Occidental Chemical v. Local 820, Intern. Chem. Work., G84-402 CA.

• Citation: 614 F. Supp. 323
• Decision Date: 23 July 1985
• Docket Number: No. G84-402 CA.,G84-402 CA.
• Parties: OCCIDENTAL CHEMICAL CORPORATION, Plaintiff, v. LOCAL 820, INTERNATIONAL CHEMICAL WORKERS UNION, Defendant.
• Court: U.S. District Court — Western District of Michigan

614 F. Supp. 323

OCCIDENTAL CHEMICAL CORPORATION, Plaintiff, v. LOCAL 820, INTERNATIONAL CHEMICAL WORKERS UNION, Defendant.

No. G84-402 CA.

United States District Court, W.D. Michigan, S.D.

July 23, 1985.

Thomas P. Gies, Crowell & Moring, Washington, D.C., for plaintiff.

Barry R. Smith, Miller, Johnson & Cummiskey, Grand Rapids, Mich., for defendant.

OPINION

BENJAMIN F. GIBSON, District Judge.

This action is brought directly under § 301 of the Labor Management Relations Act, 29 U.S.C. § 185, to vacate an arbitration award.

Suit was instituted by Occidental Chemical Corporation on April 12, 1984 to vacate an arbitration award which issued on November 10, 1983. Arbitrator Robert G. Howlett found in favor of Mr. E.A. Shirtum, a retired Occidental employee, and required that Mr. Shirtum's pension benefits be calculated without including a "service ratio reduction factor" (SRRF).¹ The collective bargaining agreement between Occidental and Local 820, of which Mr. Shirtum was a member, required that employees retire in accordance with the provisions of company's retirement program, which includes a pension plan. The pension plan documents contain the terms of the plan.

It is undisputed that the SRRF calculation was included in the company's 1974 and 1976 pension plan documents. It further appears from the record that the 1980 pension plan includes the SRRF calculation.

Following the installation of the 1976 plan, Occidental retained new actuaries who drafted a new pension plan. The new plan, which became effective January 1, 1977, did not contain the SRRF provision. The company alleges the SRRF was omitted due to an oversight, and that the company, the union and the employees understood that pension benefits were to be computed using it. The company further alleges it was unaware the SRRF was omitted until 1981, at which time it drafted a pension plan using the SRRF calculation.

Mr. Shirtum contends he relied on the 1977 pension plan documents when he elected to retire. The company, however, applied the SRRF to his pension benefit calculation, and reduced his pension benefits accordingly.

Mr. Shirtum filed a grievance on August 6, 1982. The parties agreed to an arbitration, which was held on April 29, 1983. The award issued November 10, 1983. This matter is now before the Court on cross-motions for vacation and enforcement of Arbitrator Howlett's award. After a thorough consideration of the briefs, and having heard the arguments of counsel, the Court is of the opinion that plaintiff's suit to vacate the award is time-barred by the provisions of the United States Arbitration Act of 1925, 9 U.S.C. § 12. Therefore, plaintiff's motion to vacate the award is denied, and this case is dismissed.

DISCUSSION

In DelCostello v. Teamsters, 462 U.S. 151, 103 S.Ct. 2281, 76 L.Ed.2d 476 (1983), the Supreme Court ruled that the six month limitations period of § 10(b) of the National Labor Relations Act is applicable to the employee's breach of duty of fair representation claim against his union and breach of collective bargaining agreement claim against his employer. The Court adopted § 10(b) of the National Labor Relations Act, 29 U.S.C. § 160(b), because § 301 of the Labor Management Relations Act does not contain a limitations period. Prior to DelCostello, the courts looked to "the nature of the cause of action" and applied the most analogous state statute of limitations to claims brought under § 301. See Auto Workers v. Hoosier Cardinal Corp., 383 U.S. 696, 86 S.Ct. 1107, 16 L.Ed.2d 192 (1966) (suit by union against company for breach of collective bargaining agreement).

Although DelCostello establishes a statute of limitations period for hybrid claims under § 301, it does not address actions arising solely under § 301 or, more specifically, suits to vacate arbitration awards brought directly under § 301. See DelCostello, 452 U.S. at 158-59, 103 S.Ct. at 2287, fn. 12. Every court of appeals which has considered this issue in the arbitration context has concluded the holding of DelCostello does not apply to such suits. Federation v. Westinghouse Electric Corp., 736 F.2d 896 (3rd Cir.1984) (suit to compel arbitration, applying the six month period of § 10(b) by analogy); United Brotherhood of Carpenters and Joiners v. FMC Corp., 724 F.2d 815 (9th Cir.1984) (suit to vacate arbitration, applying 20 day state statute); International Union of Electrical, Radio and Machine Workers v. Ingram Mfg. Co., 715 F.2d 886 (5th Cir.1983) en banc denied 710 F.2d 677 (suit to enforce arbitration, applying four year state "catch — all" statute); Derwin v. General Dynamics Corp., 719 F.2d 484 (1st Cir. 1983) (suit to confirm arbitration, applying either six or twenty year state statute).

