Totes Isotoner Corp v. Intl Chemical Wrks

RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206
File Name: 08a0261p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
_________________
X
Plaintiff-Appellee, -
TOTES ISOTONER CORPORATION,
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-
-
No. 07-3577
v.
,
>
INTERNATIONAL CHEMICAL WORKERS UNION -
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Defendant-Appellant. -
COUNCIL/UFCW LOCAL 664C,
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N
Appeal from the United States District Court
for the Southern District of Ohio at Cincinnati.
No. 04-00849—Susan J. Dlott, District Judge.
Argued: March 13, 2008
Decided and Filed: July 8, 2008*
Before: CLAY and McKEAGUE, Circuit Judges; BOYKO, District Judge.**
_________________
COUNSEL
ARGUED: Randall Vehar, ICWUC/UFCW LEGAL DEPARTMENT, Akron, Ohio, for Appellant.
Lawrence J. Barty, TAFT, STETTINIUS & HOLLISTER, Cincinnati, Ohio, for Appellee.
ON BRIEF: Randall Vehar, Robert W. Lowrey, ICWUC/UFCW LEGAL DEPARTMENT, Akron,
Ohio, for Appellant. Lawrence J. Barty, Paula Jean Dehan, TAFT, STETTINIUS & HOLLISTER,
Cincinnati, Ohio, for Appellee.
CLAY, J., delivered the opinion of the court, in which BOYKO, D. J., joined. McKEAGUE,
J. (pp. 14-17), delivered a separate dissenting opinion.
*
This decision was originally issued as an “unpublished decision” filed on July 8, 2008. The court has now
designated the opinion as one recommended for full-text publication.
**
The Honorable Christopher A. Boyko, United States District Judge for the Northern District of Ohio, sitting
by designation.
1
No. 07-3577 Totes Isotoner Corp. v. Int’l Chem. Workers Union Council Page 2
_________________
OPINION
_________________
CLAY, Circuit Judge. Defendant, International Chemical Workers Union Council/UFCW
Local 664C (“Union”), appeals the district court’s order granting the motion of Plaintiff,
totes»Isotoner Corporation, to vacate a supplemental labor arbitration award. For the reasons that
follow, we AFFIRM the judgment of the district court.
BACKGROUND
Totes»Isotoner Corporation (“the Company”) is an employer that makes and markets
umbrellas, gloves and other weather-related accessories, with its principal place of business located
in Butler County, Ohio. The Union is an unincorporated labor organization that is the exclusive
representative of production and maintenance employees at the Company’s distribution center in
Butler County. Over the years, the Union and the Company have been signatories to a series of
collective bargaining agreements, one of which was effective April 27, 1998 through April 26, 2002.
A. 1998 Collective Bargaining Agreement
On April 27, 1998, the Union and the Company executed a collective bargaining agreement
(“CBA”) which memorialized “their agreement with respect to rates of pay, hours of work, and
conditions of employment to be observed by the Company, the Union and employees covered by
this agreement; [and provided] procedures for equitable adjustment of grievances . . . .” (J.A. at 30)
1. Health Benefits
Section 1(a) of Appendix C to the 1998 CBA outlined the Company’s obligations with
respect to medical, dental, life and accidental death insurance coverage for Union employees during
the lifetime of the agreement. Appendix C provided that “[c]overage for . . . benefits will be as
outlined in the Totes»Isotoner Umbrella of Benefits plan and will be available to employees after
60 working days.” (J.A. at 56) Under the “Umbrella of Benefits” plan, both union and non-union
employees received the same benefits and coverage terms for relevant insurance programs.
2. Duration of the 1998 CBA and the Grievance Procedure
Under Article XIX of the 1998 CBA, the parties agreed that “[u]nless otherwise agreed upon
by the parties, notice to modify and/or terminate within the time period specified above shall prevent
this Agreement from renewing itself and shall automatically terminate said Agreement upon its
expiration date without benefit of further notice of either party.” (J.A. at 52)
Moreover, under Article XXI of the 1998 CBA, both the Company and the Union agreed that
neither could make unilateral changes to the items referenced in the 1998 CBA. (J.A. at 53) In
anticipation of grievances for alleged violations of the 1998 CBA, Article XVII both defined what
a grievance meant under the CBA and authorized the use of arbitration to resolve grievances.
Specifically, Article XVII provided that
A grievance is any difference between the employer and an employee or employees
or the Union about what any part of this Agreement means or how it will be applied.
***
In the event that no settlement is reached, either party, upon written notice to the
other, may refer the matter to an impartial arbitrator whose decision shall be final and
binding upon all parties to the grievance. However, the arbitrator shall not have the
No. 07-3577 Totes Isotoner Corp. v. Int’l Chem. Workers Union Council Page 3
right to delete or make changes in any of the provisions of this Agreement, or to
insert new ones . . . .
(J.A. at 50-51)
B. Change to the Umbrella of Benefits Plan
In November of 2001, the Company notified both Union and non-Union employees of
changes to the Umbrella of Benefits plan for the upcoming year. The Company announced that the
changes would result in increased costs for health insurance premiums and other out-of-pocket
expenses. On November 5, 2001, the Union protested the increase, alleging that the changes to the
Umbrella of Benefits plan were unilateral and therefore violative of the 1998 CBA. Notwithstanding
the Union’s protest, the Company proceeded to implement the changes on January 1, 2002.
C. 2002-2007 Collective Bargaining Agreement
In February of 2002, the Union provided the Company with notice that it was seeking
changes or amendments to the 1998 CBA. Under the terms of the 1998 CBA, the automatic
termination clause of the Agreement is triggered when either party seeks to change or amend the
existing Agreement. Thereafter, the Company and the Union engaged in negotiations for a new
collective bargaining agreement. As a consequence of these negotiations, the parties reached
agreement regarding a new five-year collective bargaining agreement which went into effect on
April 27, 2002. The 2002 CBA incorporated identical language from Article XXI and Appendix C
of the 1998 CBA.
D. Union Grievance and the Original Arbitration Award
On March 19, 2002, the Union filed a charge against the Company with the National Labor
Relations Board, alleging that “on or about December, 2001, and continuing thereafter,” the
Company “failed and refused to bargain in good-faith” with the Union regarding changes to the
Umbrella of Benefits plan. (J.A. at 283) In response, NLRB Region 9 determined that the Union’s
charge should be administratively deferred for arbitration in accordance with the terms of the 1998
CBA. According to the NLRB Regional Director, the Company “expressed a willingness for a
reasonable period of time to arbitrate the dispute underlying the charge . . . notwithstanding . . . the
subsequent expiration of the [1998] contract.” (J.A. at 70)
On June 17, 2002, pursuant to the NLRB’s deferral, the Union filed a grievance with the
Company, again alleging that the changes to the Umbrella of Benefits plan violated the 1998 CBA.
