American Nat. Can Co. v. United Steelworkers of America

• Decision Date: 25 July 1997
• Docket Number: No. 3628,U,No. 96-1451,3628,96-1451
• Citation: 120 F.3d 886
• Parties: 155 L.R.R.M. (BNA) 2905, 134 Lab.Cas. P 10,036 AMERICAN NATIONAL CAN COMPANY, Appellant, v. UNITED STEELWORKERS OF AMERICA; Localnited Steelworkers of America, Appellees.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 886

120 F.3d 886

155 L.R.R.M. (BNA) 2905, 134 Lab.Cas. P 10,036

AMERICAN NATIONAL CAN COMPANY, Appellant, v. UNITED STEELWORKERS OF AMERICA; Local No. 3628, United

Steelworkers of America, Appellees.

No. 96-1451.

United States Court of Appeals,

Eighth Circuit.

Submitted Nov. 22, 1996.

Decided July 25, 1997.

Thomas Owen McCarthy, St. Louis, MO, argued, (Geoffrey M. Gilbert, St. Louis, MO, on the brief), for Appellant.

Rudolph Milasich, Jr., Pittsburgh, PA, argued, for Appellees.

Before McMILLIAN and MORRIS SHEPPARD ARNOLD, Circuit Judges, and BOGUE, ^* District Judge.

McMILLIAN, Circuit Judge.

American National Can Company (ANC) appeals from a final order entered in the United States District Court ¹ for the Eastern District of Missouri granting summary judgment in favor of United Steelworkers of America (USWA) and United Steelworkers of America, Local No. 3628 (Union) (together "defendants") and enforcing an arbitrator's award which held that ANC violated the "contracting out" provision of the parties' collective bargaining agreement (CBA) by transferring certain work and equipment from one ANC plant to another ANC plant. American Nat'l Can Co. v. United Steelworkers, No. 4:94 CV 2473 (E.D.Mo. Jan. 5, 1996) (hereinafter "slip op."). The district court ruled that the arbitrator's award draws its essence from the CBA and that the arbitrator was not bound by two prior arbitration awards involving the application of the same clause of the CBA. Slip op. at 5. For reversal, ANC argues that the district court erred in enforcing the arbitrator's award. For the reasons discussed below, we affirm.

I. Background

The underlying facts are undisputed. ANC operates a can manufacturing plant in St. Louis, Missouri (the St. Louis plant), for which USWA is the exclusive collective bargaining representative for ANC's St. Louis employees. The CBA, currently in effect from February 22, 1993, through February 22, 1998, includes, among other provisions, an agreement that disputes arising under the CBA will be submitted to grievance and arbitration procedures, a management reservation of rights provision, and a "contracting out" prohibition (Article 3.3) stating in part that "[t]he Company will not contract out work which is normally performed by employees at the particular location when there is appropriate equipment, skills, necessary time and qualified employees to perform such work."

In September 1993, ANC notified the Union that it was going to transfer the coffee can end and sanitary can end work from its St. Louis plant to its plant in Hoopeston, Illinois (the Hoopeston plant). The equipment for performing this work was to be dismantled and removed from the St. Louis plant, and reassembled at the Hoopeston plant. Both the St. Louis plant and the Hoopeston plant are ANC facilities, but employees at the Hoopeston plant are not represented by a labor organization.

The transfer of work and equipment took place in October 1993. As a result of the transfer, fifty to sixty bargaining unit employees were adversely affected and several employees were laid off. The Union filed a grievance asserting that this transfer of work and equipment violated Article 3.3, the contracting out prohibition, among other provisions of the CBA. The dispute was not settled through grievance procedures, and the Union sought arbitration. The matter was submitted to Arbitrator John J. Mikrut, Jr. (hereinafter "the arbitrator" or "Arbitrator Mikrut").

At the arbitration hearing, held on June 22, 1994, the Union argued that ANC had violated applicable provisions of the CBA, including Article 3.3, when it transferred the coffee can end and sanitary can end work from the St. Louis plant to the Hoopeston plant. In response, ANC argued that the arbitrator was required, according to principles of res judicata, to follow two prior arbitration awards, American Nat'l Can Co. (Hammond Plant) v. United Steelworkers, Gr. No. 41-89 (Feb. 20, 1993) (Mikrut, Arb.), and American Can Co. (Vancouver Plant) v. United Steelworkers, Local 2821, Gr. No. 002-9-79 (Mar. 29, 1980) (Cole, Arb.), each of which held that a certain intra-company transfer of work did not violate Article 3.3, as identically contained in an earlier version of the CBA. Arbitrator Cole, in his 1980 decision, found that ANC had not violated the contracting out provision when it manufactured cans at its unionized Vancouver plant by utilizing metal sheets which had already been decorated at one of its non-union facilities in Canada. Arbitrator Mikrut, in his 1993 decision, similarly found that ANC had not violated the contracting out provision when it had machinery, which had been produced at a non-union facility, repaired at the non-union facility rather than at its unionized Hammond plant where the machinery had been in operation. Thus, ANC argued, because those two prior arbitration awards involved the same parties, the same language of the CBA, and similar facts, Arbitrator Mikrut was bound in the present case to hold that the transfer of the coffee can end and sanitary can end work and equipment did not qualify as contracting out within the meaning of Article 3.3 of the CBA.

