Globe Newspaper v. Inter. Ass'n of Machinists

• Decision Date: 05 August 2009
• Docket Number: Civil Action No. 08-cv-11945-DPW.
• Parties: GLOBE NEWSPAPER CO., Plaintiff, v. INTERNATIONAL ASSOCIATION OF MACHINISTS, Local 264, District 15, Defendant.
• Court: U.S. District Court — District of Massachusetts

Page 193

648 F.Supp.2d 193

GLOBE NEWSPAPER CO., Plaintiff, v. INTERNATIONAL ASSOCIATION OF MACHINISTS, Local 264, District 15, Defendant.

Civil Action No. 08-cv-11945-DPW.

United States District Court, D. Massachusetts.

August 5, 2009.

Eben A. Krim, Mark W. Batten, Proskauer Rose, LLP, Boston, MA, for Plaintiff.

Wayne A. Perkins, Law Office of Wayne A. Perkins, James O. Hall, Somerville, MA, for Defendant.

MEMORANDUM AND ORDER

DOUGLAS P. WOODLOCK, District Judge.

Plaintiff Globe Newspaper Co. ("the Globe") brings this action to vacate a portion of an interest arbitration award ("the Award") rendered by Arbitrator Timothy Bornstein ("the Arbitrator") on October 31, 2008. The Award determined the terms of the collective bargaining agreement for 2005-2007 between the Globe and Defendant International Association of Machinists, Local 264, District 15 ("the Union"). According to the Globe, the Arbitrator exceeded his authority by including an interest arbitration provision in the new contract over the Globe's objection. The Union contends that inclusion of the interest arbitration provision was proper, and further argues that the Globe's refusal to recognize the Award as valid constitutes a violation of the parties' contractual agreements and federal law. Both parties have moved for judgment on the pleadings. For the reasons discussed below, I will deny the Union's motion and grant the Globe's motion.

I. BACKGROUND¹

A. The 2005-2007 Collective Bargaining Agreement

In January 2005, the Globe and the Union began their most recent round of negotiations for a new collective bargaining agreement. In March 2006, having made little progress over eight bargaining sessions, the parties agreed to submit their dispute to interest arbitration under the terms of their previous collective bargaining agreement.² That agreement, which covered the years 1999-2004, included a provision which read: "Any disagreement relative to a succeeding contract which cannot be settled through negotiations or conciliation shall be arbitrated ...." The agreement also indicated that "[t]he decision of the Board of Arbitration or the Arbitrator shall be final and binding on both parties."

The parties stipulated to submit the following issue to the Arbitrator: "What should be the collective bargaining agreement between the parties for the years January 1, 2005—December 31, 2007?" Six hearings were held before the Arbitrator from December 5, 2006 through June 23, 2008. At the commencement of the arbitration, the Globe sought a downward departure from its previous wage pattern,³ as well as a variety of other changes from the predecessor contract. According to the Globe, these changes were sought based on "its deteriorating financial position and that of the newspaper industry generally." However, at the fourth arbitration hearing, on December 3, 2007, the Globe withdrew its earlier proposals and agreed to be bound by the settled pattern of wages and almost all of the terms from the previous collective bargaining agreement. The Globe also indicated, for the first time, that it objected to including any provision in the new agreement which obligated the parties to submit future bargaining disputes to arbitration.⁴ Prior to this, each of the collective bargaining agreements between the Globe and the Union for about the last fifty years had included provisions for interest arbitration.

The Globe reiterated its objection to the interest arbitration provision several times before the Arbitrator issued the Award. On April 4, 2008, the Globe sent a letter to the Arbitrator, elaborating on its opposition to the provision and citing case law in support of its position. At the fifth arbitration hearing, on April 14, 2008, the Globe asked for an interim ruling from the Arbitrator regarding inclusion of the interest arbitration provision. The Arbitrator denied the request. In its post-hearing brief, filed September 5, 2008, the Globe again urged the Arbitrator not to include the provision, arguing that because interest arbitration is a non-mandatory subject of bargaining under federal labor law, the provision could not be imposed by the Arbitrator over the Globe's objection.

B. The Arbitration Award

On October 31, 2008, the Arbitrator issued his Decision and Award, which determined the terms of the parties' 2005-2007 collective bargaining agreement. At the outset of his analysis, the Arbitrator noted: "In view of management's having dropped its proposals for concessions and its agreement to accept the current wage pattern, the only truly contested issue remaining is whether the parties' 2005-2007 contract should retain the clause requiring that future contract issues be submitted to interest arbitration in the event of a bargaining impasse." The Arbitrator noted that the Globe had not raised the issue of removing the provision during its earlier negotiations with the Union, and he found that the Globe's "belated challenge" was "fundamentally unfair" and "disruptive and inconsistent with the orderly conduct of labor negotiations and interest arbitration." On this basis, the Arbitrator concluded: "Absent a persuasive, substantive reason not to do so, I will include the parties' longstanding interest arbitration clause in their 2005-2007 contract."

