San Juan Coal Co. v. Int'l Union of Operating Eng'rs

• Decision Date: 06 March 2012
• Docket Number: No. 11–2071.,11–2071.
• Parties: SAN JUAN COAL COMPANY, Plaintiff–Appellee, v. INTERNATIONAL UNION OF OPERATING ENGINEERS, LOCAL 953, Defendant–Appellant.
• Court: U.S. Court of Appeals — Tenth Circuit

192 L.R.R.M. (BNA) 3037

672 F.3d 1198

SAN JUAN COAL COMPANY, Plaintiff–Appellee,

v.INTERNATIONAL UNION OF OPERATING ENGINEERS, LOCAL 953, Defendant–Appellant.

No. 11–2071.

United States Court of Appeals, Tenth Circuit.

March 6, 2012.

Shane Youtz (Marianne Bowers with him on the briefs), Youtz & Valdez, P.C., Albuquerque, NM, for Defendant–Appellant.

Patrick Richard Scully (Matthew M. Morrison with him on the briefs), Sherman & Howard L.L.C., Denver, CO, for the Plaintiff–Appellee.

Before LUCERO, McKAY, and TYMKOVICH, Circuit Judges.

LUCERO, Circuit Judge.

An arbitrator's interpretation of an agreement, even one that is flawed or based on questionable findings of fact, is due the utmost judicial deference. It matters not that a reviewing court might offer a more cogent reading of the agreement; the arbitrator's interpretation must be upheld wholly unless it is without any textual basis.

San Juan Coal Company (“San Juan”) and the International Union of Operating Engineers, Local 953 entered into binding arbitration to determine whether union members on a certain schedule were entitled to holdover pay. The arbitrator concluded that the union members were entitled to the extra pay, but on review, the district court overturned the arbitral award. Because the arbitrator's interpretation was colorable, we hold that the district court improperly substituted its interpretation of the agreement. Exercising jurisdiction under 28 U.S.C. § 1291, we reverse.

I

San Juan operates an underground coal mine near Farmington, New Mexico. Workers in the mine are unionized, and the terms of their employment are set forth in a collective bargaining agreement (“CBA”). The CBA's section on overtime pay provides that “time worked beyond the scheduled hours for a particular day will be paid at one and one-half times (1 1/2) the normal rate of pay.” It also includes a “holdover pay” provision, which states that “an employee ... required to work for two (2) hours after the completion of their shift ... will be paid an additional one half hour at one and one-half times (1 1/2) the normal rate.”

In an effort to reduce operational costs, San Juan entered into negotiations with the union to establish reorganized worker schedules. The fruit of this bargaining was a two-page Memorandum of Agreement (“MOA”).

The MOA set the terms of a new schedule that it defined as a “weekend shift.” This new schedule provided workers with four days off followed by three consecutive work days. The agreement dictated that although a “normal workday shall be no more than ten (10) consecutive hours[,] ... [t]he weekend shift will include an additional two (2) hours of mandatory overtime.” A heading in the MOA described this schedule as “3/10+2 OT Hours Weekend Shift.” Another provision stipulated that “Leave Bank for a Weekend Shift (10 Hour Shift + 2 Hours OT) will be accounted for by 10 hours of Leave Bank utilized.” Workers on the weekend schedule were thus required to work a total of 36 hours each week. The MOA stated that it does not affect any other provision of the CBA and that all workers covered under the CBA “will continue as full time employees, with no loss of benefits.”

Approximately one month after the parties executed the MOA, the union filed a grievance arguing that the weekend shift workers were wrongfully denied holdover pay. According to the union, the “shift” for the purposes of the holdover pay provision consisted of ten hours of regular pay. Under this theory, the two hours of mandatory overtime were “after completion of [the workers'] shift,” entitling them to an additional half-hour of pay at one and a half times their base rate. San Juan disagreed, contending that the weekend “shift” was the entire twelve-hour work period, meaning that holdover pay was not required unless the workers stayed for two hours beyond their normal twelve hours. To settle their dispute, the parties entered into binding arbitration.

Following an arbitration hearing in which testimony and documentary evidence were presented, the arbitrator sided with the union. In reaching his conclusion, the arbitrator stated that the MOA “explicitly identifies the Weekend Shift as a ten (10) hour shift.” To further support his conclusion, the arbitrator cited the MOA's statement that the “normal workday shall be no more than ten (10) consecutive hours of work,” implicitly reasoning that “normal workday” and “shift” were synonymous. Additionally, the arbitrator relied on the MOA's guarantee of “full time” employment. Based on its finding that “full time in the world of work is forty (40) hours per week,” the arbitrator reasoned that San Juan's interpretation would violate the MOA's full-time guarantee because workers would only be compensated for 39 hours of work.

Unhappy with this outcome, San Juan sought to overturn the arbitration award pursuant to § 301 of the Labor Management Relations Act, 29 U.S.C. § 185. Both parties moved for summary judgment. The district court granted San Juan's motion and vacated the arbitrator's decision. Although the court acknowledged that its power to review the arbitral decision was limited, it concluded that the arbitrator lost sight of the plain language of the MOA and CBA. Specifically, it rejected the arbitrator's assertion that the MOA “identifies the Weekend Shift as a ten (10) hour shift,” instead concluding that “the MOA clearly and repeatedly identifies the entire twelve-hour work period at issue as a ‘weekend shift.’ ” The court also reasoned that the arbitrator's attempts to define “normal workday,” “shift,” and “full time” had no basis in the text of the agreements. Although the court acknowledged that the MOA contained some inconsistencies, it nevertheless concluded that the arbitrator's decision was indefensible.

II

We review a grant of summary judgment in a labor arbitration case de...