Verizon Pennsylvania LLC v. Communications Workers of Amer

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
____________
No. 20-1908
____________
VERIZON PENNSYLVANIA, LLC
v.
COMMUNICATIONS WORKERS OF AMERICA, AFL-
CIO, LOCAL 13000; COMMUNICATIONS WORKERS OF
AMERICA, AFL-CIO DISTRICT 2-13,
Appellants
Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. Civil Action No. 2-18-cv-00394)
District Judge: Honorable Cynthia M. Rufe
Argued on January 21, 2021
Before: HARDIMAN, ROTH, Circuit Judges and *PRATTER,
District Judge
(Opinion filed: September 8, 2021)
*The Honorable Gene E.K. Pratter, United States District
Judge for the Eastern District of Pennsylvania, sitting by
designation.
Laurence M. Goodman
Nancy B.G. Lassen (ARGUED)
Alidz Oshagan
Willig, Williams & Davidson
1845 Walnut Street
24th Floor
Philadelphia, PA 19103
Counsel for Appellants
Meir Feder (ARGUED)
Jones Day
250 Vesey Street
New York, NY 10281
E. Michael Rossman
Samantha C. Woo
Jones Day
77 West Wacker Drive
Chicago, IL 60601
James R. Saywell
Jones Day
901 Lakeside Avenue East
Cleveland, OH 44114
Counsel for Appellee
O P I N I ON
2
ROTH, Circuit Judge:
This appeal requires us to decide whether the well-
established functus officio doctrine is still viable in labor
arbitration cases. We hold that it is, and agree with the District
Court that the arbitration award in this case cannot stand. The
deference given to arbitration awards is almost unparalleled,
but not absolute. An arbitrator’s powers are derived from and
limited by the parties’ agreement, which is made against a
background of default legal rules. Under these default rules,
once the arbitrator decides an issue, the functus officio doctrine
prohibits him from revising that decision without the parties’
consent. He can decide other issues submitted by the parties,
correct clerical errors, and even clarify his initial decision—
but nothing more.
Verizon brought this action to vacate an arbitration
award made pursuant to the Collective Bargaining Agreement
(CBA) between it and Communication Workers of America,
AFL-CIO, Local 13000 (the Union). In its Merits Award, the
Arbitration Board held that Verizon violated the CBA by
contracting with common carriers to deliver FiOS TV set-top
boxes to “existing customers” for self-installation, work that
used to be performed exclusively by Union Service
Technicians (Workers). Yet, months later, the Board, under
the guise of creating a “remedy,” improperly expanded the
scope of the violation identified in the Merits Award to include
not only deliveries to both existing and new customers, but also
the accompanying self-installations. Such revisions are
precisely what the functus officio doctrine prohibits. Thus, we
affirm the District Court’s Order, vacating the Remedy Award
to the extent that it awards damages for work that falls beyond
3
the outer bounds of the Merits Award. The outer bounds were
the delivery of boxes to existing customers.
We also hold that the Board improperly awarded
punitive damages, which the Parties agree are not permitted
under the CBA. For this reason, we will affirm the District
Court’s Order, remanding the case back to the Board to
redetermine what compensatory damages, if any, are
appropriate.
I
Article 17.01 of the CBA provides that Verizon “will
maintain its established policies as to the assignment of work
in connection with the installation and maintenance of
communications facilities owned, maintained and operated by
the Company.”1 Article 13 provides that certain grievances,
alleging violations of the CBA, must be submitted to the Board
of Arbitration.
Verizon FiOS is a television, internet, and phone
service. FiOS TV was first available in Pennsylvania in 2006.
TV content enters the home through fiberoptic cables that lead
into a “set-top box.” When FiOS launched, a customer could
obtain, upgrade, or replace a set-top box in either of two ways:
(1) a Union Service Technician delivered the box to the
customer’s home and installed it (Option One), or (2) the
customer picked up the box from a Verizon store and installed
it herself (Option Two). In November 2007, Verizon added
two more options (the mail options) for “adds, upgrades,
1
Appx. 95.
4
downgrades, or swaps” for “existing customers”: Verizon
mails the box to the customer’s home (at Verizon’s expense)
using a common carrier and either (3) the customer installs it
himself (Option Three), or (4) a Service Technician comes to
install it for a fee (Option Four).2
On February 25, 2008, shortly after learning about the
mail options, the Workers filed Grievance “EXBD-005-08
Self-Installation of Set Top Boxes,” demanding that “all work
associated with the set top boxes must be performed by” the
Workers.3 They alleged that Verizon violated the CBA by
contracting out Union work to common carriers through the
mail options. They did not challenge instore pickup or self-
installation under Option Two.
