Kalmar Indus. v. Intern. Broth. Team. Local 838

• Decision Date: 26 September 2006
• Docket Number: No. 05-4060-JAR.,05-4060-JAR.
• Citation: 452 F.Supp.2d 1154
• Parties: KALMAR INDUSTRIES USA LLC, d/b/a Ottawa Truck, Plaintiff, v. INTERNATIONAL BROTHERHOOD OF TEAMSTERS LOCAL 838, Defendant.
• Court: U.S. District Court — District of Kansas

452 F.Supp.2d 1154

KALMAR INDUSTRIES USA LLC, d/b/a Ottawa Truck, Plaintiff, v. INTERNATIONAL BROTHERHOOD OF TEAMSTERS LOCAL 838, Defendant.

No. 05-4060-JAR.

United States District Court, D. Kansas.

September 26, 2006.

COPYRIGHT MATERIAL OMITTED

Carrie Hoffman, Celeste Winford, Michele Cramer Spillman, Gardere Wynne Sewell LLP, Dallas, TX, Robert C. Johnson, Husch & Eppenberger, LLC, Kansas City, MO, for Plaintiff.

Stephen D. Bonney, Bonney Law Office, Kansas City, MO, for Defendant.

MEMORANDUM ORDER AND OPINION

ROBINSON, District Judge.

This case involves a dispute between Kalmar Industries USA LLC d/b/a/ Ottawa Truck (the "Company" or "Ottawa Truck") and Teamsters Local Union No. 838 ("Union" or "Teamsters") over whether the Company violated the parties' collective bargaining agreement ("CBA") when it paid certain wage rates for temporary employees. This matter is before the Court on the parties' cross motions for summary judgment (Does. 17 and 19). For the reasons explained in detail below the Court denies the Company's motion and grants the Union's motion, thus confirming the Arbitrator's award.

I. Summary Judgment Standard

Summary judgment is appropriate "if 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 judgment as a matter of law."¹ A fact is only material under this standard if a dispute over it would effect the outcome of the suit.² An issue is only genuine if it "is such that a reasonable jury could return a verdict for the nonmoving party."³ The inquiry essentially determines if there is a need for trial, or whether the evidence "is so one-sided that one party must prevail as a matter of law."⁴

The moving party bears the initial burden of providing the court with the basis for the motion and identifying those portions of the record that show the absence of a genuine issue of material fact.⁵ "A movant that will not bear the burden of persuasion at trial need not negate the nonmovant's claim."⁶ The burden may be met by showing that there is no evidence to support the nonmoving party's case.⁷ If this initial burden is met, the nonmovant must then "go beyond the pleadings and `set forth specific facts' that would be admissible in evidence in the event of trial from which a rational trier of fact could find for the nonmovant.⁸ "Where, as here, the parties file cross motions for summary judgment, we are entitled, to assume that no evidence needs to be considered other than that filed by the parties, but summary judgment is nevertheless inappropriate if disputes remain as to material facts."⁹ When examining the underlying facts of the case, the Court is cognizant that it may not make credibility determinations or weigh the evidence.¹⁰

II. Uncontroverted Facts

At the outset, the Court notes that the Company's statement of uncontroverted facts often attempts to interject facts not found by the Arbitrator or supported by the record. For example, the Company purports to summarize the testimony of various witnesses in an apparent attempt to supplement the Arbitrator's findings of fact, as there is no transcript of the arbitration proceedings. The Court declines to reweigh the evidence and find facts, and instead, evaluates the Arbitration Award based on the language of the parties' CBA in light of the facts found by the Arbitrator, as it is compelled to do.¹¹

The Union is a labor organization within the meaning of § 2(5) of the National Labor Relations Act ("NLRA"),¹² and at all times relevant to this case has been the exclusive collective bargaining representative of a unit of employees at the plant in Ottawa, Kansas operated by the Company. The Company is a limited liability company organized under the laws of the State of Texas and has its principal place of business in the State of Kansas, specifically Ottawa, Kansas. The Company is also an "employer" within the meaning of § 2(2) of the NLRA.¹³ The Company and the Union have been parties to a series of CBA's dating back many years. The parties entered into a CBA effective March 26, 2004, establishing the terms and conditions of employment for various workers at the Company's plant in Ottawa, Kansas.

