United Steelworkers of America, AFL-CIO-CLC v. Ideal Cement Co., Div. of Ideal Basic Industries, Inc.

• Decision Date: 17 May 1985
• Docket Number: 84-2001,P,AFL-CIO-CL,Nos. 84-1906,s. 84-1906
• Citation: 762 F.2d 837
• Parties: 119 L.R.R.M. (BNA) 2774, 103 Lab.Cas. P 11,501 UNITED STEELWORKERS OF AMERICA,laintiff-Appellant, Cross-Appellee, v. IDEAL CEMENT COMPANY, DIVISION OF IDEAL BASIC INDUSTRIES, INC., Defendant-Appellee, Cross-Appellant.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 837

762 F.2d 837

119 L.R.R.M. (BNA) 2774, 103 Lab.Cas. P 11,501

UNITED STEELWORKERS OF AMERICA, AFL-CIO-CLC, Plaintiff-Appellant, Cross-Appellee, v. IDEAL CEMENT COMPANY, DIVISION OF IDEAL BASIC INDUSTRIES, INC., Defendant-Appellee, Cross-Appellant.

Nos. 84-1906, 84-2001.

United States Court of Appeals, Tenth Circuit.

May 17, 1985.

Rudolph L. Milasich, Jr., Asst. Gen. Counsel, United Steelworkers of America, Pittsburgh, Pa. (Joseph M. Goldhammer of Brauer & Buescher, P.C., Denver, Colo., with him on the brief), for plaintiff-appellant, cross-appellee.

William C. McClearn of Holland & Hart, Denver, Colo. (Gregory A. Eurich, Denver, Colo., on the brief), for defendant-appellee, cross-appellant.

Before HOLLOWAY, Chief Judge, LOGAN, Circuit Judge, and SEAY, District Judge ^*.

SEAY, District Judge.

These appeals arise from an action to enforce a labor arbitration award under Section 301 of the Labor Management Relations Act of 1947, as amended, 29 U.S.C. Sec. 185. The circumstances leading to the action are unusual, and merit discussion.

Ideal Cement Company ("Ideal"), acting through its bargaining unit at Ideal's Portland, Colorado cement plant, and the United Steelworkers of America ("USWA"), on behalf of its local 14482, were parties to a three-year collective bargaining agreement ("the Agreement") dated May 1, 1981. The Agreement was typical of most collective bargaining agreements and contained, among other provisions, a dispute resolution article whereby grievances were to be submitted to an arbitrator whose decision on the matter would be final. ¹

A dispute between the parties arose when Ideal terminated the employment of Jeanne K. Matott on November 17, 1982. The USWA filed a grievance on Ms. Matott's behalf, protesting that the termination was a violation of the 1981 Agreement. All steps of the grievance procedure were exhausted in a timely fashion, and Ms. Matott's grievance was properly submitted to arbitration under the provisions of Article V of the Agreement.

The parties selected Robert W. Smedley as the Arbitrator, and a hearing was held before him on April 14, 1983. Arbitrator Smedley mailed a document captioned "Preliminary Award of Arbitrator" to both parties on July 1, 1983. In that document, Arbitrator Smedley made preliminary findings and suggested a procedure for the submission of additional medical information from each party. Ideal rejected the Arbitrator's suggestion in a letter to Arbitrator Smedley dated July 7, 1983, a copy of which was sent to the USWA. The Arbitrator's suggestion was accepted by the USWA, however, which mailed certain medical information to Arbitrator Smedley on August 1, 1983, providing no copy to Ideal.

On August 8, 1983, Arbitrator Smedley mailed a document (dated August 1, 1983) entitled "Award of Arbitrator" to both parties. The award found in favor of USWA and against Ideal on the issue of wrongful termination of Ms. Matott's employment. Arbitrator Smedley enclosed, with the award, a copy of the medical information he had received from USWA.

In a cover letter accompanying the award and enclosed USWA material, Arbitrator Smedley explained that he had finalized the award on August 1, 1983, but had not immediately mailed it to the parties because of his absence from the office during most the week. Arbitrator Smedley also stated that upon his return to the office on August 6, 1983, he had opened, but not read, the enclosed ex parte communication from the USWA. Arbitrator Smedley maintained the ex parte communication had not influenced his judgment because: (1) he had already decided and finalized the award before the material arrived at his office, and (2) he had not looked at the material. He stated, however, that he would not tolerate even the appearance of impropriety. He, therefore, offered Ideal the choice of electing to accept the award, or to disqualify the Arbitrator and void the award. At the request of Ideal, and after receiving no response, explanation or denial from the USWA, on September 9, 1983, Arbitrator Smedley set aside his award and disqualified himself from the case.

The USWA filed an action in the United States District Court for the District of Colorado seeking to enforce the August 1, 1983 award. In the alternative, the USWA requested that Ideal be ordered to rearbitrate the dispute. Ideal answered, agreeing to rearbitration, and filed a counterclaim alleging that the USWA's failure to resubmit the grievance to arbitration was a violation of its obligations under the collective bargaining agreement, thereby entitling Ideal to recover attorneys' fees and costs expended in its defense of the civil action.

