United Elec., Radio and Mach. Workers of America, Local 1139 v. Litton Microwave Cooking Products, Litton Systems, Inc.

• Decision Date: 06 April 1983
• Docket Number: No. 81-2230,81-2230
• Citation: 704 F.2d 393,113 LRRM 2015
• Parties: 113 L.R.R.M. (BNA) 2015, 97 Lab.Cas. P 10,004 UNITED ELECTRICAL, RADIO AND MACHINE WORKERS OF AMERICA, LOCAL 1139, Appellant, v. LITTON MICROWAVE COOKING PRODUCTS, LITTON SYSTEMS, INC., Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 393

704 F.2d 393

113 L.R.R.M. (BNA) 2015, 97 Lab.Cas. P 10,004

UNITED ELECTRICAL, RADIO AND MACHINE WORKERS OF AMERICA LOCAL 1139, Appellant, v. LITTON MICROWAVE COOKING PRODUCTS, LITTON SYSTEMS, INC., Appellee.

No. 81-2230.

United States Court of Appeals Eighth Circuit.

Submitted May 17, 1982.

Decided April 6, 1983.

Robert D. Metcalf, Michael C. Hickey, Metcalf, Lazarus & Hickey, Minneapolis, Minn., for appellant.

Faegre & Benson, Reid Carron, Minneapolis, Minn., for appellee.

Before ROSS, ARNOLD, and JOHN R. GIBSON, Circuit Judges.

JOHN R. GIBSON, Circuit Judge.

The United Electrical, Radio and Machine Workers of America, Local 1139 (the Union) appeals from portions of a district court ¹ judgment which denies the enforcement of part of an arbitration award in favor of the Union and adverse to Litton Microwave Cooking Products, Litton Systems, Inc. (Litton), and which also denies the Union an award of attorney fees. We affirm the judgment of the district court.

Litton and the Union are parties to a collective bargaining agreement (CBA) effective from October 1, 1979, to October 31, 1982. On November 24, 1980, Litton posted a notice to inform all bargaining unit employees that both of Litton's Minneapolis plants would be closed for inventory from March 23 through March 27, 1981, and that those employees who did not assist with inventory would be required to use vacation time during that week. Later that same day, the Union filed a grievance, claiming that the company violated section 11E of the CBA and any other applicable sections by scheduling a vacation shutdown outside of the vacation season.

After exhausting the grievance procedure, the parties submitted the dispute to an arbitrator. The arbitrator sustained the grievance and directed that:

1. All workers who were required to take their vacations in the month of March, 1981, shall be granted a second vacation during the summer months of 1981.

2. The second vacation shall be a paid vacation.

The Union commenced an action in the United States District Court for the District of Minnesota to enforce the arbitrator's award. The Union moved for preliminary injunctive relief, and both parties cross-moved for summary judgment. The district court granted the Union's motion for injunction in part, ordering that Litton comply with the first part of the arbitrator's award that directed all workers who were required to take their vacations in March, 1981 be granted a second vacation. The district court refused, however, to order compliance with the second part of the arbitrator's award directing the vacation to be with pay. Subsequently, in a Memorandum and Order dated October 6, 1981, the district court held that the second part of the arbitrator's award could not be enforced because it was based on an erroneous factual assumption and because it was punitive, not compensatory. The district court also denied the Union an award of attorney fees. This appeal followed.

I. The Arbitrator's Award

In reviewing an arbitration award, a court does not reexamine the merits of the respective parties' claims, but gives deference to the arbitrator's decision so long as it "draws its essence" from the collective bargaining agreement. See, e.g., United Steelworkers of America v. Enterprise Wheel & Car Corp., 363 U.S. 593, 596-97, 80 S.Ct. 1358, 1360-61, 4 L.Ed.2d 1424 (1960); In re Arbitration between Grahams Service Inc. v. Teamsters Local 975, 700 F.2d 420 at 422 (8th Cir.1982); United Food & Commercial Workers, Local No. 222 v. Iowa Beef Processors, Inc., 683 F.2d 283, 285 (8th Cir.1982). Judicial deference to arbitration, however, does not grant carte blanche approval to any decision that an arbitrator might make. Piggly Wiggly Operators' Warehouse, Inc. v. Piggly Wiggly Operators' Warehouse Independent Truck Drivers Union, Local No. 1, 611 F.2d 580, 583 (5th Cir.1980). A court may vacate a labor arbitration award if the arbitrator makes a central factual assumption that is unsupported by the record, grants a punitive award in the absence of any provision for punitive awards and of any substantiating proof of willful or wanton conduct, or contravenes a limitation contained in the collective bargaining agreement. ² See Baltimore Regional Joint Board v. Webster Clothes, Inc., 596 F.2d 95, 98 (4th Cir.1979) (per curiam); Electronics Corp. of America v. International Union of Electrical, Radio & Machine Workers, Local 272, 492 F.2d 1255, 1257 (1st Cir.1974); Truck Drivers & Helpers Union Local 784 v. Ulry-Talbert Co., 330 F.2d 562, 565-66 (8th Cir.1964).

