Boston Celtics Ltd. Partnership v. Shaw, 90-1621

• Citation: 908 F.2d 1041
• Decision Date: 11 July 1990
• Docket Number: No. 90-1621,90-1621
• Parties: 116 Lab.Cas. P 10,265, 17 Fed.R.Serv.3d 192 BOSTON CELTICS LIMITED PARTNERSHIP, Appellee, v. Brian SHAW, Defendant, Appellant. . Heard
• Court: United States Courts of Appeals. United States Court of Appeals (1st Circuit)

Page 1041

908 F.2d 1041

116 Lab.Cas. P 10,265, 17 Fed.R.Serv.3d 192

BOSTON CELTICS LIMITED PARTNERSHIP, Appellee, v. Brian SHAW, Defendant, Appellant.

No. 90-1621.

United States Court of Appeals, First Circuit.

Heard July 11, 1990.

Decided July 16, 1990.

Martin E. Silfen, with whom Silfen & Glasser, P.C., New York City, Laura L. Carroll, Robert L. Kirby, Jr., and Widett, Slater & Goldman, P.C., Boston, Mass., were on brief, for defendant, appellant.

Neil Jacobs, with whom Christopher J. Perry and Hale & Dorr, Boston, Mass., were on brief, for appellee.

Jeffrey A. Mishkin, Marc J. Goldstein, William S. Koenig, Proskauer Rose Goetz & Mendelsohn, Gary B. Bettman and Joel M. Litvin, New York City, were on brief, for National Basketball Ass'n, amicus curiae.

Before BREYER, Chief Judge, BOWNES, Senior Circuit Judge, and SELYA, Circuit Judge.

BREYER, Chief Judge.

On January 23, 1990, Brian Shaw signed a contract with the owners of the Boston Celtics (the "Celtics") in which he promised that he would cancel his commitment to play for an Italian basketball team next year so that he could play for the Celtics instead. When Shaw threatened to break his agreement with the Celtics, they immediately sought arbitration. The arbitrator found that Shaw must keep his promise. The Players Association that represents Shaw agreed with the arbitrator. The Celtics then asked the federal district court to enforce the arbitrator's decision. The court ordered it enforced.

Shaw now appeals the district court's order. We have examined the arbitration award, the district court's determination, the briefs, and the record. We conclude that the district court's decision is lawful, and we affirm it.

I Background

A. Facts

The basic facts, which are not in dispute, include the following:

(a) In 1988, soon after Shaw graduated from college, he signed a one-year contract to play for the Celtics.

(b) In 1989, Shaw signed a two-year contract to play with the Italian team Il Messaggero Roma ("Il Messaggero"). The team agreed to pay him $800,000 for the first year and $900,000 for the second year. The contract contains a clause permitting Shaw to cancel the second year (1990-91). It says that Shaw has

the right to rescind the second year of this Agreement ... [if he] returns to the United States to play with the NBA ... by delivering a registered letter to [Il Messaggero] ... between June 20, 1990 and July 20, 1990.

(c) At the end of January 1990 Shaw signed a five-year "Uniform Player Contract" with the Celtics. The contract contains standard clauses negotiated by the National Basketball Association ("NBA") franchise owners and the National Basketball Players Association (the "Players Association"). It adopts by cross-reference arbitration provisions contained in the NBA-Players Association Collective Bargaining Agreement. In the contract, the Celtics promise Shaw a $450,000 signing bonus and more than $1 million per year in compensation. In return, Shaw promises the Celtics, among other things, that he will cancel his second year with Il Messaggero. The contract says that the

Player [i.e., Shaw] and Club [i.e., the Celtics] acknowledge that Player is currently under contract with Il Messaggero Roma (the "Messaggero Contract") for the 1989-90 & 1990-91 playing seasons. The Player represents that in accordance with the terms of the Messaggero Contract, the Player has the right to rescind that contract prior to the 1990-91 season and the player hereby agrees to exercise such right of rescission in the manner and at the time called for by the Messaggero Contract.

(Emphasis added.)

(d) On June 6, 1990, Shaw told the Celtics that he had decided to play for Il Messaggero during the 1990-91 season and that he would not exercise his right of rescission.

B. Procedural History

On June 11, 1990, the Celtics invoked their right under the Collective Bargaining Agreement (cross-referenced in the Contract) to an "expedited" arbitration proceeding. The arbitrator held a two-day hearing on June 13 and 14. He found that Shaw's refusal to rescind the Il Messaggero contract violated Shaw's contract with the Celtics. He ordered Shaw to rescind the Il Messaggero contract (on June 20) and not to play for any team other than the Celtics during the term of his Celtics contract. On June 15, Shaw said he still did not intend to rescind the Il Messaggero contract.

