3d 1075, 1081 (8th Cir. 2002). That is exactly what the Arbitrator did in
this case. Indeed, there is no doubt that the Arbitration Award draws its essence from
the CBA.
III.
In conclusion, we hold the Arbitrator did not exceed the scope of his authority
and the Arbitration award draws its essence from the CBA. Accordingly, we affirm
the district court’s grant of summary judgment in favor of the Company enforcing the
Arbitration Award.
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