Goodyear Tire & Rubber Co., Houston Chemical Plant v. Sanford

• Decision Date: 21 July 1976
• Docket Number: No. 1273,1273
• Citation: 540 S.W.2d 478,80 Lab.Cas.P 11
• Court: Texas Court of Appeals
• Parties: 92 L.R.R.M. (BNA) 3492, 80 Lab.Cas. P 11,854 GOODYEAR TIRE & RUBBER COMPANY, HOUSTON CHEMICAL PLANT, Appellant, v. Max SANFORD, Appellee. (14th Dist.)

Page 478

540 S.W.2d 478

92 L.R.R.M. (BNA) 3492, 80 Lab.Cas. P 11,854

GOODYEAR TIRE & RUBBER COMPANY, HOUSTON CHEMICAL PLANT, Appellant, v. Max SANFORD, Appellee.

No. 1273.

Court of Civil Appeals of Texas,

Houston (14th Dist.).

July 21, 1976.

Rehearing Denied Sept. 8, 1976.

Richard R. Brann, Baker & Botts, Houston, for appellant.

George Dixie, Chris Dixie, Dixie, Wolf & Hall, Houston, for appellee.

J. CURTISS BROWN, Chief Justice.

This is a suit to vacate a labor arbitrator's award.

Max Sanford (Sanford or appellee) filed suit in the district court of Harris County against Goodyear Tire & Rubber Company, Houston Chemical Plant (Goodyear or appellant) seeking to vacate a labor arbitration award. The arbitrator had upheld Sanford's discharge by Goodyear. After a non-jury trial, the trial court entered a judgment that vacated the arbitrator's award, reinstated Sanford as an employee of Goodyear in the same position that he would have been in had he not been terminated, and awarded Sanford back pay. Goodyear has perfected this appeal. Points attacking the judgment of the trial court have been duly filed by appellant on all available grounds.

Most of the facts relevant to this appeal have been stipulated by the parties. On October 6, 1971 Sanford, while in the employment of Goodyear, was involved in an altercation with his supervisor, Ray Graves. Sanford accused Graves of striking him. On October 8 Sanford's labor union representatives filed a grievance on his behalf, requesting 'that immediate and positive action be taken regarding this matter.' On the same day Sanford filed simple assault charges against Graves in the Municipal Court of Houston.

At the time of this incident there was a labor agreement between Goodyear and Local 347, International Union of Operating Engineers, of which Sanford was a member. Article IV(C) of the agreement provided that

'neither party shall bring suit or other action in the court or a public administrative agency on any matter of dispute which is subject to the grievance procedure until said procedure has been exhausted. . . .'

On October 21 Goodyear notified Sanford that his employment was being terminated because he had violated this provision.

On October 27, Sanford's union filed another grievance on his behalf, this one seeking Sanford's reinstatement and Graves's removal from a supervisory capacity. After a hearing at which Sanford and several other persons testified, the arbitrator upheld Sanford's discharge. Sanford then filed suit in the district court claiming that Goodyear had breached the collective bargaining contract between Goodyear and Local 347 by discharging him without 'just cause.' The trial court vacated the arbitrator's award on the ground that 'it is contrary to accepted public policy since it imposes a restriction on the right of citizens to prompt, uninhibited access to our Criminal Courts to redress violations of Texas Penal laws.'

Section 301 of the Labor Management Relations Act, 1947, 29 U.S.C. § 185, gives United States district courts jurisdiction of '(s)uits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce . . . or between any such labor organizations. . . .' Section 301 did not divest state courts of jurisdiction of suits for violations of contracts between employers and labor organizations. Charles Dowd Box Co. v. Courtney, 368 U.S. 502, 82 S.Ct. 519, 7 L.Ed.2d 483 (1962). However, the federal courts have been authorized to fashion a body of federal law for the enforcement of collective bargaining agreements, and it is this federal law that governs. Textile Workers Union v. Lincoln Mills, 353 U.S. 448, 77 S.Ct. 912, 1 L.Ed.2d 972 (1957). A state law that is compatible with the purpose of § 301 may be 'absorbed' as federal law in order to find and apply the rule that will best effectuate the federal policy. Id. Incompatible doctrines of local law must give way to principles of federal law. Local 174, Teamsters v. Lucas Flour Co., 369 U.S. 95, 82 S.Ct. 571, 7 L.Ed.2d 593 (1962). Section 301 applies equally to suits brought by individual employees seeking to protect their rights under collective bargaining agreements as to suits in which a labor organization is a party. Smith v. Evening News Association, 371 U.S. 195, 83 S.Ct. 267, 9 L.Ed.2d 246 (1962).

This appeal presents us with three questions: (1) Does the federal law recognize public policy as a proper basis on which a court may vacate (or refuse to enforce) ¹ a labor arbitration award? (2) Does the award in the instant case contravene a federal public policy or a state public policy that is not inconsistent with federal policy? (3) Should the award be vacated in the instant case?

