Burkart Randall, a Div. of Textron, Inc. v. Lodge No. 1076, Intern. Ass'n of Machinists and Aerospace Workers, AFL-CIO

Decision Date08 May 1981
Docket NumberAFL-CI,D,No. 80-2492,80-2492
Citation648 F.2d 462
Parties107 L.R.R.M. (BNA) 2836, 91 Lab.Cas. P 12,780 BURKART RANDALL, a DIVISION OF TEXTRON, INC., Plaintiff-Appellee, v. LODGE NO. 1076, INTERNATIONAL ASSOCIATION OF MACHINISTS AND AEROSPACE WORKERS,efendant-Appellant.
CourtU.S. Court of Appeals — Seventh Circuit

Richard Shinners, St. Louis, Mo., for defendant-appellant.

William W. Cody, St. Louis, Mo., for plaintiff-appellee.

Before WOOD and CUDAHY, Circuit Judges, and MAROVITZ, Senior District Judge. *

HARLINGTON WOOD, Jr., Circuit Judge.

Lodge No. 1076, International Association of Machinists and Aerospace Workers, AFL-CIO ("Union") appeals from the district court's decision to vacate an arbitrator's award favorable to the Union concerning holiday pay at the Burkart Randall ("Company") production facility in Cairo, Illinois. We affirm in part and vacate in part, and remand for clarification by the arbitrator.

I.

The Company argued in the district court that the arbitrator exceeded his authority by a) deciding an issue concerning holiday pay that was not fairly within the terms of the collective bargaining contract at issue here, and b) doing so on a basis that is impermissible under the contract. Article 12.1 of the contract specifies several holidays on which the Company's employees need not work but for which they will receive eight hours' pay. If an employee works on a holiday, he or she is entitled to double time pay. Article 12.3E. of the contract states that "(a)ny Holiday which falls on Sunday shall be observed on the following Monday." The holidays involved in this case are the "Day Before Christmas Day" and "Christmas Day."

This dispute arose in 1978 when the Day Before Christmas Day fell on a Sunday. The Company in 1978 paid its workers eight hours' wages for that Sunday holiday, and eight hours' wages for the consecutive Monday holiday. The Company scheduled regular work for Tuesday, paying its usual straight time wages for the labor done that day. In effect this meant that two separate holidays were observed on the same day Monday.

The Union protested that the Monday holiday should have shifted to Tuesday. Thus, the Union asserted, double time pay is owed to employees who worked that Tuesday.

The parties submitted the problem to arbitrator McPherson after other negotiation procedures specified in the contract proved fruitless. The arbitrator adopted the Company's statement of the issue after determining that both parties agreed on the question. The arbitrator therefore limited his inquiry to whether "the employees (should) have been paid double time for working Tuesday, December 26, 1978." The parties submitted that the issue was arbitrable.

In support of its position, the Union argued that the Day Before Christmas Day and Christmas Day have seldom, if ever, been the same day. The logic of that argument seems irrefutable. The purpose of the contract's holiday provision, the Union said, is to provide a day of leisure as well as a day's pay. Celebrating two holidays on the same day eliminates the leisure-time benefit. The Union also pointed to the Company's handling of the same situation when it arose in 1972 under a prior contract. According to its posted announcement in 1972, the Company did not schedule work for that Tuesday "in observance of the holiday season." The Union contended that the Tuesday holiday observed under the old contract established a binding past practice to which the Company now must adhere.

The Company supported its position by noting that the contract only mentions a shift of holidays in the context of a Sunday shift to Monday. That, said the Company, excluded any other shift. Moreover, the Company said, the contract addresses only wage payment and not leisure-time rights for holidays. So, the Company argued, there is no justifiable reason to shift Monday's holiday to Tuesday. The Company also asserted that despite the language of its announcement, the 1972 Tuesday break occurred because of low seasonal demand for the Company's product, and that a single instance of work scheduling in 1972 cannot establish a binding past practice. As an additional point, at the close of the arbitral hearing, the Company shifted its position on the arbitrator's jurisdiction to decide the issue. The Company said that since the contract does not expressly mention holiday shifts from Monday to Tuesday, the contract left no room for interpretation and therefore the issue fell outside the scope of arbitration.

The arbitrator ruled in favor of the Union, although he noted that both sides had strong bases for their positions. The point that tipped the balance for the arbitrator was the Company's 1972 practice of not scheduling work on the Tuesday following consecutive Sunday-Monday holidays. The arbitrator agreed "with the Company that a single instance cannot normally establish a binding past practice, but (concluded that) perhaps this is less clear when the same situation has arisen on only one previous occasion." The arbitrator concluded "that the 1972 treatment of the problem is significant, even if it is not considered as a past practice." According to the arbitrator, the failure of the parties to address the issue when they renegotiated the contract in 1976 "appears to indicate an intent to continue their 1972 interpretation," and found the Company's past actions to be binding.

