Butler Mfg. v. United Steelworkers of America, 02-1952.

• Decision Date: 17 July 2003
• Docket Number: No. 02-1952.,02-1952.
• Citation: 336 F.3d 629
• Parties: BUTLER MANUFACTURING COMPANY, Plaintiff-Appellee, v. UNITED STEELWORKERS OF AMERICA, AFL-CIO-CLC and Local 2629, United Steelworkers of America, Defendants-Appellants.
• Court: U.S. Court of Appeals — Seventh Circuit

336 F.3d 629

BUTLER MANUFACTURING COMPANY, Plaintiff-Appellee, v. UNITED STEELWORKERS OF AMERICA, AFL-CIO-CLC and Local 2629, United Steelworkers of America, Defendants-Appellants.

No. 02-1952.

United States Court of Appeals, Seventh Circuit.

Argued October 30, 2002.

Decided July 17, 2003.

Gerald A. Golden (argued), Jennifer A. Hardgrove, Neal, Gerber & Eisenberg, Chicago, IL, for Plaintiff-Appellee.

Rudolph L. Milasich (argued), United Steelworkers of America Asst. General Counsel, Pittsburgh, PA, for Defendants-Appellants.

Before FLAUM, Chief Judge, and BAUER and DIANE P. WOOD, Circuit Judges.

DIANE P. WOOD, Circuit Judge.

Agreements to arbitrate disputes have been a common feature of collective bargaining agreements for quite some time. They are entitled to a hospitable reception in the courts, so that they can play their role of reducing industrial strife and maintaining a harmonious workplace. In this appeal, we must decide whether the district court correctly concluded that a labor arbitrator exceeded the scope of his contractual authority when he resolved a dispute between Butler Manufacturing Company and Michelle McMahill, who was a member of the United Steelworkers of America, Local 2629 (the Union). Butler claimed, and the district court agreed, that the arbitrator strayed too far beyond his powers when he applied the Family and Medical Leave Act (FMLA), 29 U.S.C § 2601 et seq., to help resolve the dispute, which concerned possible excuses for some of McMahill's absences. The court therefore granted Butler's motion for summary judgment in its suit to vacate the arbitral award, which it brought under Section 301 of the Labor Management Relations Act, 29 U.S.C. § 185. We conclude that the award should have been enforced, both because it had an adequate basis in the parties' Collective Bargaining Agreement (CBA), and independently because both parties agreed to allow the arbitrator to take the FMLA into account in his decision. We therefore reverse.

I

Butler manufactures pre-engineered metal buildings in its Galesburg, Illinois, plant. Shifts operate around the clock, seven days per week. The Union represents various Butler employees, including McMahill, who was hired in August 1994 to work the midnight to 7:00 a.m. shift. Butler and the Union were parties to a CBA that was in effect at all times relevant to this appeal.

In 1995, Butler and the Union jointly executed a Memorandum of Understanding (MOU) that set forth and incorporated into the CBA a detailed absenteeism policy. Based on the absenteeism policy that had been in place for the prior fifteen years, the 1995 MOU establishes a point system pegged to the frequency and types of employee absences. The policy assesses points for what are called "absence occurrences" attributable to personal or family member illness or personal business. Failure to report an absence prior to the start of a shift results in the imposition of absence occurrence points. When an employee accumulates six or more absence occurrence points within a six-month period, she is subject to discipline. The MOU also sets forth the various disciplinary steps, which build up from oral warnings, written reprimands, suspension, to termination.

The basic concept of the MOU absenteeism policy is that "employees are expected to be at work every scheduled workday and to be there on time. The reasons for absences should be limited to those of a necessary and compelling nature." Butler defined an absence of a necessary and compelling nature as one involving "an emergent situation that required urgent action on the part of the employee, and [that] was beyond the control of the employee and [for which] a reasonable alternative to work absence did not exist." In 1996, Butler tweaked the absenteeism policy after it conducted a 20-month review of its employees' medical absences.

Several years later, in October 1999, Butler notified McMahill that she had three or more non-compelling absences during the preceding six months. She was told that "until April 6, 2000 personal, non-occupational medical absences submitted by you for compelling reason absence consideration will only be approved if they fall within the sick leave provisions of the Agreement, or are qualified under the FMLA, or are clearly of an emergency nature."

