International Ass'n of Heat and Frost Insulators and Asbestos Workers, Local Union 34, AFL-CIO v. General Pipe Covering, Inc.

• Decision Date: 15 May 1986
• Docket Number: A,No. 85-5319,AFL-CI,85-5319
• Citation: 792 F.2d 96
• Parties: 122 L.R.R.M. (BNA) 2816, 104 Lab.Cas. P 11,963 INTERNATIONAL ASSOCIATION OF HEAT AND FROST INSULATORS AND ASBESTOS WORKERS, LOCAL UNION 34,ppellee, v. GENERAL PIPE COVERING, INC., Western Insulation Services, Inc., Thermal Insulation Supply Corp., Donna M. Dingley and Sheldon L. Dingley, Appellants.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 96

792 F.2d 96

122 L.R.R.M. (BNA) 2816, 104 Lab.Cas. P 11,963

INTERNATIONAL ASSOCIATION OF HEAT AND FROST INSULATORS AND ASBESTOS WORKERS, LOCAL UNION 34, AFL-CIO, Appellee, v. GENERAL PIPE COVERING, INC., Western Insulation Services Inc., Thermal Insulation Supply Corp., Donna M Dingley and Sheldon L. Dingley, Appellants.

No. 85-5319.

United States Court of Appeals Eighth Circuit.

Submitted Feb. 14, 1986.

Decided May 15, 1986.

J. Dennis O'Brien, Minneapolis, Minn., for appellants.

Stephen D. Gordon, Minneapolis, Minn., for appellee.

Before HEANEY and BOWMAN, Circuit Judges, and HANSON, ^* Senior District Judge.

HEANEY, Circuit Judge.

General Pipe Covering, Inc. (General Pipe), appeals from a district court order, 613 F.Supp. 858 (1985), granting appellee's motion to confirm an arbitration award.

General Pipe, a commercial insulation business owned by Donna and Sheldon Dingley, was a member of the Thermal Insulation Contractors' Association (TICA) and, as such, was bound by a collective bargaining agreement (Trade Agreement or Agreement) between TICA and the International Association of Heat and Frost Insulators and Asbestos Workers Local No. 34 (Local 34). The Trade Agreement covered the rates of pay, rules, and working conditions of the insulation workers, and established a grievance and arbitration procedure. It created a six-person "Trade Board," consisting of three employer and three union members, which had the power to investigate the labor operations of the parties, hear trade disputes, and impose fines or penalties for violations of the Agreement.

On February 12, 1985, Local 34 filed a grievance with the Trade Board alleging that General Pipe had violated the Trade Agreement by diverting union work to Western Insulation Services, Inc. (Western Insulation), ¹ a nonunion shop also owned by the Dingleys. Although General Pipe had notice that the Trade Board planned to consider the matter at its March 15, 1985, meeting, it did not send a representative and, instead, wrote a letter stating that "[a]s of February 28, 1985, General Pipe Covering, Inc. will be ceasing operation. All union personnel will be laid off." Appellants' Appendix at 82. The Trade Board found that General Pipe had violated the Trade Agreement, causing a loss to Local 34 members of wages and benefits worth approximately $75,000. It ordered General Pipe to pay that amount to the American Lung Association on behalf of Local 34, pursuant to the Trade Agreement. General Pipe did not comply with the order. Accordingly, on April 11, 1985, Local 34 filed suit in district court against General Pipe, Western Insulation, Thermal Insulation Supply Corporation, ² and the Dingleys, seeking to enforce the arbitration award. It also filed a motion for a temporary injunction and a writ of attachment. General Pipe filed motions to stay proceedings, compel additional arbitration, and vacate the arbitration award. The district court denied General Pipe's motions. It granted Local 34's motions to confirm the arbitration award, denied its motions for injunctive relief and for a writ of attachment, and awarded it attorneys' fees. This appeal followed.

I. JURISDICTION.

General Pipe argues that the district court did not have jurisdiction to confirm the Trade Board's award pursuant to 9 U.S.C. Sec. 9, ³ because the Trade Agreement did not provide that "a judgment of the court shall be entered upon the award made pursuant to the arbitration." We need not reach this issue, as Local 34 also claimed jurisdiction under section 301 of the Labor Management Relations Act, 29 U.S.C. Sec. 185, which also authorizes federal courts to enforce arbitration awards. ⁴ See General Drivers, Warehousemen & Helpers, Local Union No. 89 v. Riss & Co., 372 U.S. 517, 519, 83 S.Ct. 789, 791, 9 L.Ed.2d 918 (1963) (award of Joint Area Cartage Committee); Kallen v. District 1199, National Union of Hospital and Health Care Employees, 574 F.2d 723, 725 (2d Cir.1978) (jurisdiction independent of 9 U.S.C. Sec. 9).

