Ameritech Corp. v. Intern. Broth. Local 21
| Citation | 543 F.3d 414 |
| Decision Date | 10 September 2008 |
| Docket Number | No. 05-3553.,No. 06-4256.,No. 05-2574.,05-2574.,05-3553.,06-4256. |
| Parties | AMERITECH CORPORATION d/b/a SBC Midwest, Plaintiff-Appellant, Cross-Appellee, v. INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, LOCAL 21, Defendant-Appellee, Cross-Appellant. |
| Court | United States Courts of Appeals. United States Court of Appeals (7th Circuit) |
Gilbert A. Cornfield (argued), Cornfield & Feldman, Chicago, IL, for Defendant-Appellee.
Before MANION, EVANS, and SYKES, Circuit Judges.
These appeals stem from a drawn-out labor dispute between Ameritech and the International Brotherhood of Electrical Workers, Local 21, involving three arbitrations centering on what may fairly be described as the same issue. The first and third awards favored Ameritech; the second favored the Union. The question now is whether the third arbitration award trumps the second.
The third arbitration was the product of a settlement agreement resolving the parties' first two appeals in this court. Ameritech had appealed the district court's order enforcing the second arbitration award; the Union then appealed an order denying its motion to enforce that judgment and hold Ameritech in contempt. In their settlement the parties agreed to resolve this "protracted litigation" by submitting their dispute to a third arbitrator for a "final resolution" via a "special, bifurcated arbitration proceeding." This third arbitration was held, the arbitrator sided with Ameritech, and Ameritech sought to enforce the award by moving to vacate the earlier judgment pursuant to Rule 60(b) of the Federal Rules of Civil Procedure. The district court summarily denied this motion because the first two appeals were still pending here. Ameritech then appealed this order, and we consolidated all three.
We now dismiss the first two appeals based on the parties' settlement. Following the procedure described in U.S. Bancorp Mortgage Co. v. Bonner Mall Partnership, 513 U.S. 18, 29, 115 S.Ct. 386, 130 L.Ed.2d 233 (1994), and Marseilles Hydro Power LLC v. Marseilles Land & Water Co., 481 F.3d 1002, 1003-04 (7th Cir.2007), we reverse the district court's order denying Ameritech's Rule 60(b) motion and remand with instructions to vacate the earlier judgment enforcing the second award and enter judgment for Ameritech enforcing the third arbitration award. Because the parties agreed that the third arbitration would finally resolve their dispute, and the third arbitrator's award is inconsistent with the second, Ameritech is entitled to relief from the earlier judgment under Rule 60(b).
These three consolidated appeals are the result of a lengthy and procedurally complex labor arbitration, but the crux of the dispute is a single provision in the parties' collective-bargaining agreement. Ameritech and the Union disagreed over the meaning of § 1.03 in that agreement, which provides as follows:
This Agreement covers the work customarily performed by the employees defined in Section ... 1.01, above. However, during the tenure of this Agreement, [Ameritech] may continue to contract out such work as is now customarily contracted out and has been customarily contracted out by [Ameritech] under the previous collective bargaining agreements ... represented by [the Union].... If such work to be contracted out will cause layoffs, or part-timing or prevent the rehiring of employees with seniority standing, such contracting out of work will be reviewed by [Ameritech] with the Union and allotted on the basis of what [Ameritech] is equipped to perform and what the employees represented by the Union are able and trained to perform.
Section 1.03 thus governs Ameritech's ability to contract out work to nonunion workers and provides the Union with the right to review certain layoffs and the allotment of some of this work. The condition under which the Union may exercise its review-and-allotment right is the primary subject of the parties' dispute.
The genesis of this case was in late 2002, when Ameritech, facing flagging demand for its products, announced a plan to lay off some of the Union's members. Ameritech believed that it was not required to participate in the review-and-allotment process specified in § 1.03 because poor economic conditions—not the customary contracting out covered by § 1.03—had precipitated the layoffs. The Union maintained that it was entitled to a formal review and allotment under § 1.03, and when Ameritech disagreed, the parties proceeded to the first of the three arbitrations at issue here.
