Jasper Cabinet Co. v. United Steelworkers of America, AFL-CIO-CLC, Upholstery and Allied Div.

• Decision Date: 29 February 1996
• Docket Number: UPHOLSTERY and ALLIED,Nos. 95-2230,95-2533,AFL-CIO-CL,D,No. 331-,331-,s. 95-2230
• Citation: 77 F.3d 1025
• Parties: 151 L.R.R.M. (BNA) 2651, 131 Lab.Cas. P 11,516 JASPER CABINET COMPANY, Plaintiff-Appellant, v. UNITED STEELWORKERS OF AMERICA,DIVISION, and United Steelworkers of America, Localefendants-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1025

77 F.3d 1025

151 L.R.R.M. (BNA) 2651, 131 Lab.Cas. P 11,516

JASPER CABINET COMPANY, Plaintiff-Appellant, v. UNITED STEELWORKERS OF AMERICA, AFL-CIO-CLC, UPHOLSTERY and ALLIED DIVISION, and United Steelworkers of

America, Local No. 331-U, Defendants-Appellees.

Nos. 95-2230, 95-2533.

United States Court of Appeals, Seventh Circuit.

Argued Nov. 30, 1995.

Decided Feb. 29, 1996.

Consolidated Appeals from the United States District Court for the Southern District of Indiana, Evansville Division, Nos. EV 94-136-C, EV 94-162-C, Gene E. Brooks, Judge.

D. Patton Pelfrey (argued), James Douglas Cockrum, Brown, Todd & Heyburn, Louisville, KY, for Jasper Cabinet Company in No. 95-2230 and 95-2533.

Richard J. Swanson, Macey, Macey & Swanson, Indianapolis, IN, Rudolph L. Milasich, Jeffrey Van Hove (argued), United Steelworkers of America, Assistant General Counsel, Pittsburgh, PA, for United Steelworkers of America, AFL-CIO-CLC, Upholstery and Allied Industries Division and United Steelworkers of America, Local 331-U in No. 95-2230.

Richard J. Swanson, Macey, Macey & Swanson, Indianapolis, IN, Jeffrey Van Hove (argued), United Steelworkers of America, Assistant General Counsel, Pittsburgh, PA, for United Steelworkers of America, AFL-CIO-CLC, Upholstery and Allied Industries Division and United Steelworkers of America, Local 331-U, in No. 95-2533.

Before BAUER, ROVNER, and EVANS, Circuit Judges.

Terence T. EVANS, Circuit Judge.

In this consolidated action, the Jasper Cabinet Company appeals from the district court's entry of summary judgment in favor of the union, the United Steelworkers of America, AFL-CIO-CLC, Upholstery and Allied Industries Division, and its Local No. 331-U. Jasper originally brought separate actions under § 301 of the Labor Management Relations Act, 29 U.S.C. § 185, to vacate two arbitration awards, both of which found the company in violation of a collective bargaining agreement. The company's primary contention is that the arbitration awards upheld by the district court do not draw their essence from the collective bargaining agreement. See United Steelworkers of America v. Enterprise Wheel & Car Corp., 363 U.S. 593, 596, 80 S.Ct. 1358, 1360, 4 L.Ed.2d 1424 (1960). The company asks us to vacate the district court's enforcement of the awards and, with respect to one, reverse the district court's award of attorney's fees and costs. We decline this invitation and affirm.

We review a district court's decision to grant summary judgment de novo and apply the same standard as that employed by the district court. National Wrecking Co. v. IBT, Local 731, 990 F.2d 957, 960 (7th Cir.1993); Scherer v. Rockwell Int'l Corp., 975 F.2d 356, 359 (7th Cir.1992). In doing so, "we must review the record and all inferences drawn from it in the light most favorable to the nonmovant ... and determine whether a genuine issue exists as to any material fact." Brownell v. Figel, 950 F.2d 1285, 1289 (7th Cir.1991) (citations omitted). We will affirm a district court's grant of summary judgment where the "pleadings depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Rule 56(c), Fed.R.Civ.P.

As an initial matter, the company contends that the district court erred as a matter of law by granting summary judgment for the union and enforcing the arbitration awards. The facts forming the basis of the parties' dispute are largely uncontroverted. Jasper manufactures hand-crafted furniture, including desks, cabinets, and chairs. The union is the exclusive collective bargaining representative for the employees in the bargaining unit comprised of all production and maintenance employees at the company's plant in Jasper, Indiana.