In response to an order of the District Court, the parties filed cross motions for summary judgment; the USWA sought dismissal of Ideal's claim, and enforcement of the August 1, 1983 award, and Ideal sought dismissal of the USWA's claim, and judgment on its counterclaim for attorneys' fees and costs.

The District Court, by order dated June 4, 1984, acknowledged it was without guiding precedent, and found that the arbitration award had been "appropriately voided" in an effort "to protect the integrity of the arbitration process," since the award "could be perceived to have been tainted by an ex parte communication." The Court ordered the parties to rearbitrate the grievance before a new arbitrator. Ideal's counterclaim for attorneys' fees and costs was denied.

The USWA filed a timely notice of appeal on June 27, 1984, and an amended notice on July 6, 1984. Ideal filed its notice of cross-appeal on July 6, 1984. Jurisdiction of this Court is claimed under 28 U.S.C. Sec. 1291, as appeals from a final judgment of the District Court.

The USWA argues that the August 1, 1983 award was a final decision on the grievance. As a result, the USWA claims that Arbitrator Smedley lacked authority to vacate the final award, and that he was functus officio in acting to set aside the award. The USWA contends the District Court erred as a matter of law in refusing to enforce the final award, and supports this contention with the observation that the law is well settled that a court may vacate an award only when undue means is proven to have seriously undermined the integrity of the arbitral process.

We begin by noting the parties do not dispute the substantive arbitrability of the grievance. Accordingly, this Court need not concern itself with a separate and independent determination of that initial question. See Mobile Oil v. Local 8-766, Oil, Chemical & Atomic Workers International Union, 600 F.2d 322, 324-25 (1st Cir.1979).

Turning then to the Arbitrator's method of addressing an unfortunate incident, we are mindful of the federal courts' limited scope of review in passing upon the validity of a labor arbitrator's decision. See United Steelworkers of America v. Enterprise Wheel & Car Corp., 363 U.S. 593, 80 S.Ct. 1358, 4 L.Ed.2d 1424 (1960); United Steelworkers of America v. Warrior & Gulf Navigation Co., 363 U.S. 574, 80 S.Ct. 1347, 4 L.Ed.2d 1409 (1960); United Steelworkers of America v. American Manufacturing Co., 363 U.S. 564, 80 S.Ct. 1343, 4 L.Ed.2d 1403 (1960). This limited scope of review, as enunciated by the Supreme Court in the Steelworkers trilogy, serves well the federal labor law policy of finality in labor disputes, and lends significant support to one of the principal functions of labor arbitration--the settlement of disputes amicably and quickly without extensive judicial intervention. ² See Paperhandlers Union No. 1, Int'l Printing Pressmen & Assistants Union, AFL-CIO v. U.S. Trucking Corp., 441 F.Supp. 469, 471 (S.D.N.Y.1977) (federal labor law embraces policy of finality in labor disputes), appeal dismissed for lack of juris., 578 F.2d 1369 (2d Cir.1978). See also Derwin v. General Dynamics Corp., 719 F.2d 484, 491 (1st Cir.1983) (established labor policy significantly restricts role of federal courts); Drywall Tapers and Pointers of Greater N.Y., Local 1974 v. Operative Plasterers' and Cement Masons' Int'l Ass'n, 601 F.2d 675, 679 (2d Cir.1979) (courts must uphold arbitrator in exercise of broadest jurisdiction), cert. denied, 444 U.S. 1073, 100 S.Ct. 1018, 62 L.Ed.2d 755 (1980); Local 453, Int'l Union of Electrical, Radio & Machine Workers, AFL-CIO v. Otis Elevator Co., 314 F.2d 25, 28 (2d Cir.) (parties bound by arbitrator's decision even if regarded as unwise or wrong on merits), cert. denied, 373 U.S. 949, 83 S.Ct. 1680, 10 L.Ed.2d 705 (1963).

The federal courts are to give even greater deference to an arbitrator's decisions on matters of procedure which arise from the dispute and bear on its final disposition. The Supreme Court has stated quite plainly that matters of procedure lie solely within the discretion of the arbitrator. John Wiley & Sons, Inc. v. Livingston, 376 U.S. 543, 557, 84 S.Ct. 909, 918, 11 L.Ed.2d 898 (1964).

In this case, Arbitrator Smedley's act of mailing the award together with an offer to void it at Ideal's discretion was a procedural event, and the federal courts are obliged to defer to his decision. Arbitrator Smedley was faced with an unpleasant situation which could have irreparably harmed his integrity as an arbitrator. To avoid the appearance of impropriety he chose to utilize a procedural device not unlike the remittitur/new trial alternative offered to an overly-compensated plaintiff. The decision to offer such an alternative is one of a procedural nature.

That the Arbitrator chose to use such a procedure to protect the integrity of the arbitration process should not be subject to judicial second-guessing. Procedural arbitrability disputes should not be resolved by the courts, since the system's inherent delays and increased costs would significantly frustrate the aims of our national labor policy.

Arbitration has been an effective "substitute for industrial strife," and has been "a major factor in achieving industrial peace." See United Steelworkers of America, 363 U.S....