Mobil Oil Corp. v. Independent Oil Workers Union

• Decision Date: 18 May 1982
• Docket Number: Nos. 81-2582,No. 81-2583,L,A,No. 81-2582,AFL-CI,81-2583,81-2582,s. 81-2582
• Citation: 679 F.2d 299
• Parties: 110 L.R.R.M. (BNA) 2620, 94 Lab.Cas. P 13,613 MOBIL OIL CORPORATION, Appellant inppellee in, v. INDEPENDENT OIL WORKERS UNION, affiliated with the Oil, Chemical and Atomic Workers International Union,ocal 8-831, Appellee inppellant in
• Court: U.S. Court of Appeals — Third Circuit

Page 299

679 F.2d 299

110 L.R.R.M. (BNA) 2620, 94 Lab.Cas. P 13,613

MOBIL OIL CORPORATION, Appellant in No. 81-2582, Appellee in No. 81-2583, v. INDEPENDENT OIL WORKERS UNION, affiliated with the Oil Chemical and Atomic Workers International Union AFL-CIO, Local 8-831, Appellee in No 81-2582, Appellant in No. 81-2583.

Nos. 81-2582, 81-2583.

United States Court of Appeals Third Circuit.

Argued April 12, 1982.

Decided May 18, 1982.

Lawrence S. Coburn (argued), Pepper, Hamilton & Scheetz, Philadelphia, Pa., for Mobil Oil Corp.

Gary L. Borger, Cherry Hill, N. J., Jonathan Walters (argued), Kirschner, Walters & Willig, Philadelphia, Pa., for Independent Oil Workers Union, Local 8-831.

Before SEITZ, Chief Judge, ADAMS, Circuit Judge, and STAPLETON, District Judge ^*.

OPINION OF THE COURT

SEITZ, Chief Judge.

Mobil Oil Corporation appeals from the district court's order enforcing an arbitrator's award of conditional reinstatement of an employee whom Mobil discharged. Independent Oil Workers Union, Local 8-831 appeals from the district court's order denying its request for costs and attorneys' fees. This court has jurisdiction pursuant to 28 U.S.C. § 1291 (1976).

I.

Article X of the collective bargaining agreement between Mobil and Local 8-831 reserved to Mobil the right to discharge an employee "for cause." On December 3, 1979, Mobil discharged Dominic Licciardello, an employee at its refinery in Paulsboro, New Jersey. Local 8-831 filed a grievance on behalf of Licciardello, arguing that he had been discharged without cause and that he should be reinstated with full back pay. The parties could not resolve the grievance, and the Union submitted the matter to arbitration pursuant to the arbitration provisions of the collective bargaining agreement. On the initial day of the arbitration hearing, counsel stipulated that the issue to be decided by the arbritrator was: "Did the Company have cause on December 3, 1979 to discharge Dominic Licciardello ...?"

The arbitrator found that Licciardello had fought on the job and had a poor work record. The arbitrator stated that he "normally would have no hesitation in sustaining a discharge where (such behavior had been established)." The arbitrator did not, however, uphold the discharge. He found that Licciardello had suffered from a "severe mental disorder" during the period just before his discharge and that he had been hospitalized for six weeks following his discharge. The arbitrator found that Licciardello's belief that he was a prime suspect in an FBI investigation into the theft of oil had contributed to his mental disorder. Prior to discharge, however, Mobil did not know of Licciardello's mental disorder.

The arbitrator concluded that under the circumstances Mobil did not have cause to discharge Licciardello and ordered conditional reinstatement without back pay. Mobil refused to reinstate Licciardello and sought to vacate the award in federal district court. Local 8-831 filed a counterclaim seeking enforcement of the award. The district court granted Local 8-831's motion for summary judgment, but denied its request for costs and attorneys' fees. Both parties appeal.

II.

Mobil argues that: (1) the award should be vacated because the arbitrator exceeded the scope of his authority as defined by the collective bargaining agreement and by the issue submitted to him by the parties; and (2) the arbitrator dispensed his own brand of industrial justice in violation of the agreement. Local 8-831 argues that the award was rationally derived from the collective bargaining agreement and thus should be enforced.

A.

We first consider whether we should defer to an arbitrator's definition of the submitted issue.

Federal courts do not ordinarily review de novo the merits of an arbitration award where the parties have agreed to be bound by an arbitrator's decision. See United Steelworkers v. American Manufacturing Co., 363 U.S. 564, 567-68, 80 S.Ct. 1343, 1346, 4 L.Ed.2d 1403 (1960). There are, however, limitations to the judicial deference given an arbitrator's decision. An arbitrator's award must draw its essence from the collective bargaining agreement, and an arbitrator must not exceed his authority and dispense his own brand of industrial justice. See United Steelworkers v. Enterprise Wheel & Car Corp., 363 U.S. 593, 597, 80 S.Ct. 1358, 1361, 4 L.Ed.2d 1424 (1960). This court has emphasized that federal court review of an arbitrator's award is extremely narrow, however, and if the arbitrator's "interpretation (of the meaning of the collective bargaining agreement) can in any rational way be derived from the agreement," courts must enforce the award. Ludwig Honold Mfg. Co. v. Fletcher, 405 F.2d 1123, 1128 (3d Cir. 1969).

