National Postal Mail Handlers Union v. American Postal Workers Union ( 2009 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued September 22, 2009 Decided December 18, 2009
No. 08-5467
NATIONAL POSTAL MAIL HANDLERS UNION, A DIVISION OF
THE LABORERS’ INTERNATIONAL UNION OF NORTH AMERICA,
APPELLANT
v.
AMERICAN POSTAL WORKERS UNION AND UNITED STATES
POSTAL SERVICE,
APPELLEES
Consolidated with 08-5487
Appeals from the United States District Court
for the District of Columbia
(No. 1:06-cv-01986-JR)
Ray E. Donahue, Special Assistant U.S. Attorney, argued
the cause for appellant United States Postal Service. With
him on the briefs was R. Craig Lawrence, Assistant U.S.
Attorney. Claire M. Whitaker, Assistant U.S. Attorney,
entered an appearance.
2
Ramya Ravindran argued the cause for appellant National
Postal Mail Handlers Union. With her on the briefs was
Andrew D. Roth.
Anton G. Hajjar argued the cause and filed the brief for
appellee American Postal Workers Union.
Before: SENTELLE, Chief Judge, and GRIFFITH and
KAVANAUGH, Circuit Judges.
Opinionfor the Court filed by Circuit Judge
KAVANAUGH, with whom Circuit Judge GRIFFITH joins.
Dissenting Opinion filed by Chief Judge SENTELLE.
KAVANAUGH, Circuit Judge: This is an arbitration case.
Two unions of postal workers – the American Postal Workers
Union and the National Postal Mail Handlers Union –
disagreed over which union was entitled to perform certain
work at a U.S. Postal Service facility in Oakland. The Postal
Service assigned the tasks to NPMHU’s mail handlers.
According to APWU, that assignment contravened a 1979
Postal Service directive regarding allocation of work. APWU
brought the matter to arbitration and prevailed in the
arbitration proceeding.
NPMHU then sued in federal court to overturn the
arbitrator’s decision. NPMHU claimed, in particular, that the
arbitrator erred in finding the dispute arbitrable under the
parties’ contract. Applying the extremely deferential standard
of review for labor arbitration decisions, the District Court
upheld the arbitrator’s decision on arbitrability even though it
was, in the court’s words, “probably erroneous.” 578 F.
Supp. 2d 160, 162 (D.D.C. 2008). We too acknowledge that
the arbitrator probably erred as a matter of contract
3
interpretation. Yet in light of the deference courts must afford
to a labor arbitrator’s contract interpretation – including an
arbitrator’s decision on arbitrability where, as here, the parties
agree to present that issue to the arbitrator – we agree with the
District Court that we must uphold the arbitrator’s decision in
this case. We therefore affirm the judgment of the District
Court.
I
A
In 1979, the Postal Service issued a directive allocating
responsibility for various mail processing functions between
two crafts of postal employees: clerks and mail handlers. The
American Postal Workers Union represents clerks, and the
National Postal Mail Handlers Union represents mail
handlers. We will refer to those unions as APWU and
NPMHU.
In 1992, APWU, NPMHU, and the Postal Service agreed
on how to resolve disputes over which union should perform
certain work (what the Agreement refers to as “jurisdictional
disputes”). Under that 1992 Agreement, the parties refer
disputes over work assignments to a Local Dispute Resolution
Committee that includes representatives of the three parties.
If the parties deadlock at that local level, an aggrieved party
may appeal to a Regional Dispute Resolution Committee. If
deadlock persists, an aggrieved party may appeal to “final and
binding” arbitration before an agreed-upon arbitrator.
The 1992 Agreement also provides: “Effective with the
signing of this Agreement, no new disputes will be initiated at
the local level by either union challenging jurisdictional work
assignments in any operations as they currently exist. Except
4
as otherwise specifically provided . . . all local craft
jurisdictional assignments which are not already the subject of
a pending locally initiated grievance will be deemed as a
proper assignment for that facility.” J.A. 100 (emphasis
added).
