National Wrecking Co. v. International Broth. of Teamsters, Local 731

• Decision Date: 05 May 1993
• Docket Number: 92-2392,Nos. 92-2170,s. 92-2170
• Parties: 143 L.R.R.M. (BNA) 2046, 125 Lab.Cas. P 10,679 NATIONAL WRECKING COMPANY, an Illinois corporation, Plaintiff-Counter Defendant-Appellant, and Douglas R. Stevens, Appellant, v. INTERNATIONAL BROTHERHOOD OF TEAMSTERS, LOCAL 731, Defendant-Counter Plaintiff-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 957

990 F.2d 957

143 L.R.R.M. (BNA) 2046, 125 Lab.Cas. P 10,679

NATIONAL WRECKING COMPANY, an Illinois corporation Plaintiff-Counter Defendant-Appellant and Douglas R. Stevens, Appellant, v. INTERNATIONAL BROTHERHOOD OF TEAMSTERS, LOCAL 731 Defendant-Counter Plaintiff-Appellee.

Nos. 92-2170, 92-2392.

United States Court of Appeals Seventh Circuit.

Argued Dec. 11, 1992.

Decided April 7, 1993.

Rehearing and Rehearing En Banc Denied May 5, 1993.

Richard G. Schultz, Douglas R. Stevens (argued), Foran & Schultz, Chicago, IL, for National Wrecking Co., plaintiff-appellant, and Douglas R. Stevens, appellant.

Robert E. Bloch (argued), Dowd & Bloch, Chicago, IL, for International Broth. of Teamsters, Local 731, defendant-appellee.

Before BAUER, Chief Judge, CUMMINGS, Circuit Judge, and GRANT, Senior District Judge. ^*

BAUER, Chief Judge.

National Wrecking Company ("National") brought suit against the International Brotherhood of Teamsters, Local 731 ("Union") pursuant to the Federal Arbitration Act, 9 U.S.C. § 10, challenging the validity of an arbitration award. The Union counterclaimed seeking enforcement of the arbitration award. The district court granted the Union's motion for summary judgment and enforced the award. 790 F.Supp. 785. The district court also sanctioned National and its counsel and remanded the case to the arbitrator for implementation of the award. For the following reasons, we affirm in part and reverse in part.

I.

This case arises out of a labor dispute involving vision, specifically that of Joseph Barnett, a Union truck driver and former National employee. National and the Union were parties to a collective bargaining agreement ("CBA") that required them to follow certain grievance and arbitration procedures whenever disputes occurred. National was also subject to certain Department of Transportation ("DOT") regulations which, among other things, mandated that truck drivers satisfy certain vision requirements. Specifically, the DOT regulations require that Barnett's vision be correctable to 20/40 vision in each eye. ¹

On March 8, 1990, National fired Barnett when an ophthalmologist reported that his vision fell short of the DOT requirements. Barnett challenged his dismissal by filing a grievance with the Union. Eventually, pursuant to the CBA, Barnett filed for arbitration. Barnett underwent four eye exams before the arbitration. Two of those exams indicated that Barnett's vision fell below the DOT requirements, while the other two concluded that Barnett's eyesight satisfied the DOT requirements.

On January 30, 1991, the arbitrator issued an opinion in which he concluded that he was unable to resolve the question of Barnett's eyesight because of the conflicting evidence. The arbitrator therefore ordered Barnett to undergo another examination. The test was to be performed by a neutral ophthalmologist, who was to submit a "binding opinion" about Barnett's qualifications for reinstatement. Arbitrator's Award at 28, Exhibit 1 to National's Memorandum in Opposition to Motion for Sanctions and Award of Attorneys' Fees, Record Document 39 ("R. Doc. 39"). The arbitrator's opinion also stated that the ophthalmologist was to "issue a final determination on the point in question." Id. The parties were directed to select the ophthalmologist. If they could not agree, the arbitrator himself would select one. After National and the Union failed to agree on an ophthalmologist, the arbitrator appointed Dr. Robert Levine to examine Barnett. Levine tested Barnett and concluded that, although Barnett's right eye was correctable to 20/20 vision, his left eye "does not see every letter in the 20/40 line though his vision ... was better than 20/50." Exhibit 4 to R.Doc. 39. After written and oral communication between the arbitrator and Levine, Levine rendered his final written opinion, dated June 27, 1991, that "[b]ased upon this ophthalmic examination and my review of the United States Department of Transportation vision requirements for truck drivers, I have concluded that Mr. Barnett is visually qualified to perform his truck driving duties." Exhibit 6 to R.Doc. 39. In July of 1991, the arbitrator therefore ordered Barnett reinstated.

National refused to reinstate Barnett and filed this lawsuit challenging the arbitrator's award. The district court granted the Union's motion for summary judgment and enforced the award. The district court also sanctioned National and remanded the case to the arbitrator for implementation. National appeals.

II.

