Sheet Metal Workers' Intern. Association Local Union No. 359 v. Madison Industries, Inc. of Arizona

Decision Date29 May 1996
Docket Number94-17077,Nos. 94-15376,s. 94-15376
Parties152 L.R.R.M. (BNA) 2505, 131 Lab.Cas. P 11,590, 96 Cal. Daily Op. Serv. 3779, 96 Daily Journal D.A.R. 6135 SHEET METAL WORKERS' INTERNATIONAL ASSOCIATION LOCAL UNION NO. 359, Plaintiff-Appellee, v. MADISON INDUSTRIES, INC., OF ARIZONA, Defendant-Appellant.
CourtU.S. Court of Appeals — Ninth Circuit

M. Douglas Tobler, John R. Tellier, Hammond, Natoli & Tellier, Phoenix, Arizona, for defendant-appellant.

Rosemary Cook, Phoenix, Arizona, for plaintiff-appellee.

Appeal from the United States District Court for the District of Arizona, C.A. Muecke, District Judge, Presiding. D.C. No. CV-93-00979-CAM.

Before SNEED, NORRIS, and WIGGINS, Circuit Judges.

SNEED, Circuit Judge:

Madison Industries, Inc., of Arizona ("Madison") appeals two grants of summary judgment against it in Sheet Metal Workers' International Association Local Union No. 359's ("the union") action to enforce an arbitration award under 29 U.S.C. § 185. In the first appeal, No. 94-15376, Madison contests the district court's enforcement of the arbitration award; denial of Madison's motions for reconsideration/new trial and to supplement the record; and grant of attorney's fees to the union. In the second appeal, No. 94-17077, Madison quarrels with the district court's award of damages and striking of an affidavit. We affirm both judgments.

I. BACKGROUND OF THE ARBITRATION AWARD

This case arises out of a labor dispute that has stubbornly resisted resolution. Hopefully, our disposition of this case will hasten that resolution. The background of this dispute is as follows.

Madison is an Arizona corporation that manufactures and installs prefabricated buildings. To those ends, it employs workers skilled in sheet metal work and other trades. It is a party to two collective bargaining agreements ("contracts") with the union--one covering "building trades," or "outside," workers, the other covering "production," or "inside," workers.

According to the union, this case stems from the layoff of ten Madison sheet metal employees. On February 26, 1993, the union's business agent, Ted Lewis, received phone calls from members who had been laid off from Madison and replaced with employees from Crown Technical Industries ("Crown"), a non-signatory to the contracts between the union and Madison. When Lewis complained to Madison's project manager, Dan White, that by subcontracting this work to a non-signatory employer, Madison was violating its contract with the union, White responded that Madison could not afford the union members' wages.

According to Madison, this dispute evolved from a different problem--Lewis' insistence that production, or "inside," workers not perform work he claimed belonged to building trades, or "outside," workers. Madison claims that its contract with the production workers allowed those workers to do the tasks which Lewis claimed for the building trades workers. Because of Lewis' interference, and because the union failed to dispatch workers with the proper skills, Madison was forced to hire employees of Crown or Dave Bailey Construction Services ("DBCS"), both non-signatories, to do work covered by the collective bargaining agreements with the union.

On March 8, 1993, the union filed a grievance as authorized in the building trades contract, requesting arbitration before the Phoenix Sheet Metal Joint Adjustment Board ("PAB"):

Over the past few months Madison Industries has been hiring non-signatory employees to do production and building trades work. During the last two weeks in February Madison terminated five apprentices/probationary apprentices and five journeymen and replaced them with non-signatory workers from [Crown]. These replacement workers have been hired to do the work that has been traditionally union sheet metal journeymen and apprentices and were not dispatched out of the local According to the contract's grievance procedures provision, Article X, section 2, "[e]xcept in the case of deadlock, a decision of a Local Joint Adjustment Board shall be final and binding."

union from the out of work list, as per the agreement.

The arbitration hearing was held on April 16 before a panel consisting of three sheet metal contractors and two union representatives. During the hearing, the union introduced nine photographs taken at Madison's premises immediately following the layoffs. 1 At the hearing, Madison stipulated that the work being performed in the photographs had within the last five to ten years been performed by building trades employees. Madison also stipulated that the workers in the photographs had not been referred through the union hall as the contract required.