The Company filed this suit to vacate the arbitrator's decision, and the Union cross-claimed to enforce the decision. On cross-motions for summary judgment, the district court held that since the contract was silent as to the shifting of Monday holidays to Tuesday, the arbitrator exceeded his authority by adding a term to the contract. The district court also took note of a provision of the contract which states that the terms of the contract renegotiated in 1976 evidence the complete agreement between the parties, and specifically supersede any earlier express or implied understandings. Thus, according to the district court, the arbitrator exceeded his authority when he relied on the Company's past practice in making his determination. The contract had ruled out that possibility.

This appeal ensued.

II.

The series of United States Supreme Court cases known as the "Steelworkers Trilogy" establishes the modern context for judicial review of an arbitrator's decision. United Steelworkers of America v. American Manufacturing Co., 363 U.S. 564, 80 S.Ct. 1343, 4 L.Ed.2d 1403 (1960); United Steelworkers of America v. Warrior & Gulf Navigation Co., 363 U.S. 574, 80 S.Ct. 1347, 4 L.Ed.2d 1409 (1960); United Steelworkers of America v. Enterprise Wheel & Car Corp., 363 U.S. 593, 80 S.Ct. 1358, 4 L.Ed.2d 1424 (1960). The aggregate determination of these cases on the role of judicial review in the arbitration context is that the arbitrator's decision should not be upset unless it is arbitrary or capricious or fails to draw its essence from the collective bargaining contract because it exceeds the confines of interpreting and applying the contract. American Manufacturing Co., supra, 363 U.S. at 569, 80 S.Ct. at 1347; Warrior Gulf & Navigation Co., supra, 363 U.S. at 582-83, 80 S.Ct. at 1352-53; Enterprise Wheel & Car Corp., supra, 363 U.S. at 597, 80 S.Ct. at 1361. See F.W. Woolworth Co. v. Miscellaneous Warehousemen's Union, 629 F.2d 1204, 1215 (7th Cir. 1980), cert. denied sub nom. F.W. Woolworth Co. v. Fell, U.S., 49 U.S.L.W. 3801 (No. 80-1286 1981); Amoco Oil Co. v. Oil, Chemical & Atomic Workers Int'l Union, 548 F.2d 1288, 1293-94 (7th Cir. 1977); Yellow Cab Co. v. Democratic Union Organizing Committee, 398 F.2d 735, 737 (7th Cir. 1968). "Neither the correctness of the arbitrator's conclusion nor the propriety of his reasoning is relevant to a reviewing court, so long as his award complies with the aforementioned standards to be applied by the reviewing court in exercising its limited function." Amoco Oil Co., supra, 548 F.2d at 1294.

A. Arbitrability of the issue.

The question presented to the arbitrator was whether the Company should have paid its employees double time holiday pay for their labor on Tuesday, December 26, 1978. In order to have the authority to address this question, the language of the agreement must be susceptible to interpretation on that point. The arbitrator's decision is ambiguous as to the basis on which he concluded that the issue submitted was arbitrable. We conclude, however, that it is arbitrable, "in the face of the heavy presumption favoring the arbitration award." F.W. Woolworth Co., supra, 629 F.2d at 1214. See Mobil Oil Co. v. Local 8-766, Oil, Chemical & Atomic Workers Int'l Union, 600 F.2d 322 (1st Cir. 1979) (court of appeals may itself resolve question of law whether dispute is arbitrable).

The Union says that the employees are entitled to double pay for their Tuesday work because under the agreement a holiday is meant to be a day of leisure as well as a guarantee of pay. The Union's analysis is supported by the contract viewed, as it must be, "in the light of its language, its context, and any other indicia of the parties' intention." F.W. Woolworth Co., supra, 629 F.2d at 1215. Article 12.1 provides for a wage premium of double pay for those who work on a holiday "regardless of the day of the week on which (the holiday) may fall." It is reasonable to assume that the extra pay is provided because the worker who renders services to the Company on a holiday gives up leisure time to which he or she is entitled under the agreement. Moreover, under Article 12.3D., holidays consist of twenty-four consecutive hours. In this way, the contract provides substance to the abstract term "holiday" by orienting it to time as well as monetary relationships. The time relationships may reasonably be read to explain the monetary provisions, and vice versa: a premium is required because the employee's leisure time is lost. Since employee...

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