Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-08-05056/USCOURTS-caDC-08-05056-0/pdf.json

Nature of Suit Code: 720
Nature of Suit: Labor Management Relations Act
Cause of Action: 

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued November 17, 2008 Decided January 23, 2009

No. 08-5056

UNITED STATES POSTAL SERVICE,

APPELLEE

v.

AMERICAN POSTAL WORKERS UNION,

APPELLANT

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.

USCA Case #08-5056 Document #1160537 Filed: 01/23/2009 Page 1 of 18
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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

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to the commands of United Steelworkers of America v.

Enterprise Wheel & Car Corp., 363 U.S. 593 (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. 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 (2001) (quoting United Paperworkers Int’l Union,

AFL-CIO v. Misco, Inc., 484 U.S. 29, 39 (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

USCA Case #08-5056 Document #1160537 Filed: 01/23/2009 Page 3 of 18
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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 (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.

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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.

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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 employees may not

challenge separations on the grounds of alleged noncompliance

with ELM procedures. However, the Das Award also made

clear that the union may arbitrate the question of whether an

employee’s separation occurred during the probationary period.

On this second point, Arbitrator Das noted that “Article 12.1.A

has no application if the separation action does not occur during

the probationary period.” Id. at J.A. 92. 

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Arbitrator Das also noted that Article 12 does not define

what constitutes a separation under the CBA. To fill this

definitional void, he looked to the ELM and ruled that

[the] definition [of “separation”] is provided . . . in Section

365.11 of the ELM which states: “Separations are

personnel actions that result in employees’ being removed

from the rolls of the Postal Service.”

Id. at J.A. 88. 

The parties agree that the Das Award provides the

controlling arbitral precedent regarding the meaning of Article

12.1.A, and that the Das decision is binding on the parties to this

dispute. 

B. Facts and Proceedings Below

The facts as reported in the arbitrator’s award, the District

Court’s decision, and the record on appeal are straightforward

and largely undisputed. Lorraine Daliessio was hired on

November 22, 1997, as a part-time flexible mark-up clerk in the

Computer Forwarding unit at the Philadelphia Pennsylvania Post

Office. Decl. Of Vivian T. Barnett, reprinted in J.A. 258 at ¶¶ 1,

4. Daliessio’s 90-day probationary period was scheduled to end

on February 19, 1998. Id. at ¶ 4. On December 30, 1997, at her

30-day evaluation, Daliessio’s supervisor, Vivian Barnett,

informed her that she had been rated “unacceptable” in two key

performance areas: work quality and work quantity. Id. at ¶ 5.

On January 30, 1998, Daliessio’s supervisor gave her an

unsatisfactory rating and checked the box on an evaluation form

indicating that she would not recommend Daliessio for retention

or rehire. Daliessio declined to sign the form. Her supervisor

told her to clean out her locker, turn in her I.D., and go home.

Daliessio did so, and did not return to work. Id. at J.A. 259 ¶¶

7-8.

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On February 4, 1998, Supervisor Barnett sent a letter to the

Manager of Labor Relations asking that action be taken to

remove Daliessio from the employment rolls effective January

30, 1998. Id. at J.A. 260 ¶ 9. On February 20, 1998, one day

after Daliessio’s probationary period ended, the Manager of

Labor Relations sent a letter to Daliessio stating: “This will

confirm your separation from the Postal Service [as] a result of

lack of proficiency.” Notice of Separation, Feb. 20, 1998,

reprinted in J.A. 164-65. The union filed a grievance to

challenge the separation. The grievance was denied by the

Postal Service and appealed to arbitration by the union. Appeal

to Arbitration, Sept. 14, 1998, reprinted in J.A. 156. 

Arbitrator Loeb heard the grievance in late 2005 and issued

a decision on January 28, 2006. In re Postal Serv. and Am.