On July 7, 2016, the Board issued the Merits Award,
ruling that the mail options violated Article 17.01. The Board
defined the issue submitted as whether Verizon violated the
CBA by “implementing a process to deliver set top boxes to
existing customers by common carrier for customer self-
installation. And if so, what shall be the remedy?”4 It stated
that “beginning when [FiOS] was implemented,” Service
Technicians “were assigned to deliver set top boxes that they
installed,”5 and that common carriers “who do the delivery
work . . . are getting the advantage of work that is protected by
Section 17.01.”6 The Board concluded that Workers “who
have been denied the opportunity to perform the delivery work
in question are entitled to compensation” and ordered Verizon
2
Id. at 232, 305.
3
Id. at 405.
4
Id. at 229.
5
Id. at 247.
6
Id. at 252.
5
“to cease and desist from delivery of set top boxes by anyone
other than” Union employees.7 However, “[t]here [was] no
record evidence by which to assess how often [Verizon] sent
out set top boxes to existing customers who wanted a different
box that they did not want to install themselves.”8 For that
reason, the Board “referred [the issue of money damages] back
to the parties for resolution” and retained jurisdiction in case
the Parties could not agree on a “monetary remedy.”9
The Parties failed to reach an agreement and submitted
the remedy issue back to the Board. The Parties disagreed
(then and now) about the scope of the “delivery work in
question” protected by the Merits Award. Specifically,
Verizon argued that, under the Merits Award, the protected
work assignment included only the delivery aspect of the mail
options, not the self-installation aspect, and that the Merits
Award allowed any Union employee to deliver the boxes.
Verizon had tried to comply with the Merits Award by creating
a new Union position, Assistant Technician, solely to deliver
set top boxes for self-installation by customers. The Workers
argued that, under the Merits Award, any time a box is
delivered to (rather than picked up by) a customer, the delivery
and installation are a single work “assignment” protected by
Article 17.01. Thus, “unless the customer obtains the box from
the Company and brings it [home], the Company’s delivery of
set top boxes, and the installation or maintenance (including
swaps and upgrades) of those boxes must be performed by” the
Workers.10 Because the mail options did not cause the
Workers to fall below full-time employment, they sought
7
Id. at 253.
8
Id. at 252.
9
Id. at 252–53.
10
Id. at 261.
6
backpay at overtime rates.
On January 10, 2018, the Board issued the Remedy
Award, agreeing with the Workers that, in the Merits Award,
it had ruled that both the delivery and self-installation aspects
of the mail options violate the CBA. It further held that
delivery by Assistant Technicians violated the CBA because
the protected work assignment belonged to the Service
Technicians. “[T]o compensate the[] [Service Technicians]
and to deter future violations of Article 17.01,”11 the Board
ordered Verizon to pay two hours (the average time to deliver
and install a box) of backpay for each box shipment delivered
by mail or an Assistant Technician, equitably distributed
among the Service Technicians. Although the Workers sought
overtime rates, the Board awarded only straight-time rates,
stating “that there is no firm basis for awarding pay at overtime
rates” because the Workers “did not lose income as they were
fully employed at the time.”12
On January 31, 2018, Verizon filed this action,
challenging both Awards. The District Court granted summary
judgment in part13 for Verizon, vacating the Remedy Award
because it (1) amended the Merits Award in violation of the
functus officio doctrine and (2) awarded punitive damages.
The District Court remanded the case to the Board “for
calculation of a remedy consistent with [its] opinion.”14 The
11
Id. at 269.
12
Id. at 268.
13
The District Court granted summary judgment for the Workers to
the extent that the Board held that delivery by common carrier
violates the CBA. Appx. 26. Verizon does not challenge that ruling
on appeal.
14
Id.
7
Workers appeal.
II
We exercise plenary review of the District Court’s
decision to vacate the Remedy Award.15 Because parties
litigating the validity of an arbitration award have bargained
for the arbitrator’s judgment, courts may not review the merits
of the award.16 A court may vacate an arbitration award if “the
arbitrators exceeded their powers, or so imperfectly executed
them that a mutual, final, and definite award upon the subject
matter submitted was not made.”17 Three limits on arbitrators’
powers are relevant here. First, because “arbitration is a
creature of contract . . . an arbitration panel has the authority to
decide only the issues that have been submitted for arbitration
by the parties.”18 Second, courts must vacate an arbitrator’s
award if it is “irrational.”19 An award is irrational if it fails to
“‘draw[] its essence from the collective bargaining
agreement’”20 in such a way that it “can[not] be rationally
derived either from the agreement [or] the parties[’]
15
Kaplan v. First Options of Chic., Inc., 19 F.3d 1503, 1509 (3d Cir.
1994).
16
Major League Umpires Ass’n v. Am. League of Pro. Baseball
Clubs, 357 F.3d 272, 279–80 (3d Cir. 2004).
17
9 U.S.C. § 10(a)(4).
18
Metromedia Energy, Inc. v. Enserch Energy Servs., Inc., 409 F.3d
574, 578 (3d Cir. 2005).
19
Ario v. Underwriting Members of Syndicate 53 at Lloyds for 1998
Year of Account, 618 F.3d 277, 295 (3d Cir. 2010).
