Aircraft Braking Systems Corp. v. Local 856, Intern. Union, United Auto., Aerospace and Agr. Implement Workers, UAW

• Decision Date: 02 October 1996
• Docket Number: No. 95-3774,95-3774
• Citation: 97 F.3d 155
• Parties: 153 L.R.R.M. (BNA) 2402, 132 Lab.Cas. P 11,689 AIRCRAFT BRAKING SYSTEMS CORPORATION, Plaintiff-Appellant, v. LOCAL 856, INTERNATIONAL UNION, UNITED AUTOMOBILE, AEROSPACE AND AGRICULTURAL IMPLEMENT WORKERS, UAW, Defendant-Appellee, American Arbitration Association, Inc., Defendant.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 155

97 F.3d 155

153 L.R.R.M. (BNA) 2402, 132 Lab.Cas. P 11,689

AIRCRAFT BRAKING SYSTEMS CORPORATION, Plaintiff-Appellant, v. LOCAL 856, INTERNATIONAL UNION, UNITED AUTOMOBILE, AEROSPACE AND AGRICULTURAL IMPLEMENT WORKERS, UAW, Defendant-Appellee American Arbitration Association, Inc., Defendant.

No. 95-3774.

United States Court of Appeals Sixth Circuit.

Argued Aug. 14, 1996.

Decided Oct. 2, 1996.

Edward C. Kaminski (briefed), Buckingham, Doolittle & Burroughs, Akron, OH, Carol MacKenzie, Pearl & MacKenzie (argued and briefed), Syosset, NY, for Plaintiff-Appellant.

David Roloff, Goldstein & Roloff (argued and briefed), Cleveland, OH, for Defendant-Appellee.

Before: MARTIN, Chief Judge; DAUGHTREY, Circuit Judge; BECKWITH, District Judge. ^*

BOYCE F. MARTIN, Jr., Chief Judge.

Plaintiff Aircraft Braking Systems appeals the district court's order vacating an arbitration ruling that no interim collective bargaining agreement existed between Aircraft Braking Systems and Local 856, UAW. Aircraft Braking Systems also appeals the district court's decision to remand the underlying grievance to a new arbitrator, and the district court's award of attorney's fees in favor of the union. We AFFIRM the district court's judgment and REMAND for further proceedings consistent with this opinion.

The facts of the underlying dispute giving rise to this appeal are stated succinctly in a prior unpublished decision of this Court:

This case involves a labor dispute between [Aircraft Braking Systems Corporation] and Defendant Union. The Union is the certified bargaining representative for ABS' production and maintenance employees. ABS and the Union were parties to a collective bargaining agreement which, by its own terms, expired on August 10, 1991. Prior to the August 10, 1991 expiration of the collective bargaining agreement, [the parties] entered into negotiations for a new agreement; however, they were unable to reach an agreement on the terms of a new collective bargaining agreement.

On August 10, 1991, ABS informed the Union that it was implementing the terms of its "Final Proposal" to the Union, on the grounds that the parties had reached an impasse in their bargaining. The "Final Proposal" stated in relevant part:

The Contract between U.A.W., Local # 856 and Aircraft Braking Systems Corporation which by its terms expires at 6:00 PM August 10, 1991, is hereby extended and renewed for a period of three years from August 10, 1991, or the date of ratification whichever is later except as specifically amended hereafter.

....

14. All Company proposals dated June 20, 1991, and all tentative agreements will be incorporated into the Basic Labor Agreement ... except as modified by the attached Company proposals.

....

The existing collective bargaining agreement between the parties, which expired on August 10, 1991, contained both an arbitration clause and a no-strike clause. One of the proposals made by ABS on June 20, 1991 was to change paragraph 193 of the existing collective bargaining agreement to read:

The parties to this agreement will utilize the services of the American Arbitration Association when the need for arbitration arises.

....

This resulted in a unilaterally imposed "Final Proposal" which reads in relevant part:

Section 2. Grievance Procedure

Step 4

It is hereby agreed that should the above procedure fail to bring about an agreement between the parties with respect to certain grievances, either party may within twenty (20) workings [sic] days after the final written answer as outlined in the agreement above submit the issue to an arbitrator, selected by mutual agreement.

....

181 The parties to this agreement will utilize the services of the American Arbitration Association when the need for arbitration arises.

....

184 Specifically the Arbitrator shall not have the power to arbitrate general wage levels or maximum or minimum rates of existing classifications, and the only grievances which may be submitted to the said Arbitrator for hearing and determination shall be those arising out of alleged violation or misinterpretation of the provisions of this agreement; or individual rate grievances within the employee's classification (classification in this instance shall include the subdivision).

....