In the grievance, the Union sought to have pre-January 1, 2002 insurance premiums reinstated and
employees reimbursed for the additional premiums paid as a result of the January 1, 2002 increases.
The parties, however, were unable to settle the grievance and therefore submitted the matter for
arbitration before a jointly-selected arbitrator.
Because the parties did not stipulate the issues to be decided by the Arbitrator, the Arbitrator
determined the issues to be as follows:
Did Management violate the Agreement when they unilaterally made changes in the
healthcare insurance benefits beginning on January 1, 2002?
If Management violated the Agreement, what is the appropriate remedy?
(J.A. at 80) The Arbitrator relied on the 1998 CBA to resolve the two above-referenced issues in
favor of the Union.
No. 07-3577 Totes Isotoner Corp. v. Int’l Chem. Workers Union Council Page 4
With respect to the first issue, the Arbitrator examined Article XXI, the Waiver Clause of
the 1998 CBA, to find that “the healthcare insurance benefits and the employees’ share of the
premiums in effect at the time the Agreement was finalized is what the Union bargained for with the
Company and they are not subject to unilateral change by Management during the lifetime of the
Agreement.” (J.A. at 87)
On March 5, 2004, to remedy the violation of the 1998 CBA, the Arbitrator ordered that
[t]he changes Management made to the employees’ healthcare insurance coverage
on or about January 1, 2002 are hereby rescinded and all of the benefits previously
in effect are to be reinstated. The change in employees’ share of the healthcare
insurance premiums that occurred as a result of these changes are hereby rescinded
and employees are to be reimbursed for any and all additional costs they incurred as
a result of Management having violated the Agreement. In addition, employees are
to be reimbursed for all monies spent for benefits that would have been paid for
under the coverage in effect before the changes occurred, but were not paid for after
the changes occurred. Management is hereby directed to cease and desist from
unilaterally making any changes in employees’ healthcare insurance benefits
provided for in Appendix C of the Agreement. Management is hereby directed to
cease and desist from unilaterally increasing employees’ share of healthcare
insurance premium costs. The Arbitrator will retain jurisdiction over this matter
until the award is fully implemented.
(J.A. at 89)
E. Alleged Non-Compliance and Supplemental Award
In response to the Arbitrator’s award in favor of the Union, the Company calculated the loss
incurred by each employee as a result of the benefits change between January 1, 2002, the
commencement of the health plan changes, and April 26, 2002, the expiration date of the 1998 CBA.
The Company did not, however, revoke the January 1, 2002 change to the health benefits plan or
reinstate the prior terms of the Umbrella of Benefits plan. Consequently, the Union filed a
complaint with the Arbitrator arguing that the Company was not in compliance with his March 5,
2004 award.
Thereafter, the parties agreed to submit the non-compliance dispute to the Arbitrator through
“supplemental proceedings” and a hearing was held on September 13, 2004. At the outset of the
hearing, the Arbitrator noted that he did not retain the documents regarding his March 5, 2004
award. Therefore, the parties submitted joint exhibits containing the 1998 CBA, the NLRB referral
to arbitration, and the initial grievance filed by the Union. During the supplemental proceedings,
the parties presented oral arguments and later briefed controverted issues before the Arbitrator.
In arguments before the Arbitrator, the Union asserted that the Company failed to comply
with the Arbitrator’s March 5, 2004 award inasmuch as the Company failed to rescind the increase
in insurance premiums and limited its employee reimbursement to the date on which the 1998 CBA
expired. The Union contended that the Arbitrator’s prior cease and desist order extended beyond
the expiration of the 1998 CBA and required the Company to make employees whole for the entire
period that the increased insurance premiums were in effect, not simply for the period of the 1998
CBA. The 2002 CBA, the Union contended, had no bearing on the Company’s duty to extend its
compliance with the order beyond the expiration of the 1998 CBA. In particular, the Union argued
that “[g]iven the specific cease and desist language of the March 5, 2004 Award, the effective date
of the new CBA is of no significance since [the language of] Appendix C [] did not change from the
1998-2001 CBA which was in effect when the grievance was filed.” (J.A. at 149-50)
No. 07-3577 Totes Isotoner Corp. v. Int’l Chem. Workers Union Council Page 5
The Company, however, argued that the Arbitrator’s award was effective only during the life
of the 1998 CBA. In particular, the Company argued that the parties agreed to arbitrate the
grievance as governed by the 1998 CBA and that all of the evidence presented to the Arbitrator
related to the 1998 CBA. Further, the Company noted that the Arbitrator heard no evidence
regarding the 2002 CBA or the negotiations leading up to the agreement. The Company argued that
“a determination of what health care benefits employees are entitled [to] at any point in time during
the term of the new labor agreement – that is, after April 26, 2002, can only be determined by an
interpretation and application of the terms of that agreement.” (J.A. at 137) To the extent that the
Union complained about health benefit premiums after April 26, 2002, the Company asserted, the
Union must file a separate grievance under the 2002 CBA.
After hearing arguments from both the Union and the Company, the Arbitrator requested a
copy of the 2002 CBA, noting that “[i]t may or may not have any relevancy to the disposition of this
particular matter.” (J.A. at 114) The Company complied with the Arbitrator’s request. Counsel for
the Company, however, made clear that “I’ll note for the record that I would not submit that as
evidence pertinent to this matter but simply as a convenience to the arbitrator.” (Id.) Neither party
offered any additional evidence regarding the 2002 CBA or the negotiations that led to its execution.
On September 30, 2004, the Arbitrator issued a decision and award regarding the Company’s
compliance with his March 5, 2004 award. The parties did not stipulate to the issues to be decided
by the Arbitrator. Therefore, the Arbitrator determined the issues to be as follows:
Has Management complied with the Arbitrator’s March 5, 2004 Award?
If not, what is the appropriate remedy?
(J.A. at 171-72)
The Arbitrator found that the Company was not in compliance with his March 5, 2004 award.
The Arbitrator noted that “the decisions Management put into effect on or about January 1, 2002
have remained in effect to date. The healthcare insurance benefits that employee[s] had prior to
January 1, 2002 have been diminished while co-pays have increased.” (J.A. at 171)
The Arbitrator further found that
At the September 4, 2003 and February 12, 2004 Hearings the Arbitrator was well
aware of the fact that a successor agreement (2002-2007) was in effect. The
Arbitrator also recognized [] Management’s belief that they have the unfettered
authority to change negotiated copays for employees’ healthcare insurance benefits
and the kinds and levels of benefits themselves have carried over intact from the
1998-2001 agreement to the 2002-2007 agreement.
When the Arbitrator rendered his decision and fashioned the Award it was with the
clear intention of providing quasi-injunctive relief and it is for this reason that he
issued a cease and desist order as part of the Award. The NLRB and the Courts have
long recognized that arbitrators have the legitimate authority to grant quasi-
injunctive relief in the form of cease and desist orders.
