Lackawanna Leather Co. v. United Food & Commercial Workers Intern. Union, AFL-CIO & CLC

• Decision Date: 25 April 1983
• Docket Number: AFL-CIO,82-1052,No. 271,Nos. 81-2434,271,s. 81-2434
• Citation: 706 F.2d 228
• Parties: 113 L.R.R.M. (BNA) 2321, 113 L.R.R.M. (BNA) 3226, 97 Lab.Cas. P 10,070 The LACKAWANNA LEATHER COMPANY, Appellant, v. UNITED FOOD & COMMERCIAL WORKERS INTERNATIONAL UNION,& CLC, District Union, formerly Amalgamated Meatcutters & Butcher Workmen of North America,(Local 271), Appellee. The LACKAWANNA LEATHER COMPANY, Appellee, v. UNITED FOOD & COMMERCIAL WORKERS INTERNATIONAL UNION,& CLC, District Union, formerly Amalgamated Meatcutters & Butcher Workmen of North America,(Local 271), Appellant.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 228

706 F.2d 228

113 L.R.R.M. (BNA) 2321, 113 L.R.R.M. (BNA) 3226,

97 Lab.Cas. P 10,070

The LACKAWANNA LEATHER COMPANY, Appellant, v. UNITED FOOD & COMMERCIAL WORKERS INTERNATIONAL UNION,

AFL-CIO & CLC, District Union No. 271, formerly

Amalgamated Meatcutters & Butcher

Workmen of North America,

AFL-CIO (Local 271),

Appellee.

The LACKAWANNA LEATHER COMPANY, Appellee, v. UNITED FOOD & COMMERCIAL WORKERS INTERNATIONAL UNION,

AFL-CIO & CLC, District Union No. 271, formerly

Amalgamated Meatcutters & Butcher

Workmen of North America,

AFL-CIO (Local 271),

Appellant.

Nos. 81-2434, 82-1052.

United States Court of Appeals Eighth Circuit.

Submitted Jan. 13, 1983.

Decided April 25, 1983.

Robert L. Berry (argued), Kennedy, Holland, DeLacy & Svoboda, Omaha, Neb., for appellant and cross-appellee.

Thomas F. Dowd (argued), Dowd & Fahey Law Offices, Omaha, Neb., for appellee and cross-appellant.

Before LAY, Chief Judge, FLOYD R. GIBSON, Senior Circuit Judge, HEANEY, BRIGHT, ROSS, McMILLIAN, ARNOLD, JOHN R. GIBSON, and FAGG, Circuit Judges, en banc.

BRIGHT, Circuit Judge.

Lackawanna Leather Company (Lackawanna) appeals the district court's ¹ grant of summary judgment enforcing an arbitration award in favor of United Food & Commercial Workers International Union, AFL-CIO & CLC, District Union No. 271 (Union). Lackawanna contends the district court should have vacated a portion of the award because the arbitrator exceeded the scope of his authority by interpreting a section of the collective bargaining agreement not placed in issue by the parties. The Union cross-appeals from the district court's denial of attorneys' fees, claiming entitlement to fees on grounds that Lackawanna wrongfully refused to comply with the arbitration award. We affirm the judgment of the district court.

I. Background.

On March 11, 1980, Lackawanna served one of its employees, Charles Hodges, with a written notice of poor work performance. The notice reflected Lackawanna's dissatisfaction with Hodges' operation of a hide-shaving machine. Upon receiving the warning, Hodges also received a notice of discharge, pursuant to section 8.4 of the collective bargaining agreement then in effect. Section 8.4 provided in pertinent part:

An employee, who during the course of a years [sic] period, receives three written notices in relation to inefficiency, absesenteeism [sic], etc. shall be immediately discharged upon receipt of the third notice.

Lackawanna discharged Hodges because he had received two prior notices, one for an unexcused absence, and one for excessive tardiness, in less than a year's time.

The Union filed a grievance on behalf of Hodges, contending that Lackawanna did not issue the warning notice and discharge for justifiable cause under the labor agreement, and that Lackawanna's action, in fact, was taken in retaliation for Hodges' refusal to take vacation time rather than draw unemployment during a recent plant shutdown. After the initial grievance procedure proved unsuccessful, the parties submitted the grievance to arbitration.

Following a hearing, the arbitrator found that although Lackawanna had justifiable cause for issuing the warning notice, it had wrongfully discharged Hodges. The arbitrator held that section 8.4 of the collective bargaining agreement allowed discharge only when the employer issued three written notices for the same type of infraction. Because Hodges had not received any prior notices for poor work, the arbitrator held that Hodges should not have been discharged and ordered him reinstated.