All three of the foregoing grounds are implicated in the present case. The first two grounds served as the basis for the district court's decision; the third is raised on appeal. We affirm on all three grounds.

A. ARBITRATOR'S UNSUPPORTED FACTUAL ASSUMPTION

The district court summarized its first ground for vacating the award as follows:

In ordering the week of vacation with pay, the arbitrator asserted that "[m]erely granting an unpaid week off results in a net annual loss in wages." His reasoning is as follows:

Only a full week of paid vacation for each of the employees affected meets the test of a "make whole" remedy. Merely granting an unpaid week off results in a net annual loss in wages. Assuming a 52 week of payroll periods the granting of an unpaid week of time off for a summertime vacation computes to 50 weeks of paid employment, plus one week of paid vacation, for a 51 week payroll year.

The contractual obligation under the same set of assumptions, however, is designed to produce the following annual compensation: 51 weeks of paid employment plus one week of paid vacation, for a a [sic] 52 week payroll year. Thus, to merely grant an unpaid week off for a summer vacation equates to imposing on the grievants what virtually amounts to a lay-off. No recognized principle of equity permits such a penalty on the prevailing party in a contractual dispute.

(emphasis in original).

After reviewing the affidavits and deposition filed herein, the Court concludes that the arbitrator's factual assumption regarding a 52-week pay-period year is clearly without support. Plaintiff admits in its brief that prior to the March 1981 inventory shutdown, the practice was that employees who neither worked nor used vacation during inventory shutdowns were not paid for the period involved in the shutdown. In his deposition, Rocco MeMaio [sic], Local 1139's Financial Secretary, testified that, from 1975 through 1977 employees who did not work during inventory shutdowns did not receive pay for the period. He also stated that during the 1978, 1979, and 1980 inventory shutdowns plaintiff and defendant had agreed that employees who did not work could have the option of either taking the time off without pay or using accrued vacation. Moreover, under sections 3A, 6E, and 6C of the agreement defendant has the right to lay off employees.

Clearly, lay-offs are not prohibited by the contract. The exact timing of the inventory shutdown, only, is controlled. Additionally, employees are not guaranteed a 52-week pay period year. Those employees who neither work nor use paid vacation time during inventory shutdown in fact have a 51-week pay-period year. Thus, the granting of a week of paid vacation results in a windfall to those who neither worked nor used vacation time during the March 1981 inventory shutdown.

Although a mere error in the determination of factual issues is not sufficient to disturb an arbitrator's award, NF & M Corp. v. United Steelworkers of America, 524 F.2d 756, 759 (3d Cir.1975), if the arbitrator assumes the existence of a fact that is central to the award, and an examination of the record reveals no support whatever for the arbitrator's assumption, an award cannot stand. See Electronics Corp. of America v. International Union of Electrical, Radio & Machine Workers, Local 272, 492 F.2d at 1257; cf. Detroit Coil Co. v. International Association of Machinists & Aerospace Workers, Lodge # 82, 594 F.2d 575, 580-81 (6th Cir.) (award cannot stand when arbitrator's factual determinations unsupported by record), cert. denied, 444 U.S. 840, 100 S.Ct. 79, 62 L.Ed.2d 52 (1979); H.K. Porter Co. v. United Saw, File & Steel Products Workers of America, Federal Labor Union No. 22254, 333 F.2d 596, 601-02 (3d Cir.1964) (same). These principles of labor arbitration are in accord with long-established equitable doctrine with respect to arbitration of disputes generally. See Burchell v. Marsh, 58 U.S. (17 How.) 344, 349-50, 15 L.Ed. 96 (1854) (gross mistake, not mere error of judgment, required for court to intervene).

At issue here is the arbitrator's factual assumption concerning a fifty-two week pay-period year. After carefully examining the record, we agree with the district court that the arbitrator's assumption is clearly without support. Moreover, we believe that the assumption is so central to the arbitrator's decision that but for the erroneous assumption a different result would have been reached. Under these circumstances, we conclude that the award cannot stand.

The Union contends, however, that the district court misinterpreted the arbitrator as stating an erroneous factual assumption, when he was "merely stating a hypothetical assumption to serve as an example." In view of the context in which the assumption appears, and the obvious connection with the decision rendered, the Union's contention must fail.

The Union also contends that the district court improperly considered evidence beyond the award itself and the collective bargaining agreement. We disagree. Although an arbitrator is not required to make formalized findings or to offer reasons for his decisions, when he does so, a court may properly consider them. See United Steelworkers of America v. Enterprise Wheel & Car Corp., 363 U.S. at 597, 80 S.Ct. at 1361; American Postal Workers Union v. United States Postal Service, 682 F.2d 1280, 1285 (9th Cir.1982...