The Arbitrator notes that nothing in the 2002-2007 agreement gives Management the
right to unilaterally change negotiated healthcare insurance benefits or negotiated
copays. Clearly, if Management’s decision was violative of the 1998-2001
agreement it is violative of the 2002-2007 agreement. The improper action that
occurred during the 1998-2001 agreement simply carried over into the 2002-2007
agreement.
No. 07-3577 Totes Isotoner Corp. v. Int’l Chem. Workers Union Council Page 6
(J.A. at 172) To remedy the Company’s non-compliance, the Arbitrator directed the Company to
“comply with the provisions of the March 5, 2004 Award,” and retained jurisdiction over the award
until fully implemented. (Id.)
The Company later filed a complaint with the United States District Court for the Southern
District of Ohio requesting that the Arbitrator’s supplemental award be set aside and vacated. The
Company’s complaint alleged that the Arbitrator acted outside of his authority by “interpreting” the
2002 CBA in his supplemental award in favor of the Union. The Union counterclaimed for
enforcement of both the supplemental award as well as the Arbitrator’s original March 5, 2004
award. The parties filed cross-motions for summary judgment. The district court confirmed the
original March 5, 2004 award but vacated the Arbitrator’s supplemental award, and remanded the
compliance issue to the Arbitrator for further proceedings. The Union now timely appeals.
DISCUSSION
Arbitrator’s Authority to Issue the Supplemental Award in Favor of the Union
A. Standard of Review
This Court reviews a district court’s grant of summary judgment in a labor arbitration dispute
de novo. Way Bakery v. Truckdrivers, Local No. 164, 363 F.3d 590, 593 (6th Cir. 2004). Summary
judgment is appropriate if the evidence, when viewed in the light most favorable to the nonmoving
party, shows that there is no genuine issue of material fact such that the moving party is entitled to
judgment as a matter of law. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587
(1986). “The judge is not to weigh the evidence and determine the truth of the matter, but rather
determine whether there is a genuine issue for trial.” Sterling China Co. v. Glass, Molders, Pottery,
Plastics and Allied Workers Local No. 24, 357 F.3d 546, 551 (6th Cir. 2004).
Although we review a district court’s summary judgment disposition de novo, in the context
of arbitration, “courts play only a limited role when asked to review the decision of an arbitrator.”
Tennessee Valley Auth. v. Tennessee Valley Trades & Labor Council, 184 F.3d 510, 514 (6th
Cir.1999) (per curiam) (quotation marks and citation omitted). Indeed, “[a] court’s review of an
arbitration award ‘is one of the narrowest standards of judicial review in all of American
jurisprudence.’” Way Bakery, 363 F.3d at 593 (quoting Tennessee Valley Auth., 184 F.3d at 515).
It is well-established that an arbitrator’s award is legitimate and must be upheld where it is
drawn from the collective bargaining agreement and the issues submitted for determination by the
parties. United Steelworkers v. Enterprise Wheel & Car Corp., 363 U.S. 593, 597 (1960). So long
as “an arbitrator is even arguably construing or applying the contract and acting within the scope
of his authority, the fact that a court is convinced he committed serious error does not suffice to
overturn his decision.” Major League Baseball Players Assoc. v. Garvey, 532 U.S. 504, 509 (2001)
(internal quotations and citations omitted). Indeed, “[b]ecause the parties have contracted to have
disputes settled by an arbitrator chosen by them rather than by a judge, it is the arbitrator’s view of
the facts and of the meaning of the contract that they have agreed to accept.” United Paperworkers
Int’l Union, AFL-CIO v. Misco, Inc., 484 U.S. 29, 37-38 (1987). Consequently, “courts are not
authorized to reconsider the merits of an award even though the parties may allege that the award
rests on errors of fact or on misinterpretation of the contract.” Id. at 36.
Indeed, “[t]he refusal of courts to review the merits of an arbitration award is the proper
approach to arbitration under collective bargaining agreements. The federal policy of settling labor
disputes by arbitration would be undermined if courts had the final say on the merits of the awards.”
Enterprise Wheel & Car Corp., 363 U.S. at 596. However, an arbitrator’s award “must draw its
essence from the contract and cannot simply reflect the arbitrator’s own notions of industrial
justice.” Misco, 484 U.S. at 38. “When the arbitrator’s words manifest an infidelity to this
No. 07-3577 Totes Isotoner Corp. v. Int’l Chem. Workers Union Council Page 7
obligation,” the scope of the arbitrator’s authority has been exceeded and “courts have no choice but
to refuse enforcement of the award.” Enterprise Wheel & Car Corp., 363 U.S. at 597.
In Michigan Family Resources, Inc. v. Service Employees International Union Local 517M,
475 F3d 746 (2007) (en banc), this Court further narrowed the scope of judicial review regarding
labor-arbitration disputes. Taking guidance from the Supreme Court’s decisions in Misco and
Garvey, this Court overruled its prior four-part test under Cement Divisions, Nat’l Gypsum Co. v.
United Steelworkers of America, 793 F.2d 759 (6th Cir. 1986),1 and announced a new line of inquiry
regarding arbitration awards. Id. at 753.
In Michigan Family Resources, this Court held that arbitration awards should be reversed
on appeal only where a “procedural aberration” occurs within the arbitration process. Id. To
determine whether a procedural aberration has occurred, this Court must ask:
Did the arbitrator act ‘outside his authority’ by resolving a dispute not committed to
arbitration? Did the arbitrator commit fraud, have a conflict of interest or otherwise
act dishonestly in issuing the award? And in resolving any legal or factual disputes
in the case, was the arbitrator ‘arguably construing or applying the contract’?
Id. If the response to these questions is negative, “the request for judicial intervention should be
resisted even though the arbitrator made ‘serious,’ ‘improvident’ or ‘silly’ errors in resolving the
merits of the dispute.” Id. Moreover, “[t]he arbitrator does not exceed his authority every time he
makes an interpretive error; he exceeds that authority only when the collective bargaining agreement
does not commit the dispute to arbitration.” Id. at 756.
Although this Court should be loath to vacate an award in a labor arbitration dispute, there
are occasions in which judicial intervention may be warranted. Indeed, as we noted in Michigan
Family Resources, “we cannot ignore the specter that an arbitration decision could be so ignorant
of the contract’s plain language as to make implausible any contention that the arbitrator was
construing the contract.” Id. at 753 (internal quotations and citations omitted). Nevertheless, such
intervention should be the exception and not the rule, “[f]or in most cases, it will suffice to enforce
the award that the arbitrator appeared to be engaged in interpretation, and if there is doubt we will
presume that the arbitrator was doing just that.” Id.
With these thoughts in mind, we now address the claims of the Union.