B
In 2001, a dispute arose over which union was
responsible for scanning foreign mail on the loading dock at
the U.S. Postal Service’s Oakland International Service
Center. At the time, mail handlers (represented by NPMHU)
performed that work. APWU filed two grievances claiming
that clerks, not mail handlers, should perform the tasks in
question. The parties referred APWU’s grievances to the
Local Dispute Resolution Committee, but the committee was
unable to agree on a resolution. The parties next referred the
issue to a Regional Dispute Resolution Committee; again, no
resolution ensued.
APWU then appealed both grievances to arbitration.
Before the arbitrator, NPMHU and the Postal Service
maintained that the grievances were not arbitrable because (i)
they concerned an assignment of work that had initially been
made before 1992 and (ii) the parties’ 1992 Agreement barred
grievances about such pre-1992 assignments.
The arbitrator determined that the dispute was arbitrable.
He read the 1992 Agreement to incorporate a “continuing
violations” theory under which he could assess the
appropriateness of certain pre-1992 assignments to the extent
they continued post-1992. The arbitrator then addressed the
merits and ruled in favor of APWU, concluding that the
Postal Service had improperly assigned the work in question
to mail handlers rather than to clerks.
5
NPMHU filed suit under 39 U.S.C. § 1208(b) and sought
to have the arbitrator’s award vacated on the ground that the
arbitrator had erred in finding the dispute arbitrable. NPMHU
contended that arbitration was not available to resolve
disputes over work assignments that had initially been made
before 1992. The Postal Service agreed with NPMHU that
the arbitrator had erred on the arbitrability issue.
The District Court opined that the arbitrator’s decision on
arbitrability was “probably erroneous.” 578 F. Supp. 2d 160,
162 (D.D.C. 2008). But the court nonetheless granted
summary judgment to APWU. Applying the courts’
deferential standard of review of labor arbitration decisions,
the court found no basis to disturb the arbitrator’s
determination that the dispute was arbitrable. Id. at 163.
NPMHU and the Postal Service appeal; our review is de novo.
See U.S. Postal Serv. v. Am. Postal Workers Union, 553 F.3d
686, 692 (D.C. Cir. 2009).
II
A
Section 1208(b) of Title 39 authorizes federal district
courts to hear suits “for violation of contracts between the
Postal Service and a labor organization representing Postal
Service employees, or between any such labor organizations.”
The Postal Service and a postal workers’ union may of course
agree to arbitration as a means to efficiently resolve
contractual disputes. Section 1208(b) does not supply a
standard for judicial review of arbitration decisions. We have
held, however, that the standard for judicial review of
arbitration awards in the postal context is the same as the
standard articulated by the Supreme Court for judicial review
6
of labor arbitration awards under § 301(a) of the Labor-
Management Relations Act of 1947. See U.S. Postal Serv. v.
Am. Postal Workers Union, 553 F.3d 686, 689 (D.C. Cir.
2009) (same standard applies because statutes are “virtually
identical”) (quoting U.S. Postal Serv. v. Nat’l Rural Letter
Carriers’ Ass’n, 959 F.2d 283, 286 (D.C. Cir. 1992)).
The Supreme Court has long applied a very deferential
standard for judicial review of labor arbitration decisions. In
the foundational case, the Court ruled that a labor arbitrator’s
decision must be upheld so long as it “draws its essence from
the collective bargaining agreement.” United Steelworkers of
Am. v. Enter. Wheel & Car Corp., 363 U.S. 593, 597 (1960).
That standard is met, the Court explained, if the arbitrator
“premise[d] his award on his construction of the contract.”
Id. at 598.
On several occasions, the Supreme Court has reiterated
and reinforced that deferential standard of review for labor
arbitration decisions. Most recently and perhaps most
emphatically, in Major League Baseball Players Ass’n v.
Garvey, 532 U.S. 504 (2001), the Court stated that courts “are
not authorized to review the arbitrator’s decision on the merits
despite allegations that the decision rests on factual errors or
misinterprets the parties’ agreement.” Id. at 509. Sending a
clear message to federal courts about their proper role in labor
arbitration matters, the Supreme Court did not mince words or
sugar-coat the point: If an arbitrator is “even arguably
construing or applying the contract and acting within the
scope of his authority,” then a court may not overturn his
decision, even if the court is convinced the arbitrator
committed “serious error.” Id. (quoting E. Associated Coal
Corp. v. United Mine Workers of Am., Dist. 17, 531 U.S. 57,
62 (2000)). Where “no dishonesty is alleged,” a court may
vacate a labor arbitration award only if the arbitrator “strays
7
from interpretation and application of the agreement and
effectively ‘dispense[s] his own brand of industrial justice.’”