In May 2004, the Union filed a grievance alleging that the Company was failing to pay temporary employees in accordance with the CBA. The Company denied that grievance throughout the grievance procedure, and the Union submitted that grievance to arbitration in accordance with the grievance procedure. The parties selected M.W. Gear (the "Arbitrator") to serve as arbitrator pursuant to the procedure set forth in the CBA. The Arbitrator heard the grievance and issued an opinion and award dated March 28, 2005, in which he sustained the grievance and ordered a remedy (the "Award").

In his Award, the Arbitrator summarized the procedural history of the case, set forth the pertinent provisions of the CBA and the issues, found the facts, and issued a ruling.¹⁴ Ultimately, the Arbitrator found that the CBA covered temporary employees, the grievance was arbitrable, that the Company had violated the current CBA by not paying temporary employees the "new hire" rates set forth in Appendix A, and ordered a remedy including back pay and a requirement that the Company pay temporary employees at the contractual rate for the duration of the current CBA.¹⁵

III. Standard of Review

The Company seeks vacation of the Arbitrator's. Award pursuant to section 301 of the Labor-Management Relations Act ("LMRA") of 1947, 29 U.S.C. § 185. Arbitration awards may be vacated by the district court only upon extraordinarily narrow grounds, as the Tenth Circuit recognized when it characterized the standard of review of arbitral awards as "among the narrowest known to the law."¹⁶ There are a number of judicially-created grounds for vacating an award, including that the award is violative of public policy, that the arbitrator engaged in manifest disregard of the law, or that the arbitration denied the parties a fundamentally fair hearing.¹⁷ Outside of these limited areas, the arbitration award must be confirmed, even in the face of errors by the arbitrator in factual findings or his interpretations of the law.¹⁸ The district court does not sit to hear claims of factual or legal error by an arbitrator as if it were an appellate court reviewing a lower court's decision.¹⁹ "[T]he question of interpretation of the collective bargaining agreement is a question for the arbitrator. It is the arbitrator's construction which was bargained for; and so far as the arbitrator's decision concerns construction of the contract, the courts have no business overruling him because their interpretation of the contract is different from his.²⁰ "As long as the arbitrator's award `draws its essence from the collective bargaining agreement,' and is not merely `his own brand of industrial justice,' the award is legitimate."²¹ That will be the case "as long as the arbitrator is even arguably construing or applying the contract and acting within the scope of his authority."²²

But an award does not draw its essence from the CBA if it is contrary to the express language of the contract ... or . . . is so unfounded in reason and fact, so unconnected with the working and purpose of the agreement as to manifest an infidelity to the obligation of the arbitrator . . . . [or] if viewed in the light of its language, its context, and any other indicia of the parties' intention, it is without factual support.²³

"Manifest disregard" of the law means more than simply a misunderstanding of the applicable law or an error in its application.²⁴ To engage in "manifest disregard," the arbitrator must be "willfully inattentive" to the governing law.²⁵ That means that the party asserting manifest disregard of the law must show that the arbitrator knew what the binding authority was and explicitly disregarded it.²⁶ Notably, the "manifest disregard" standard applies only to conclusions of law; "[t]he arbitrator's factual findings are beyond review.²⁷

IV. Analysis

A. Arbitrability of the Union's Grievance Authority to Decide Arbitrability

The question of who, the court or the arbitrator, has the authority to decide the arbitrability of a grievance in a particular case determines the standard of review of the arbitrator's decision. If the parties have "clearly and unmistakenly" agreed to allow the arbitrator to decide arbitrability, the "court should give considerable leeway to the arbitrator, setting aside his or her decision only in certain narrow circumstances."²⁸ Conversely, if the parties did not agree to submit the arbitrability, question to the arbitrator, the court conducts an independent review.²⁹

The framework considered by the Supreme Court in First Options of Chicago, Inc. v. Kaplan³⁰ is useful in separating the issues before the Court. The Court explained that "[just as the arbitrability of the merits of a dispute depends upon whether the parties agreed to arbitrate that dispute, so the question `who has the primary power to decide arbitrability' turns upon what the parties agreed about that, matter."³¹ The Court noted, however, the difficulty in permitting arbitrators to decide the scope of their own jurisdiction:

[T]he "who (primarily) should decide arbifrability" question ... is rather arcane. A party often might not focus upon that question or upon the significance of having the arbitrators decide the scope of their own powers. And, given the principle that a party can be forced to arbitrate only those issues it specifically has agreed to submit to arbitration, one can understand why courts might hesitate to interpret silence or ambiguity on the "who should decide arbitrability" point as giving the arbitrators that power, for doing so might too often force unwilling parties to arbitrate a matter they reasonably would have thought a...