Holly Sugar Corp. v. Distillery, Rectifying, Wine & AWIU

• Decision Date: 09 June 1969
• Docket Number: No. 22152.,22152.
• Citation: 412 F.2d 899
• Parties: HOLLY SUGAR CORP., Appellant, v. DISTILLERY, RECTIFYING, WINE & ALLIED WORKERS INT'L UNION, AFL-CIO, et al., Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

412 F.2d 899 (1969)

HOLLY SUGAR CORP., Appellant, v. DISTILLERY, RECTIFYING, WINE & ALLIED WORKERS INT'L UNION, AFL-CIO, et al., Appellees.

No. 22152.

United States Court of Appeals Ninth Circuit.

June 9, 1969.

James C. Paras (argued), J. Hart Clinton, George F. Clinton and John J. Sampson, of Morrison, Foerster, Holloway, Clinton & Clark, San Francisco, Cal., for appellant.

Roland C. Davis (argued) and Alan C. Davis, of Carroll, Davis, Burdick & McDonough, San Francisco, Cal., for appellees.

Before CHAMBERS, JERTBERG, and ELY, Circuit Judges.

ELY, Circuit Judge:

Again we meet a problem concerning enforcement of arbitration awards. The appellant employer, Holly Sugar, insists that the award should not be enforced because the arbitrator, in making it, exceeded his powers as defined by the bargaining agreement. The District Court rejected the argument and declared the award binding in all respects. We affirm.

The parties to the bargaining compact are the three major producers of California beet sugar (Holly Sugar Corporation, American Sugar Corporation, Spreckels Company) and several unions affiliated with the United Sugar Workers Council of California and the Distillery, Rectifying, Wine and Allied Workers International Union, AFL-CIO (hereinafter the "Union"). The bargaining agreements apply to a number of processing plants of these three companies and contain virtually identical provisions. For each plant, however, there is a separate list of jobs and corresponding wage rates which vary according to the needs of a particular factory. The instant controversy pertains to a time period covered by two successive bargaining agreements and concerns a disagreement as to the proper wage and job classification for one Harold Zimmer, an employee at one of Holly's plants. There are several differences between the two applicable bargaining contracts; however, in relation to the dispute before us, the only important difference is that the first contract's job list did not include any classification for painters at the Holly factories whereas the current agreement provides for a "Painter (Spray Gun Only)" at those plants.

Zimmer, a journeyman painter, was hired by Holly in March 1964, and for the next two years was engaged exclusively in painting projects. Since, at the time of Zimmer's original employment there was no "Painter" job classification, Holly classified Zimmer as a "Mechanic's Helper", and from March 1964 through February 28, 1965, paid Zimmer according to the rate assigned that classification. After the second contract became effective on March 1, 1965, Zimmer was paid a higher rate under the new classification, "Painter (Spray Gun Only)", while he was engaged in preparing, actually using, or cleaning spray gun equipment. Holly continued, however, to compensate Zimmer at the lower "Mechanic's Helper" rate for his work in preparing surfaces to be spray painted and for painting or preparing to paint with a brush or roller.

Since it was the practice of the other California beet producers who were covered by the collective bargaining agreement and who employed full time painters to pay such workers at higher rates under a general classification of "Painters", the Union filed this grievance in Zimmer's behalf. The Union insisted that Holly had, in effect, created a "new job" when it employed Zimmer and was bound under the terms of both contracts to either negotiate or arbitrate the appropriate classification and wage rate. In addition, the Union charged that there was an improper application of the new classification, "Painter (Spray Gun Only)", in the Company's refusal to pay Zimmer according to the classification's wage rate for his work in preparing surfaces for painting.

The arbitrator, one Burns, rendered an award which, in general, upheld the Union's position. He held that Holly had indeed created a "new job", within the meaning of Section XVII(2),¹ when it hired Zimmer. Moreover, he concluded that Section XVII(2) and Section VII(G)² require that when a "new job" is created the employer has an affirmative duty to so notify the Union, as well as to post notice of its creation. And, since throughout the period in controversy other plants covered by the agreement had a "Painter" classification established for persons performing work identical to that done by Zimmer, Burns reasoned that Zimmer was entitled to the same wage and classification as his counterparts from the date of his initial hiring. The arbitrator also found that Holly had incorrectly applied the new classification "Painter (Spray Gun Only)". He explained that it is normally the responsibility of any painter, whether he paints by spraying, brushing, or rolling, to prepare surfaces either by brushing or cleaning and that because nothing indicated that these normal duties should be excluded for purposes of the job classification agreed upon by the parties in 1965, Zimmer was entitled to a painter's rate for all time spent in such "painting activities."