A. Standard of Review

We review a district court's decision to grant summary judgment de novo and accept all facts and inferences in the light most favorable to the non-moving party. Vukadinovich v. Board of Sch. Trustees, 978 F.2d 403, 408 (7th Cir.1992). We will affirm a district court's decision to grant 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.' " Id. (quoting Fed.R.Civ.P. 56(c)).

Our review of an arbitrator's award which arises out of a collective bargaining agreement is extremely limited. Local 100A v. John Hofmeister and Son, Inc., 950 F.2d 1340, 1343 (7th Cir.1991). Judicial review of arbitration awards is narrow because arbitration is intended to be the final resolution of disputes. Arbitrators do not act as junior varsity trial courts where subsequent appellate review is readily available to the losing party. Rather, reviewing courts ask only if the arbitrator's award "draws its essence from the collective bargaining agreement." United Steelworkers of America v. Enterprise Wheel & Car Corp., 363 U.S. 593, 597, 80 S.Ct. 1358, 1361, 4 L.Ed.2d 1424 (1960). We will uphold an arbitration award so long as the arbitrator's interpretation can in some rational manner be derived from the collective bargaining agreement. Walters Sheet Metal Corp. v. Sheet Metal Workers Local No. 18, 910 F.2d 1565, 1566 (7th Cir.1990). We will not set aside an arbitrator's award for factual or legal errors, as long as the award contains the honest decision of the arbitrator after a full and fair hearing of the parties. Ethyl Corp. v. United Steelworkers of America, 768 F.2d 180, 183 (7th Cir.1985), cert. denied, 475 U.S. 1010, 106 S.Ct. 1184, 89 L.Ed.2d 300 (1986). Our standard of review is the same whether the award arises under Section 301 of the Taft-Hartley Act, 29 U.S.C. § 185 ("Section 301"), as the district court concluded, or under the Federal Arbitration Act, 9 U.S.C. § 10, as National asserts. Ethyl Corp., 768 F.2d at 184. ² Our decision in this case is therefore not affected by which of these two statutes applies.

B. Delegation of the Arbitrator's Decision-making Authority

National argues that the arbitration award is invalid because the arbitrator delegated his decision-making authority to the ophthalmologist to decide whether Barnett's vision was satisfactory. The district court held, and we agree, that National has waived this argument because it failed to present it to the arbitrator.

Failure to present an issue before an arbitrator waives the issue in an enforcement proceeding. John Hofmeister, 950 F.2d at 1343-44; Automobile Mechanics Local 701 v. Joe Mitchell Buick, 930 F.2d 576, 578 (7th Cir.1991). Parties, such as National, cannot stand by during arbitration, withholding certain arguments, then, upon losing the arbitration, raise such arguments in federal court. We will not tolerate such sandbagging. John Hofmeister, 950 F.2d at 1344. "Permitting parties to keep silent during arbitration and raise arguments in enforcement proceedings would 'undermine the purpose of arbitration' " which is to provide a fast and inexpensive method for the resolution of labor disputes. Id. at 1345 (citation omitted). See also Chicago Newspaper Guild v. Field Enterprises, Inc., 747 F.2d 1153, 1157 (7th Cir.1984) ("The long-established federal policy of settling labor disputes by arbitration would be seriously undermined if parties kept available information from the arbitrator and then attempted to use the information as a defense to compliance with an adverse award.")

National had ample opportunity to object to the arbitrator's use of and reliance on Dr. Levine's opinion. The arbitrator's January 30, 1991 opinion indicated that Levine would submit a binding opinion which would finally determine whether Barnett's eyesight satisfied the DOT regulations. National participated willingly with the arbitrator's decision to rely on Levine. Further, National could have objected to the arbitrator's reliance on Levine at any time between January 30, 1991, when the arbitrator rendered his initial opinion, and July 1991, when the arbitrator issued his final opinion. It did not. National cannot now, after receiving an unfavorable ruling from the arbitrator, object to the arbitrator's decision to rely on Levine. National has waived its delegation argument.

C. Alleged Factual and Legal Errors of the Arbitrator

Next, National contends that the arbitration award must be vacated because it is contradicted by the finding of fact upon which it is based. National also claims that the award, if enforced, forces National to violate federal law and public policy. We will address these two related arguments together.

Generally, we will not vacate an arbitration award because the arbitrator made errors of fact or law. Burchell v. Marsh, 58 U.S. (17 How.) 344, 348, 15 L.Ed. 96 (1855); Moseley, Hallgarten, Estabrook & Weeden, Inc. v. Ellis, 849 F.2d 264, 272 (7th Cir.1988); Ethyl Corp., 768 F.2d at 183. Federal courts will not vacate an arbitration award merely because the arbitrator misinterpreted applicable law. National R.R. Passenger Corp. v. Chesapeake and Ohio Ry. Co., 551 F.2d 136, 143 (7th Cir.1977). See also Northrop Corp. v. Triad Int'l Marketing...