US. Postal Serv. v. Am. Postal Workers Union, AFL-CI

• Citation: 204 F.3d 523
• Decision Date: 30 November 1999
• Docket Number: D,CA-98-1355-A,No. 99-1562,AFL-CI,99-1562
• Parties: (4th Cir. 2000) UNITED STATES POSTAL SERVICE, Plaintiff-Appellee, v. AMERICAN POSTAL WORKERS UNION,efendant-Appellant. (). . Argued:
• Court: United States Courts of Appeals. United States Court of Appeals (4th Circuit)

Page 523

204 F.3d 523 (4th Cir. 2000)

UNITED STATES POSTAL SERVICE, Plaintiff-Appellee, v. AMERICAN POSTAL WORKERS UNION, AFL-CIO, Defendant-Appellant.

No. 99-1562 (CA-98-1355-A).

UNITED STATES COURT OF APPEALS, FOR THE FOURTH CIRCUIT.

Argued: November 30, 1999.

Decided: February 25, 2000.

Appeal from the United States District Court for the Eastern District of Virginia, at Alexandria.

Claude M. Hilton, Chief District Judge.

ARGUED: Susan Lynne Catler, O'DONNELL, SCHWARTZ & ANDERSON, P.C., Washington D.C., for Appellant. Anne Norris Graham, UNITED STATES POSTAL SERVICE, New York, New York, for Appellee. ON BRIEF: Peter J. Leff, O'DONNELL, SCHWARTZ & ANDERSON, P.C., Washington, D.C., for Appellant. R. Andrew German, Managing Counsel, Legal Policy, UNITED STATES POSTAL SERVICE, New York, New York; Helen F. Fahey, United States Attorney, Dennis E. Szybala, Assistant United States Attorney, Alexandria, Virginia, for Appellee.

Before WILKINSON, Chief Judge, KING, Circuit Judge, and Cynthia Holcomb HALL, Senior Circuit Judge of the United States Court of Appeals for the Ninth Circuit, sitting by designation.

Affirmed by published opinion. Chief Judge Wilkinson wrote the opinion, in which Senior Judge Hall joined. Judge King wrote a dissenting opinion.

OPINION

WILKINSON, Chief Judge:

The American Postal Workers Union (APWU) and the United States Postal Service (Postal Service) are parties to a national collective bargaining agreement. This agreement gives the Postal Service the right to separate any probationary employee at any time during the 90-day probationary period. The agreement also unambiguously denies probationary employees access to the grievance procedure in relation to a separation. The APWU nonetheless filed a grievance attacking the separation of a probationary employee and appealed the matter to arbitration. In the face of clear contractual language to the contrary, the arbitrator held that the grievance was arbitrable. The district court vacated the award on the ground that the arbitrator exceeded his authority. See United States Postal Serv. v. American Postal Workers Union, 46 F. Supp. 2d 457 (E.D. Va. 1999). Because the arbitrator completely rewrote the collective bargaining agreement by creating a new class of arbitrable grievances, we affirm the district court's judgment.

I.

A.

This case revolves around the provisions of the 1994 national collective bargaining agreement (National Agreement) between appellant APWU and appellee Postal Service. Article 15 of the National Agreement prescribes a grievance-arbitration procedure for the resolution of any dispute between the parties "related to wages, hours, and conditions of employment." The last step of this procedure is binding arbitration. If the parties reach arbitration, Article 15.5.A(6) dictates that an arbitrator's decisions "shall be limited to the terms and provisions of this Agreement, and in no event may the terms and provisions of this Agreement be altered, amended, or modified by an arbitrator."

Article 12 of the National Agreement, however, expressly excludes probationary employees from the grievance-arbitration procedure to contest a separation. New postal employees must serve a 90-day probationary period before becoming permanent employees. Article 12.1.A states: "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." This unequivocal language is reinforced by Article 15.5.A(6)'s prohibition on arbitral modification of the agreement.

Article 19 of the National Agreement fortifies the supremacy of the contract's terms over any Postal Service handbook or manual. Article 19 provides: "Those parts of all handbooks, manuals and published regulations of the Postal Service, that directly relate to wages, hours or working conditions, as they apply to employees covered by this Agreement, shall contain nothing that conflicts with this Agreement, and shall be continued in effect except that the Employer shall have the right to make changes that are not inconsistent with this Agreement and that are fair, reasonable, and equitable."

B.

Huong Hoang was employed by the Postal Service as a part-time clerk in Arlington, Virginia. On February 19, 1997, during Hoang's probationary period, the Postal Service officially notified her in writing that she had been rated "unsatisfactory" in her last probationary evaluation and would be separated the following day.