On September 30, 1994, the arbitrator found that ANC had violated Article 3.3 of the CBA. United Steelworkers v. American Nat'l Can Co., Gr. No. 93-55 (Sept. 30, 1994) (Mikrut, Arb.) (hereinafter "Mikrut 1994 Decision"). He considered the two prior arbitration awards cited by ANC but nevertheless concluded that "[ANC's] argument must be rejected because the Union's counter-argument that '... intra-corporate transfers of work' are encompassed within the sub-contracting prohibition of Article 3.3, is significantly more persuasive, within the context of the instant dispute, than that which has been adduced by [ANC] herein." Id. at 20-21 (emphasis added). The arbitrator explained in full:

This conclusion, although seemingly inconsistent with this Arbitrator's previous Award ..., nonetheless, is perceived to be proper insofar as the Arbitrator in the previous case was not presented with as thorough and comprehensive an articulation of the Union's position therein or the applicable arbitral authorities as that which has been presented by the Union in the instant case. Moreover, the Arbitrator further notes that there are significant distinctions between the fact circumstances involved in the two (2) cited cases and those which are involved in the instant case. In the two cited cases, the subject triggering, complained-of incidents were largely single occurrences of relatively short duration; they appear to involve considerably smaller amounts of money; there was some question whether the disputed work was work which "... is normally performed by employees at the particular location when there is appropriate equipment, skills, necessary time and qualified employees to perform such work..." as is prescribed in Article 3.3; and lastly, perhaps more importantly, no loss of bargaining unit jobs appears to have occurred as a result of Management's decision in the cited cases.

In the instant case, however, the amount of work involved is considerable in terms of the scope of duties, number of bargaining unit jobs affected, and the amount of money involved; the disputed transfer is to be a permanent transfer of work to the Hoopeston Plant; there is absolutely no doubt whatsoever that the St. Louis bargaining unit employees are capable of performing the work in accordance with the provisions of Article 3.3; and despite the uncertainty in the record as to the exact number of St. Louis bargaining unit employees who were negatively impacted by Management's decision herein, it is conceded by [ANC] that a significant number of bargaining unit jobs were lost at the St. Louis Plant as a result of that decision, and that said loss of jobs had a resultant, negative impact on the bargaining unit and the Union itself.

Id. at 21-22. In light of these "critical factual differences" between the present case and the two prior cases, the arbitrator concluded, no "reasonable or proper comparison can be made" to support a finding in ANC's favor. Id. at 22. The arbitrator then went on to determine, based on the facts of the present case, that ANC had violated Article 3.3 of the CBA when it transferred the coffee can end and sanitary can end work from the St. Louis plant to the Hoopeston plant. Id. at 24. In fashioning a remedy, the arbitrator directed ANC to transfer the work and equipment back to the St. Louis plant and make whole all current and former bargaining unit employees who had been adversely affected by ANC's violation. Id. at 24-25.

ANC filed the present civil action in federal district court seeking to vacate the arbitrator's award, and defendants filed a counterclaim seeking to enforce the award. The district court thereafter granted a motion for summary judgment filed by defendants, denied ANC's cross-motion for summary judgment, and ordered enforcement of the arbitrator's award on grounds that the arbitrator was not bound under principles of res judicata to follow the two prior arbitration decisions cited by ANC and that the arbitrator's decision draws its essence from the CBA. Slip op. at 5-6. ANC appealed.

II. Discussion

In a series of 1960 decisions known as the "Steelworkers Trilogy," the Supreme Court recognized the general rule that--when parties to a collective bargaining agreement bargain for arbitration as a method of resolving disputes arising under the agreement, and a dispute is then properly submitted to arbitration--the arbitrator's interpretation of the collective bargaining agreement must be afforded extreme judicial deference. "The function of the court is very limited when the parties have agreed to submit all questions of contract interpretation to the arbitrator. It is confined to ascertaining whether the party seeking arbitration is making a claim which on its face is governed by the contract." United...