CLARK COUNTY UTIL. v. BROTH. OF ELEC.

• Decision Date: 11 September 2003
• Docket Number: No. 72718-0.,72718-0.
• Citation: 76 P.3d 248,150 Wash.2d 237
• Parties: CLARK COUNTY PUBLIC UTILITY DISTRICT NO. 1, d/b/a Clark Public Utilities, Respondent, v. INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, Local 125, Petitioner.
• Court: Washington Supreme Court

76 P.3d 248

150 Wash.2d 237

CLARK COUNTY PUBLIC UTILITY DISTRICT NO. 1, d/b/a Clark Public Utilities, Respondent, v. INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, Local 125, Petitioner.

No. 72718-0.

Supreme Court of Washington, En Banc.

Argued February 25, 2003.

Decided September 11, 2003.

Rinehat Robblee & Hannah, Richard Robblee, Anne E. Senter, Seattle, McKanna Bishop Joffe, John Bishop, Portland, OR, for petitioner.

Davis Wright Tremaine, Jeffrey Youmans, Seattle, Davis Wright Tremaine, Henry Farber, Bellevue, for respondent.

JOHNSON, J.

In this, our second review of the labor arbitration award in question,¹ we are asked to clarify the standard of review for arbitration awards and apply it to the award here. We conclude that our review is extremely limited. We do not reach the merits of an arbitrator's legal conclusions; we evaluate only whether the arbitrator acted outside of the authority given to her by the parties. We reverse the Court of Appeals and conclude that the trial court should not have invalidated the arbitrator's award.

FACTUAL AND PROCEDURAL HISTORY

In March 1996, Clark County Public Utilities District (the District) laid off ten employees (the Grievants) from positions covered under a collective bargaining agreement (CBA) between the District and the International Brotherhood of Electrical Workers (the Union). The Union submitted a grievance to the District on behalf of the employees, alleging the layoffs violated the terms of the CBA. Unable to resolve the dispute, the parties submitted the grievance to arbitration, as provided by the CBA.

ARBITRATION

The parties stipulated to the arbitrator's authority to issue a binding decision on whether the CBA imposed an obligation on the District to adhere to portions of its personnel policy manual and whether the District violated those portions of the manual when it laid off the Grievants. Clerk's Papers (CP) at 10, 15. The parties also charged the arbitrator with devising the appropriate remedy if she found the District violated the CBA. CP at 15. After a hearing, the arbitrator issued a decision and an award in the Union's favor. CP at 7-43. The arbitrator concluded that the CBA incorporated portions of the District's personnel policy manual by reference, which stated the District would "make every effort" to place a laidoff employee "in a comparable position in compensation and responsibilities" or if a comparable position is not available, in a position "at a lower wage range in which the employee is qualified." CP at 19. She found that in the months surrounding the Grievants' layoffs, the only vacant union bargaining unit positions were ones for which the Grievants were not qualified. However, she also found that the District filled several nonbargaining unit positions, both before and after the layoffs, for which the Grievants were qualified. She concluded that the District violated the terms of the manual that were made binding by the CBA by not making every effort to place the Grievants in the open nonbargaining unit positions.

In reaching her conclusion, the arbitrator examined relevant language of the CBA and the personnel policy manual. She described her role as "seek[ing] a contract interpretation that is most consistent with the parties' evident intent when negotiating the language in dispute." CP at 23. The arbitrator was also aware of the limits on her jurisdiction, acknowledging that "the Collective Bargaining Agreement between the parties, Article 5.7 specifically prohibits the Arbitrator from adding to or amending its terms." CP at 24. The arbitrator found, however, that the CBA gave her the "specific authority to interpret the parties' Agreement ... if she finds the document is ambiguous." CP at 24.

The arbitrator determined that, although relevant language from the CBA appeared clear, as a whole the document was subject to more than one interpretation. The arbitrator read Article 2.6² of the CBA to incorporate all consistent language from the personnel policy manual into the CBA. Another CBA provision, Article 6.1,³ seemed to incorporate only enumerated benefits from the personnel manual. She determined the CBA was therefore ambiguous. CP at 25-26.