20
Exxon Shipping Co. v. Exxon Seamen’s Union, 73 F.3d 1287,
1295 (3d Cir. 1996) (quoting W.R. Grace & Co. v. Loc. Union 759,
461 U.S. 757, 766 (1983)).
8
submissions to the arbitrators,”21 or “the record before the
arbitrator reveals no support whatsoever for the arbitrator’s
determination.”22 Finally, although courts must defer to an
arbitrator’s initial decision, the functus officio doctrine “bar[s]
an arbitrator from revisiting the merits of an award once it has
issued.”23
III
A. Functus Officio
The District Court found that the Remedy Award
violates the functus officio doctrine because it expanded the
protected work identified in the Merits Award by including (1)
deliveries and self-installations, rather than just deliveries; and
(2) deliveries to new customers, rather than just “existing
customers.” We agree.
As an initial matter, we reject the Workers’ argument
that we should abrogate the functus officio doctrine in labor
arbitration cases. “Although the doctrine was applied strictly
at common law . . . ‘the federal courts have been less strict in
applying the common law functus officio rule in reviewing
21
Ario, 618 F.3d at 295 (last alteration in original).
22
United Indus. Workers, Serv., Transp., Pro. Gov’t of N. Am. of
Seafarers’ Int’l Union of N. Am. v. Virgin Islands, 987 F.2d 162, 170
(3d Cir. 1993); accord Citgo Asphalt Refining Co. v. Paper, Allied-
Indus., Chem. & Energy Workers Int’l Union Loc. No. 2-991, 385
F.3d 809, 816 (3d Cir. 2004); News Am. Publ’ns, Inc. Daily Racing
Form Div. v. Newark Typographical Union, Loc. 103, 918 F.2d 21,
24 (3d Cir. 1990).
23
Office & Pro. Emps. Int’l Union, Loc. No. 471 v. Brownsville Gen.
Hosp., 186 F.3d 326, 331 (3d Cir. 1999).
9
labor disputes’”24 after the Supreme Court interpreted the
Labor Management Relations Act of 1947 as directing lower
federal courts to create common law for labor arbitration
enforcement proceedings.25 Nonetheless, “it has never been
abrogated by any court of which we have been made aware,”26
and we hold that it is alive and well in this Court. The doctrine
prohibits arbitrators from revising their prior decisions because
arbitrators “lack[] the institutional protection of judges.”27
Moreover, the doctrine’s three exceptions give arbitrators
flexibility to effectuate their contractually-derived powers:
(1) an arbitrator “can correct a mistake which is
apparent on the face of his award”; (2) “where
the award does not adjudicate an issue which has
been submitted, then as to such issue the
arbitrator has not exhausted his function and it
remains open to him for subsequent
determination”; and (3) “[w]here the award,
although seemingly complete, leaves doubt
whether the submission has been fully executed,
24
Id. (quoting Teamsters Loc. 312, 118 F.3d at 991).
25
See generally Textile Workers Union v. Lincoln Mills of Ala., 353
U.S. 448 (1957).
26
Int’l Broth. of Elec. Workers, Loc. Union 824 v. Verizon Fla.,
LLC, 803 F.3d 1241, 1248 (11th Cir. 2015).
27
Brownsville Gen. Hosp., 186 F.3d at 331; accord Teamster Loc.
312 v. Matlack, Inc., 118 F.3d 985, 991 (3d Cir. 1997) (“[F]unctus
officio conceives of arbitrators as ‘ad hoc judges—judges for a case;
and when the case is over, they cease to be judges and go back to
being law professors or businessmen or whatever else they are in
private life.’” (quoting Glass, Molders, Plastics & Allied Workers
Int’l Union, AFL-CIO, CLC, Loc. 182B v. Excelsior Foundry Co.,
56 F.3d 844, 847 (7th Cir. 1995))).
10
an ambiguity arises which the arbitrator is
entitled to clarify.”28
Moreover, if parties want greater flexibility, they can negotiate
around the doctrine entirely.
The Workers do not explain why the doctrine should not
continue to be the default rule. In fact, they specifically
bargained for the doctrine to apply here. The CBA provides
that any “arbitration shall be conducted under the Voluntary
Labor Arbitration Rules.”29 Rule 40 allows “any party” to
“request the arbitrator . . . to correct any clerical, typographical,
technical, or computational errors in the award,” but prohibits
the arbitrator from “redetermin[ing] the merits of any claim
already decided.”30 Accordingly, the Board’s powers were
limited by the functus officio doctrine. As explained below, the
Remedy Award ran afoul of those limitations.
i Self-Installation
Verizon argues that the Board held in the Merits Award
that self-installation did not violate the CBA and that the Board
thus could not revisit that issue in the Remedy Award. The
record is not clear as to whether the Board decided the self-
installation issue in the Merits Award. In many instances, it
28
Brownsville Gen. Hosp., 186 F.3d at 331 (alteration in original)
(quoting Colonial Penn Ins. Co. v. Omaha Indem. Co., 943 F.2d
327, 332 (3d Cir. 1991)).
29
Appx. 222.