The PAB found that Madison, contrary to its contentions, had violated its contract with the building trades workers "in that they have not called Sheet Metal workers through the union hall and have retained sub contractors and Crown Technical to perform sheet metal work." The PAB ordered Madison to "reinstate those members of Local 359 that were replaced by Crown Technical personnel and DBCS personnel ... and also pay one (1) weeks wages plus fringes to those members that were terminated because of this violation of the agreement." The arbitration award provided for additional penalties to be imposed if Madison failed to comply with the initial award within 48 hours. 2

Madison did fail to comply with the award, neither reinstating the laid-off employees nor paying them one week's wages. Therefore, the PAB issued a new order on April 30, 1993, imposing the additional penalties. Madison failed to comply with the new order as well. On May 24, 1993, the union filed a petition in federal district court to enforce the arbitration award. Madison counterclaimed seeking to vacate the award.

On December 20, 1993, the district court upheld the award and granted summary judgment in favor of the union. Madison filed a motion for reconsideration or a new trial, and a motion to supplement the record. The district court denied both motions on January 24, 1994. Madison timely filed a notice of appeal on February 17. The union then filed a motion for summary judgment on damages, which the district court granted on October 24. Madison timely appealed from that judgment on November 10.

The district court had jurisdiction pursuant

                to 29 U.S.C. § 185. 3  Our jurisdiction is pursuant to 28 U.S.C. § 1291
                
II. THE FIRST APPEAL
A. The Grant of Summary Judgment Enforcing the Arbitration Award

Madison argues that the district court erred in granting summary judgment enforcing the arbitration award, because the PAB exceeded its authority in a number of ways. We disagree.

1. Legal Standards

We review de novo the district court's grant of summary judgment confirming an arbitration award. Pack Concrete, Inc. v. Cunningham, 866 F.2d 283, 284 (9th Cir.1989). Section 301 of the Labor Management Relations Act authorizes the district courts to enforce or vacate an arbitration award entered pursuant to a collective bargaining agreement. 29 U.S.C. § 185(a); Sheet Metal Workers Int'l Ass'n, Local Union No. 150 v. Air Sys. Eng'g, Inc., 948 F.2d 1089, 1091 (9th Cir.1990). However, judicial review of an arbitration award is both limited and highly deferential. Sheet Metal Workers Int'l Ass'n, Local No. 359 v. Arizona Mechanical & Stainless, Inc., 863 F.2d 647, 653 (9th Cir.1988). Thus, the court may not review the merits, but must ask only whether the grievance is governed by the contract and whether the parties agreed to arbitrate the dispute. United Steelworkers of Am. v. American Mfg. Co., 363 U.S. 564, 568, 80 S.Ct. 1343, 1346-47, 4 L.Ed.2d 1403 (1960); United Steelworkers of Am. v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582-83, 80 S.Ct. 1347, 1352-53, 4 L.Ed.2d 1409 (1960). As long as the award "draws its essence" from the contract, meaning that on its face it is a plausible interpretation of the contract, then the courts must enforce it. United Steelworkers of Am. v. Enterprise Wheel & Car Corp., 363 U.S. 593, 597, 80 S.Ct. 1358, 1361, 4 L.Ed.2d 1424 (1960); Arizona Mechanical, 863 F.2d at 653. The arbitrator's interpretation of the scope of issues submitted to him is entitled to the same deference. Pack Concrete, 866 F.2d at 285.

In interpreting the contract, the arbitrator is not bound by precedent or by the record before him; rather, "the industrial common law-the practices of the industry and the shop-is equally a part of the collective bargaining agreement although not expressed in it." Warrior & Gulf Navigation Co., 363 U.S. at 581-82, 80 S.Ct. at 1352; Stead Motors of Walnut Creek v. Automotive Machinists Lodge No. 1173, 886 F.2d 1200, 1206 (9th Cir.1989) (en banc), cert. denied, 495 U.S. 946, 110 S.Ct. 2205, 109 L.Ed.2d 531 (1990).

2. Did the PAB Exceed Its Authority?

With these standards in mind, we examine Madison's objections to the scope of authority exercised by the PAB. First, Madison contends that the charge submitted by the union complained of replacements of both building trades and production workers by non-signatory employees, yet the PAB improperly exercised its authority under the building trades contract only. However, Madison stipulated at the hearing that the work being done by replacement workers had been done by building trades workers during the last 5-10 years. Further, although the PAB made no explicit finding that the laid-off workers were building trades employees, such a finding is implicit in its decision.

Madison's position at the arbitration hearing was that the disputed work belonged to production workers because it was performed at Madison's plant rather than an off-premises "job site." Madison wanted the work to be done by production workers (who are paid less than outside workers), and when the union would not allow that, Madison laid off union workers and hired non-signatory employees Given that context, the PAB...

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