Upshur Coals Corp. v. United Mine Workers of America, Dist. 31

• Decision Date: 03 June 1991
• Docket Number: No. 90-1826,90-1826
• Citation: 933 F.2d 225
• Parties: 137 L.R.R.M. (BNA) 2397, 119 Lab.Cas. P 10,846 UPSHUR COALS CORPORATION, Plaintiff-Appellee, v. UNITED MINE WORKERS OF AMERICA, DISTRICT 31; United Mine Workers of America, Defendants-Appellants, International Union; Jack Canpell; William W. Bennett, Jr.; Wilbert Dancy; Gary Replogle, Appellants.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 225

933 F.2d 225

137 L.R.R.M. (BNA) 2397, 119 Lab.Cas. P 10,846

UPSHUR COALS CORPORATION, Plaintiff-Appellee, v. UNITED MINE WORKERS OF AMERICA, DISTRICT 31; United Mine Workers of America, Defendants-Appellants International Union; Jack Canpell; William W. Bennett Jr.; Wilbert Dancy; Gary Replogle, Appellants.

No. 90-1826.

United States Court of Appeals Fourth Circuit.

Argued March 5, 1991.

Decided May 14, 1991.

As Amended June 3, 1991.

Judith Ann Scott, United Mine Workers of America, Washington, D.C., argued (Robert H. Stropp, Jr., United Mine Workers of America, Washington, D.C., Grant Crandall, Bradley J. Pyles, William D. Turner, Crandall & Pyles, Charleston, W.Va., on brief), for defendants-appellants.

Thomas J. Bender, Jr., Saul, Ewing, Remick & Saul, Philadelphia, Pa., argued (Kristine Grady Derewicz, Saul, Ewing, Remick & Saul, Philadelphia, Pa., Mark A. Carter, Smith, Heenan and Althen, Charleston, W.Va., on brief), for plaintiff-appellee.

Before PHILLIPS and NIEMEYER, Circuit Judges, and RESTANI, Judge, United States Court of International Trade, sitting by designation.

PHILLIPS, Circuit Judge:

This is an appeal from a decision vacating an arbitration award based upon an interpretation of the National Bituminous Coal Wage agreement of 1984 (1984 NBCWA). The arbitration board concluded that the 1984 NBCWA required appellee, Upshur Coals, to continue providing accrued health benefits to laid off employees even after the 1984 NBCWA had expired. The district court reversed the decision of the arbitration board, holding that Upshur's responsibilities ended with the expiration of the 1984 NBCWA. Because the arbitration award was entitled to great deference, and because we conclude that the decision of the arbitrators drew its essence from the agreement and was not in manifest disregard of the law, we now reverse.

I

In 1984, Upshur Coals Corporation, a coal mine operator, and the United Mine Workers of America (UMWA), entered into a collective bargaining agreement known as the National Bituminous Coal Wage Agreement of 1984. This agreement provided, among other things, for health benefits for employees and laid off employees. Article XX, Sec. (c)(3)(i), of the agreement stated:

Each signatory Employer shall establish and maintain an Employee benefit plan to provide, implemented through an insurance carrier(s), health and other non-pension benefits for its Employees covered by this agreement as well as pensioners under the 1974 Pension Plan and Trust.... The benefits provided by the Employer to its eligible Participants pursuant to such plans shall be guaranteed during the term of this Agreement by the Employer at levels set forth in such plans.

This Article went on to say that the benefits plans:

established pursuant to this agreement are incorporated by reference and made part of this Agreement, and the terms and conditions under which health and other nonpension benefits will be provided under such plans are as to be set forth in such plans.

The Benefit Plan for UMWA Represented Employees, which became effective on October 1, 1984 and was incorporated into Article XX, included an explicit provision for the continuation of insurance coverage for laid off employees. Article III.D. (1)(a).

The Benefit Plan provided that any employee laid off during the term of the agreement was entitled to receive continued health coverage, paid for by Upshur, for a fixed period after layoff. The plan contained a specific provision detailing the length of time for which a laid off employee would continue receiving health insurance. The extent of this continued health insurance depended on how many hours the laid off employee had worked in the prior two years. An employee who had worked less than 500 hours in the prior two years was entitled to thirty days of insurance coverage after layoff; one with between 500 and 2000 hours logged would receive six months of coverage; and one who had worked upwards of 2,000 in the prior two years was entitled to twelve months of continued insurance.

On June 26, 1987, Upshur Coals terminated all its mining operations for economic reasons. By October 19, 1987, all employees represented by the UMWA were permanently laid off. Upshur provided the laid off workers with continued health coverage, pursuant to the agreement until the 1984 NBCWA expired. Upshur did not sign any subsequent wage agreement, however, and upon expiration of the 1984 agreement, it ceased providing the remaining health benefits due laid off employees.