30
AMERICAN ARBITRATION ASSOCIATION, LABOR ARBITRATION
RULES ¶ 40 (2013), available at
https://www.adr.org/sites/default/files/Labor_Arbitration_Rules_3.
pdf.
11
suggested that the self-installation issue was not included in the
Parties’ submission. For example, the Board stated that
“[w]hile the Union views any work, even that done by a
customer, on a set top box as bargaining unit work, the issue
before us is whether contracting out the delivery of set top
boxes to common carriers violates Section 17.01.”31 The
Board also stated that Verizon’s “focus on customer self-
installation” was “misplaced” because “[t]he Union’s focus is
on the delivery of set top boxes . . . by common carrier.”32
Indeed, in their merits brief, the Workers stated that “this
dispute is not about [Option Two] or who installs the set top
boxes after they are delivered to existing customers.”33
In the Remedy Award opinion, however, the Board
concluded (and the Parties agree) that it had already decided
the scope of the work assignment, including the self-
installation issue, “in [its] initial decision on the merits of the
dispute.”34 Indeed, it stated in the opinion accompanying the
Merits Award that “[t]he question is whether there was an
established policy in effect at the time of the change as to
assignment of the installation or maintenance work and the
delivery of the equipment.”35 Accordingly, we hold that the
Board did decide this issue in the Merits Award. Indeed, if the
Board had concluded that the self-installation issue was not
within the scope of the Parties’ submission, the Board would
31
Appx. 248.
32
Id. at 249 (brackets and emphases in original omitted).
33
Id. at 551 n.7 (second emphasis added).
34
Id. at 267; see also United Mine Workers of Am. Dist. No. 5 v.
Consolidation Coal Co., 666 F.2d 806, 811 (3d Cir. 1981)(“[I]t is
an arbitrator, and not the court, who is to decide whether the same
issue has already been resolved in an earlier proceeding.”).
35
Appx. 247 (emphasis added).
12
have exceeded the scope of its authority by deciding that issue
in the Remedy Award.
The Workers nonetheless argue that the Board could
revisit the scope of the work assignment in the remedy
proceedings for two reasons. First, the Workers argue that the
Board reserved the remedy issue and could thus redecide the
issues addressed in the Merits Award, including the scope of
the work assignment, either because the Merits Award was not
a “final award” and the functus officio doctrine did not apply
to it or because the doctrine’s second exception applied. We
disagree.
By its terms, the doctrine’s second exception does not
apply. That exception “authorizes an arbitrator to decide a
remaining issue which has been submitted by the parties but
not resolved.”36 Moreover, although we have stated in dictum
that the functus officio doctrine applies only if the “award [is]
final, complete, and coextensive with the terms of the
submission,”37 the existence of the doctrine’s second exception
implies that the doctrine applies to partial decisions that finally
resolve some, but not all, of the submitted issues.
However, allowing arbitrators to revisit issues that they
have already decided merely because they retained jurisdiction
on ancillary issues—here, the monetary remedy—creates
several potential problems. Partial awards are just as
susceptible as “final” awards to the types of post hoc influences
and ex parte communications that the doctrine is meant to
36
Teamsters Loc. 312 v. Matlack, Inc., 118 F.3d 985, 992 (3d Cir.
1997) (emphases added).
37
La Vale Plaza, Inc. v. R.S. Noonan, Inc., 378 F.2d 569, 572 (3d
Cir. 1967).
13
protect against. Additionally, an arbitrator could issue a partial
award as a placeholder to apply settlement pressure, rather than
just adjudicating the dispute as the parties agreed she would.38
In any event, even if an arbitrator ordinarily could
revisit the merits of a partial award, the Board could not do so
in this case because the Parties narrowed the scope of their
submission during the remedy proceedings.39 In their brief, the
Workers submitted only the following issue: “What shall be
the appropriate remedy for the Company’s violation of Article
17.01 of the CBA?”40 The Workers repeatedly treated the
scope of the work assignment as settled by the Merits Award,
stating that “the cornerstone of a remedy is the Panel’s Award
on the merits.”41 Accordingly, the Board was not free to revisit
the scope of the work assignment.
Second, the Workers argue that the Remedy Award
merely clarified an ambiguity about the scope of the work
38
See id. (“The[] exceptions from the functus officio doctrine were
narrowly drawn to prevent arbitrators from engaging in practices
that might . . . change a party’s expectations about its rights and
liabilities contained in an award.”).
39
Cf. Metromedia Energy, Inc., 409 F.3d at 579 (explaining that
courts will defer to, but not rubber stamp, arbitrator’s interpretation
of the issues submitted to it); Trade & Transport, Inc. v. Natural
Petroleum Charterers Inc., 931 F.2d 191, 195 (2d Cir. 1991) (“[I]f
the parties have asked the arbitrators to make a final partial award
as to a particular issue and the arbitrators have done so, the
arbitrators have no further authority, absent agreement by the
parties, to redetermine that issue.”).
40
Appx. 950.
41
Appx. 948.