Postal Workers Union, No. C94C-4C-D 98076813 (Reg’l

Award, Jan. 28, 2006) (Loeb, Arb.) (“Loeb Award”), reprinted

in J.A. 52. The parties agreed that, under the Das Award,

Arbitrator Loeb could properly decide whether the grievant was

separated during her probationary period. The parties also

agreed that if Loeb determined that the grievant was not

separated within her probationary period, her grievance on the

merits was arbitrable. After explaining the controlling

principles in the Das Award and then making findings regarding

Daliessio’s dismissal, Arbitrator Loeb concluded that

Daliessio’s claim was arbitrable because she was not separated

until after her probationary period. Loeb found that the

grievant’s purported “separation” consisted of USPS sending her

home and telling her not to come back to work. However, in

Arbitrator Loeb’s view, “[n]either the recommendation nor the

order not to return to work terminated the Grievant. The

supervisor, her manager and the Manager of Labor Relations all

recognized that was the case by their actions.” Id. at J.A. 66.

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After concluding that the grievant was not separated during

her probationary period, Arbitrator Loeb went on to discuss the

ELM. He observed, inter alia, that because the ELM

declare[s] that separation must take place during the

employee’s probationary period and [sets] the conditions by

which it must terminate the employee, the Employer cannot

prohibit the Grievant from accessing the grievance

procedure on the basis of Article 12 to allege that she was

not terminated during her probation. 

Id. at J.A. 67. In the end, Arbitrator Loeb concluded: “The

plain fact of the matter is that the Employer failed to terminate

the Grievant, as that term is understood in Article 12[,] within

her probationary period.” Id. at J.A. 68. Finding no just cause

for dismissal, the arbitrator ordered Daliessio reinstated with

seniority and back pay.

The District Court granted summary judgment to USPS and

vacated the Loeb Award. See U.S. Postal Serv., 536 F. Supp. 2d

12. Characterizing the issue in the case as “whether APWU’s

grievance challenging Daliessio’s ‘termination’ was arbitrable,”

id. at 16, the District court held that the arbitrator’s decision

“exceeded the authority granted by the National Agreement.”

Id. at 17. 

Because the Das Award . . . expressly disallows

probationary employees access to grievance procedures for

challenges to a separation based on non-compliance with

ELM Section 365.32, Loeb’s reliance on those procedures

to determine that Daliessio was not terminated within the

probationary period is misplaced. In fact, it runs directly

counter to Article 12.1.A as interpreted by the Das Award.

Id. at 17-18. Holding that “[t]his flawed analysis constitutes . . .

manifest disregard of the National Agreement,” the District

Court vacated the arbitration award. Id. at 18. 

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II. ANALYSIS

A. Standard of Review

“Our review of a district court’s decision on a summary

judgment motion is de novo. We will affirm the district court’s

grant of summary judgment to [the Postal Service] only if

[USPS] has demonstrated in view of all the facts – and the

reasonable inferences drawn therefrom in the light most

favorable to [the union], the non-moving party – that ‘there is no

genuine issue as to any material fact and that the moving party

is entitled to judgment as a matter of law.’ FED. R. CIV. P.

56(c).” Teamsters Local Union No. 61 v. United Parcel Serv.,

272 F.3d 600, 603 (D.C. Cir. 2001) (citation omitted).

“Unless the parties clearly and unmistakably provide

otherwise,” “the question of arbitrability – whether a

collective-bargaining agreement creates a duty for the parties to

arbitrate the particular grievance – is undeniably an issue for

judicial determination.” AT&T Techs., Inc. v. Comm’ns

Workers of Am., 475 U.S. 643, 649 (1986). It is undisputed in

this case that the parties agreed to present the question of

arbitrability to the arbitrator. Therefore, judicial review of the

arbitrator’s award here is strictly limited pursuant to the

Supreme Court’s decision in Enterprise Wheel and its progeny.

 We are only called upon to determine whether the

arbitrator’s award “draws its essence from the collective

bargaining agreement.” Enterprise Wheel, 363 U.S. at 597. An

arbitrator may not, of course, “dispense his own brand of

industrial justice.” Id. However, “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.” Misco, 484 U.S. at 38; see also Garvey, 532 U.S. at

509 (“Courts are not authorized to review the arbitrator’s

decision on the merits despite allegations that the decision rests

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on factual errors or misinterprets the parties’ agreement.”)

(citation omitted). So long as the arbitrator’s award draws its

essence from the parties’ agreement, the arbitrator has the right

to be wrong and a court may not second-guess his decision.