In June 1988, the UMWA filed an unfair labor practice charge with the National Labor Relations Board, claiming that Upshur violated Secs. 8(a)(1) and (5) of the National Labor Relations Act by discontinuing health coverage for laid off employees. In August 1988, the NLRB deferred further consideration of these charges when Upshur agreed to submit the dispute to arbitration. ¹ A month later, District 31 of the UMWA submitted a request for Resolution of Dispute to the Trustees of the UMWA Health and Retirement Funds, the arbitrator explicitly designated in both the agreement and its attached Employer Benefit Plan.

On December 7, 1988, a manager of the UMWA Health and Retirement Fund wrote to Upshur, suggesting that the Trustees were likely to follow their precedents in two prior Resolutions of Disputes (ROD) in which the Trustees had interpreted both the 1981 and the 1984 NBCWAs as requiring former employers of laid off employees to continue providing contracted health benefits even after expiration of those agreements, despite the fact that the former employer had not signed the subsequent wage agreement. In the latter ROD, interpreting the 1984 agreement, the Trustees acknowledged that in District 29, U.M.W.A. v. Royal Coal Co., 768 F.2d 588 (4th Cir.1985), the Fourth Circuit held that signatories of the 1984 agreement, that were not signing the subsequent agreement, were not obligated to continue providing health benefits to pensioners after the 1984 NBCWA expired. Pointing to an NLRB decision, Coalite, Inc., 278 NLRB 293 (1986), as an example however, the Trustees noted that health benefits for laid off employees are not inherently identical to those for pensioners.

Upon receiving this letter suggesting that it would likely lose the arbitration, Upshur attempted to withdraw its consent to arbitration. Initially, it appears that the NLRB decided to revoke its decision to defer processing of the UMWA's unfair labor practice claim. When the Trustees decided to render a judgment in the dispute, notwithstanding Upshur's attempt to withdraw its willingness to submit to arbitration, however, the Regional Director of the NLRB exercised his discretion to withhold action on the unfair labor practice claim awaiting the conclusion of arbitration.

On September 13, 1989, the Trustees rendered their ROD opinion, concluding that Upshur was responsible for providing laid off employees health benefits for the full period promised in the contract. On December 11, 1989, Upshur filed suit in the District Court for the Northern District of West Virginia, requesting that the court vacate the arbitration decision. The court granted the motion to vacate, holding that Royal Coal controlled, that pensioners and laid off employees were treated identically under the 1984 NBCWA, and that Upshur was under no obligation to provide further health benefits to laid off employees after the expiration of the agreement. The UMWA now appeals.

II

The first issue is whether this is an appropriate juncture at which to review the decision of the district court. Upshur contends that we should withhold review of the district court's judgment until the NLRB resolves the UMWA's unfair labor practice claim. We disagree for two reasons. First, the unfair labor practice claim is separate and distinct from the contractual claims at issue here. The NLRB claim charges that Upshur violated Section 8(a)(1) and (5) of the Labor Management Relations Act, in that its elimination of health care benefits was in bad faith. The claim brought to arbitration and before us here, on the other hand, involves a matter of pure contractual interpretation. Since the purpose of arbitration is to provide speedy resolution of contractual disputes, we will not frustrate that intent by delaying this appeal. The matters before the arbitrator and the NLRB are fundamentally different and there is no reason for us to stall the quick resolution of arbitration dispute--particularly when the NLRB has itself decided to withhold processing of the unfair labor practice claim pending the result in this litigation.

In addition, resolving this claim now serves the interest in judicial economy. Since we conclude that the arbitrators' decision was within the legitimate scope of their powers, and therefore hold that Upshur must provide benefits under the terms of the contract, the UMWA need not continue its unfair labor practice claim. Therefore, addressing this contractual dispute now will reduce the overall workload of the administrative tribunal.

We are also troubled by the circumstances surrounding Upshur's attempt to withdraw consent to arbitration. Several months after having consented to arbitration, Upshur decided to withdraw its consent upon a receipt of a letter suggesting that it was likely to lose the arbitration. If we were to allow a party that suspects it will lose in arbitration to withdraw consent to arbitrate shortly before a decision is handed down, and further permit this action to delay judicial review, we would frustrate the purpose of arbitration, namely "the speedy resolution of labor disputes." See Fortune, Alsweet & Eldridge, Inc. v. Daniel, 724 F.2d 1355, 1357 (9th Cir.1983). We therefore move to the substance of the UMWA's appeal.

III

The UMWA argues that the district court erred in granting Upshur's motion to vacate the arbitrators' award. The court held that, in finding Upshur responsible for...