Arbitrator John Flagler concluded this first arbitration in December 2002, and he resolved the dispute in Ameritech's favor. Flagler agreed with Ameritech's interpretation of § 1.03, namely, that the Union must first establish that the layoffs in question were caused by customary contracting out (as opposed to some other cause) before being entitled to the review-and-allotment process. Because Ameritech established that the layoffs were caused by poor economic conditions (not contracting out), Flagler concluded that the Union was not entitled to review and allotment.
The Union filed a second grievance in the spring of 2004, arguing that it was entitled to review and allotment because Ameritech's continued use of outside contractors prevented the rehiring of the laid-off Union members. Arbitrator Richard Kasher conducted the second arbitration, and this time the result favored the Union. Kasher distinguished his postlayoff analysis from Flagler's prelayoff analysis and did not require the Union to first show that continued contracting out had caused the failure to rehire the laid-off employees. Instead, he ordered Ameritech to provide the Union with information for a formal review and allotment without that threshold showing.
The parties then moved their dispute to the District Court for the Northern District of Illinois. Ameritech filed a complaint to vacate the Kasher award, and the Union counterclaimed to enforce the award. On cross-motions for summary judgment, the district court entered judgment for the Union, upholding Kasher's decision based on the broad judicial deference that courts traditionally afford to arbitration awards. See, e.g., United Steelworkers of Am. v. Enter. Wheel & Car Corp., 363 U.S. 593, 597, 80 S.Ct. 1358, 4 L.Ed.2d 1424 (1960) (); Ethyl Corp. v. United Steelworkers of Am., 768 F.2d 180, 183-84 (7th Cir.1985) (same). But when the court denied the Union's subsequent motions to hold Ameritech in contempt, the stage was set for two cross-appeals. Ameritech appealed the order denying its motion for summary judgment and granting judgment for the Union (Appeal No. 05-2574), and the Union appealed the denial of its motion to enforce the judgment and hold Ameritech in contempt (Appeal No. 05-3553).
The parties were then directed into appellate mediation under Rule 33 of the Federal Rules of Appellate Procedure. They emerged from that process on September 16, 2005, with an agreement to submit their dispute to a third arbitration, to be conducted in two phases. This third arbitration was conducted before Arbitrator Robert Perkovich pursuant to a detailed Joint Pre-Conference Statement negotiated and signed by the parties. The statement provided that "this special, bifurcated arbitration proceeding" was "the culmination of protracted litigation between the parties through two different arbitrations, and civil actions in the U.S. District Court and 7th Circuit Court of Appeals." The statement memorialized that "the parties agreed to resolve their dispute regarding Article 1.03 through this bifurcated process" and that this third arbitration would be the "final resolution of the proper interpretation and application of Section 1.03 of the parties' Collective Bargaining Agreement relative to [the 2002 layoffs]."
Perkovich's award favored Ameritech. He held that the first award (Arbitrator Flagler's) had been incorporated into the parties' collective-bargaining agreement and was therefore controlling on the proper interpretation of § 1.03 and that Arbitrator Kasher had erred by disregarding it. Armed with Perkovich's award, Ameritech returned to the district court with a Rule 60(b) motion seeking to vacate the earlier judgment based on this third arbitration and the parties' settlement. The district court summarily denied this motion, saying only that it could not consider the motion because the two earlier appeals were still pending. Ameritech appealed this order (Appeal No. 06-4256), and we consolidated all three appeals for briefing and disposition.
The parties ask us to reconcile their arbitration trilogy on the merits, but the proper resolution of these appeals begins—and ends—with the settlement that brought about the third arbitration. The parties engaged in appellate settlement negotiations under Rule 33 of the Federal Rules of Appellate Procedure and explicitly agreed to submit their dispute to a third and final arbitration as a "final resolution" and "culmination" of the "protracted litigation" between them—i.e., the first two arbitrations, the district court's first and second orders, and the first two appeals in this court.
Rule 33 authorizes the court of appeals to implement a settlement reached while the case is on appeal. Herrnreiter v. Chi. Hous. Auth., 281 F.3d 634, 637 (7th Cir. 2002). Unlike in the district court, however, settlement negotiations in this court are not overseen by a judicial officer; instead, they are handled by a settlement conference attorney and what occurs during negotiations is not revealed to the court. Id. We have held that the implementation of a settlement reached on appeal entails the dismissal of...
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