B. Analysis
The Union argues that the district court misapplied Michigan Family Resources when it
vacated the Arbitrator’s award based on findings that (1) the Arbitrator was not arguably construing
“the contract;” and (2) he acted outside of his authority by resolving a dispute not committed to
arbitration. We will address each point of contention.
1
The previous test utilized to evaluate arbitration awards, as announced in Cement Divisions, allowed for
vacatur of an award where the award failed to draw its essence from the collective bargaining agreement. Under Cement
Divisions, to determine whether an award drew its essence from the agreement, we considered whether “(1) the award
conflicts with express terms of the collective bargaining agreement; (2) an award impos[ed] additional requirements that
are not expressly provided in the agreement; (3) an award is without rational support or cannot be rationally derived from
the terms of the agreement; and (4) an award is based on general considerations of fairness and equality instead of the
precise terms of the agreement.” 793 F.2d at 766 (internal citations omitted).
No. 07-3577 Totes Isotoner Corp. v. Int’l Chem. Workers Union Council Page 8
1. Arguably Construing the Contract
The Union contends that the Arbitrator “arguably construed” the collective bargaining
agreement when he issued the supplemental award in favor of the Union, albeit through a more
circuitous route. The Union asserts that the “contract” that the Arbitrator was construing was the
original award inasmuch as the parties placed the issue of compliance with that award squarely
before the Arbitrator for determination. The Union contends that the original award was to have life
after the expiration of the 1998 CBA and that both parties granted the Arbitrator authority to
determine whether the Company was in compliance with the original award. The Company,
however, asserts that the Arbitrator was not construing, arguably or otherwise, any portion of the
1998 CBA when he made reference to the 2002 CBA and that the original award does not constitute
a “contract” that the Arbitrator could construe to reach the 2002 CBA.
In Michigan Family Resources, this Court explained that an arbitration award must be upheld
if the arbitrator was “arguably construing” the relevant contractual provisions. 475 F.3d at 753. We
find that an arbitrator may “arguably construe a contract” in a supplemental proceeding which
clarifies or enforces an original award that has as its basis the relevant collective bargaining
agreement. See Sterling China Co., 357 F.3d at 557.
In Sterling China Company v. Glass, Molders, Pottery, Plastics & Allied Workers Local 24,
357 F.3d 546 (6th Cir. 2004), this Court held that a supplemental award arguably construed a
collective bargaining agreement where it “drew its essence” from an original award that interpreted
the collective bargaining agreement. There, the plaintiff, Sterling China Company, appealed from
a district court order enforcing a supplemental arbitration award in favor of the union. Id. at 548.
The plaintiff argued that the arbitrator’s supplemental award should be vacated inasmuch as the
award did not construe the collective bargaining agreement that served as the basis for the
underlying dispute. Id. at 556. This Court, however, disagreed. The Sterling China court noted that
the underlying dispute regarding wages for particular job classifications was governed by the
collective bargaining agreement and that the arbitrator, in making his original award, interpreted and
construed that agreement to conclude that the union’s grievance should be sustained. Id. Therefore,
even under the more lenient Cement Divisions test, this Court held that “whether the arbitrator
correctly determined the award or not, the district court’s ruling may not be reversed on review since
the supplemental award ultimately drew its essence from the CBA.” Id. at 557. See also Int’l Ass’n
of Machinists and Aerospace Workers v. Tennessee Valley Authority, 155 F.3d 767 (6th Cir. 1998)
(finding that a supplemental arbitration award arguably construed a collective bargaining agreement
because it relied upon an original award that determined the parties’ rights under the relevant
agreement).
Similarly, in Marcucilli v. American Airlines, No. 04-40244, 2007 WL 1219042 (E.D. Mich.
2007), the court held that two supplemental arbitration awards “arguably construed” a collective
bargaining agreement because both were based upon an original award that “construed the CBA.”
Id. at *2.
Taken together, Sterling China, International Association of Machinists and Marcucilli stand
for the proposition that a supplemental award “arguably construes” a collective bargaining
agreement where the supplemental award seeks to clarify or enforce an original award that
interpreted the relevant agreement. Thus, whether the “contract” at issue was the 1998 CBA or the
Arbitrator’s original award is insignificant inasmuch as both reference the same document: the 1998
CBA that produced the initial grievance.
The Union, however, argues that the parties’ “submission” to the Arbitrator constituted an
agreement that broadened the scope of what the Arbitrator was to “arguably construe.” The Union
argues, without any support from this Circuit, that the Arbitrator was to construe not only the 1998
No. 07-3577 Totes Isotoner Corp. v. Int’l Chem. Workers Union Council Page 9
CBA but also the National Labor Relations Act (“NLRA”). The Union asserts that because the
initial charge filed by the Union before the National Labor Relations Board included allegations that
the Company engaged in unfair labor practices in violation of the NLRA, when the charge was
administratively deferred, “the entire Charge arguably went to the Arbitrator for resolution.” (Union
Br. at 30) Assuming that the Arbitrator was construing not only the 1998 CBA but also the NLRA,
the Union argues that “[t]he Arbitrator’s earlier construction of the 1998 CBA, and implicitly,
Section 8(a)(5) of the NLRA is no longer challengeable. As such the Award is now the law-of-this-
case whether or not it could have been successfully raised earlier.” (Union Br. at 30).
Even assuming, arguendo, that the submission was broader than the 1998 CBA, the
Arbitrator’s original award undermines the Union’s argument regarding what the Arbitrator actually
or even arguably construed. When describing the nature of the case, the Arbitrator noted that “this
case pertains to a dispute regarding the interpretation and application of language in the Agreement.”
(J.A. at 77) (emphasis added). The Arbitrator went on to summarize the parties’ positions with
respect to the Agreement as well as to provide a summary of the 1998 CBA itself, including the
grievance provision and Appendix C. (J.A. at 78-79) Indeed, the Arbitrator framed the issues
before him as “[d]id management violate the agreement when they unilaterally made changes in the
healthcare insurance benefits beginning on January 1, 2002? If Management violated the Agreement
what is the appropriate remedy?” (J.A. at 85, 89) The controlling document before the arbitrator,
therefore, whether phrased as the original award or the 1998 CBA, ultimately stemmed from the
1998 CBA that was in force at the time the change to the healthcare benefits became effective.
Resolving the question of what the Arbitrator was to construe does not, however, resolve the
critical question of whether the Arbitrator acted outside of his authority with respect to the
supplemental award.
2. Authority to Render the Supplemental Award
The Union argues that the district court erred when it found that the Arbitrator acted outside
of his authority by reaching a dispute not committed to arbitration, i.e., whether the unilateral
healthcare benefits increase was violative of the 2002 CBA. We disagree.