14
assignment protected by the Merits Awards, under the
doctrine’s third exception. Again, we disagree.
This exception usually arises in determining whether an
award must be remanded: Where an award itself is too
ambiguous to enforce, the court must remand it for
clarification.42 The Workers argue that because the Board has
already purported in the Remedy Award to clarify that the
Merits Award protected all deliveries and accompanying self-
installations, we are required to defer to that “clarification.”
Not so. Unflagging deference to arbitrators’ “clarifications”
would effectively give them the power to revisit the merits of
prior decisions, thus completely eliminating the functus officio
doctrine. Where an arbitrator has actually decided an issue but
the ruling is ambiguous, we defer to the arbitrator’s post hoc
interpretation of his award only if it is a rational clarification
of the ambiguity; otherwise, the arbitrator is revising the
award, not clarifying it.43
42
Brownsville Gen. Hosp., 186 F.3d at 326; Loc. 719, Am. Bakery
& Confectionary Workers of Am., AFL-CIO v. Nat’l Biscuit Co., 378
F.2d 918, 926 (3d Cir. 1967); see also Arco-Polymers, Inc. v. Loc.
8-74, 671 F.2d 752, 754 n.1 (3d Cir. 1982); Bell Aerospace Co. Div.
of Textron, Inc. v. Loc. 516, Int’l Union, United Auto., Aerospace &
Agric. Implement Workers of Am., 500 F.2d 921, 923 (2d Cir. 1974).
43
See Gen. Re Life Corp. v. Lincoln Nat’l Life Ins. Co., 909 F.3d
544, 549 (2d Cir. 2018) (explaining that a supplemental award
clarifying an earlier award violates the functus officio doctrine
unless “the clarification merely clarifies the award rather than
substantively modifying it”); Sterling China Co. v. Glass, Molders,
Pottery, Plastics & Allied Workers Loc. No. 24, 357 F.3d 546, 556
(6th Cir. 2004) (“[T]he arbitrator’s authority allows for clarification
of an award subject to multiple interpretations.”); see also SBC
Advanced Solutions, Inc. v. Commc’ns Workers of Am., Dist. 6, 794
F.3d 1020, 1031 (8th Cir. 2015); Eastern Seaboard Const. Co., Inc.
15
We agree with the Workers that the Merits Award itself
was ambiguous as to the scope of the protected work
assignment. In the award, the Board stated that the Workers
are entitled to compensation for “the delivery work in
question,” but did not define that phrase. The Board also stated
that “[t]he grievance is granted”44 The grievance, in turn,
related to “all work associated with the set top box.”45 Yet,
even the Workers do not contend that the Merits Award
referred to “all work associated with the set top boxes”: They
concede that Option Two does not violate the CBA.
But we need not decide whether the Remedy Award is
a rational clarification of these ambiguities in the Merits Award
itself, i.e., whether “delivery work in question” could be read
as shorthand for both the delivery and self-installation aspects
of the mail options, since that “clarification” is foreclosed by
the Merits Opinion. Because “arbitrators have no obligation to
explain their reasons for an award or even to write an opinion
unless the contract so requires,”46 “mere ambiguity in the
opinion accompanying an award, which permits the inference
that the arbitrator may have exceeded his authority, is not a
reason for refusing to enforce the award.”47 Nonetheless, we
v. Gray Const., Inc., 553 F.3d 1, 6 (1st Cir. 2008); Brown v. Witco
Corp., 340 F.3d 209, 221 (5th Cir. 2003) (“[T]he arbitrator went
beyond the express scope of the remand order by issuing a
clarification that essentially reversed the determinations that he
made in the August 27 Clarification Letter.”).
44
Appx. 253.
45
Id. at 230.
46
Exxon Shipping Co. v. Exxon Seamen’s Union, 73 F.3d 1287,
1297 (3d Cir. 1996).
47
United Steelworkers of Am. v. Enterprise Wheel & Car Corp., 363
16
may vacate an award where “it is obvious from the written
opinion” that the arbitrator exceeded his authority.48
Here, it is obvious from the Merits Opinion that the
Remedy Award revised the Merits Award and thus exceeded
the Board’s authority under the functus officio doctrine. In the
Merits Opinion, the Board explicitly stated that either the
Workers were not challenging the self-installation aspect of the
mail options or, if they were, “[p]rior awards have confirmed
that self-installation by a customer does not amount to
contracting out bargaining unit work. . . . The question of self-
installation of certain equipment . . . has long been settled.
Delivery is another matter.”49 Thus, the Merits Award
U.S. 593, 598 (1960); accord Exxon Shipping Co., 73 F.3d 1287,
1297 (3d Cir. 1996) (“[A]n arbitrator’s decision need [not] be . . .
internally consistent.”); United Parcel Serv., Inc. v. Int’l Broth. of
Teamsters, Chauffeurs, Warehousemen & Helpers of Am., Loc.
Union No. 430, 55 F.3d 138, 141–42 (3d Cir. 1995).