Michigan's statute of limitations applicable to actions to vacate arbitration expressly excludes "collective bargaining contracts between employers and employees." M.C. L.A. § 600.5001(3). Therefore, this section is inapplicable to actions under § 301. Badon v. General Motors Corp., 679 F.2d 93, 98 (6th Cir.1982). However, this Court concludes that the federal labor policies identified in DelCostello are best protected by adoption of the three month period of the United States Arbitration Act. Because DelCostello represents a new approach, based more on labor policy considerations than on the former practice of pigeonholing a § 301 claim in an "analogous state claim" category, some discussion of legal background is necessary.

a. Hoosier Cardinal and the analogous state claim analysis.

The Court in United Auto Workers v. Hoosier Cardinal, 383 U.S. 696, 86 S.Ct. 1107, 16 L.Ed.2d 192 (1966) likened the union's § 301 claim to a contract action and adopted Indiana's six year statute applicable to actions for breach of oral contracts, the Court having found that the union's claim was partly based on the written collective bargaining agreement and partly based on "the oral employment contract each employee had made" with the company. 383 U.S. at 699, 86 S.Ct. at 1110. Had the Court not construed the contract as being of a hybrid nature (in the part written-part oral sense), the alternative was to apply Indiana's twenty year limitations period applicable to written contracts.²

In electing to apply the shorter limitations period, the Court also relied on the federal policy favoring rapid disposition of labor disputes. Hoosier Cardinal, 383 U.S. at 707, 86 S.Ct. at 1114. The Court cited the six months limitations period of § 10(b) of the NLRA as embodying this policy, but reasoned that had Congress intended to also include such a limitation in § 301 suits, it would have done so. The Court rejected the argument that there is a need for a uniform standard with regard to limitations periods, concluding a lack of uniformity in this area is "unlikely to frustrate in any important way the achievement of any significant goal of labor policy." 383 U.S. at 702, 86 S.Ct. at 111.

The Court in Hoosier Cardinal also relied on a line of cases which hold that state statutes of limitations govern the timeliness of federal causes of action unless Congress has specifically provided otherwise. The Court cited cases applying this rule which date back to 1895, and stated "... when Congress has disagreed with such an interpretation of its silence, it has spoken to overturn it by enacting a uniform period of limitations." 383 U.S. at 704, 86 S.Ct. at 1112 (citations omitted).

So, although the Hoosier Cardinal court recognized a federal interest in rapid disposition of labor disputes, it reasoned that the practice of federalizing analogous state statutes of limitations would not frustrate any federal labor goals.

The rule of Hoosier Cardinal was applied to actions to vacate arbitration awards, such as the action presently before this Court, in United Parcel Service, Inc. v. Mitchell, 451 U.S. 56, 101 S.Ct. 1559, 67 L.Ed.2d 732 (1981). In Mitchell, though, the Court made clear that the only issue before it was which state limitations period to apply, New York's six year statute governing contract claims or New York's 90 day period for actions to vacate arbitration awards. The Court made clear that it was not passing on the question of whether adoption of a uniform standard is appropriate. See Mitchell, 451 U.S. at 61, 101 S.Ct. 1562, fn. 2.³

b. Mitchell; toward policy-based limitations.

Although the Hoosier Cardinal court applied the six-year period to the breach of collective bargaining agreement claim, the Mitchell court adopted the 90 day period (applicable to state actions to vacate arbitration awards) to § 301 suits to vacate arbitration awards. The court in Mitchell made clear that such § 301 suits stand on a different footing than breach of collective bargaining agreement suits, such that separate policy considerations should attach to decisions about the proper amount of time to be given to a party seeking to disturb an arbitration award. It appears to this Court that the Court in Mitchell sought to apply a limitations period which protects the integrity of the grievance process in labor relations, and, specifically, the arbitration process as a fundamental element of that system.

It is important to bear in mind the observations made in the Steelworkers Trilogy that "the grievance machinery under a collective bargaining agreement is at the very heart of the system of industrial self-government.... The processing ... machinery is actually a vehicle by which meaning and content are given to the collective bargaining agreement." Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574, 581, 80 S.Ct. 1347, 1352, 4 L.Ed.2d 1409 (1960). Although the present case involves a fairly mundane and discrete wrongful discharge complaint, the grievance and arbitration procedure often processes disputes involving interpretation of critical terms in the collective-bargaining agreement affecting the entire relationship between company and union. See, e.g., Humphrey v. Moore

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