Phoenix Newspapers, Inc. v. Phoenix Mailers Union Local 752, Intern. Broth. of Teamsters, 91-16459

• Decision Date: 24 March 1993
• Docket Number: No. 91-16459,91-16459
• Citation: 989 F.2d 1077
• Parties: 142 L.R.R.M. (BNA) 2819, 125 Lab.Cas. P 10,628 PHOENIX NEWSPAPERS, INC., Plaintiff-Appellant, v. PHOENIX MAILERS UNION LOCAL 752, INTERNATIONAL BROTHERHOOD OF TEAMSTERS, Defendant-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1077

989 F.2d 1077

142 L.R.R.M. (BNA) 2819, 125 Lab.Cas. P 10,628

PHOENIX NEWSPAPERS, INC., Plaintiff-Appellant, v. PHOENIX MAILERS UNION LOCAL 752, INTERNATIONAL BROTHERHOOD OF TEAMSTERS, Defendant-Appellee.

No. 91-16459.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Aug. 19, 1992.

Decided March 24, 1993.

Marshall W. Anstandig, Bryan, Cave, McPheeters & McRoberts, Phoenix, AZ, for plaintiff-appellant.

Michael J. Keenan, Phoenix, AZ, for defendant-appellee.

Appeal from the United States District Court for the District of Arizona, Earl H. Carroll, District Judge, Presiding.

Before: WIGGINS, O'SCANNLAIN, and FERNANDEZ, Circuit Judges.

WIGGINS, Circuit Judge:

OVERVIEW

Phoenix Newspapers, Inc. ("PNI") appeals the district court's grant of summary judgment and award of attorneys' fees in favor of Phoenix Mailers Union Local 752 ("the Union"). PNI filed a complaint in district court to vacate an arbitration award and moved for summary judgment. The Union filed a cross-motion for summary judgment, seeking enforcement of the arbitration award and attorneys' fees. The district court found that PNI made essentially three arguments: (1) the dispute was not arbitrable, (2) the arbitration award was not valid because it did not draw its essence from the collective bargaining agreement ("Agreement"), and (3) the arbitrator's remedy exceeded his authority. The district court granted the Union's motion for summary judgment and awarded fees. PNI appeals.

The district court had jurisdiction pursuant to 28 U.S.C. § 1331. We have jurisdiction pursuant to 28 U.S.C. § 1291, and we affirm in part, and reverse in part.

BACKGROUND

PNI and the Union are parties to a collective bargaining agreement that governs the wages, hours, and working conditions of PNI's mailroom employees. A dispute arose when PNI unilaterally implemented manning changes for the Sheridan, an inserting machine. The Union filed a grievance, claiming that PNI's manning changes violated the Agreement and past practice. Soon after, the Union filed a charge with the National Labor Relations Board ("NLRB"), alleging a violation of section 8(a)(5) of the National Labor Relations Act ("NLRA"). The NLRB deferred action pending arbitration of the dispute.

The arbitrator found that the dispute was arbitrable, that PNI violated sections 2 and 32 of the Agreement, and that PNI violated sections 8(a)(5) and 8(d) of the NLRA. The arbitrator concluded that the employees, who bore a greater work load as a result of PNI's manning changes, were entitled to increased compensation. He gave the parties sixty days to reach a new wage rate that would compensate for the effects of the manning changes. If the parties were unable to reach an agreement during that time, the arbitrator indicated he would determine the appropriate level of compensation.

DISCUSSION

PNI appeals the district court's order, alleging that the dispute was not arbitrable, that the award did not draw its essence from the Agreement, that the arbitrator did not have authority to hear the unfair labor practice charge, and that the arbitrator's remedy exceeded his authority. PNI also appeals the district court's award of attorneys' fees. We affirm the district court's findings that the dispute was arbitrable and that the award drew its essence from the Agreement. We reverse the district court's finding that the remedy was within the arbitrator's power and the award of attorneys' fees. Based on the record before us, we cannot determine whether the unfair labor practice charge was properly decided by the arbitrator. ¹

I. Standards of Review.

In the Steelworkers Trilogy, ² the Supreme Court declared that public policy favors the resolution of labor disputes through arbitration. Accordingly, judicial review of arbitration awards is extremely limited. Stead Motors v. Automotive Machinists Lodge 1173, 886 F.2d 1200, 1204 (9th Cir.1989) (en banc), cert. denied, 495 U.S. 946, 110 S.Ct. 2205, 109 L.Ed.2d 531 (1990). An arbitration award must be enforced if on its face it represents a plausible interpretation of the contract. George Day Const. Co. v. United Bhd. of Carpenters and Joiners, Local 354, 722 F.2d 1471, 1477 (9th Cir.1984).