The Celtics responded immediately by asking the federal district court to use its authority under Sec. 301 of the Labor Management Relations Act, 29 U.S.C. Sec. 185, to enforce the award, see General Drivers No. 89 v. Riss & Co., 372 U.S. 517, 519, 83 S.Ct. 789, 791, 9 L.Ed.2d 918 (1963) (per curiam); Kemner v. District Council Of Painting and Allied Trades No. 36, 768 F.2d 1115 (9th Cir.1985); Kallen v. Dist. 1199, National Union of Hospital Employees, 574 F.2d 723, 725 (2d Cir.1978) ("[F]ederal courts indisputably have jurisdiction under section 301 to enforce a labor arbitration award"), and the parties no longer dispute that Sec. 301 applies. The Celtics asked the court for "expedited enforcement" of the award and for a preliminary injunction. After receiving Shaw's response (in the form of an opposition, a motion to dismiss, a brief, and supporting affidavits), and after holding an oral hearing, on June 26, the court granted the Celtics' motion to expedite, ordered Shaw to cancel the Il Messaggero agreement "forthwith," and "enforced" the award. Shaw now appeals this district court decision, attacking both the preliminary injunction and the order enforcing the arbitration award.

II The Legal Merits

Shaw makes two basic categories of argument in his effort to show that the district court lacked the legal power to enter its order. First, he says that the arbitration award was itself unlawful. Second, he says that regardless of the lawfulness of the award, the district court followed improper procedures. We shall address these arguments in turn and explain why we find each not persuasive.

A. The Arbitrator's Decision

Shaw says that the district court should not have enforced the arbitrator's award because that award was itself unlawful, for any of five separate reasons.

1. The termination promise. Shaw argues that the arbitrator could not reasonably find that he broke a contractual promise to the Celtics because, he says, the Celtics had previously agreed with the Players Association that contracts with individual players such as Shaw would not contain promises of the sort here at issue, namely, a promise to cancel a contract to play with a different team. Shaw says that this previous agreement between the Celtics and the Players Association renders his promise to terminate Il Messaggero "null and void." To support this argument, he points to Article I, section 2 of the Collective Bargaining Agreement, which Shaw and the Celtics, through cross-reference, made part of their individual agreement. Section 2 says, "Any amendment to a Uniform Player Contract [of the type Shaw and the Celtics used], other than those permitted by this [Collective Bargaining] Agreement, shall be null and void." The Agreement permits amendments (a) "in ... respect to the compensation ... to be paid the player," (b) "in respect to specialized compensation arrangements," (c) in respect to a "compensation payment schedule," and (d) in respect to "protect[ion]" of compensation in the event of contract termination. Shaw says that his promise to cancel the Il Messaggero agreement was an amendment to the Uniform Players Contract that does not concern compensation specialized compensation, compensation schedules, or compensation protection; therefore, it is "null and void." (We have set out the amendment in an appendix to this opinion.)

Shaw's argument, while logical, fails to show that the arbitrator's contrary finding is unlawful. The reasons it fails are fairly straightforward. First, the argument concerns the proper interpretation of a contract negotiated pursuant to a collective bargaining agreement. Second, federal labor law gives arbitrators, not judges, the power to interpret such contracts. The Supreme Court, noting the strong federal policy favoring the voluntary settlement of labor disputes, has written that a labor arbitration award is valid so long as it "draws its essence" from the labor contract. See United Steelworkers v. Enterprise Wheel & Car Corp., 363 U.S. 593, 597, 80 S.Ct. 1358, 1361, 4 L.Ed.2d 1424 (1960). An award "draws its essence" from the contract so long as the "arbitrator is even arguably construing or applying the contract and acting within the scope of his authority." United Paperworkers Int'l v. Misco, 484 U.S. 29, 38, 108 S.Ct. 364, 371, 98 L.Ed.2d 286 (1987). We have held that "this language makes clear that any 'exception' to the normal rule (that forbids the court to find an arbitrator's interpretation outside the authority delegated to him by the contract) is extremely narrow." Crafts Precision Indus., Inc. v. Lodge No. 1836, Int'l Assoc. of Machinists, 889 F.2d 1184, 1185 (1st Cir.1989). Consequently, "we shall uphold an arbitrator's interpretation of a contract as long as we can find some 'plausible argument that favors his interpretation.' " Id. (quoting Berklee College of Music v. Massachusetts Federation of Teachers Local 4412, 858 F.2d 31 (1st Cir.1988), cert. denied, --- U.S. ----, 110 S.Ct. 53, 107 L.Ed.2d 22 (1989)).

Third, one can find "plausible arguments" favoring the arbitrator's construction. Shaw's "rescission" promise defines the beginning of the compensation relationship. It also plausibly determines, at the very least, whether Shaw's compensation will begin at $1.1 million (and continue for three years) or whether it will begin at $1.2 million (and continue for only two years). See Appendix, infra (describing compensation schedule). More importantly, and also quite plausibly, Shaw's overall compensation might have been much different had he declined to promise to...