Prior to reaching the question of whether the Arbitrator acted outside of his authority, thus
constituting a “procedural aberration” that warrants judicial intervention, we should note what is not
at issue in this appeal. The issue before this Court is not whether the Arbitrator could order quasi-
injunctive relief, or even whether he could order such relief after the expiration of the 1998 CBA.
See Bixby Medical Center, Inc. v. Michigan Nurses Ass’n, 142 F. App’x 843, 850 (6th Cir. 2005)
(unpublished) (affirming cease and desist arbitration order entered after the expiration of a collective
bargaining agreement). The Arbitrator did so in the original award which was confirmed by the
district court and is not challenged on appeal. Rather, the question before this Court under the
“procedural aberration” review announced by Michigan Family Resources is whether the Arbitrator
had authority to interpret the 2002 CBA in enforcing the original award during the supplemental
compliance proceedings.
At the outset, we note that “in Michigan Family Resources we severely curtailed the ‘scope
of authority’ concept. In that case, we stated: ‘An arbitrator does not exceed his authority every time
he makes an interpretive error; he exceeds his authority only when the collective bargaining
agreement does not commit the dispute to resolution.’” Truck Drivers Local No. 164 v. Allied Waste
Sys., 512 F.3d 211, 217 (6th Cir. 2008) (quoting Michigan Family Res., 475 F.3d at 756). When an
arbitrator reaches a question not committed to him by the parties, he acts outside of his authority
such that an order vacating such an award is appropriate. See Peterbilt Motors Company v. UAW
Int’l Union, 219 F. App’x 434, 438 (6th Cir. 2007) (unpublished); Int’l Brotherhood of Elec.
Workers v. Toshiba America, 879 F.2d 208, 211 (6th Cir. 1989).
No. 07-3577 Totes Isotoner Corp. v. Int’l Chem. Workers Union Council Page 10
For example, in International Brotherhood of Electrical Workers v. Toshiba America, 879
F.2d 208 (6th Cir. 1989), this Court considered a challenge to an arbitrator’s award that ordered the
defendant-company to reinstate five employees who were allegedly terminated in violation of a
collective bargaining agreement. Id. at 208-09. There, employees who were members of a union
under a collective bargaining agreement staged a job walkout in violation of the no-strike clause of
the agreement. Id. at 209. The agreement also provided that any disciplinary action taken as a result
of a violation of the no-strike clause “shall not be altered or amended in the grievance and arbitration
procedures . . . .” Id. at 210. Following the walkout, the company terminated the employees and
the union filed a grievance on their behalf. Because the parties were unable to resolve the grievance,
the matter was submitted to arbitration. Id. at 209. Although the arbitrator found that the company
had the right to terminate the employees because of their participation in the walkout, the arbitrator
nonetheless ordered the employees reinstated. The arbitrator ordered the employees reinstated
because of an oral agreement made between the company and the union that none of the employees
who walked out would be terminated. Id. Relying on Misco, this Court vacated the arbitrator’s
award reinstating the employees. Id. at 210. We found that the arbitrator acted outside of his
authority by reaching the question of the discipline imposed by the company once it had been
determined that a violation of the no-strike clause occurred. Id. In other words, we found that the
arbitrator exceeded his authority by reaching a question that was not properly presented to him for
review under the relevant collective bargaining agreement.
Similarly, in Peterbilt Motors Co. v. UAW International Union, 219 F. App’x 434 (6th Cir.
2007), albeit in an unpublished opinion, this Court vacated an arbitrator’s award upon finding that
the arbitrator acted outside of his authority to reach a question that was not arbitrable under the
collective bargaining agreement. There, a company and a union went to arbitration regarding an
employee’s accident and insurance benefits which were denied by a separate insurer. Id. at 435.
Over the company’s protest that the matter was not arbitrable because the insurer was not a party
to the agreement, the arbitrator ruled that the company was required to pay for accident benefits
under the agreement, notwithstanding the fact that the insurer denied coverage. Id. at 437.
Therefore, the arbitrator concluded, the grievance regarding the insurance benefits was arbitrable
as against the company. Relying on Michigan Family Resources, this Court vacated the award after
concluding that the arbitrator reached a question not committed to him by arbitration because the
arbitrator’s award was “ignorant of the contract’s plain language.” Id. at 438.
In the instant case, the supplemental award issued by the Arbitrator which interpreted the
2002 CBA constituted a “procedural aberration” under Michigan Family Resources. It is undisputed
that the parties did not submit a grievance for resolution under the 2002 CBA. Thus, similar to
Toshiba and Peterbilt, the Arbitrator reached a question not submitted to him by the parties when
he opined that “if Management’s decision was violative of the 1998-2001 agreement it is violative
of the 2002-2007 agreement.” Consequently, in reaching the question of the violation of the 2002
CBA, the Arbitrator acted outside of his authority; and therefore, the supplemental award was
properly vacated even under the narrow standard announced by Michigan Family Resources.
Indeed, at the initiation of the arbitration process, the central questions presented to the
Arbitrator were whether the Company violated the 1998 CBA and if so, what measures would
appropriately remedy the violation. When the parties returned to the Arbitrator for compliance
proceedings the question addressed to the Arbitrator shifted somewhat. The question of liability
under the 1998 CBA had been resolved inasmuch as the Arbitrator’s original award found that the
Company had violated the 1998 CBA. In addition, the Company’s non-compliance with the original
award was unquestioned because the health care premiums had not been rescinded, nor had
employees been reimbursed for the cost of the increase. Rather, the central dispute at the
compliance proceeding came down to whether the Arbitrator’s orders were coterminous with the
1998 CBA or whether they were to have effect after its expiration. Clearly, while the issues in
dispute varied between the original proceeding and the compliance proceeding, the basic question
No. 07-3577 Totes Isotoner Corp. v. Int’l Chem. Workers Union Council Page 11
submitted to the Arbitrator remained the same: the Company’s required duties under the 1998 CBA.
Thus, when the Arbitrator addressed the question of the 20022 CBA, he acted outside of his authority
by reaching a question not presented to him by the parties.