The APWU then filed a grievance on Hoang's behalf challenging her separation. The APWU claimed, inter alia, that the Postal Service failed to comply with certain provisions of the Postal Service's Employee and Labor Relations Manual (ELM) in attempting to separate Hoang. The APWU asserted that the proper official did not initiate the separation (ELM 365.325) and that the separation notice failed to include the requisite "conclusions as to the inadequacies of performance or conduct" (ELM 365.326). The APWU argued that the Postal Service's attempt to separate Hoang during her probationary period was therefore not effective and the Postal Service would instead have to follow the discharge procedure applicable to permanent employees if it wanted to terminate Hoang. The APWU contested Hoang's separation on other grounds as well, alleging that she received insufficient guidance and training and was a victim of discrimination. The APWU sought reinstatement of Hoang with back pay.

The Postal Service denied the APWU's grievance at all stages of the grievance process. The Postal Service also maintained throughout that the matter was non-grievable because it related to the separation of a probationary employee. The APWU then appealed the matter to arbitration. At the outset of the arbitration hearing, the Postal Service challenged the arbitrator's authority to hear the matter. The parties therefore agreed to bifurcate the case and first submitted only the question of arbitrability to the arbitrator. The Postal Service argued that the matter was not arbitrable because Article 12.1.A of the National Agreement denies probationary employees access to the grievance procedure for complaints relating to a separation. The APWU countered that Article 12.1.A does not prevent an arbitrator from deciding whether there was a procedurally effective separation of a probationary employee in the first place.

Arbitrator Christopher Miles found that the grievance was arbitrable (the Miles Award). He asserted that although Article 12 entitles the Postal Service to terminate probationary employees before the end of their probationary periods, the Postal Service must effectuate any such termination in accordance with the ELM. The arbitrator further stated that Article 19 of the National Agreement incorporated the provisions of the ELM relating to wages, hours, or working conditions. He concluded that a violation of ELM procedures was a violation of the National Agreement and therefore subject to arbitration under Article 15. The arbitrator then ordered that a hearing be scheduled on the merits of the grievance.

The Postal Service filed suit in the United States District Court for the Eastern District of Virginia. The Postal Service asked the court to vacate the Miles Award. The APWU filed a counterclaim seeking to enforce the Miles Award, as well as a claim for attorney's fees and costs. After both parties moved for summary judgment, the district court vacated the award. The district court ruled that Arbitrator Miles exceeded his authority by issuing an award that was directly contrary to the language of the parties' collective bargaining agreement. See United States Postal Serv. v. American Postal Workers Union, 46 F. Supp. 2d at 461-62. Specifically, the district court found that the arbitrator's decision altered the terms of Article 12.1.A and therefore violated Article 15.5.A(6)'s prohibition on any alteration of the National Agreement by an arbitrator. See id. The APWU now appeals.

II.

It is important to note at the outset that judicial review of arbitration awards is extremely limited -in fact, it is"among the narrowest known to the law." Union Pac. R.R. v. Sheehan , 439 U.S. 89, 91 (1978) (internal quotation marks omitted). A court sits to "determine only whether the arbitrator did his job -not whether he did it well, correctly, or reasonably, but simply whether he did it." Mountaineer Gas Co. v. Oil, Chem. & Atomic Workers Int'l Union , 76 F.3d 606, 608 (4th Cir. 1996). Indeed, "as long as the arbitrator is even arguably construing or applying the contract and acting within the scope of his authority, that a court is convinced he committed serious error does not suffice to overturn his decision." United Paper workers Int'l Union v. Misco, Inc., 484 U.S. 29, 38 (1987). If courts were allowed to delve into the merits of an arbitration award, then the federal policy of settling labor disputes by arbitration would be seriously undermined. See United Steelworkers of Am. v. Enterprise Wheel & Car Corp., 363 U.S. 593, 596 (1960). Such "judicial second-guessing . . . would transform a binding process into a purely advisory one, and ultimately impair the value of arbitration for labor and management alike." Westvaco Corp. v. United Paper workers Int'l Union, 171 F.3d 971, 974 (4th Cir. 1999) (internal quotation marks omitted).

An arbitrator does not have carte blanche, however, to "dispense his own brand of industrial justice." Enterprise Wheel, 363 U.S. at 597. Rather, "an arbitrator is confined to interpretation and application of the collective bargaining agreement." Id. "[H]is award is legitimate only so long as it draws its essence from the collective bargaining agreement. When the arbitrator's words manifest an infidelity to this obligation, courts have no choice but to refuse enforcement of the award." Id. The...