48
Metromedia Energy, Inc. v. Enserch Energy Servs., Inc., 409 F.3d
574, 580 (3d Cir. 2005) (emphasis added); accord Raymond James
Fin. Servs., Inc. v. Bishop, 596 F.3d 183, 191 (4th Cir. 2010);
Randall v. Lodge No. 1076, Int’l Ass’n of Machinist & Aerospace
Workers, AFL-CIO, 648 F.2d 462, 468 (7th Cir. 1981) (explaining
that court will remand case based on ambiguities in an opinion only
“once the reasons that are given strongly imply that the arbitrator
may have exceeded his or her authority under the submission and
contract”); U.S. Steel & Carnegie Pension Fund v. McSkimming,
759 F.2d 269 (3d Cir. 1985); cf. M&C Corp. v. Erwin Behr GmbH
& Co., 143 F.3d 1033, 1038 (6th Cir. 1998) (“[I]f the arbitrator’s
opinion and award, read together, are not ambiguous, the award
should be enforced.”).
49
Appx. 249. The Workers argue that the Board referred only to
“prior awards” and thus was not ruling on this issue. We disagree.
Why would the Board randomly mention prior awards, particularly
17
protects, at most, deliveries under Options Three and Four, but
not self-installations.
Nonetheless, the Workers argue that because they
always install the boxes that they deliver, installation and
delivery were a single work “assignment” before the mail
options. The Workers rely on the Board’s statement that they
“were assigned to deliver the set top boxes that they
installed.”50 This statement only further undermines their
argument for two reasons.
First, the Workers made similar statements in their
arbitration brief, but did so to show that “delivery is work in
connection with the installation and maintenance of [a]
communication facility” and thus can be protected by Article
17.01.51 Indeed, the Workers specified that the “core work”
was the “transporting and delivering [of] set top boxes to
customers premises,” and that “the work . . . is now assigned
to UPS and other common carrier employees.”52
in the context of rejecting Verizon’s arguments about self-
installation, if it was not ruling that self-installation, in some
contexts, is permitted? As explained above, the Board ruled on the
issue of self-installation, and these statements clearly show how it
ruled on that issue: “[S]elf-installation by a customer does not
amount to contracting out bargaining unit work.”
50
Id. at 247 (emphasis added).
51
Id. at 555 (emphases added).
52
Id. at 550–51 (emphasis added); accord id. at 551 (arguing that
“the ‘basic work’ of delivery continues to be done[] by non-
bargaining unit members” (emphasis added)).
18
Second, if anything, the Board’s statement that the
Workers “deliver[ed] the set top boxes that they installed”
suggests that “the delivery work in question” is even narrower
than Verizon’s proposed interpretation. Specifically, it
indicates that the protected work assignment includes
deliveries only of “boxes that the[ Workers] installed,” not
deliveries of boxes that others installed. Under that reading,
the Merits Award protects only deliveries (and perhaps
installations) under Option Four, where Service Technicians
actually did the installations, and thus does not protect any
deliveries under Option Three, let alone the accompanying
self-installations. In fact, Verizon initially argued for that
interpretation below, and several parts of the Merits Opinion
support it.
For example, the Board stated that Verizon must stop
“mailing the product to customers when the Company is to
provide the installation or maintenance on a set top box,” and
that the Board could not issue a monetary remedy because there
was no evidence about the number of deliveries to “customers
who wanted a different box that they did not want to install
themselves.”53 The Board also distinguished this case from an
arbitration decision (Strongin) that held that mail delivery of
telephone cords for self-installation did not violate the CSA
because “delivery of the cords was merely incidental to the
[self-]installation” and “the Company is no longer routinely
engaged in installing these cords.”54 The Board explained that
here, “technicians continue to install some set of the set top
53
Id. at 252 (emphases added).
54
Id. at 250.
19
boxes . . . . When that occurs, delivery of a box is not
incidental.”55 Where a box is delivered under Option Three (or
by an Assistant Technician), Verizon does not “provide the
installation or maintenance,” and the Workers did not present
any evidence of customers who chose Option Three despite
wanting to choose Options One or Four.
Thus, the parts of the Merits Opinion on which the
Workers rely, viewed in the context of the entire Opinion,
undermine their argument. We need not decide whether the
Merits Award protects all deliveries under Options Three and
Four, as Verizon argues, or only deliveries and Union-
installations under Option Four, as Verizon argued below.
Regardless of which of those two interpretations is correct,
both of them foreclose the Board’s purported “clarification”:
The Merits Award does not protect self-installations under
Option Three.56 Accordingly, it is obvious from the face of the
Merits Opinion that the Board revised the Merits Award by
awarding damages for self-installations, and the third
exception to the functus officio doctrine thus does not apply.
In sum, the Merits Opinion forecloses the Remedy
Award’s purported “clarification” of the scope of the protected
work assignment, and the Board was not permitted to redecide
that issue merely because it reserved jurisdiction on the
remedy. Accordingly, we affirm the District Court’s Judgment
holding that the Board violated the functus officio doctrine by
awarding backpay for self-installations under Option Three.