Lackawanna filed a complaint in the district court claiming the arbitrator both exceeded his authority by interpreting section 8.4, when neither side had placed the meaning of section 8.4 in issue, and interpreted section 8.4 incorrectly. Lackawanna sought an order either vacating and correcting that portion of the award dealing with section 8.4, or, in the alternative, reopening arbitration in order to allow it to present evidence regarding the meaning of section 8.4. The district court granted summary judgment in favor of the Union, and Lackawanna appealed. ²

II. Discussion.

A. Arbitrator's Scope of Authority.

Lackawanna contends the arbitrator exceeded his authority in interpreting section 8.4 because neither the Union nor Lackawanna disputed the meaning of section 8.4 or placed its interpretation in issue. Lackawanna argues that the Union and Lackawanna had always understood section 8.4 to allow discharge after the employee received three written notices of any combination of infractions. According to Lackawanna, the only issue placed before the arbitrator involved whether Lackawanna properly issued a poor work notice to Hodges. Consequently, Lackawanna argues, that portion of the arbitrator's award which interprets section 8.4 incorrectly must be vacated. We disagree. In our judgment, the record demonstrates that the arbitration award properly rests on the collective bargaining agreement.

An arbitrator's award must be upheld as long as it "draws its essence" from the collective bargaining agreement. United Steelworkers of America v. Enterprise Wheel & Car Corp., 363 U.S. 593, 596-97, 80 S.Ct. 1358, 1360-61, 4 L.Ed.2d 1424 (1960); United Food & Commercial Workers, Local No. 222, AFL-CIO v. Iowa Beef Processors, Inc., 683 F.2d 283, 285 (8th Cir.1982). In determining whether an arbitrator has exceeded his authority, the agreement must be broadly construed with all doubts being resolved in favor of the arbitrator's authority. Resilient Floor and Decorative Covering Workers, Local Union 1179 v. Welco Mfg. Co., 542 F.2d 1029, 1032 (8th Cir.1976).

Lackawanna claims that the arbitrator acted outside his jurisdiction because neither party ever submitted the "proper interpretation" of section 8.4 to him. That argument is seriously flawed. Whether the arbitrator erred in reaching a particular result is irrelevant to the determination of whether the arbitrator acted within his jurisdiction. The central issue is whether the arbitrator acted within his jurisdiction in interpreting section 8.4. We hold that he did so act.

Lackawanna's justification for discharge required that it establish a factual and contractual basis for the discharge. Similarly, the Union's challenge of the discharge required that it establish a factual and contractual basis for its challenge. The record demonstrates that both parties supported their relative positions by relying on the collective bargaining agreement.

The grievance letter filed by the Union contended that Hodges' warning notice and discharge were "not for justifiable cause as per the labor agreement. " (Emphasis added). Lackawanna introduced evidence during the arbitration hearing that Hodges' discharge was in accordance with company policy and the collective bargaining agreement. At the outset of the case, the arbitrator outlined the issue as follows:

Did the Company have proper cause to warn and terminate Charles Hodges for poor work on March 7, 1980? If not, what is the proper remedy? [Emphasis added.]

Thus, the arbitrator considered each element of the issue separately, asking, first, whether Hodges' conduct justified a warning notice, and, second, whether a warning notice properly made would justify the discharge.

After concluding that Hodges' conduct justified a warning notice, the arbitrator considered Lackawanna's right to terminate Hodges. The arbitrator first recognized Lackawanna's position "that under Section 8.4 discharge is automatic upon receipt of a third warning notice for any reason." Next, after observing that neither party introduced any evidence regarding the interpretation of section 8.4, and that "[a] Company witness testified that the discharge of Hodges was in accord with Company policy, but no prior instances of the administration of such a policy were introduced[,]" the arbitrator referred to the usual interpretation given provisions similar to section 8.4.

The arbitrator observed that provisions such as section 8.4 are common in collective bargaining agreements and that such provisions are commonly interpreted to require multiple notices of specific offenses in order to justify discharge. The arbitrator construed section 8.4 to require three notices of inefficiency to justify discharge. Here, the company gave Hodges only one such notice. Thus, by determining the meaning of section 8.4, the arbitrator addressed the precise issue presented to him in the grievance letter: whether the warning notice and discharge constituted justifiable cause "as per the labor agreement."

That the parties failed to introduce evidence regarding the interpretation of section 8.4 does not constitute a valid ground for vacating the award. A provision such as section 8.4 and its ordinary interpretation must be reached in any decision made by an arbitrator interpreting a collective bargaining agreement. Without evidence as to the meaning of the contract clause in question, an arbitrator may properly give that clause a reading ordinary to similar labor contracts. To hold otherwise relieves the employer of its burden of showing that its actions were justified.

The Supreme Court has held that an arbitrator does not exceed the scope of the issue presented to him as long as the arbitrator "[stays] within the areas marked out for his consideration." United Steelworkers of America v. Enterprise Wheel & Car Corp., supra, 363 U.S. at 598, 80 S.Ct. at 1361. In applying this principle to the instant case, District Judge Schatz reasoned as follows:

It is clear that the Union wished the arbitrator to decide whether Mr. Hodges' "warning notice and his discharge of March 11, 1980 is ... for justifiable cause as per the labor agreement. ["] Absent a formal submission of the issue, this grievance letter of March 12, 1980, served to present the issue to the arbitrator. The Court notes that very little, if any, evidence was presented at the arbitration hearing with regard to the past ...