The first question, then, is whether federal law recognizes public policy as a proper basis on which a court may vacate a labor arbitration award. The starting point in this inquiry must of necessity be United Steelworkers v. Enterprise Wheel & Car Corp., 363 U.S. 593, 80 S.Ct. 1358, 4 L.Ed.2d 1424 (1960), one of the famous Steelworkers Trilogy, in which the Court said:

'The refusal of courts to review the merits of an arbitration award is the proper approach to arbitration under collective bargaining agreements. The federal policy of settling labor disputes by arbitration would be undermined if courts had the final say on the merits of the awards. . . .

'. . . Nevertheless, an 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 596--97, 80 S.Ct. at 1361.

Thus, it is appropriate that we recognize at the outset the very limited scope of review given to courts when they are asked to enforce or vacate an award made by a labor arbitrator. It is clear that 'if, by reason of expansive judicial oversight, the risk of judicial displacement of the award were to become substantial, the workability of the system would be seriously jeopardized.' Dunau, Scope of Judicial Review of Labor Arbitration Awards, N.Y.U. 24th Conf. on Lab. 175, 177 (1972).

Nonetheless, exceptions have been recognized that go beyond the literal language in Enterprise that the award must draw its essence from the collective bargaining agreement. For example, it has been held that a labor arbitration award which requires one or both parties to violate the law will not be enforced. Glendale Manufacturing Co. v. Local 520, ILGWU, 283 F.2d 936 (4th Cir. 1960), Cert. denied, 366 U.S. 950, 81 S.Ct. 1902, 6 L.Ed.2d 1243 (1961). If the award is arbitrary, capricious, or not adequately grounded in the basic collective bargaining contract, it will not be enforced. Dallas Typographical Local 173 v. A. H. Belo Corp., 372 F.2d 577 (5th Cir. 1967).

Further, it is possible that the United States Arbitration Act, 9 U.S.C. § 1 (1970) may apply to suits founded on LMRA § 301. If so, the provisions of § 10 of that Act could be considered additional exceptions to the general rule of non-reviewability. Of particular interest in the instant case is § 10(d), which requires vacation of the award '(w)here the arbitrators exceeded their powers. . . .' Though the Supreme Court has not yet decided the issue, numerous lower courts have concluded that labor arbitration awards are within the scope of the Arbitration Act. See, E.g., International Association of Machinists v. General Electric Co., 406 F.2d 1046 (2d Cir. 1969); Newark Stereotypers' Local 18 v. Newark Morning Ledger Co., 397 F.2d 594 (3d Cir.), Cert. denied, 393 U.S. 954, 89 S.Ct. 378, 21 L.Ed.2d 365 (1968); Pietro Scalzitti Co. v. Operating Engineers Local 150, 351 F.2d 576 (7th Cir. 1965).

Besides the instances mentioned above, a number of federal courts have suggested that labor arbitrators' awards which contravene public policy will be vacated. See Local 453, Electrical Workers v. Otis Elevator Co., 314 F.2d 25 (2d Cir.), Cert. denied, 373 U.S. 949, 83 S.Ct. 1680, 10 L.Ed.2d 705 (1963); Metal Products Workers Local 1645 v. Torrington Co., 358 F.2d 103, 106 (2d Cir. 1966); Machinists District 8 v. Campbell Soup Co., 406 F.2d 1223 (7th Cir.), Cert. denied, 396 U.S. 820, 90 S.Ct. 57, 24 L.Ed.2d 70 (1969); Ludwig Honold Mfg. Co. v. Fletcher, 405 F.2d 1123, 1128--29 n. 27 (3d Cir. 1969); Botany Industries, Inc. v. New York Joint Board, Amalgamated Clothing Workers, 375 F.Supp. 485, 490--91 (S.D.N.Y.), Vacated as moot sub nom. Robb v. New York Joint Board, Amalgamated Clothing Workers, 506 F.2d 1246 (2d Cir. 1974); Local 1852, Waterfront Guard Association v. Amstar Corp., 363 F.Supp. 1026, 1033 (D.Md.1973); UAW Local 985 v. W. M. Chace Co., 262 F.Supp. 114 (E.D.Mich.1966); cf. Washington-Baltimore Newspaper Guild Local 35 v. Washington Post Co., 143 U.S.App.D.C. 210, 442 F.2d 1234, 1239 (1971); Gulf States Telephone Co. v. Local 1692, Electrical Workers, 416 F.2d 198, 201 (5th Cir. 1969).

In Local 453, Electrical Workers v. Otis Elevator Co., supra, the case most often cited for this proposition, the court said:

'It is no less true in suits brought under § 301 to enforce arbitration awards than in other lawsuits that the 'power of the federal courts to enforce the terms of private agreements is at all times exercised subject to the restrictions and limitations of the public policy of the United States. * * *' Hurd v. Hodge, 334 U.S. 24, 34--35, 68 S.Ct. 847, 852--53, 92 L.Ed. 1187 (1948). The public policy to be enforced is a part of the substantive principles of federal labor law which federal courts, under the mandate of Textile Workers Union of America v. Lincoln Mills, 353 U.S. 448, 77 S.Ct. 912, 1 L.Ed.2d 972 (1957),...