ANR Advance Transp. Co. v. International Broth. of Teamsters, Local 710

• Decision Date: 07 October 1998
• Docket Number: No. 97-4075,97-4075
• Parties: 159 L.R.R.M. (BNA) 2082, 136 Lab.Cas. P 10,230 ANR ADVANCE TRANSPORTATION COMPANY, Plaintiff-Appellant, v. INTERNATIONAL BROTHERHOOD OF TEAMSTERS, LOCAL 710, Defendant-Appellee. Seventh Circuit
• Court: U.S. Court of Appeals — Seventh Circuit

Page 774

153 F.3d 774

159 L.R.R.M. (BNA) 2082, 136 Lab.Cas. P 10,230

ANR ADVANCE TRANSPORTATION COMPANY, Plaintiff-Appellant, v. INTERNATIONAL BROTHERHOOD OF TEAMSTERS, LOCAL 710, Defendant-Appellee.

No. 97-4075.

United States Court of Appeals,Seventh Circuit.

Argued May 29, 1998.

Decided Aug. 26, 1998.

Rehearing and Suggestion for Rehearing En Banc Denied Oct. 7, 1998.

Jeffrey L. Madoff (argued), Matkov, Salzman, Madoff & Gunn, Chicago, IL, for Plaintiff-Appellant.

Marvin Gittler (argued), Susan Brannigan, Asher, Gittler, Greenfield, Cohen & D'Alba, Chicago, IL, for Defendant-Appellee.

Before CUMMINGS, RIPPLE and EVANS, Circuit Judges.

RIPPLE, Circuit Judge.

ANR Advance Transportation Company, Inc., brought this action under § 301(a) of the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 185(a). It sought vacation of an arbitrator's decision that had resolved a postmerger wage level dispute against ANR Advance and in favor of the International Brotherhood of Teamsters, Local No. 710 (the "Union"). ANR Advance later moved for summary judgment; the district court denied that motion and instead granted summary judgment, sua sponte, to the Union. ANR Advance now appeals. For the reasons that follow, we affirm the judgment of the district court.

I BACKGROUND

A. Facts

ANR Advance Transportation Company, Inc. ("ANR Advance") is a trucking company that was formed on November 5, 1995, upon the merger of two separate trucking companies. Specifically, Advance Transportation Company ("Advance") was absorbed by ANR Freight System, Inc. ("ANR Freight"), and the company was renamed ANR Advance to reflect the transaction.

Prior to the merger, both Advance and ANR Freight employed office and dock workers. In each company, both groups were represented by the Union. Moreover, in each company, there was a separate collective bargaining agreement ("CBA") with the Union for each of these two job classifications. These four CBAs had several similarities. Each was in effect from April 1, 1994, through March 31, 1998; each contained an Article 10 that governed the effect of a merger on the compensation of workers employed by the merging company. In pertinent part, that article provided:

If the minimum wage, hour and working conditions in the company absorbed differ from those minimums set forth in this Agreement, the higher of the two shall R.1-1, Ex. A at 22. ¹ This case involves the arbitrator's interpretation of this provision and the resulting wage levels to be paid to employees after the merger.

remain in effect for the members so absorbed.

Although the CBAs had some similar provisions, they also had significant differences with respect to compensation and benefits. Although the minimum wage rates for both office and dock employees were the same, employees at ANR Freight were participants in a Wage Reduction-Job Security Plan ("ANR Freight Plan"). This Plan provided for a reduction of 15% in the wage rates contained in the CBAs. According to ANR Advance, this reduction in wages in the ANR Freight Plan was a quid pro quo for certain benefits pertaining to job security. The other premerger company, Advance, had in place Addenda to its CBAs which provided for rates of pay 10% lower than those provided in the CBAs. The parties dispute whether this 10% wage reduction in the Addenda, like the ANR Freight Plan, was in exchange for benefits. In any event, the effect of these provisions was that, before the merger, there was a 5% differential between the hourly wages paid to Advance employees and ANR Freight employees; Advance employees received the higher comparative hourly wage rates.

Following the merger, ANR Advance determined that it would pay all of its office and dock employees in accordance with the CBAs between ANR Freight (the surviving company) and the Union. Consequently, ANR Advance paid the former Advance employees 5% less than they had been receiving. However, these employees, although now receiving a lower hourly wage, became eligible for the benefits provided under the Wage Reduction-Job Security Plan. Nevertheless, the former Advance employees filed grievances and asserted that their pay had been reduced in contravention of Article 10 of their CBAs.