The record demonstrates that the company and the union are parties to a collective bargaining agreement which was in effect at all times relevant to this action and covers the period of March 2, 1992 to March 1, 1996. The agreement sets forth the wages, hours, and conditions of employment for the employees within the bargaining unit. Article 29 of the agreement provides for a multistep grievance procedure for the resolution of disputes concerning the interpretation or application of the agreement. That article states, in relevant part:

In the event any employee shall consider that he or she has a grievance under the terms and provisions of this Agreement, or that any provisions of this Agreement have been, or are being violated and any and all differences between the Employer and the Union or any employee of the Employer covered hereunder arising under the provisions of this Agreement shall constitute a grievance, such employee shall process the grievance as follows: ...

Article 29 of the agreement then sets forth a three-step process through which contractual grievances are to be resolved. If grievances cannot be resolved through this process, then Articles 30 through 32 of the agreement establish an arbitration procedure for the final resolution of such disputes. Article 32 states, in relevant part, that:

The arbitrator may interpret and/or apply any of the terms of this Agreement, but shall have no authority to alter, modify, eliminate, add to or remove any part or parts of this Agreement.

A majority of Jasper's employees do not earn their wages based on an hourly rate. Instead, they work under an incentive wage rate system based upon their volume of production. During the period from May 1990 to August 1993, the company paid bargaining unit employee Robert Leuken at the same incentive rates for performing certain assembly work. In August 1993, the company reduced Leuken's incentive rate, claiming that a change in the work content of his job justified the rate change. The union admits that there had been a change in the work content of Leuken's job, but asserts that the change in work content occurred several years before the company attempted to change the incentive rates.

The union filed a grievance protesting the company's reduction of incentive rates for Leuken, alleging that the change violated the agreement and seeking a return to the prior incentive rates. The parties were unable to settle the grievance prompting its submission to arbitration. After determining that the concept of a "reasonable time limit" applied to the company's right to reduce incentive rates, the arbitrator, Ann Breen-Greco, found that the company violated the agreement when it reduced Leuken's incentive rates. The arbitrator drew this conclusion from a detailed analysis of the plain language of the agreement. The arbitrator sustained the grievance and ordered the company to make Leuken whole for the rate reduction.

Meanwhile, a separate dispute arose concerning the company's assessment of unexcused absences to employees who refused to work overtime hours, and the union filed two grievances objecting to the practice. The two grievances were processed through the contractual grievance procedure and submitted to arbitration. The arbitrator on this dispute, Joseph Cannavo, found the language of the agreement to be ambiguous on the issue of whether Jasper had the right to require employees to work overtime. Looking to other evidence of the parties' intent the arbitrator considered the parties' bargaining history and past practice. The arbitrator concluded that overtime was not mandatory under the agreement and the union established that the company had violated the agreement. He sustained the grievances and ordered the company to cease and desist from charging its employees with hours of absenteeism for refusing to work overtime. He also ordered the company to remove all forms of discipline for refusal to work overtime from employees' records.

The company filed separate actions in the United States District Court for the Southern District of Indiana to vacate these two arbitration awards. In each case the union counterclaimed to enforce the awards and cross-motions for summary judgment were filed. On the first arbitration decision and award finding the company violated the agreement by reducing incentive rates, the district court held the arbitrator was properly interpreting the agreement when she found an implied reasonable timeliness condition. Because the arbitrator "was arguably construing or applying the contract and acting within [her] authority," the court granted the union summary judgment and enforced the award.

In the case of the second arbitration decision and award finding overtime not to be mandatory, the district court found that the arbitrator "was applying his informed judgment to the parties' dispute, and rendered a decision which is an arguable application of the Agreement." Finding the company's challenge to this arbitration award to be untenable and meritless, the court awarded attorney's fees and costs to the union.

The company's appeal can be reduced to one issue: whether the arbitration awards draw their essence from the collective bargaining agreement between Jasper and the union. The limited scope of judicial review of arbitration awards is well-settled. See, e.g., National Wrecking Co. v. Int'l Brotherhood of Teamsters, Local 731, 990 F.2d 957, 960 (7th Cir.1993); Polk Bros., Inc. v. Chicago Truck Drivers Union, 973 F.2d 593, 596 (7th Cir.1992); Chicago Typographical Union No. 16 v. Chicago Sun-Times, Inc., 935 F.2d 1501, 1505 (7th Cir.1991); United Steelworkers of America v. Enterprise Wheel & Car Corp., 363 U.S. 593, 596, 80 S.Ct. 1358, 1360, 4 L.Ed.2d 1424 (1960). As we stated recently in Sullivan v. Lemoncello, 36 F.3d 676, 682-83 (7th Cir.1994), the Supreme Court has reiterated this longstanding principle:

To resolve disputes about the application of a collective bargaining agreement, an arbitrator must find facts and a court may not reject those findings simply because it disagrees with...