Id. (quoting Enter. Wheel, 363 U.S. at 597). See also United
Paperworkers Int’l Union, AFL-CIO v. Misco, Inc., 484 U.S.
29, 36-38 (1987); AT&T Techs., Inc. v. Commc’ns Workers of
Am., 475 U.S. 643, 648 (1986).
In short, the relevant question under the Supreme Court’s
precedents is not whether the arbitrator erred – or even
seriously erred – in interpreting the contract. Rather, the
question is whether the arbitrator was “even arguably
construing or applying the contract.” Garvey, 532 U.S. at 509(quoting E. Associated, 531 U.S. at 62). Courts do not review
the substantive reasonableness of a labor arbitrator’s contract
interpretation. See id.; see also Harry T. Edwards, Judicial
Review of Labor Arbitration Awards: The Clash Between the
Public Policy Exception and the Duty To Bargain, 64 CHI.-
KENT L. REV. 3, 3-8 (1988). This extraordinarily deferential
standard is essential to preserve the efficiency and finality of
the labor arbitration process. These critical principles, which
can elude parties who sometimes quixotically seek to overturn
labor arbitration decisions, guide our approach to labor
arbitration generally and to this case in particular.
B
Before applying those bedrock principles to this dispute,
we must address one additional point. The Supreme Court’s
deferential standard of judicial review applies not just to a
labor arbitrator’s determination on the merits, but also to the
arbitrator’s threshold decision that the dispute was arbitrable,
at least so long as the parties agreed contractually or by
consent to present the question of arbitrability to the
arbitrator. See AT&T Techs., 475 U.S. at 649; U.S. Postal
Serv., 553 F.3d at 692-93. If, on the other hand, an arbitration
8
agreement does not say who is to decide the question of
arbitrability and the parties do not otherwise consent to
arbitration of that question, then arbitrability is an issue for de
novo judicial determination. See AT&T Techs., 475 U.S. at
649; Madison Hotel v. Hotel & Rest. Employees, Local 25,
AFL-CIO, 144 F.3d 855, 857 n.1 (D.C. Cir. 1998) (en banc).
The parties in this case agree that, under the contract, the
issue of arbitrability was for the arbitrator to decide.
Therefore, as the parties further agree, our review of the
arbitrator’s decision on arbitrability in this case is governed
by the deferential standard articulated by the Supreme Court
for judicial review of labor arbitration decisions.
C
Applying the relevant standard articulated by the
Supreme Court, we must ascertain whether the arbitrator in
this matter was “even arguably construing or applying the
contract” when he found the dispute arbitrable. See Garvey,
532 U.S. at 509 (quoting E. Associated, 531 U.S. at 62).
The parties’ 1992 Agreement generally barred arbitration
of disputes over work assignments that were initially made
before 1992, unless a grievance was already pending as of the
time of the Agreement. The Agreement thus imposed a
statute-of-limitations-like bar on arbitration of grievances
relating to pre-1992 work assignments.
The Oakland dispute concerned an assignment of certain
duties to mail handlers that was initially made before 1992.
APWU had not filed a grievance by the time the parties
entered the 1992 Agreement. Therefore, the arbitrator should
have ruled that the grievances brought by APWU were not
arbitrable.
9
The arbitrator nonetheless found the dispute arbitrable.
The arbitrator concluded that the parties could challenge work
assignments initially made before 1992 if those assignments
continued after 1992. According to the arbitrator, the contract
language must be construed in light of the common-law
“continuing violations” doctrine. In support of that
construction of the contract, the arbitrator relied on and
quoted from a respected arbitration treatise: “Many arbitrators
have held that ‘continuing’ violations of the agreement (as
opposed to a single isolated and completed transaction) give
rise to ‘continuing’ grievances in the sense that the act
complained of may be said to be repeated from day to day –
each day there is a new occurrence . . . .” J.A. 184 (quoting
FRANK ELKOURI & EDNA ASPER ELKOURI, HOW ARBITRATION
WORKS 152-53 (3d ed. 1973)). The treatise further explains
that grievances arising out of such “continuing” violations
may be filed “at any time.” ELKOURI & ELKOURI, HOW
ARBITRATION WORKS 218-19 (Alan Miles Ruben ed., 6th ed.