The Union, however, argues that the Arbitrator properly considered the 2002 CBA, not for
the purpose of determining whether a violation of that agreement occurred, but for the purpose of
determining whether the Company was obliged to comply with his previous order after the
expiration of the 1998 CBA. The Union argues that the Arbitrator’s reference to the 2002 CBA was
not an attempt to interpret the agreement, but rather, an attempt to evaluate the veracity of the
Company’s “intervening-event defense.” The Union argues that the Arbitrator was considering
whether the parties to the 2002 CBA may have taken intervening action that undermined, made
unnecessary, or “mooted out” the rescission, reinstatement, and cease and desist orders issued in the
original award. Absent this “intervening event” defense, argues the Union, the 2002 CBA would
not have been relevant to the compliance determination at all. The Union asserts that “[i]n making
reference to the successor CBA, the Arbitrator was not doing anything significantly different from,
or more than, what the NLRB would do in a compliance proceeding, which is analogous to what the
Arbitrator was doing in the Supplemental Award proceedings.” (Union Br. at 41)
In support of this proposition, the Union cites a case from the National Labor Relations
Board, Lawrenceville Ready-Mix, 305 N.L.R.B. 1010 (1991). In Lawrenceville Ready-Mix, the NLRB
considered a charge by a union alleging that an employer engaged in an unfair labor practice by
refusing to bargain collectively with the representatives of his employees regarding an increase to
healthcare costs in violation of § 8(a)(5) of the NLRA. Id. at 1012-13. A judge considered the
charge and found in favor of the union, ordering a number of remedies including reimbursements
to employees for the increased healthcare costs. Id. The employer later challenged the order,
alleging that the order was “no longer appropriate because the parties have entered into a new
collective bargaining agreement.” Id. at 1010. In consideration of the employer’s allegation, a panel
of the NLRB permitted the introduction of evidence at the compliance stage regarding the new
agreement to determine if the new agreement cut off the employer’s obligations under the prior
order. Id. at 1011. The Union asserts that, like the NLRB in Lawrenceville Ready-Mix, the
Arbitrator’s consideration of the 2002 CBA was relevant to whether the new agreement cut off the
Company’s responsibility to implement the original award beyond the expiration of the 1998 CBA,
as was alleged by the Company.
The Union’s argument seems logical enough. Here, the Arbitrator issued an order for the
Company to reimburse its employees for the increased health care costs and to cease and desist from
further unilateral action. The Company responded that it only had to cease and desist and reimburse
employees for the four months between the increase in healthcare costs and the expiration of the
1998 CBA. Thus, it would seem that the 2002 CBA would be relevant in determining whether it
properly cut off obligations on the part of the Company. Despite the logic of this argument, it still
does not resolve the question of the Arbitrator’s authority to construe the 2002 CBA. Because this
question remains unanswered, the analysis offered in Lawrenceville Ready-Mix is inapposite. First,
the Union cites no binding authority suggesting that an arbitrator has powers that are coextensive
with the NLRB such that statutory violations can be resolved in arbitration. Second, even assuming
2
Indeed, were we to uphold the Arbitrator’s supplemental decision, as the dissent would urge us to do, we
would likely undermine the parties’ freely negotiated, bargained-for procedures which require the submission of a
grievance prior to the determination of remedies. This end-run around the collective bargaining agreement would,
therefore, produce a windfall to the Union by opening up an opportunity for the Union to seek sanctions against the
Company for the violations of the 2002 CBA as found by the Arbitrator. The Company, on the other hand, would be
stuck with a decision, rendered in the absence of a full hearing, finding that it violated the 2002 CBA. In the end, both
the Union and the Company would have been subjected to remedies and obligations under the 2002 CBA that they did
not arbitrate. For this reason alone, we must vacate the Arbitrator’s supplemental award.
No. 07-3577 Totes Isotoner Corp. v. Int’l Chem. Workers Union Council Page 12
that the Arbitrator had powers analogous to those of the NLRB, Lawrenceville Ready-Mix does not
suggest that the Arbitrator would have had authority to determine that a violation of a new
agreement occurred absent a separate charge or grievance being filed under that agreement.
The Union, however, asserts that the Arbitrator had authority to construe the 2002 CBA
based on “the Recognition Clause, as well as the deferred Charge, to determine whether the
Company had met its contractual and statutory bargaining obligations.” (Union Reply Br. at 14)
The Recognition Clause of the 1998 CBA provided that the Company recognized the Union “for
the purpose[] of collective bargaining with regard to . . . working conditions and all other terms and
conditions of employment . . . .” The Union argues that “[s]uch contractual clauses have been
interpreted as, effectively, incorporating an employer’s statutory obligation to bargain in good faith
with a union, including its obligation not to make unilateral changes.” (Id.)
The Union cites two cases from other circuits which approved of arbitration awards where
the arbitrators found that employers’ statutory duties to bargain in good faith were incorporated into
a contractual recognition clause, even where such duties are not explicitly referenced in an
agreement. See Five Star Parking v. Union Local 723, 2007 WL 2110716, at *5 (3d Cir. 2007)
(unpublished); Virginia Mason Hosp. v. Washington State Nurses Ass’n, 511 F.3d 908, 914 (9th Cir.
2007). We need not resolve whether the recognition clause incorporated the Company’s statutory
duty, however, because the cases relied upon by the Union are inapposite. First, in Five Star and
Virginia Mason Hospital, the arbitrators that found violations of the contractual recognition clauses
were interpreting the terms of the collective bargaining agreements actually committed to them by
the parties and heard testimony regarding the negotiations that went into crafting the agreements.
In the instant case, the Arbitrator was not referencing an agreement that was actually put before him
when he found that the 2002 agreement was violated by the healthcare changes. Second, and most
important, in each of the cases the arbitrators explicitly based their decisions in favor of the unions
on the contractual recognition clauses of each agreement at issue. Here, the Arbitrator did not rest
his decision on the contractual recognition clause, and we are not at liberty to delve into the merits
of the arbitration dispute to find an alternative rationale that would allow the award to be affirmed.
This is not a typical appeal where this Court may affirm for any reason supported by the record,
even if the opinion below did not rely on such grounds. To do so would be to impermissibly replace
the judgment of this Court for that of the arbitrator. Indeed, this Court has “no business weighing
the merits of the grievance, considering whether there is equity in a particular claim, or determining
whether there is particular language in the written instrument which will support the claim.”
Michigan Family Res., 475 F.3d at 750 (quoting Enterprise Wheel & Car Corp., 363 U.S. at 568).
In the alternative, the Union argues that under Michigan Family Resources, this Court must
presume that an arbitrator is acting within his authority to construe an agreement that is properly
before him. Thus, the Union argues that the district court should have viewed the Arbitrator’s
reference to the 2002 CBA as dicta and affirmed the award on the permissible rationale discussed
in the supplemental award. In other words, the Union asserts, “the district court failed to interpret
and apply this supplemental ‘contract’ as it should have to make it enforceable, if possible, rather
than striking it down.” (Union Br. at 34). We do not, however, read Michigan Family Resources
as suggesting that courts reviewing arbitration awards must overlook instances “[w]hen the
arbitrator’s words manifest an infidelity” to address questions committed to him by the parties.
Enterprise Wheel & Car Corp., 363 U.S. at 596. Certainly, reversals of arbitration awards should
be few and far between and reserved for only the most “egregious” of errors. In the instant case,
the Arbitrator’s supplemental award constitutes such an occasion because the Arbitrator did not
confine himself “to interpretation and application of the collective bargaining agreement” put before
him by the parties. Id. at 597. Inasmuch as the Arbitrator went outside of his authority by
interpreting the 2002 CBA, thus entering “the forbidden world of ‘effectively dispens[ing] his own
brand of industrial justice,’” we must uphold the district court’s order vacating and remanding the
supplemental award. Michigan Family Res., 475 F.3d at 752 (quoting Garvey, 532 U.S. at 509).