II. STANDARD OF REVIEW

A. Motion for Judgment on the Pleadings

Fed.R.Civ.P. 12(c) provides that a party may move for judgment on the pleadings after the pleadings are closed, but early enough not to delay trial. "Because [a Rule 12(c)] motion calls for an assessment of the merits of the case at an embryonic stage, the court must view the facts contained in the pleadings in the light most favorable to the nonmovant and draw all reasonable inferences therefrom . . . ." Perez-Acevedo v. Rivero-Cubano, 520 F.3d 26, 29 (1st Cir.2008) (internal quotation omitted). A court may enter judgment on the pleadings "only if the uncontested and properly considered facts conclusively establish the movant's entitlement to a favorable judgment." Aponte-Torres v. Univ. of P.R., 445 F.3d 50, 54 (1st Cir.2006).

B. Petition to Vacate an Arbitral Award

Under § 301 of the Labor Management Relations Act, federal courts may entertain "[s]uits for violation of contracts between an employer and a labor organization." 29 U.S.C. § 185(a). "Where a collective bargaining agreement includes an arbitration clause, the arbitration award is treated as a contractual obligation that can be enforced through a section 301 suit." Local 2322, IBEW v. Verizon New Eng., Inc., 464 F.3d 93, 96 (1st Cir.2006). Under certain circumstances, a federal court may also vacate or modify an arbitration award that was issued pursuant to a collective bargaining agreement. See United Paperworkers Int'l Union v. Misco, Inc., 484 U.S. 29, 42, 108 S.Ct. 364, 98 L.Ed.2d 286 (1987). The court's review of an arbitrator's decision, however, is "extremely narrow and exceedingly deferential." Ramos-Santiago v. UPS, 524 F.3d 120, 123 (1st Cir.2008) (internal quotation omitted); see also Maine Cent. R.R. Co. v. Bhd. of Maint. of Way Employees, 873 F.2d 425, 428 (1st Cir.1989) ("Judicial review of an arbitration award is among the narrowest known in the law."). That a reviewing court is convinced an arbitrator committed legal or factual error in his decision is not itself sufficient to justify setting aside an arbitral award. See UMass Mem'l Med. Ctr., Inc. v. United Food & Commercial Workers Union, Local 1445, 527 F.3d 1, 5 (1st Cir.2008); see also Challenger Caribbean Corp. v. Union Gen. de Trabajadores de P.R., 903 F.2d 857, 860 (1st Cir.1990) ("We do not sit as a court of appeal to hear claims of factual or legal error by an arbitrator or to consider the merits of the award." (internal quotation omitted)).

Nevertheless, there are "a few exceptions to the general rule that the arbitrator has the last word." Mercy Hosp., Inc. v. Mass. Nurses Ass'n, 429 F.3d 338, 343 (1st Cir.2005). One such exception is that a court may vacate an arbitral award that is found to violate public policy. See id. (citing W.R. Grace & Co. v. Local Union 759, Int'l Union of United Rubber Workers, 461 U.S. 757, 766, 103 S.Ct. 2177, 76 L.Ed.2d 298 (1983)). This exception "traces its roots to the common law doctrine that courts may refuse to enforce illegal contracts." Id. In order for an arbitral award to be vacated on this ground, "the award must violate an explicit well defined and dominant public policy, as ascertained by reference to laws and legal precedents." Id. (internal quotations and alterations omitted).

A federal court may also vacate an arbitral award "when there was misconduct by the arbitrator, when the arbitrator exceeded the scope of her authority, or when the award was made in manifest disregard of the law." JCI Commc'ns, Inc. v. IBEW, Local 103, 324 F.3d 42, 48 (1st Cir.2003). For a challenger to demonstrate that an arbitrator acted with "manifest disregard of the law," he must show that the arbitration award was: "(1) unfounded in reason and fact; (2) based on reasoning so palpably faulty that no judge, or group of judges, could ever conceivably have made such a ruling; or (3) mistakenly based on a crucial assumption that is concededly a non-fact." Ramos-Santiago, 524 F.3d at 124. There must also be "some showing in the record, other than the result obtained, that the arbitrator[] knew the law and expressly disregarded it." Id. (quoting Advest, Inc. v. McCarthy, 914 F.2d 6, 10 (1st Cir.1990)).⁵

III. DISCUSSION

The only disputed aspect of the arbitration award in this case is the provision requiring the parties to submit future labor disputes to interest arbitration. The Globe contends that because interest arbitration is a non-mandatory subject of bargaining under federal labor law, the Arbitrator's decision to include the provision over the Globe's objection was both contrary to public policy and a manifest disregard of the law. The Union contends that interest...