U.S. Postal Service v. American Postal Workers

• Decision Date: 23 January 2009
• Docket Number: No. 08-5056.,08-5056.
• Citation: 553 F.3d 686
• Parties: UNITED STATES POSTAL SERVICE, Appellee v. AMERICAN POSTAL WORKERS UNION, Appellant.
• Court: U.S. Court of Appeals — District of Columbia Circuit

553 F.3d 686

UNITED STATES POSTAL SERVICE, Appellee v. AMERICAN POSTAL WORKERS UNION, Appellant.

No. 08-5056.

United States Court of Appeals, District of Columbia Circuit.

Argued November 17, 2008.

Decided January 23, 2009.

Appeal from the United States District Court for the District of Columbia (No. 06cv00793).

Darryl J. Anderson argued the cause and filed the briefs for appellant.

Fred E. Haynes, Assistant U.S. Attorney, argued the cause for appellee. With him on the brief were Jeffrey A. Taylor, U.S. Attorney, R. Craig Lawrence, Assistant U.S. Attorney, and Teresa A. Gonsalves, Appellate Counsel, U.S. Postal Service.

Before: SENTELLE, Chief Judge, and GRIFFITH, Circuit Judge, and EDWARDS, Senior Circuit Judge.

Opinion for the Court filed by Senior Circuit Judge EDWARDS.

EDWARDS, Senior Circuit Judge:

This case involves an action brought in District Court by the United States Postal Service ("USPS" or "Postal Service"), under the Postal Reorganization Act, 39 U.S.C. § 1208(b), to vacate an arbitrator's award granting a grievance filed by the American Postal Workers Union ("APWU" or "the union"). The union's grievance was filed under a collective bargaining agreement ("CBA") between USPS and APWU, and it challenged the dismissal of an employee, Lorraine Daliessio, who had been employed by USPS. The Postal Service argued to the arbitrator that, because Daliessio was a probationary employee when separated from employment, she could be terminated without cause and without access to the grievance and arbitration procedures available to nonprobationary employees under the parties' CBA.

The parties agreed that the arbitrator had the authority to decide whether the grievance was arbitrable under the CBA. The arbitrator ruled that Daliessio's grievance was arbitrable, because the grievant was not separated during her probationary period. The arbitrator reached this conclusion in part because the Postal Service had failed to give proper notice as required by the USPS Employee and Labor Relations Manual ("ELM") when it purported to separate Daliessio. Finding no just cause, the arbitrator ordered Daliessio reinstated with seniority and back pay.

The District Court vacated the award. U.S. Postal Serv. v. Am. Postal Workers Union AFL-CIO, 536 F.Supp.2d 12 (D.D.C.2008). The District Court agreed with USPS that, because controlling arbitral precedent "expressly disallows probationary employees access to grievance procedures for challenges to a separation based on non-compliance with [the] ELM," id. at 17, the arbitrator's award "exceeded the authority granted by the [parties'] National Agreement." Id. On appeal, APWU argues that the District Court erred in failing to adhere to the commands of United Steelworkers of America v. Enterprise Wheel & Car Corp., 363 U.S. 593, 80 S.Ct. 1358, 4 L.Ed.2d 1424 (1960), and its progeny governing judicial review of arbitration awards. The Enterprise Wheel line of cases, which controls the disposition of this case, emanates from section 301 of the Labor-Management Relations Act of 1947, 29 U.S.C. § 185(a) ("LMRA").

Section 1208(b) of the Postal Reorganization Act, 39 U.S.C. § 1208(b), gives federal district courts jurisdiction over suits for violations of contracts between the United States Postal Service and unions representing postal employees. Section 1208(b) is virtually identical to section 301(a) of the [LMRA], which provides that "[s]uits for violation of contracts between an employer and a labor organization representing employees ... may be brought in any district court of the United States having jurisdiction of the parties." [Id.] We have previously applied cases interpreting section 301(a) in determining the scope of section 1208(b).

U.S. Postal Serv. v. Nat'l Rural Letter Carriers' Ass'n, 959 F.2d 283, 286 (D.C.Cir.1992) (second alteration in original).