Article V. WORK STOPPAGE

Section 1. No Strike or Lockout

203 It is the express desire of the parties to this Agreement that the procedures contained herein will serve the purpose of affecting a peaceable settlement of all disputes that may arise between them. As long as this Agreement is in effect, the Company will not lock out any employees. As long as this Agreement is in effect, the Union will not cause or permit its members to cause, nor will any employee take part in any strike, sit-down, stay-in or slow-down, or any curtailment of work or restriction of production, or picketing, or interference with production of the Company in any matter which comes within the jurisdiction of the Arbitrator.

Aircraft Braking Sys. Corp. v. Local 856, International Union, United Auto, Aerospace and Agricultural Implement Workers, 1995 WL 236678 at * 1-2 (6th Cir.1995) (unpublished) (Aircraft Braking Systems I). In Aircraft Braking Systems I, Aircraft Braking Systems sought a stay of arbitration proceedings brought by the Union on the ground that, because the Union never ratified the "Final Proposal" set forth in part above, no collective bargaining agreement existed between the parties. According to Aircraft Braking Systems' theory, because no agreement existed, there was nothing upon which the arbitrator could base his or her decision, and therefore the grievance at issue was not arbitrable. The district court rejected this argument, finding that, based on the parties' respective conduct after the expiration of the prior collective bargaining agreement on August 10, 1991, an interim agreement existed between the parties, which included an agreement to arbitrate certain disputes. ¹ After finding that an interim contract existed, the district court refused to issue an injunction to stay the arbitration proceedings that Aircraft Braking Systems sought to avoid. This Court affirmed on appeal, holding that the district court did not commit clear error in finding that a temporary contract existed, which included an agreement to arbitrate certain disputes between the parties. We also rejected Aircraft Braking Systems' claim that the district court erred by failing to give Aircraft Braking Systems adequate notice before consolidating the hearing on its motion for a preliminary injunction with the merits of the action. We held that the district court adequately afforded the parties a full and fair opportunity to litigate the matter, stating that:

[I]n this case, [Aircraft Braking Systems] filed a post-hearing brief which indicated its satisfaction with the state of the record. Further, in its brief on appeal, [Aircraft Braking Systems] has reargued the same issue in the same way and relied on the same evidence. More importantly, in its brief on appeal, [Aircraft Braking Systems] did not indicate what additional evidence it would have presented if it had received notice from the district court. Accordingly, we conclude that [Aircraft Braking Systems] was not prejudiced by the district court's failure to give notice under Fed.R.Civ.P. 65.

Id. at * 10 (footnote omitted).

The present case arose on March 8, 1994, when Aircraft Braking Systems, making arguments similar to those it made in Aircraft Braking Systems I, sought to stay arbitration of two grievances, No. A-8779 and No. A-8712, initiated by the Union by filing a complaint seeking a temporary restraining order and preliminary injunction in district court. At the time, Judge Bell had already issued his opinion and order in Aircraft Braking Systems I, and the appeal was pending in this Court. On April 1, the district court held a hearing on the motion for a preliminary injunction. On April 4, the court issued an order temporarily enjoining the arbitration of Grievance A-8779 for reasons not at issue here. However, the court refused to stay arbitration of Grievance A-8712.

The parties proceeded to arbitration on Grievance A-8712 on April 28. The arbitration hearing was held on four separate days, concluding on September 20, 1994. The arbitrator issued a decision on March 1, 1995, stating his view that Grievance A-8712 was not arbitrable because there was no enforceable agreement to arbitrate. In the arbitrator's view, the district court's order in Aircraft Braking Systems I was "not binding upon this [a]rbitrator:"

For were I to comply with the Court's order, I would have to ignore the evidentiary record in this case. In other words, I would be abdicating my role as an [a]rbitrator in determining the intent upon the evidentiary record.

....

The evidentiary record warrants the conclusion that neither the Company nor the Union intended to be contractually bound after 6:00 p.m. on August 10, 1991. The fundamental principles of contract law apply in this case. The Company's final offer was not accepted expressly or impliedly by the Union.

The Company's position that there is no agreement to arbitrate the instant dispute is sustained. The Union failed to carry its burden of proving that such an agreement existed between the parties.

The parties thereafter filed respective motions to confirm and vacate the arbitrator's award. On May 4, 1995, the district court ordered the parties to brief the issue whether the doctrines of res judicata or collateral estoppel barred the arbitrator from concluding that no agreement existed in light of the district court's order in Aircraft Braking Systems I. On June 16, the district court issued an order vacating the arbitrator's award on the ground that the parties did not submit the issue of arbitrability to the arbitrator, and that Aircraft Braking Systems was barred by collateral estoppel and res judicata principles from relitigating...