Bacardi Corp. v. Congreso De Uniones Industriales De Puerto Rico

• Decision Date: 09 November 1982
• Docket Number: No. 82-1234,82-1234
• Citation: 692 F.2d 210
• Parties: 111 L.R.R.M. (BNA) 2923, 95 Lab.Cas. P 13,857 BACARDI CORPORATION, Plaintiff, Appellee, v. CONGRESO de UNIONES INDUSTRIALES de PUERTO RICO, Defendant, Appellant.
• Court: U.S. Court of Appeals — First Circuit

Page 210

692 F.2d 210

111 L.R.R.M. (BNA) 2923, 95 Lab.Cas. P 13,857

BACARDI CORPORATION, Plaintiff, Appellee, v. CONGRESO de UNIONES INDUSTRIALES de PUERTO RICO, Defendant, Appellant.

No. 82-1234.

United States Court of Appeals, First Circuit.

Submitted Oct. 8, 1982.

Decided Nov. 9, 1982.

Nicolas Nogueras, Jr., San Juan, P.R., on brief, for defendant, appellant.

Jay A. Garcia-Gregory, Eduardo Negron-Rodriguez, Fiddler, Gonzalez & Rodriguez, San Juan, P.R., on brief, for plaintiff-appellee.

Before COFFIN, Chief Judge, TIMBERS, ^* Senior Circuit Judge, and BOWNES, Circuit Judge.

COFFIN, Chief Judge.

This is an action to set aside an arbitration award. The underlying question is whether the collective bargaining agreement between the Congreso de Uniones Industriales de Puerto Rico ("the union") and the Bacardi Corporation ("the company") requires the company to pay employees for a holiday on which they did not work when the holiday fell on a Saturday.

The company having denied the union's request that employees be paid for July 4, 1981, which fell on a Saturday, the union filed a grievance. Pursuant to procedures established in the collective bargaining agreement, the grievance culminated in an arbitration hearing. The arbitrator ordered the company to pay regular wages as if the employees had worked on that Saturday, an additional amount equal to such unpaid wages, and $200.00 for attorney's fees. The company refused to pay and brought this action under Sec. 301 of the Labor Management Relations Act of 1947, 29 U.S.C. Sec. 185, to have the award set aside. Finding that the arbitrator had exceeded the scope of his authority, the district court granted summary judgment for the company. The union appeals. We affirm in part and vacate in part.

Where, as here, the "parties to a collective bargaining agreement have provided for arbitration as the final and binding method for settling grievances the arbitration award is normally non-reviewable by a court." Bettencourt v. Boston Edison Co., 560 F.2d 1045, 1048 (1st Cir.1977); see also Westinghouse Elevators v. S.I.U. de Puerto Rico, 583 F.2d 1184, 1186 (1st Cir.1978). Exceptions are few and limited. Bettencourt, supra, 560 F.2d at 1049. "[S]o far as the arbitrator's decision concerns construction of the contract, the courts have no business overruling him because their interpretation of the contract is different from his." Steelworkers v. Enterprise Corp., 363 U.S. 593, 597, 80 S.Ct. 1358, 1361, 4 L.Ed.2d 1424 (1960). If, however, the arbitrator bases his award on something other than the collective bargaining agreement, that award may be overturned.

"[A]n arbitrator is confined to interpretation and application of the collective bargaining agreement; he does not sit to dispense his own brand of industrial justice. He may of course look for guidance from many sources, yet his award is legitimate only so long as it draws its essence from the collective bargaining agreement. When the arbitrator's words manifest an infidelity to this obligation, courts have no choice but to refuse enforcement of the award." Id. at 597, 80 S.Ct. at 1361.

The district court concluded here that the arbitrator's decision "cannot in any rational way be derived from the collective bargaining agreement, as viewed in light of its language, context and the parties' intent revealed through the bargaining history and past practices", and was based instead on "a public policy of the Legislature of Puerto Rico of protection to the workers, afforded by the State labor laws."

The district court found that "the language of the collective bargaining agreement, taken as a whole is clear and unambiguous." We cannot agree. Article X of the collective bargaining agreement ("Holidays") provides in relevant part:

"46. The following shall be considered as holidays:

January 1st

January 6th

February 4

Third Monday in February (Washington)

Holy Thursday (movable)

Holy Friday (movable)

Last Monday of May (Memorial Day)

July 4

July 17

July 25

First Monday in September (Labor Day)

Second Monday in October (Discovery of America)

Fourth Monday in October (Veteran's Day)

Fourth Thursday in November (Thanksgiving Day)

Friday Following Thanksgiving Day

December 25

Employees birthday.

"47. Each regular employee covered by this Agreement who works for the Company the working day immediately preceding or the working day immediately after each and everyone of the holidays mentioned in Clause 46 above, shall receive pay for the above mentioned holidays for which he was not called to work, at his regular hourly rate. Any employee who presents a doctor's certificate or valid excuse justifying his absence during the working day preceding or following any holiday mentioned in Clause 46 above, shall receive pay for said holiday."

We agree with the arbitrator that this language is susceptible of two interpretations: (1) a guaranty that the employee's income is not reduced by not working on a holiday; or (2) an obligation to pay wages on a certain number of designated holidays whether or not those holidays fall on a normal working day. The day at issue, Saturday, July 4, 1981, is indeed a mentioned holiday on which employees were "not called to work". Those employees who worked on Friday, July 3 worked on "the working day immediately preceding." ¹

In holding that the arbitrator's interpretation could not be rationally derived from the collective bargaining agreement, the district court also relied upon paragraph 50 of Article X, which provides that "[a]ny of the holidays listed in clause 46 above which falls on a Sunday shall be observed on the following Monday." It noted further that a similar provision with regard to Saturdays was specifically proposed by the union in collective bargaining talks but not adopted in the agreement. But such a provision is not equivalent to the interpretation of paragraph 47 urged by the union and accepted by the arbitrator. It would result, when a holiday falls on a Saturday, in a four-day Tuesday-Friday work week for which the employee is paid five days' wages, whereas the interpretation of paragraph 47 accepted by the arbitrator would instead result in a normal five-day work week for which the employee is paid six days' wages.

As further evidence of the arbitrator's infidelity to the collective bargaining agreement, the district court pointed out that a clause in the 1967 agreement similar to that at issue here was interpreted by an arbitrator in 1969 to give employees no right to receive pay for the October 12, 1968 holiday, which fell on a Saturday. Though we agree that the retention of the thus interpreted language is relevant in determining the intent of the parties to the current agreement, an arbitrator's failure to follow a previous interpretation is not sufficient in itself to warrant judicial review of his award. Westinghouse v. S.I.U. de Puerto Rico, 583 F.2d 1184, 1186-87 (1st Cir.1978).

Though noting the previous interpretation, the arbitrator here specifically concluded that the intention of the parties in negotiating the current collective bargaining agreement was that employees be paid for holidays falling on Saturdays as if they had worked on that day.

"[A]lthough the terminology of the previous agreements...