No. 07-3577 Totes Isotoner Corp. v. Int’l Chem. Workers Union Council Page 13
CONCLUSION
For the reasons stated above, we AFFIRM the judgment of the district court.
No. 07-3577 Totes Isotoner Corp. v. Int’l Chem. Workers Union Council Page 14
________________
DISSENT
________________
McKEAGUE, Circuit Judge, dissenting. The district court determined that this matter should
be returned to the Arbitrator because, in that court’s words, “The Arbitrator . . . undertook to
determine whether the Company had complied with the 2002-2007 CBA.” totes>>Isotoner Corp.
v. Int’l Chem. Workers Union Council, No. 1:04-CV-849, 2007 WL 1108462, at *5 (S.D. Ohio Apr.
10, 2007) (unpublished). That conclusion depends critically on whether the Arbitrator had the
authority to direct prospective relief beyond the expiration date of the 1998 CBA (i.e., April 26,
2002). If he had such authority, or if that question is not before us because it has been waived, then
the Arbitrator’s references to the 2002 CBA can be viewed as part of the Arbitrator’s finding that
the Company had not complied with the ordered remedy in the Original Award, rather than a
determination that the Company had violated the 2002 CBA.
I
Considering the latter issue first, the Arbitrator awarded prospective “quasi-injunctive” relief
in addition to retrospective monetary relief in the Original Award : “Management is hereby directed
to cease and desist from unilaterally making any changes in employees’ healthcare insurance
benefits provided for in Appendix C of the Agreement. Management is hereby directed to cease and
desist from unilaterally increasing employees’ share of healthcare insurance premium costs.”
Original Award at 13. When asked whether the Company had complied with the Original Award,
the Arbitrator explained in relevant part in his Supplemental Award:
The Arbitrator notes that nothing in the 2002-2007 agreement
gives Management the right to unilaterally change negotiated
healthcare insurance benefits or negotiated copays. Clearly, if
Management’s decision was violative of the 1998-2001 agreement it
is violative of the 2002-2007 agreement. The improper action that
occurred during the 1998-2001 agreement simply carried over into
the 2002-2007 agreement.
Supplemental Award at 4.
This paragraph is at the heart of the dispute. Certainly, it can be read as the district court and
majority suggest: the Arbitrator exceeded his authority under the 1998 CBA by determining whether
the Company had complied with the 2002 CBA. However, assuming for the moment that the
Arbitrator had the authority to order prospective relief beyond the expiration of the 1998 CBA, the
paragraph can be viewed in a different light.
As explained above, the Arbitrator had directed the Company to cease and desist from
unilaterally increasing employees’ share of healthcare insurance premium costs. This directive was
reasonably intended to apply beyond the expiration of the 1998 CBA. To determine whether his
directive had been complied with, the Arbitrator would have had to look at evidence outside the
1998 CBA. When considering the 2002 CBA, the Arbitrator first explained that the new agreement
had not mooted his prospective relief (“nothing in the 2002-2007 agreement gives Management the
right to unilaterally change negotiated healthcare insurance benefits or negotiated copays”), nor
satisfied it (“Clearly, if Management’s decision was violative of the 1998-2001 agreement it is
violative of the 2002-2007 agreement. The improper action that occurred during the 1998-2001
agreement simply carried over into the 2002-2007 agreement.”). In other words, the Arbitrator
No. 07-3577 Totes Isotoner Corp. v. Int’l Chem. Workers Union Council Page 15
looked at the 2002 CBA and saw the status quo, and the status quo violated the prospective relief
he ordered in the Original Award.
Under this construction of the Supplemental Award, the Arbitrator was “arguably . . .
applying . . . and acting within the scope of his authority” under the Original Award. Mich. Family
Res., Inc. v. Serv. Employees Int’l Union Local 517M, 475 F.3d 746, 752 (6th Cir.) (citation
omitted), cert. denied, 127 S. Ct. 2996 (2007). The Arbitrator was not, according to this
construction, determining whether the 2002 CBA had been violated by the Company. Rather, the
2002 CBA was one piece of evidence that the Arbitrator consulted to determine whether the
Company had complied with his earlier cease and desist directive. Because the 2002 CBA had the
exact same provisions as the 1998 CBA, and because the Company admittedly had not extended
relief beyond the expiration date of the 1998 CBA, the Arbitrator concluded that the Company
continued to violate the cease and desist directive.
Whether this is the most natural way to read the Supplemental Award does not control, as
long as it is a plausible reading. We must resolve any reasonable doubt about whether an award
draws its essence from the contract in favor of enforcing the award. United Steelworkers of Am. v.
Enter. Wheel & Car Corp., 363 U.S. 593, 598 (1960) (“A mere ambiguity in the opinion
accompanying the award, which permits the inference that the arbitrator may have exceeded his
authority, is not a reason for refusing to enforce the award.”); Polk Bros., Inc. v. Chicago Truck
Drivers, Helpers & Warehouse Workers Union (Independent), 973 F.2d 593, 597 (7th Cir. 1992).
Because the Supplemental Award can plausibly be read as concluding not that the Company violated
the 2002 CBA, but rather failed to satisfy the prospective remedy in the Original Award, we should
defer to the Arbitrator under the highly deferential standard of review applied to arbitration awards.
Mich. Family, 475 F.3d at 753 (“[O]nce it was established that the arbitrator was construing or
applying the contract (and acting within the scope of his authority), it made no difference whether
the arbitrator had committed serious, improvident or even silly errors in resolving the merits of the
dispute.” (internal quotation marks omitted)).
The crucial question becomes, then, whether the Arbitrator had the authority to order
prospective relief beyond the expiration of the 1998 CBA.
II
This question presents a close call. I agree with the majority that the Union misses the mark
with several of its arguments. For example, the Union asserts that the Arbitrator was standing in the
shoes of the NLRB and therefore had the authority to remedy violations of the workers’ statutory
rights. Alternatively, the “Recognition” section of the 1998 CBA incorporated statutory rights into
the agreement, according to the Union. Yet,1while an arbitrator’s award can, under certain limited
circumstances, remedy statutory violations, there is nothing to suggest that this Arbitrator was
construing anything but contractual rights and duties. The parties’ briefs to the Arbitrator focus on
the 1998 CBA provisions, and both the Original and Supplemental Awards deal with the contractual
rights and duties of the parties. It is also difficult to read the “Recognition” section as incorporating
all of the statutory rights under the National Labor Relations Act of 1947 (the “NLRA”) into the
1
See, e.g., Five Star Parking v. Union Local 723, 246 F. App’x 135, 139 (3d Cir. 2007) (unpublished) (“While
it is true that, for purposes of efficiency and economy, an arbitrator may at times hear issues pertaining to unfair labor
practices, this is only permissible when the arbitrator decides NLRA issues in addition to issues of contract
interpretation.”), cert. denied, 128 S. Ct. 1229 (2008).