Federal courts should not review the merits of arbitration awards, but rather should merely determine whether the parties agreed to arbitrate the dispute and to give the arbitrator the power to provide for his award. Warrior & Gulf, 363 U.S. at 582-83, 80 S.Ct. at 1352-53. A reviewing court should only determine whether the arbitrator is dispensing "his own brand of industrial justice," assuring itself that the award "draws its essence from the collective bargaining agreement." Enterprise Wheel, 363 U.S. at 597, 80 S.Ct. at 1361. A reviewing court is "bound--under all except the most limited circumstances--to defer to the decision of [the arbitrator], even if ... that ... decision finds the facts and states the law erroneously." Stead Motors, 886 F.2d at 1204.

II. The Dispute was Arbitrable.

There is a strong presumption in favor of arbitrability. Warrior & Gulf, 363 U.S. at 582-83, 80 S.Ct. at 1352-53. This presumption is strengthened when the arbitration agreement contains broad language. Id. at 585, 80 S.Ct. at 1354. The party contesting arbitrability bears the burden of demonstrating how the language in the collective bargaining agreement excludes a particular dispute from arbitration. "In the absence of any express provision excluding a particular grievance from arbitration, ... only the most forceful evidence of a purpose to exclude the claim from arbitration can prevail." Id. at 584-85, 80 S.Ct. at 1353-54.

Here, no provision of the Agreement excludes manning disputes from arbitration. On the contrary, the broad language of the Agreement compels a finding of arbitrability. See id. at 585, 80 S.Ct. at 1354. In section 11, ³ the parties agreed to submit all disputes over the interpretation and application of any clause of the Agreement to arbitration and did not provide for a specific exception that covers this dispute. PNI has failed to produce forceful evidence sufficient to override the presumption of arbitrability.

PNI incorrectly contends that the doctrine of "management rights" shields this dispute from arbitration. See Teamsters Union Local 287 v. Frito-Lay, Inc., 849 F.2d 1210, 1213 (9th Cir.1988). The Agreement did not include a "management rights" clause explicitly granting PNI exclusive powers. Although PNI did retain the right as a matter of past practice to make manning changes, it still had an obligation to negotiate over the effects of such changes when, as in this case, they resulted in substantial changes in working conditions. Again, PNI has failed to provide "forceful evidence" that it retained management rights that would invalidate arbitration in this case. See id.

Further, PNI's claim that the Union waived its right to bargain over the changes in manning is incorrect. In making its argument, PNI relies on NLRB v. Island Typographers, Inc., 705 F.2d 44 (2nd Cir.1983). In that case, the union waived its right to bargain over changes because it failed to respond in a timely manner to changes formally proposed by the employer. Id. at 48-51. Here, however, the Union responded to PNI's unilateral changes in manning by filing a grievance. This action cannot be interpreted as a waiver of the Union's right to bargain over the changes. Accordingly, the district court's conclusion that the dispute was arbitrable is correct.

III. The Arbitrator's Award Drew Its Essence from the Agreement.

An arbitration award should be upheld as long as it draws its essence from the collective bargaining agreement. See Enterprise Wheel, 363 U.S. at 596-99, 80 S.Ct. at 1360-62. In Stead Motors, this court determined that an award fails to draw its essence from an agreement only when it ignores the plain language of the contract and "manifestly disregard[s]" the contours of the agreement. 886 F.2d at 1205 n. 6. Moreover, an arbitrator is granted leeway in interpreting a collective bargaining agreement. " '[M]ore than a contract,' the agreement has to be seen as 'a generalized code to govern a myriad of cases which the draftsmen cannot wholly anticipate.' " Id. at 1207 (quoting Warrior & Gulf, 363 U.S. at 578, 80 S.Ct. at 1351). Although an arbitrator cannot ignore the plain language of a contract, United Paperworkers Int'l Union v. Misco, Inc., 484 U.S. 29, 38, 108 S.Ct. 364, 370, 98 L.Ed.2d 286 (1987), the arbitrator is not bound by the four corners of the document. See Warrior & Gulf, 363 U.S. at 581-82, 80 S.Ct. at 1352-53.

PNI has not provided sufficient evidence to invalidate the arbitrator's award. In finding that PNI violated sections 2 and 32 of the Agreement ⁴ by failing to negotiate with the Union over the substantial effects of the manning changes, the arbitrator made a plausible interpretation of the Agreement. See George Day, 722 F.2d at 1477. PNI has failed to prove that the arbitrator "manifestly disregarded" the contours of the Agreement. See Stead Motors, 886 F.2d at 1205, n. 6. Moreover, PNI's attempt to limit the arbitrator's inquiry only to whether PNI had the right to make manning changes is incorrect. Such a narrow view ignores the fact that PNI's unilateral manning changes altered the bargain that is represented by the Agreement. See First Nat'l Maintenance Corp. v. NLRB, 452 U.S. 666, 681-82, 101 S.Ct. 2573, 2582-83, 69 L.Ed.2d 318 (1981) (recognizing that a union must be given an opportunity to bargain over the effects of an economic decision made by a company, even though that decision was within management's discretion). The arbitrator correctly concluded that PNI should bargain over the effects of the manning changes. Because PNI has not demonstrated that the arbitrator's award manifestly disregarded the contours of the Agreement, we affirm the district court's finding that the arbitration award drew its essence from the...