Under Enterprise Wheel, a court may not vacate an arbitrator's award if it "draws its essence" from the parties' collective bargaining agreement. 363 U.S. at 597, 80 S.Ct. 1358. It does not matter whether the arbitrator's decision on the merits appears to be misguided. "When an arbitrator resolves disputes regarding the application of a contract, and no dishonesty is alleged, the arbitrator's `improvident, even silly, factfinding' does not provide a basis for a reviewing court to refuse to enforce the award." Major League Baseball Players Ass'n v. Garvey, 532 U.S. 504, 509, 121 S.Ct. 1724, 149 L.Ed.2d 740 (2001) (quoting United Paperworkers Int'l Union, AFL-CIO v. Misco, Inc., 484 U.S. 29, 39, 108 S.Ct. 364, 98 L.Ed.2d 286 (1987)). In other words, the Supreme Court has made it abundantly clear that "a federal court may not overrule an arbitrator's decision simply because the court believes its own interpretation of the contract would be the better one." W.R. Grace & Co. v. Local Union 759, Int'l Union of the United Rubber, Cork, Linoleum & Plastic Workers of Am., 461 U.S. 757, 764, 103 S.Ct. 2177, 76 L.Ed.2d 298 (1983). Because the arbitrator's award in this case drew its essence from the parties' CBA, the award cannot be overturned by a federal court. Accordingly, we reverse the judgment of the District Court and remand the case for judgment to be entered in favor of APWU.

I. BACKGROUND

A. The National Agreement

The APWU and USPS are parties to a collective bargaining agreement covering employees at postal facilities throughout the United States. The instant dispute is governed by the CBA that was in effect between 1994 and 1998. See Collective Bargaining Agreement Between American Postal Workers Union, AFL-CIO and United States Postal Service, Nov. 21, 1994 — Nov. 20, 1998 (the "National Agreement"), reprinted in Joint Appendix ("J.A.") 30.

Article 15 of the National Agreement sets forth the parties' grievance-arbitration procedure. A grievance under the CBA is defined as a complaint by an employee or the union that involves the interpretation, application of, or compliance with the provisions of the contract. National Agreement, Art. 15. 1, J.A. 43. In the event that a grievance is not resolved under the contractual grievance procedure, the matter may be submitted to a neutral arbitrator jointly chosen by the parties. Id. at Art. 15.2, J.A. 43-46. Cases involving interpretive issues of general application under the National Agreement are arbitrated at the national level, and the resulting awards establish controlling precedent on the meaning of the National Agreement. Id. at Art. 15.5, J.A. 47-49. "Area Level Arbitration" cases, as distinguished from "National Panel" cases, are final and binding only on the parties to the individual case. Id.

The ELM also contains provisions relating to the terms and conditions of employment of employees covered by the CBA. However, unlike the CBA, the ELM is not a product of collective bargaining between APWU and USPS. The Postal Service may add to and amend the terms of the ELM, but the union must be notified of any changes and it may challenge them on the ground that they conflict with the terms of the National Agreement or are otherwise unfair, unreasonable, or inequitable. Id. at Art. 19, J.A. 74. In addition, the parties have agreed that the provisions of the ELM "shall be continued in effect" unless changed in accordance with procedures set forth in Article 19. Id.

The ELM establishes, inter alia, detailed procedures covering the separation of probationary employees. Under the terms of the ELM, an appointing official must "notify[] the employee in writing why she or he is being terminated and the effective date of the action," along with "the appointing official's conclusions as to the inadequacies of performance or conduct." ELM 365.326, reprinted in J.A. 173. The ELM requires that the notice of termination be given to the employee before the end of the probationary period. Id. at 365.327, J.A. 174.

Under the CBA, new employees are considered probationary for the first 90 days of employment. Pursuant to Article 12 of the National Agreement, USPS may separate employees during their probationary period without just cause. The CBA provides:

The probationary period for a new employee shall be ninety (90) calendar days. The Employer shall have the right to separate from its employ any probationary employee at any time during the probationary period and these probationary employees shall not be permitted access to the grievance procedure in relation thereto.

National Agreement, Art. 12. 1.A, J.A. 31.

For a time, USPS and APWU officials disagreed over whether an employee who was separated during his or her probationary period could challenge the employer's action under the CBA grievance and arbitration procedures. The union contended that separations must comply with ELM procedures and that claims of noncompliance could be brought to arbitration. The Postal Service disagreed, contending that Article 12. 1.A made it clear that probationary employees who were separated had no access to the CBA grievance and arbitration procedures. In 2000, in a USPS action seeking to vacate an arbitrator's award, the Fourth Circuit agreed with the Postal Service that the CBA barred all arbitral challenges to the separation of probationary employees. See U.S. Postal Serv. v. Am. Postal Workers Union, AFL-CIO, 204 F.3d 523 (4th Cir.2000).

The matter finally came to a head in 2001, when National Arbitrator Shyam Das presided over an arbitration proceeding that concerned the meaning of Article 12.1.A. In particular, Arbitrator Das was asked to decide what claims, if any, a probationary employee could pursue under the parties' CBA grievance and arbitration procedures to challenge a separation action taken within the employee's probationary period. See In re Postal Serv., Am. Postal Workers Union and Nat'l Ass'n of Letter Carriers, Case No. Q98C-4Q-C 99251456 (Nat'l Award, Sept. 10, 2001) (Das, Arb.) ("Das Award"), reprinted in J.A. 69. Arbitrator Das concluded that probationary...