No. 07-3577 Totes Isotoner Corp. v. Int’l Chem. Workers Union Council Page 16
CBA. In any event, the 2Arbitrator did not discuss or otherwise signal any reliance on any specific
provision of the NLRA.
The best argument of the Union is that the Company has waived the issue. Neither party
sought to vacate, modify, or correct the Original Award in state or federal court. The deadline for
doing so has since passed. O.R.C. § 2711.13 (requiring that notice of a motion to vacate, modify,
or correct an arbitration award must be served within three months after the award is delivered to
the parties). Moreover, the parties did not seek “clarification” of the Original Award (a request that
is not subject to the three-month deadline, see Sterling China Co. v. Glass, Molders, Pottery,
Plastics & Allied Workers Local No. 24, 357 F.3d 546, 552-53 (6th Cir. 2004)). In fact, the
Company asserts in its amended complaint that the Original Award “was not ambiguous”—instead,
according to the Company, the supplemental proceeding was necessary solely to resolve whether
the award had been satisfied. Amended Complaint ¶23.
In its brief on appeal, the Company convincingly argues that the Arbitrator’s authority could
not be expanded to include an issue which the Company clearly indicated it did not intend to
arbitrate—i.e., whether its unilateral actions violated the 2002 CBA. Yet, by not seeking a
modification or clarification of the Original Award and by asserting in its complaint that the Original
Award is unambiguous, the Company has, by its actions, agreed to be bound by the Original Award.
Accordingly, we should treat the Original Award “as if it represented an agreement between [the
company] and the union as to” the proper remedy for the Company’s violation of the 1998 CBA. E.
Associated Coal Corp. v. United Mine Workers of Am., Dist. 17, 531 U.S. 57, 62 (2000). In other
words, “[f]or present purposes, the award is not distinguishable from the contractual agreement.”
Id. This is key—the question before us becomes, in effect, whether the Supplemental Award draws
its essence from the 1998 CBA or the Original Award.3
Enterprise Wheel emphasized a crucial point with respect to remedies—“an arbitrator needs
flexibility when formulating remedies.” Dexter Axle Co. v. Int’l Ass’n of Machinists & Aerospace
Workers, Dist. 90, Lodge 1315, 418 F.3d 762, 768-69 (7th Cir. 2005) (citing Enterprise Wheel, 363
U.S. at 597) (footnote omitted). “[W]here it is contemplated that the arbitrator will determine
remedies for contract violations that he finds, courts have no authority to disagree with his honest
judgment in that respect.” United Paperworkers Int’l Union v. Misco, Inc., 484 U.S. 29, 38 (1987).
“A court ‘must consider whether it is at all plausible to suppose that the remedy [the arbitrator]
devised was within the contemplation of the parties and hence implicitly authorized by the
agreement.’” Dexter Axle, 418 F.3d at 769 (quoting Local 879, Allied Indus. Workers of Am. v.
Chrysler Marine Corp., 819 F.2d 786, 789 (7th Cir. 1987)).
The Arbitrator concluded in the Supplemental Award that the Company failed to comply
with the Original Award because the Company had not altered its unilateral action over health
insurance. If, as the Company argues, the Original Award, including its remedial provisions,
extends no farther in time than the 1998 CBA, then clearly the Arbitrator acted outside his authority
2
For example, an employer violates its bargaining obligations under Sections 8(a)(1) and (5) of the NLRA if
it changes a term or condition of employment without bargaining with the employees’ bargaining representative. Litton
Fin. Printing Div. v. NLRB, 501 U.S. 190, 198 (1991) (citing NLRB v. Katz, 369 U.S. 736, 743 (1962)); NLRB v.
Plainville Ready Mix Concrete Co., 44 F.3d 1320, 1325-26 (6th Cir. 1995).
3
The Company misreads Eastern Associated Coal to hold that “an arbitration award not challenged on its merits
constituted a valid interpretation of the labor agreement and therefore could be treated ‘as if’ it represented an agreement
‘as to the proper meaning’ of the labor agreement.” Appellee’s Br. at 20. Nowhere did the Supreme Court hold that the
arbitration award constituted “a valid interpretation” of the agreement. Rather, the Court treated the issue as one akin
to waiver: “Eastern does not claim here that the arbitrator acted outside the scope of his contractually delegated authority.
Hence we must treat the arbitrator’s award as if it represented an agreement between Eastern and the union as to the
proper meaning of the contract’s words ‘just cause.’” E. Associated Coal, 531 U.S. at 62 (citation omitted).
No. 07-3577 Totes Isotoner Corp. v. Int’l Chem. Workers Union Council Page 17
in the Supplemental Award. Supporting the Company’s position is the Arbitrator’s framing of the
issue in the Original Award: “Did [the Company] violate the [1998] Agreement when [it]
unilaterally made changes in the healthcare insurance benefits beginning on January 1, 2002?”
Original Award at 4.
Yet, there are several indications that the prospective relief in the Original Award was
intended and understood to extend beyond the 1998 CBA. As explained above, one of the relief
provisions made no specific reference to the 1998 CBA: “Management is hereby directed to cease
and desist from unilaterally increasing employees’ share of healthcare insurance premium costs.”
Id. at 13. The omission by itself provides little insight. Yet, when considered in the context of the
timing of the Original Award, the omission takes on greater significance. The Arbitrator issued the
Original Award in March 2004, well after the expiration of the 1998 CBA. By definition, any
forward-looking, “quasi-injunctive” relief awarded at that time must have had life beyond the date
the 1998 CBA expired to avoid being a nullity. Simply put, the cease-and-desist directive makes
little sense unless it extends to Company actions after April 26, 2002.
III
Considering the Original Award as a bargained-for agreement between the parties, the court
should reverse the district court. The Supplemental Award certainly draws its essence from the 1998
CBA and the Original Award. During the supplemental proceedings, the Arbitrator focused the
issue on whether the remedies in the first award had been satisfied. The Arbitrator reasonably
concluded that the terms of the Original Award called for prospective relief beyond a date that had
already passed when the award was issued. Therefore, the Arbitrator had reason to look at evidence,
including the terms and conditions of the 2002 CBA, to determine whether the Company had yet
complied. Vacating the Administrator’s Second Award interferes with the parties’ bargained-for
agreement, including the quasi-injunctive relief ordered under the Original Award. Accordingly,
I dissent from the majority’s decision to affirm the district court and to send this matter back for
further arbitration proceedings.