This dispute went to arbitration. The arbitrator determined that ANR Advance had breached the CBAs by paying the former Advance employees hourly wages less than they had been receiving prior to the merger. Article 10 required a comparison of "wage, hour and working conditions." In the arbitrator's view, the hourly rates to be compared were not the "unreduced" wages contained in the CBAs, but the wage rates in effect because of the ANR Freight Plan and the Addenda that modified the CBAs' wage terms. See R.1-1, Ex. G at 28, 32. ² The arbitrator therefore determined that the Advance employees' premerger wages had been higher than those paid to the ANR Freight employees. Accordingly, he held that the Advance employees were entitled to their premerger wages because the CBA provisions stated that "the higher of the two shall remain in effect for the members ... absorbed." ANR Advance was ordered to pay the former Advance employees the difference between their current and former wages from the time of merger to the time of the arbitration award; it was further ordered to pay the premerger wages to those employees for the remainder of the contract.

B. Proceedings in the District Court

ANR Advance then filed this action to vacate the arbitrator's award. In due course, it filed a motion for summary judgment. The district court reviewed the arbitrator's decision and determined that, in making his decision, the arbitrator had interpreted the CBAs' language and that the decision therefore drew its essence from the CBAs. Although the court believed that ANR Advance's position with regard to the proper interpretation of the CBAs and to the consequent treatment of the wage comparison was rational, the court also determined that the The district court therefore denied ANR Advance's motion for summary judgment and instead granted, sua sponte, summary judgment to the Union.

                arbitrator's position was rational and not in excess of his authority.  The district court also concluded that the arbitrator was entitled to disregard the decision of another arbitrator that had indicated that the 15% wage reduction would apply to all employees of the merged company, ANR Advance.  The decision in that case, noted the court, applied to different contracts and, because it was sparse in its reasoning, "did not give any insight into the rationale for the decision or the specific provisions on which the decision was based."   R.24 at 9
                

II DISCUSSION

A.

ANR Advance now challenges the district court's decision to grant summary judgment in favor of the Union. We review the district court's grant of summary judgment de novo, applying the same standard to evaluate the arbitrator's decision as that employed by the district court. See Amax Coal Co. v. United Mine Workers of Am., Int'l Union, 92 F.3d 571, 574 (7th Cir.1996); Jasper Cabinet Co. v. United Steelworkers of Am., AFL-CIO-CLC, Upholstery & Allied Div., 77 F.3d 1025, 1026 (7th Cir.1996). In that review, we construe the facts of record and all inferences that may be drawn from them in the light most favorable to ANR Advance. See Jasper Cabinet Co., 77 F.3d at 1026. Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). "When the material facts are not in dispute, as in this case, the sole question is whether the moving party [the Union] is entitled to judgment as a matter of law." Cozzie v. Metropolitan Life Ins. Co., 140 F.3d 1104, 1107 (7th Cir.1998) (internal quotations omitted).

Litigants attempting to overturn an arbitrator's award face a daunting challenge. See Amax Coal Co., 92 F.3d at 575 ("It is well established that judicial review of arbitration awards under collective bargaining agreements is extremely narrow." (citing cases)). The Supreme Court has explained that when "[c]ollective-bargaining agreements ... provide grievance procedures to settle disputes between union and employer with respect to the interpretation and application of the agreement and require binding arbitration for unsettled grievances," the "courts are not authorized to reconsider the merits of an award even though the parties may allege that the award rests on errors of fact or on misinterpretation of the contract." United Paperworkers Int'l Union v. Misco, Inc., 484 U.S. 29, 36, 108 S.Ct. 364, 98 L.Ed.2d 286 (1987). The Supreme Court went on to state that:

[T]he arbitrator's award settling a dispute ... must draw its essence from the contract and cannot simply reflect the arbitrator's own notions of industrial justice. But as long as the arbitrator is even arguably construing or applying the contract and acting within the scope of his authority, that a court is convinced he committed serious error does not suffice to overturn his decision.

Id. at 38, 108 S.Ct. 364. Since the Court's reconfirmation ³ of this standard in Misco, we have elaborated further on its application. We have explained that " '[i]t is only when the arbitrator must have based his award on some body of thought, or feeling, or policy, or law that is outside the contract' that the award can be said not to draw its essence from the [CBA]." Jasper Cabinet Co., 77 F.3d at 1028 (quoting Ethyl Corp. v. United Steelworkers of Am., 768 F.2d 180, 184-85 (7th Cir.1985), cert. denied, 475 U.S. 1010 106 S.Ct. 1184, 89 L.Ed.2d 300 (1986)). Therefore, in this context, our role is not to substitute our judgment for the arbitrator or even to determine that the arbitration was legally or factually in error; instead, we must limit our inquiry to...