After McMahill received notice that she could not miss any more work that did not qualify as personal sick leave, an emergency, or under the FMLA, she missed three additional days. On November 4, 1999, she missed one complete shift to remain at home with her husband, who had been injured in a fight. Six days later, McMahill missed another shift in order to stay home with her sick son. Then, on December 23, 1999, McMahill was absent again because her other son was ill. McMahill asked Butler to find that each of these absences was supported by a compelling reason, but each time Butler refused and charged her with an additional absence occurrence. On January 6, 2000, McMahill missed yet another shift. This time she sought and obtained permission to take a personal leave of absence. By the end of McMahill's leave there was some confusion over her employment status in light of a conversation that she had with one of her superiors while on leave. Nevertheless, McMahill returned to work on February 3, 2000. This was several days after the expiration of her leave of absence, and she had not obtained the Company's approval to extend her leave. The Company held a disciplinary hearing on February 7, 2000, after which it terminated her for excessive absenteeism.

The Union contested McMahill's termination. When the parties were unable to reach an agreement, they submitted the dispute to arbitration. A full hearing was held before an arbitrator selected by both parties. At the hearing, the arbitrator heard testimony from two Butler employees, one Union officer, and McMahill herself. Following the hearing, each side filed a brief for the arbitrator's consideration. In its brief, Butler argued that McMahill lacked justification for missing an entire shift to look after her injured husband. It specifically invited the arbitrator to look to the FMLA in resolving the question of justification, by arguing that "[t]he documentation provided for this absence prior to the grievant's termination clearly showed that it was not qualified under FMLA." Likewise, Butler's brief asserted that McMahill's second absence related to her son's illness was not covered by the FMLA.

After considering the parties' oral and written presentations, the arbitrator ruled that McMahill's absences on November 4 and 10, 1999, and on December 23, 1999, were each qualified absences under the FMLA. Accordingly, he found her termination unsupported by just cause and ordered her reinstated with half back-pay.

Unhappy with the outcome in arbitration, Butler filed this § 301 action in federal court, seeking an order vacating the arbitrator's award. On cross-motions for summary judgment, the district court found that the arbitrator acted outside of his contractual authority when he turned to the FMLA to assess the propriety of Butler's termination of McMahill. It found that the parties had not incorporated the FMLA into their agreement, and therefore that the arbitrator was not free to rely on that law in considering McMahill's termination.

II

A court's role in reviewing an arbitral award is quite limited. Apart from the general reasons for setting aside any arbitral award found in the Federal Arbitration Act, 9 U.S.C. § 10, the court may consider only whether an arbitrator exceeded the scope of the authority conferred upon her by the parties' actions and agreements. Northern Indiana Pub. Serv. Co. v. United Steelworkers of Am., 243 F.3d 345, 346-47 (7th Cir.2001). With few exceptions, as long as the arbitrator does not exceed this delegated authority, her award will be enforced. This is true even if the arbitrator's award contains a serious error of law or fact. Major League Baseball Players Assoc. v. Garvey, 532 U.S. 504, 509, 121 S.Ct. 1724, 149 L.Ed.2d 740 (2001) (per curiam); Nat'l Wrecking Co. v. Int'l Bhd. of Teamsters, Local 731, 990 F.2d 957, 960 (7th Cir.1993). Otherwise, as we have pointed out in the past, arbitration would just be the first of a series of steps that always culminated in court litigation, and it would lose its raison d'être. See Flexible Mfg. Sys. Pty. Ltd. v. Super Prods. Corp., 86 F.3d 96, 100 (7th Cir.1996). We review the district court's decision to grant Butler summary judgment and vacate the arbitrator's award de novo. Amax Coal Co. v. United Mine Workers of Am., Int'l Union, 92 F.3d 571, 574 (7th Cir.1996).

In order to assess whether the arbitrator exceeded his contractual authority to resolve the parties' dispute, we look first at the specific provisions of the CBA and the agreement to arbitrate it contains. In addition, we may also consult the parties' submissions in arbitration to see if there was a post-dispute agreement to submit additional questions to the arbitrator.

Looking first at the pre-dispute agreement to arbitrate contained in the CBA, we find that it is a broad one, that commits the parties to arbitrate any "differences as to the meaning and application of this Agreement, other than with respect to the right of the Company to contract or subcontract work." Article 10, paragraph 91. As long as the arbitrator's award draws its essence from the parties' CBA, it must be enforced. United Paperworkers Int'l Union v. Misco, Inc., 484 U.S. 29, 36, 108 S.Ct. 364, 98 L.Ed.2d 286 (1987) (quoting United Steelworkers of Am. v. Enterprise Wheel & Car Corp., 363 U.S. 593, 597, 80 S.Ct. 1358, 4 L.Ed.2d 1424 (1960)); Dean v. Sullivan, 118 F.3d 1170, 1171 (7th Cir.1997). In deciding whether an award draws its essence from the parties' agreement, the reviewing court must do no more than assure itself that "the arbitrator's interpretation can in some rational manner be derived...