Lodge No. 725, International Association of MacHinists v. Mooney Aircraft, Inc. , 410 F.2d 681 ( 1969 )

TUTTLE, Circuit Judge:

This case involves the validity of an arbitration award. The collective bargaining agreement provided that the decision was to be rendered within three days after the hearing of the grievance.¹ The award was made on July 3, 1964, about 44 days after the May 20 hearing. The company contends that the award was invalid. The union contends that the company waived its rights to object because it made no objection to the failure to comply with the time limits until after the award was issued.

After the award was issued, the union unsuccessfully sought to have it implemented. The company refused. The union then filed suit in the district court under § 301(a) of the LMRA to enforce the award which ordered the reinstatement of a discharged employee. Before trial the union moved for summary judgment. The brief of appellant in support of the motion for summary judgment alleged among other things that it was entitled to judgment based on the company’s waiver of its rights. The court denied the motion and a trial was held. The jury found that the arbitrator did not request an extension of time for filing the award and that the company did not agree to such an extension. The court then entered a judgment for the company and refused to enforce the award. On this appeal, the union again asserts that its position is that regardless of the jury’s findings, it was entitled to judgment as a matter of law because of the company waiver.

Although it made some attempts to contact the arbitrator by telephone shortly after the hearings, during the 44 days the company did not protest the failure of the arbitrator to render the decision within the three day period.² It was not until after the company received the adverse award ordering it to reinstate the employee that it protested the delay.

Waiver and estoppel have been applied to situations such as this. For example, in District Lodge 71, IAM v. Bendix Corp., 218 F.Supp. 744 (W.D. of Mo., 1963), the final arbitration award was rendered almost two weeks after the fifteen day period set by the agreement for the rendering of the decision. As in the case at bar, the agreement did not state that awards made after this period were void. There also, as in this case, the agreement did provide procedures for extension of the time, but none was requested. As did the company here, the union did not object to the lack of timeliness until after the final award was made. The court held that the union knew or should have known that the award would not be issued within the fifteen day period but it failed to object. In these circumstances, its silence constituted a waiver of any objection on that basis.

The company argues that awards made after the expiration of the time fixed in the agreement are void. It places major reliance on International Bhd. of Ry. Employees v. Norfolk S. Ry., 143 F.2d 1015 (4 Cir., 1944) and Annot. 154 A.L.R. 1392 (1944). The Norfolk case involved the validity of an arbitration award made under the Railway Labor Act, 45 U.S.C.A. § 158. The court held that the failure to issue the award during the 15 day period after the hearing as provided in the collective bargaining agreement rendered it void. The case is distinguishable on several grounds. First, the court was obviously concerned with interpreting federal statutory law peculiar to the railroad industry. The Act provided that collective bargaining agreements “Shall fix a period from the beginning of the hearings within which the said board shall make and file its award: Provided, That the parties may agree at any time upon an extension of this period.” 45 U.S.C'.A. § 158(i). Further, a purpose of the Act was “to provide for the prompt and orderly settlement of all disputes * 45 U.S.C.A. § 151a(4). In view of these statutes, the court said that not only was the inclusion of a time limit mandatory, but also the issuance of the award within these limits was mandatory unless the statutory procedures were followed for extending the time. Obviously, there are no comparable federal statutes here. Furthermore, even the Norfolk case does not stand for the proposition that all awards issued beyond the time provided for in the agreement were per se void as contended by the. company. The issue of waiver was not discussed in the Norfolk case. The annotation following this case, which is referred to by the company in its brief, makes it clear that a finding of waiver was proper even at common law. It was quoted by the court in the Bendix case, supra, in support of its holding that waiver was present. The court quoted the following from Annot. 154 A.L.R. 1392, 1406 (1944):

“It seems to be absolutely essential, in order to preserve one’s rights, to protest against the continuance of the arbitration proceedings after the stipulated time has elapsed. Mere non-participation in the continued proceedings will not be sufficient.”

The court then concluded, “This is a reasonable rule which will be applied in this case.” 218 F.Supp. at 748. The Supreme Court in the Steelworkers trilogy [United Steelworkers of America v. American Manufacturing Co.], 363 U.S. 564 et seq., 80 S.Ct. 1343, 4 L.Ed.2d 1403 (1960) laid to rest the initial judicial hostility toward private labor arbitration. Once a dispute has been submitted to the arbitrator, courts should be slow to withhold enforcement of the award.³

Here the discharge dispute was clearly arbitrable and, in ordering reinstatement, the arbitrator did not exceed his powers. To hold that the company could wait 44 days without protesting the failure of the arbitrator to render his decision and then, when the adverse award was handed down to allow the company to attack it on these grounds would run counter to the express federal labor policy in favor of encouraging arbitration. Moreover, we would be extremely loath to penalize the beneficiary of the award because of the lapse of time over which he had no possible control. This is especially true because of the extreme shortness of the period. While it would doubtless be good policy for the parties to emphasize in their contract the desirability of quick action, we must answer the question here in the same manner as though Mr. Holliman had submitted his award in four days rather than the three provided for. It is unthinkable that such an award would be set aside because of a loss of jurisdiction to act one day later than the three days mentioned in the contract.⁴

Accordingly, the judgment should be reversed and the case remanded to the trial court for the entry of a judgment in favor of the appellant.

1 . “B. The Board of Arbitrators shall meet within five days after notice of intention to arbitrate is given and render their decision within three days after hearing the grievance, provided these time limits may be modified upon request of the third member of the board.

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“E. The time limits set forth in the Arbitration Article may be extended by mutual agreement.”

2 . There is no evidence as to the purpose of these attempted calls. Moreover, it was conceded by the company’s witness that he knew the address of the impartial arbitrator, but that no written communication was attempted, “because I also knew be was out of the city.” There is no evidence that this absence was extended or that any effort was made to ascertain the whereabouts of the arbitrator.

3 . Here the trial court submitted to the jury the question whether the company’s representative actually agreed, at the conclusion of the hearing, to a delay in Mr. Holliman’s making of his award, and the question whether Mr. Holliman requested an extension of time. Notwithstanding disputed testimony on these points the jury answered “No” to each question. Nevertheless, it is not disputed that all parties were told that Mr. Holli-man had to postpone action on other pending arbitration matters because he was about to leave town. The jury was not asked to determine whether Mr. Hol-liman proceeded on the assumption (though possibly mistaken) that an agreement for extension of time had been had. (Such absence would hardly be compatible with rendering a decision within three days). We think it unnecessary to resolve or further consider this issue in light of our disposition of the ease.

4 . We think it appropriate to note the dissenting opinion filed by Judge God-bold. Our position is that there is no issue of fact here. It is undisputed that the company did not challenge the jurisdiction of the arbitrators to proceed to a final determination of the issues before him at any time after the expiration of the three-day period and before the issuing of the decision adverse to the company. The record is replete with statements by counsel for both parties before final judgment was entered by the trial court agreeing that the pretrial judge overruled the appellant’s contention that this amounted, as a matter of law, to a waive of the company’s right to challenge the arbitrator’s jurisdiction. Thus, this legal issue is before us on appeal. We conclude that such failure to challenge the jurisdiction of the arbitrators until after the adverse decision was entered amounted, as a matter of law, to a waiver.