The scope of an arbitrator's authority is limited to the issue that the parties submit for him to decide. See, e.g., Textile Workers Union, Local 1386 v. American Thread Co., 291 F.2d 894, 896 (4th Cir. 1961). That rule, however, does not indicate the standard by which federal courts should review the arbitrator's determination of his authority as defined by the submitted issue. There are several reasons why we believe that the deference that is accorded to an arbitrator's interpretation of the collective bargaining agreement should also be accorded to an arbitrator's interpretation of the issue submitted.

First, plenary judicial review of arbitration submissions undermines the congressional policy in favor of expeditious and relatively inexpensive means of settling grievances, and thus of promoting labor peace. Second, a failure to defer to the arbitrator's interpretation of the submission would in some cases be inconsistent with deference to the arbitrator's interpretation of the agreement. This is so because a collective bargaining agreement merely constitutes a promise to arbitrate, see Piggly Wiggly Operators' Warehouse, Inc. v. Piggly Wiggly Operators' Warehouse Independent Truck Drivers Union, Local No. 1, 611 F.2d 580, 583 (5th Cir. 1980), and once the parties have gone beyond their promise to arbitrate and have supplemented the agreement by defining the issue to be submitted to an arbitrator, courts must look both to the contract and to the submission to determine his authority, see Washington-Baltimore Newspaper Guild, Local 35 v. The Washington Post Co., 442 F.2d 1234, 1236 (D.C.Cir.1971). For example, when an arbitrator determines what a contractual phrase, such as "cause," in a submission means, the arbitrator's determination must be informed by what that word was intended to mean in the contract. Thus, interpretation of the submission will likely involve consideration of the same issues as a review of the merits. Finally, a deferential standard obviates the burden that would rest upon the judiciary if it were required to determine, case by case, the exact scope of submission in the endless number of grievances and disputes that inevitably occur between employers and employees. ¹

B.

The issue submitted to the arbitrator was whether Mobil had cause on December 3, 1979 to discharge Licciardello. Mobil contends that this submission limited the arbitrator's authority to the application of article X of the collective bargaining agreement to those facts within Mobil's knowledge on December 3. Mobil maintains that the question answered by the arbitrator was not the question submitted, but whether, considering all medical and social data available at the time of the hearing, Licciardello's discharge was fair to him. Mobil's argument, then, is that the arbitrator exceeded his power when he relied upon post-discharge medical evidence not within Mobil's knowledge on December 3 to conclude that Mobil, even though it had acted in good faith in discharging Licciardello, did not have cause to discharge him.

We believe that the language of the submission is not as clearly restrictive as Mobil suggests. The arbitrator read the parties' submission to pose the question: "Was Mobil's decision to discharge Licciardello on December 3, 1979 justified by 'cause'?" He interpreted "cause" in turn to mean "objective" cause and inquired whether the discharge was justified in light of all the circumstances relevant to the employee's job performance, rather than only those factors known to Mobil at the time. Whether this reading is more or less persuasive than Mobil's, we cannot say that it was beyond the arbitrator's authority. Whether "just cause," in the contract and in the submission, limited the arbitrator to evidence of what Mobil knew at the time of discharge is not apparent from the contract, and the extra words "on December 3" in the submission do not so obviously restrict the arbitrator to a subjective standard that any other reading would be "so palpably faulty that no judge, or group of judges, could ever conceivably have made such a ruling." Safeway Stores v. American Bakery Workers Local 111, 390 F.2d 79, 82 (5th Cir. 1968). Thus, we believe that the arbitrator's interpretation of the issue he was to decide did not exceed his authority as granted by the submission and the collective bargaining agreement.

Alternatively, Mobil argues that an arbitrator may not rely upon post-discharge evidence when determining whether a company had cause for discharging an employee. Mobil argues that the district court's opinion in American Honda Motor Co. v. Local 585, UAW, No. 79-1231, slip op. at 3 (E.D.Pa. July 20, 1979), aff'd mem., 615 F.2d 1352 (3d Cir. 1980), stands for the proposition that, when blameworthy conduct for a discharge is established, a finding of "no cause" for that discharge by an arbitrator cannot be based upon evidence not known to the employer at the time of the discharge. We do not read American Honda so broadly. We believe that American Honda stands only for the narrow proposition that an arbitrator may not rely on an employee's subsequent rehabilitation to order reinstatement. Once we have decided that the arbitrator did not exceed his...