Pennsylvania Power Co. v. Local Union No. 272 of Intern. Broth. of Elec. Workers, AFL-CIO, AFL-CIO
| Decision Date | 22 September 1989 |
| Docket Number | No. 89-3036,AFL-CIO,89-3036 |
| Citation | 886 F.2d 46 |
| Parties | 132 L.R.R.M. (BNA) 2388, 113 Lab.Cas. P 11,525 PENNSYLVANIA POWER COMPANY, Appellant, v. LOCAL UNION # 272 OF the INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS,; the International Brotherhood of Electrical Workers,. |
| Court | U.S. Court of Appeals — Third Circuit |
Edward N. Stoner, II (argued), David J. McAllister, Reed Smith Shaw & McClay, Pittsburgh, Pa., Harry A. Flannery, Pennsylvania Power Co., New Castle, Pa., for appellant.
Marianne Oliver (argued), Pittsburgh, Pa., for appellee.
Before BECKER, STAPLETON, and ROSENN, Circuit Judges.
This appeal from a summary judgment in favor of Local Union No. 272 and the denial of Pennsylvania Power Co.'s cross motion challenges a labor arbitrator's ruling on the arbitrability of a wage rate dispute. We conclude that the arbitrator exceeded the scope of his authority and we will accordingly reverse.
The facts are not in dispute. In April 1986, Pennsylvania Power Corp. (Penn Power) created a new job classification, the "Mechanic-A/Welder," for employees performing welding on pressurized piping systems. Penn Power decided to assign the same wage rate to the new position as the one that applied to the Mechanic-A position. Local Union No. 272 of the International Brotherhood of Electrical Workers (the Union) met with Penn Power and argued that the wage rate for the new position should be upgraded. Penn Power refused.
On November 6, 1986, the Union filed a grievance, seeking "proper evaluation and compensation paid" for the new position. App. at 61. Penn Power responded by noting the following:
No Contract violation. The job evaluation system is not a part of the Agreement, therefore, the grievance is not arbitrable.
The Union then requested Penn Power to furnish it with certain materials used by Penn Power in arriving at its wage rate decision, but Penn Power refused, claiming confidentiality. After the Union filed a complaint with the NLRB and a hearing was scheduled, Penn Power agreed to submit to arbitration both the issue of whether the grievance regarding the wage rate was arbitrable and, if that issue should be determined against Penn Power, the merits of the grievance.
The arbitrator held a hearing on the issue of arbitrability and, in January 1988, he concluded that the grievance was arbitrable. In May 1988, the arbitrator ruled on the merits, concluding that the position of Mechanic-A/Welder should be upgraded from the wage rate assigned it by the Company.
Penn Power sought an order vacating the arbitrator's award in the United States District Court for the Western District of Pennsylvania. On cross motions for summary judgment, the District Court affirmed the arbitrator's award, granting the Union's motion and denying that of Penn Power.
Our review of the district court's grant and denial of the summary judgment motions is plenary. In considering the propriety of the arbitrator's decision on arbitrability, however, our review is subject to the same highly deferential standard we employ in reviewing arbitrators' rulings on the merits. We will not vacate an arbitrator's arbitrability decision unless it cannot rationally be derived from the collective bargaining agreement. See United Steelworkers v. American Smelting, Etc., 648 F.2d 863, 867 (3d Cir.1981). As with arbitrators' decisions on the merits, a decision on arbitrability will be affirmed as long as it "draws its essence" from the collective bargaining agreement. Where, however, an arbitrator substitutes his notions of industrial justice for the terms of the parties' agreement, he exceeds his authority. 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).
The collective bargaining agreement at issue here has two features relevant to this appeal. Article 17 provides that, when the "company makes a substantial change in the duties and responsibilities of any job classification or establishes a new job classification, the Company ... will meet with the Union to discuss the description and negotiate regarding the proper wage rate." App. at 47-48. The agreement does not articulate what measures should be taken by the parties if the negotiations do not lead to agreement.
Article 8, section 2(d) contains the second salient feature. It provides that App. at 27.
This court has twice been called upon to examine the legal effect of language like that found in Article 8, section 2(d). We have concluded that such clauses limit the scope of arbitrable issues to those "involving the interpretation or application of terms and conditions of employment that the parties have themselves agreed to in their contract." Lodge 802, Etc. v. Pennsylvania Shipbuilding Co., 835 F.2d 1045, 1047 (3d Cir.1987); Jersey Nurses Economic Security Org. v. Roxbury Medical Group, 868 F.2d 88, 90 (3d Cir.1989). We have distinguished such "rights" arbitration from "interest" arbitration, where the parties have agreed to allow the arbitrator to set new terms and conditions of employment that are not contained in the collective bargaining agreement. When the parties have agreed to "rights" rather than to "interest" arbitration, the arbitrator exceeds her authority if she deems arbitrable those issues whose resolution calls for the addition of new terms or conditions to the agreement. See Lodge 802, 835 F.2d at 1047; Jersey Nurses, 868 F.2d at 90.
The arbitrator's January ruling on the arbitrability of the proper wage rate for the Mechanic-A/Welder position ignored Article 8, p 2(d). Moreover, the arbitrator failed to examine the fundamental question whether the parties' agreement evinced an intent to arbitrate disputes over job classifications. Indeed, the arbitrator wholly eschewed reliance on the language of the parties' agreement in arriving at his decision. Instead, he based his decision on the following observations:
If disputes over the "proper wage rate" ... cannot be settled by agreement of the Parties, how will they be settled? The only other alternative is to leave them for negotiations over a new Agreement, which could result in a strike, costly to all concerned and specified ... to be avoided by the grievance procedure, with possible binding arbitration.
In his May 1988 ruling on the merits, the arbitrator commented further regarding his earlier decision in finding the grievance arbitrable. The arbitrator acknowledged that the agreement did not "specify the procedure to be followed if the parties cannot reach agreement on the proper classification and wage rate ...," App. at 72, but he nonetheless concluded that the duty to negotiate included the duty to arbitrate when no agreement could be reached at such negotiations: "If [the company] wishes to keep intact its present system of job evaluation to determine Salary Grades which are fair both to employees in the disputed job and in all other established jobs, it must allow [arbitration] as the reasonable and proper interpretation and application of the expression 'negotiating the proper wage rate' (Article 17, section 2)." App. at 76 (emphasis in original). The arbitrator again ignored article 8, section 2(d).
The collective bargaining agreement contains no wage rate for the Mechanic-A/Welder position. In seeking an arbitrator's ruling as to the appropriate wage rate for that position, the...
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