2003).
In this Court, NPMHU and the Postal Service argue that
the arbitrator jumped the rails in relying on the continuing
violations doctrine to construe the contract. In their view, the
contractual language regarding pre-1992 assignments was so
clear and the arbitrator’s error so gross that it cannot be said
that he was “even arguably construing or applying the
contract.” Garvey, 532 U.S. at 509 (quoting E. Associated,
531 U.S. at 62). According to NPMHU and the Postal
Service, the only plausible explanation for the arbitrator’s
botched decision is that the arbitrator was dispensing “his
own brand of industrial justice.” Id. (quoting Enter. Wheel,
363 U.S. at 597). We think that argument reflects a
misunderstanding of contract interpretation principles and of
the proper role of courts in reviewing labor arbitration
10
decisions. The fact that an arbitrator relies on a substantive
background principle of law or an established canon of
construction – and does not follow the plain text of a contract
– does not automatically mean the arbitrator has gone rogue.
As the Supreme Court has explained, a labor arbitrator is “not
confined to the express provisions of the contract,” but may
also look to other sources – including the “industrial common
law” – for help in construing the agreement. United
Steelworkers of Am. v. Warrior & Gulf Navigation Co., 363
U.S. 574, 581-82 (1960). The Court has further stated that an
arbitrator may “look for guidance from many sources,” and
the award is legitimate if it can be “read as embodying a
construction of the agreement itself, perhaps with the
arbitrator looking to ‘the law’ for help in determining the
sense of the agreement.” Enter. Wheel, 363 U.S. at 597-98.
Relying on traditional canons of construction or other settled
interpretive principles – and not merely on the plain text of a
contract – might be seriously misguided in certain cases, but
such reliance cannot be dismissed as the arbitrator’s
dispensing “his own brand of industrial justice.” Indeed, the
arbitrator’s approach here bore some resemblance to what
courts have done in applying the continuing violations
doctrine in federal statute of limitations cases. See, e.g.,
Klehr v. A.O. Smith Corp., 521 U.S. 179, 189 (1997). In
short, although the arbitrator’s use of the continuing
violations doctrine to construe this contract may have been
badly mistaken, it was not outside traditional juridical and
interpretive bounds: The arbitrator was “arguably construing
or applying the contract.” Garvey, 532 U.S. at 509 (quoting
E. Associated, 531 U.S. at 62).
NPMHU and the Postal Service separately posit that the
arbitrator never actually addressed the issue of arbitrability,
but merely assumed the dispute was arbitrable. They argue
that the arbitrator’s discussion of the continuing violations
11
doctrine in his opinion concerned a question about the general
timeliness of APWU’s grievances, not the issue of
arbitrability under the express terms of the Agreement. This
is a red herring. NPMHU and the Postal Service argued to the
arbitrator that the dispute was not arbitrable because the
grievance concerned a pre-1992 assignment, APWU had not
filed a grievance by the time of the 1992 Agreement, and
APWU did not otherwise meet the conditions specified in the
contract for bringing a post-1992 grievance. NPMHU and the
Postal Service raised no other argument against arbitrability
and no other timeliness-based argument. When the arbitrator
discussed the continuing violations doctrine, he was
addressing this lone argument raised by NPMHU and the
Postal Service against arbitrability.*
***
Had we been the arbitrators in this case, we would have
followed the plain terms of the Agreement and ruled for
NPMHU and the Postal Service. But the arbitrator was at
least “arguably construing or applying” the Agreement in
reaching his decision. Garvey, 532 U.S. at 509 (quoting E.
Associated, 531 U.S. at 62). Therefore, under the Supreme
Court’s precedents, the courts may not overturn the
arbitrator’s award. We affirm the judgment of the District
Court.
So ordered.
*
In his decision, the arbitrator offered an additional ground for
finding APWU’s grievance to be arbitrable. He suggested that the
parties had “all agreed” to have him decide the merits of the
grievance, in essence waiving any objections to arbitrability. J.A.
183. Because we find that the arbitrator’s reliance on the
continuing violations doctrine is sufficient to sustain his decision on
arbitrability, we do not consider that alternative ground.