55
Id. (emphasis added).
56
Because Verizon did not cross-appeal the District Court’s ruling
that deliveries by Assistant Technicians (but not the accompanying
self-installations) were protected in the Merits Award, we do not
disturb that ruling.
20
ii Existing Customers
The Merits Opinion was clearly limited to “existing
customers,”57 but that term was omitted from the Remedy
Award. The Workers quibble over the definition of “existing
customers,” arguing that the District Court incorrectly limited
the Remedy Award to “deliveries to customers that were in
existence when the Union filed its grievance.”58 Not so.
Neither the District Court nor the Board precisely defined what
they meant by “existing customers.”59 It is for the Board to
57
See, e.g., id. at 229 (framing issue as whether Verizon violated the
CBA by “implementing a process to deliver set top boxes to existing
customers by common carrier for customer self-installation”); id. at
238 (quoting Workers’ argument that they “were assigned to deliver
[the] set top boxes to already existing customers”); id. at 249 (“The
Union’s focus is on the delivery of set top boxes to existing
customers by common carrier.”); id. at 252 (“There is no record
evidence by which to assess how often the Company sent out set top
boxes to existing customers . . . .”).
58
Appellants’ Br. at 40.
59
Although the Board never conclusively defined it, the record
suggests that the term “existing customers” is derived from the
scope of the mail options, which were allegedly limited to “adds,
upgrades, downgrades, or swaps” for “existing customers,” Appx.
305—in other words, “customers who already have a FiOS service.”
Id. at 230 (emphasis added) (brackets omitted). But see id. at 252(discussing monetary remedy for deliveries “to existing customers
who wanted a different box . . . .” (emphasis added)). Verizon
suggested as much in its Motion for Summary Judgment, arguing
that the Merits Award was limited to existing customers because,
21
clarify any ambiguity in the meaning of “existing customers”
if and when the remedy issue is submitted to it on remand.60
Regardless of the precise remedial limitations that term
imposes, the District Court correctly vacated the Remedy
Award because it did not include that term at all and thus
expanded the work assignment identified in the Merits Award.
Accordingly, we will affirm the District Court’s ruling that the
Remedy Award violated the functus officio doctrine because it
was not limited to “existing customers.”
B. Punitive Damages
Verizon argues that the Board impermissibly awarded
punitive damages. The Workers do not argue that the CBA
allows the Board to award punitive damages.61 Instead, they
inter alia, the mail options were not available “to new customers
until years after the grievance in this case.” Mot. Sum. J. at 11.
60
As with the self-installation issue, however, any clarification must
rationally fit the Merits Award and not be foreclosed by the Merits
Opinion.
61
Other circuits have created a presumption that punitive damages
do not draw their essence from a CBA absent an explicit punitive-
damages provision. E.g., Island Creek Coal Co. v. Dist. 28, United
Mine Workers of Am., 29 F.3d 126, 129 (4th Cir. 1994); Raytheon
Co. v. Automated Business Sys., Inc., 882 F.2d 6, 10 (5th Cir. 1989);
United Elec., Radio & Mach. Workers of Am., Loc. 1139 v. Litton
Microwave Cooking Prod., Litton Sys., Inc., 704 F.2d 393, 395 (8th
Cir. 1983); Desert Palace, Inc. v. Local Joint Exec. Bd. of Las
Vegas, 679 F.2d 789, 794 (9th Cir. 1982); Bacardi Corp. v.
Congreso de Uniones Industriales de P.R., 692 F.2d 210, 214 (1st
Cir. 1982). Because the Workers do no argue that the Board was
permitted to award punitive damages, however, we do not decide
whether to adopt that presumption.
22
argue that the Remedy Award was only compensatory. We
agree with Verizon.
Although the Remedy Award and the accompanying
opinion are ambiguous, they “strongly imply that the [Board]
may have exceeded [its] authority.”62 The Board stated that it
sought “to compensate” and “to deter future violations.”63
Although compensatory damages alone could “deter future
violations” of the CBA, the goal of deterrence often indicates
that damages are punitive.64 And although the Board stated
that the Workers “lost work to which they were entitled,”65 it
was merely holding that Verizon violated the CBA to the extent
that it assigned delivery work to Assistant Technicians. It did
not make explicit findings that any Service Technicians
actually lost pay for which they could be compensated. To the
contrary, it stated that the Workers “did not lose income as they
were fully employed at the time.”66
The Workers argue that, in finding that they “did not
lose income,” the Board was merely explaining its decision to
award straight-time rates rather than overtime rates. The
Workers are correct that that was the context of this finding,
but that explanation makes no sense: Even accepting the
Workers’ argument that the Board had discretion to award only
62
Randall, 648 F.2d at 468.
63
Appx. 253.
64
Cf. City of Newport v. Fact Concerts, Inc., 453 U.S. 247, 266–67
(1981) (“Punitive damages by definition are not intended to
compensate the injured party, but rather to punish the tortfeasor
whose wrongful action was intentional or malicious, and to deter
him and others from similar extreme conduct.”).