General Pipe also argues that the district court lacked jurisdiction because there was no final and binding award by a neutral arbitrator. Federal courts have approved the use of trade boards to resolve disputes under collective bargaining agreements. See e.g., Hines v. Anchor Motor Freight, Inc., 424 U.S. 554, 96 S.Ct. 1048, 47 L.Ed.2d 231 (1976); General Drivers, 372 U.S. at 519, 83 S.Ct. at 791; NLRB v. Wolff & Munier, Inc., 747 F.2d 156 (3d Cir.1984); Early v. Eastern Transfer, 699 F.2d 552 (1st Cir.), cert. denied, 464 U.S. 824, 104 S.Ct. 93, 78 L.Ed.2d 100 (1983); Teamsters Freight Employees Local Union No. 480 v. Bowling Green Express, 707 F.2d 254 (6th Cir.1983); Chicago Cartage Co. v. International Brotherhood of Teamsters, 659 F.2d 825 (7th Cir.1981); Barrentine v. Arkansas-Best Freight System, 615 F.2d 1194 (8th Cir.1980), rev'd on other grounds, 450 U.S. 728, 101 S.Ct. 1437, 67 L.Ed.2d 641 (1981). As this Court stated in Barrentine, however,

[a] forceable argument can be made * * * that the kind of arbitration in question is subject to grave abuses, including, notably, collusive secret agreements between employers and unions as a result of which the interests of individual * * * grievants may be sacrificed to arrangements that management and union labor may consider to be in their own broader interests.

Barrentine, 615 F.2d at 1201.

Courts have not hesitated to set aside awards of joint employer/union committees where they have found that the committee members had interests adverse to those of the grievants. See Morales v. Vega, 579 F.2d 677 (1st Cir.1978) (courts should consider allegations that members of committee conspired to deprive grievant of first-amendment rights); Kirkland v. Arkansas-Best Freight System, 475 F.Supp. 180 (E.D.Ark.1979) (award set aside where union members of committee did not fairly represent all employees and where process violated fundamental rules of fairness), aff'd in part, rev'd in part on other grounds, 629 F.2d 538 (8th Cir.1980) (reversed only as to damages), cert. denied, 450 U.S. 980, 101 S.Ct. 1514, 67 L.Ed.2d 814 (1981); Allsbrook v. Consolidated Freightways, 100 L.R.R.M. (BNA) 2153 (E.D.Pa.1978) (use of arbitration procedure not required where adverse interests). General Pipe has failed to show, however, that the proceedings were fundamentally unfair. Accordingly, if the award of the Trade Board "is under the collective bargaining agreement final and binding, the District Court has jurisdiction under Sec. 301 to enforce it." See General Drivers, 372 U.S. at 519, 83 S.Ct. at 791.

General Pipe contends that the award was not final and binding because, under the Trade Agreement, General Pipe was entitled to a subsequent proceeding before a neutral arbitrator. Article IV, section 2 of the Agreement states: "Any controversy which cannot be settled informally by the Trade Board parties shall be referred to a neutral arbitrator chosen by mutual agreement of the parties." Appellants' Appendix at 70. A question thus arises as to the meaning of "Trade Board parties." If, as General Pipe argues, it refers to the parties to the Trade Agreement, General Pipe's refusal to participate in the Trade Board proceeding and to abide by the Trade Board's decision could arguably entitle it to a further proceeding before a neutral arbitrator. ⁵ If, on the other hand, "Trade Board parties" refers to the members of the Trade Board itself, General Pipe would have been entitled to a neutral arbitrator only if the Trade Board had not been able to reach a decision by a majority vote.

We agree with the Trade Board and the district court that the latter is the correct interpretation. The Trade Board's treatment of its award as final is persuasive. "Because the authority of arbitrators is a subject of collective bargaining, just as is any other contractual provision, the scope of the arbitrator's authority is itself a question of contract interpretation that the parties have delegated to the arbitrator." W.R. Grace & Co. v. Local Union 759, International Union of the United Rubber, Cork, Linoleum & Plastic Workers, 461 U.S. 757, 765, 103 S.Ct. 2177, 2183, 76 L.Ed.2d 298 (1983). Additionally, any other interpretation would be illogical. As the district court points out, if either party could ignore the decisions of the Trade Board, the Trade Board would be a "toothless organism." Order at 5. More importantly, the Trade Agreement expressly provides for "cases where the parties to [the] Agreement fail to agree;" in those cases "the matter in dispute shall be referred to the Joint Trade Board." Appellants' Appendix at 69. We therefore conclude that the Trade Board's award was final and binding and that the district court had jurisdiction to confirm it under section 301.

II. STANDARD OF REVIEW.

Since we find that the district court had jurisdiction to confirm the arbitration award, we must consider whether it applied the correct standard of review. Federal labor policy encourages arbitration as one major method of achieving industrial peace. United Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574, 578, 80 S.Ct. 1347, 1350, 4 L.Ed.2d 1409 (1960).

Under well-established standards for the review of labor arbitration awards, a federal court may not overrule an arbitrator's decision simply because the court believes its own interpretation of the contract would be the better one. When the parties include an arbitration clause in their collective-bargaining agreement, they choose to have disputes concerning constructions of the contract resolved by an arbitrator. Unless the arbitral decision does not "dra[w] its essence from the collective bargaining agreement," a court is bound to enforce the award and is not entitled to review the merits of the contract dispute. This remains so even when the basis for the arbitrator's decision may be ambiguous.

W.R. Grace, 461 U.S. at 764, 103 S.Ct. at 2182 (citations omitted).

This Court's...