SENTELLE, Chief Judge, dissenting: The majority accurately
states the facts underlying this controversy, and I have no
quarrel with its recitation of the general principles of law
applicable to the review of arbitration decisions. However, I
cannot agree that the principles, as applied to the facts in this
case, lead to the majority’s result.
As the majority states, the appellant, National Postal Mail
Handlers Union, and appellee, American Postal Workers’ Union
(APWU), entered an agreement with the United States Postal
Service in 1992 which provided: “Effective with the signing of
this agreement, no new disputes will be initiated at the local
level by either union challenging jurisdictional work
assignments in any operations as they currently exist.” Maj op.
at 4 (emphasis added by the court). In 2001, APWU filed two
grievances underlying the present appeal concerning union
jurisdiction over the scanning of foreign mail at a USPS
international service center. These grievances concerned work
assignments that were made before 1992 and which seem to be
clearly within the compass of the language of the agreement
quoted above. Indeed, both the district court and the majority of
this court agree that the agreement rendered those assignments
not subject to grievance and arbitration. Nonetheless, the
arbitrator, relying on a theory of “continuing violations,” held
that the grievances were arbitrable and ruled for APWU.
Despite the all but universal agreement that the parties had
contracted in 1992 that no such grievance as this was to be filed,
the district court and the majority would uphold the award
because of the deferential standard of review of labor arbitration
decisions. The majority relies on the numerous cases of this and
the Supreme Court affording the greatest of deference to
arbitrators’ decisions. For example, in Major League Baseball
2
Players Ass’n v. Garvey, 532 U.S. 504 (2001), as the majority
recalls, the Court held that “[c]ourts are not authorized to review
the arbitrator’s decision on the merits despite allegations that the
decision rests on factual errors or misinterprets the parties’
agreement.” 532 U.S. at 509 (quoted at Maj. Op. 6). It is also
true, as the majority sets forth, that our broad deference to
arbitrators extends even to the question of arbitrability. See,
e.g., USPS v. APWU, 553 F.3d 686, 692-93 (D.C. Cir. 2009).
However, broad as is our deference to arbitrators’ decisions, it
is not limitless.
In assessing the limits of the deference owed an arbitrator’s
decision, the Supreme Court has told us that the arbitrator’s
“award is legitimate only so long as it draws its essence from the
collective bargaining agreement.” United Steelworkers v.
Enterprise Wheel & Car Corp., 363 U.S. 593, 597 (1960). I
submit that when an arbitrator’s ruling on arbitrability is 180
degrees removed from what the majority describes as the “plain
terms of the agreement” defining the breadth of the arbitrable
issues between the parties, that award in no sense “draws its
essence” from the agreement.
Granted, the arbitrator and the majority recite general
principles of labor and arbitration law which in the absence of
the clarity of the agreed exclusion might support arbitrability of
the underlying grievance. However, as the Supreme Court
explained in Enterprise Wheel:
[The arbitrator] may of course look for guidance from many
sources, yet his award is legitimate only so long as it draws
its essence from the collective bargaining agreement. When
the arbitrator’s words manifest an infidelity to this
obligation, courts have no choice but to refuse enforcement
of the award.
3
As we have previously noted, “[i]f the arbitrator has rendered a
judgment based on external legal sources, wholly without regard
to the terms of the parties’ contract, then the award could not be
said to draw its essence from the contract.” APWU v. USPS, 789
F.2d 1, 3 (D.C. Cir. 1986). As the arbitrator in the decision
before us did precisely that, I would reverse the district court’s
grant of summary judgment for the defendant and its denial of
summary judgment to the plaintiff. It appears to me that the
arbitrator based his decision entirely on his external legal
theories relating to “continuing violation” without regard to the
express terms of the parties’ agreement excluding grievances
over pre-1992 assignments. In his award, the arbitrator himself
recognized that “[t]he language [of the agreement] clearly points
in the direction of limiting the filing of grievances for existing
work . . . .” That the arbitrator recited the agreement’s language,
while rendering it utterly ineffectual, does not change the course
of his illegitimate reasoning. I would therefore hold that the
arbitrator’s decision fails even in light of the standard of review
mandated by our precedent.
I respectfully dissent.