Holly's appeal presents the usual argument of parties seeking to invalidate adverse arbitration awards. The Company insists that, under the teachings of the "Trilogy",³ the question of whether a particular grievance is arbitrable requires less judicial scrutiny than the question of whether an award once rendered is enforceable. Arguing that the arbitrator exceeded his powers, the appellant relies principally on United Steelworkers of America v. Enterprise Wheel & Car Corp., 363 U.S. 593, 80 S. Ct. 1358, 4 L.Ed.2d 1424 (1960).

"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 597, 80 S.Ct. at 1361.

It is well established that arbitration is a matter of contract and that arbitration provisions are construed with great liberality. See, e.g. United Steelworkers of America v. Warrior & Gulf Nav. Co., 363 U.S. 574, 80 Sup.Ct. 1347, 4 L.Ed.2d 1409 (1960). Moreover, Holly is quite correct in its argument that simply because a court would compel arbitration in a particular dispute does not necessarily mean that it would approve of everything or anything which the arbitrator might decide in resolving the dispute. See Torrington Co. v. Metal Products Workers Union, 362 F.2d 677 (2d Cir. 1966); International Ass'n of Machinists AFL-CIO v. Hayes Corp., 296 F.2d 238 (5th Cir. 1961), rehearing denied, 316 F.2d 90 (1963). However, if the scope of judicial review in post-a-ward proceedings were as broad as the appellant suggests, we would be tempted to slip into the practice, so prevalent before the "Trilogy", of "deciding the merits in the guise of adjudicating the court-reserved issue of the scope * * * of the agreement to arbitrate." United States Gypsum Co. v. United Steelworkers, 384 F.2d 38, 49 (5th Cir. 1967), cert. denied, 389 U.S. 1042, 88 S. Ct. 783, 19 L.Ed.2d 832 (1968) (citations omitted). See also Safeway Stores v. American Bakery & Confectionery Workers International Union, 390 F.2d 79 (5th Cir. 1968); Boeing Co. v. International Ass'n of Machinists, 381 F.2d 119 (5th Cir. 1967); Dallas Typographical Union No. 173 v. A. H. Belo Corp., 372 F.2d 577 (5th Cir. 1967).

Accordingly, while the courts must insure that the arbitrator's award "draws its essence from the collective bargaining agreement" and that his decision does not "manifest an infidelity to this obligation," 363 U.S. at 597, they must resist "the temptation to `reason out' a la judges the arbiter's award to see if it passes muster." Safeway Stores v. American Bakery & Confectionery Workers International Union, supra at 83. Therefore, if, on its face, the award represents a plausible interpretation of the contract in the context of the parties' conduct, judicial inquiry ceases and the award must be affirmed. See San Francisco-Oakland Newspaper Guild v. Tribune Publishing Co., 407 F.2d 1327 (9th Cir. 1969). See also Anaconda Co. v. Great Falls Mill & Smelterman's Union, 402 F.2d 749 (9th Cir. 1968).

TIMELINESS OF THE GRIEVANCE

The Company insists that the Union's grievance was not arbitrable since it involved, in large part, a dispute under the expired 1962 bargaining agreement and was not filed within the thirty-day period required by both contracts.⁴ These contentions were presented to the arbitrator, who concluded that the Company's failure properly to notify the Union concerning the true nature of Zimmer's work tolled any time provisions within the agreements requiring the Union to negotiate or arbitrate a wage rate for that employee. He wrote:

"Since the company failed to comply with its obligations under the 1962 contract which would have had the effect of putting the union on notice of the employment of Zimmer and the establishment of a job that consisted exclusively of painting and work in connection with painting, the 30-day limitation of both the 1962 and the 1965 contracts was tolled until knowledge or information was received by the union which would have the effect of putting the union on notice. This knowledge was not received until the early part of 1966 when the grievance here under consideration was filed.

"Although the 1962 contract has been superseded by the 1965 contract, grievances under the 1962 contract were not barred by its expiration in March 1965. Grievances would be barred only by the limitation period contained in the 1962 contract or by the statutory limitations applicable to written contracts or by laches. Since both the 30-day limitation of the 1962 contract and any other limitation were tolled because of the failure of the company to give or impart notice of the establishment of

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