65
Appx. 268.
66
Id.
23straight-time backpay for lost overtime work,67 that does not
explain the Board’s statement that they “did not lose income.”
That someone was “fully employed” does not mean that he did
not lose overtime work; to the contrary, it means that if he lost
anything, it was overtime. And if he lost overtime, he
presumably “los[t] income.”
Ordinarily, we would remand this matter to the Board
to clarify whether any part of the damages were punitive. Here,
however, clarification is not necessary. If the Remedy Award
was not at least partially punitive, it would be irrational
because there was no record evidence supporting
compensatory backpay for all box shipments.68 It is well
settled that compensatory damages for breach of contract are
intended “to put [the plaintiff] in the position he or she would
have been in had there been no breach.”69 “[T]he non-
67
Cf. New Meiji Market v. United Food & Com. Workers Loc. Union
905, 789 F.2d 1334, 1336 (9th Cir. 1986).
68
See NF&M Corp. v. United Steelworkers of Am., 524 F.2d 756,
759–60 (3d Cir. 1975) (“[I]f an examination of the record before the
arbitrator reveals no support whatever for his determinations, his
award must be vacated.”); see also Swift Indus., Inc. v. Botany
Indus., Inc., 466 F.2d 1125, 1134 (3d Cir. 1972) (vacating
arbitrator’s bond award as irrational because it exceeded the
maximum amount of liability supported by the record).
69
Official Comm. of Unsecured Creditors v. R.F. Lafferty & Co.,
Inc., 267 F.3d 340, 351 (3d Cir. 2001); accord Brand Mktg. Grp.
LLC v. Intertek Testing Servs., N.A., Inc., 801 F.3d 347, 357 (3d Cir.
2015) (“Compensatory damages ‘are intended to redress the
concrete loss that the plaintiff has suffered by reason of the
defendant’s wrongful conduct.’” (quoting Cooper Indus., Inc. v.
Leatherman Tool Grp., Inc., 532 U.S. 424, 432 (2001))); ATACS
Corp. v. Trans World Commc’ns, Inc., 155 F.3d 659, 669 (3d Cir.
1998); see also United States v. Burke, 504 U.S. 229, 239 (1992)
24
breaching party should not be placed in a better position
through the award of damages than if there had been no
breach.”70 Even setting aside the Board’s violation of the
functus officio doctrine, the Workers have not pointed to any
evidence that there were Service Technicians able and willing
to perform any of the deliveries and installations, let alone all
of them.71
(explaining that “backpay” includes “only an amount equal to the
wages the employee would have earned” (emphasis added));
Carden v. Westinghouse Elec. Corp., 850 F.2d 996, 1005 (3d Cir.
1988) (holding that “back pay cannot legitimately be claimed”
where “no present compensation can be expected”); Leeper v.
United States, 756 F.2d 300, 303 (3d Cir. 1985) (“A tort victim can
also recover lost earnings where there has been an actual loss of
income or an employment benefit.”).
70
Bluebonnet Sav. Bank, F.S.B. v. United States, 339 F.3d 1341,
1345 (Fed. Cir. 2003); see also Ware v. Rodale Press, Inc., 322 F.3d
218, 225–26 (3d Cir. 2003) (“To prove damages [for breach of
contract], a plaintiff must give a factfinder evidence from which
damages may be calculated to a ‘reasonable certainty.’” (quoting
ATACS Corp., 155 F.3d at 668)).
71
See Citgo Asphalt Refining Co. v. Paper, Allied-Indus., Chem. &
Energy Workers Int’l Union Loc. No. 2-991, 385 F.3d 809, 819–20
(3d Cir. 2004); Ga. Power Co. v. Int’l Broth. of Elec. Workers, Loc.
84, 995 F.2d 1030, 1032 (11th Cir. 1993); Westinghouse Elec. Corp.
Aerospace Div. v. Int’l Broth. of Elec. Workers, AFL-CIO, 561 F.2d
521, 523–24 (4th Cir. 1977); see also Leed Architectural Prods.,
Inc. v. United Steelworkers of Am., Loc. 6674, 916 F.2d 63, 66 (2d
Cir. 1990); Bacardi Corp. v. Congreso de Uniones Industriales de
Puerto Rico, 692 F.2d 210, 214 (1st Cir. 1982); cf. Brentwood Med.
Assocs. v. United Mine Workers of Am., 396 F.3d 237, 243 (3d Cir.
2005) (upholding award even though arbitrator impermissibly added
new language to CBA because “there [was] sufficient substance in
the remainder of the [opinion] to pass the minimum rationality
25
Accordingly, the Remedy Award was either punitive or
irrational. The District Court thus correctly vacated the
Remedy Award and remanded the matter to the Board for a
redetermination of what compensatory damages, if any, are
appropriate based on the evidence and the scope of the work
assignment identified in the Merits Award and Merits Opinion.
IV
For the forgoing reasons, we will affirm the judgment of
the District Court.
threshold”).
26