The arbitrator acknowledged the District's argument that the more specific language of Article 6.1 superseded the language of Article 2.6. She also took into account the conspicuous disclaimer at the beginning of the manual, which read, "[t]hese personnel policies are not to be construed as a contract or covenant of employment." CP at 28 (capitalization removed). However, the arbitrator rejected the argument that this language precluded the manual from ever being considered part of a contract. She reasoned that doing so would enable the District to "evade its obligations even under Article 6.1" of the CBA. CP at 28. She further determined that Article 2.6 would be superfluous if the manual did not apply to the bargaining unit members. CP at 27. The arbitrator explained,

While both parties advanced plausible theories that would explain the language differences between Article 2.6 and 6.1, the Arbitrator finds that the Union's hypothesis is superior because it conforms to the maxim of contract interpretation which favors giving effect to all words and phrases in a written instrument. The Employer's view, unfortunately, would effectively allow Article 6.1 to cancel out the broader orbit of Article 2.6. The Arbitrator prefers an explanation that truly reconciles the two provisions.

CP at 28.

The arbitrator found support for her conclusion in additional language of the manual and testimony of witnesses. The arbitrator then concluded that the District violated the CBA by not following those provisions that Article 2.6 incorporated from the personnel manual and by not acting in good faith to make "every effort" to place Grievants in vacant positions. CP at 43. The arbitrator interpreted "every effort" to mean that the District had to notify the Grievants of the open positions and use good faith in considering the Grievants for those positions. The District was not required "to waive qualifications or waive its right to select the candidate of its choice" in the nonbargaining unit positions "so long as the Employer [did] not act[ ] arbitrarily, discriminatorily or in bad faith." CP at 38.

The arbitrator ordered the District to offer three of the Grievants specific nonunion positions, with back pay calculated from the dates the appropriate open positions were filled by others until the District offers those positions to the Grievants, reduced by any interim earnings and unemployment compensation.⁴ CP at 41-42. Upon a motion to reconsider, the arbitrator amended her award to require only two Grievants to be offered nonunion positions with back pay. CP at 44.

SUPERIOR COURT WRIT OF CERTIORARI AND PRIOR REVIEW BY THIS COURT

The District filed a petition for a writ of certiorari to Clark County superior court under the Washington State Constitution, article IV, section 6.⁵ CP at 1. The District alleged the arbitrator's award was illegal because it exceeded her authority under the CBA by awarding the Grievants positions outside the bargaining unit and awarding back pay. The District also alleged the award was arbitrary and capricious. The Union filed a counterclaim, arguing the District's petition for constitutional writ of certiorari was untimely. Clark County Pub. Util. Dist. No. 1 v. Wilkinson, 139 Wash.2d 840, 843, 991 P.2d 1161 (2000). The superior court accepted review and found the arbitrator exceeded her authority by placing the Grievants outside the collective bargaining unit. It also ruled that the District's petition was timely. In the first appeal stemming from the superior court's ruling, the Court of Appeals held the petition was not timely but did not reach whether the award was arbitrary and capricious or illegal. Clark County Pub. Util. Dist. No. 1 v. Wilkinson, 93 Wash.App. 350, 967 P.2d 1270 (1998),rev'd,139 Wash.2d 840, 991 P.2d 1161 (2000). This court accepted review on the timing issue, reversed the Court of Appeals, and remanded to the trial court, holding that the petition was timely. Clark County, 139 Wash.2d 840,991 P.2d 1161. On remand, the parties stipulated that the superior court's original order should be reinstated and that all remaining issues should be appealed. The present case stems from issues raised by the parties after remand.

COURT OF APPEALS DECISION

The second time the arbitration award in question reached the Court of Appeals, that court reviewed whether the award was arbitrary and capricious, or illegal and affirmed the superior court's decision on different grounds. Clark County Pub. Util. Dist. No. 1 v. Int'l Bhd. of Elec. Workers, 111 Wash. App. 690, 692, 45 P.3d 1127, review granted, 147 Wash.2d 1020, 60 P.3d 93 (2002). The Court of Appeals held that the arbitrator erred in determining the personnel manual created an enforceable promise and that doing so was arbitrary and capricious. Clark County, 111 Wash.App. at 692, 45 P.3d 1127.

The Court of Appeals acknowledged that it must give "exceptional deference" to an arbitrator's opinion under a writ of certiorari, stating a labor arbitrator is the "final judge of the law and the facts." Clark County, 111 Wash.App. at 694, 45 P.3d 1127 (citing Dep't of Soc. & Health Servs. v. State Pers. Bd. (DSHS), 61 Wash.App. 778, 785, 812 P.2d 500 (1991)). That court understood its review was limited to "`whether the arbitrator interpreted the collective bargaining agreement, not whether [s]he did so correctly.'" Clark County, 111 Wash.App. at 694, 45 P.3d 1127 (emphasis omitted). The court concluded the arbitrator interpreted the CBA when she found it included consistent portions of the personnel policy manual. Clark County, 111 Wash.App. at 695, 45 P.3d 1127.

The Court of Appeals then concluded that the arbitrator erred when she determined that the language from the manual that was...