B. The Arbitrator’s Award in This Case

There is some force to the Postal Service’s argument that,

on the merits, Arbitrator Loeb’s Award is questionable. It is

undisputed that the Das decision establishes the controlling law

under the parties’ CBA concerning the meaning of Article

12.1.A. As noted above, Arbitrator Das ruled that “Article

12.1.A denies a probationary employee access to the grievance

procedure to challenge his or her separation on the grounds of

alleged noncompliance with the procedures in Section 365.32 of

the ELM.” Das Award, J.A. 93. The Postal Service contends

that Arbitrator Loeb was faithless to this principle when he cited

the ELM in determining that Daliessio was improperly

separated.

Although the Postal Service may have an arguable ground

to disagree with the arbitrator’s decision, this is no basis for a

court order vacating the Loeb Award. The question before this

court is not whether the arbitrator’s decision is wrong on the

merits, but whether his decision draws its essence from the

parties’ CBA. We hold that it does. 

Arbitrator Loeb was asked to construe Article 12.1.A of the

National Agreement. In so doing, he was plainly aware that he

was bound by the Das Award. The Loeb Award discusses the

Das decision in some detail, focusing in particular on Das’s

holdings regarding when a probationary employee may

permissibly challenge her separation. After reviewing the CBA

and the relevant arbitral precedent, Arbitrator Loeb first held

that:

In view of those authorities, the undersigned must conclude

that the Union has a right to challenge the Grievant’s

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termination through the grievance procedure. . . .

Regardless of how the Union chooses to characterize the

nature of the grievance or how badly it feels that the Service

transgressed the requirements in Section 365.327 of the

ELM, the issue before the Arbitrator is not the process the

Service employed when it terminated the Grievant, but

whether she was discharged during her probationary period.

The answer is that she was not.

Loeb Award, J.A. 66. 

Loeb then recited findings of fact in support of his

conclusion that the grievant had not been terminated during her

probationary period:

The record is clear that the Grievant was advised on

January 30, 1998 that her work was unsatisfactory and that

her supervisor would not recommend her retention. She

memorialized those comments on the Form 1750 by

checking the box indicating that she would not recommend

the Grievant be retained by the Service. The Grievant

claimed that she never saw that section of the evaluation

form, but in view of her subsequent EEO statement her

claim is not credible. The Grievant’s credibility, however,

is not an issue in this case. What matters is what the Postal

Service did which is sent her home and told her not to come

back to work. Neither the recommendation nor the order

not to return to work terminated the Grievant. The

supervisor, her manager and the Manager of Labor

Relations all recognized that was the case by their actions.

The supervisor and the manager by requesting that Labor

Relations separate the Grievant and Labor Relations by

sending a letter to that effect to the Grievant. The letter,

which was dated February 20, 1998, was sent by certified

mail to the Grievant’s address of record. She effectively

evaded receipt of the letter by refusing to claim it. Thanks

to her tactics it was not until late March that the Postal

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Service finally constructively delivered the letter to the

Grievant’s address of record. By then it was too late.

Id. at 66-67. These findings are plainly adequate to support

Loeb’s judgment. It is significant that Loeb’s critical findings

of fact do not rest on the employer’s compliance or

noncompliance with the ELM. Rather, Loeb simply looked at

the record and decided that, as he viewed the facts, the employee

was not effectively terminated until after her probationary

period.

After discussing the applicable contract provision, making

it clear that he understood and meant to rely on the principles set

forth in the Das Award, and reciting his critical findings of fact

in support of his judgment, Arbitrator Loeb then went on to

discuss the ELM. It is at this point that the opinion engenders

great confusion. The Loeb Award states that, 

[h]ad the Service not drafted Sections 365.323 and .326 of

the ELM, it would not have mattered when the Employer

sent the letter out or when the Grievant received it as

Article 12, Section 1.A. only states that if the Service

intends to terminate a probationary employee it must do so

during his probationary period. The ELM radically altered

that scheme . . . provid[ing] the manner in which separation

must occur. 

Id. at 67. This portion of the Loeb Award, at least if read in

isolation, seems to be at odds with Das’s ruling that a “challenge

to the validity of the procedures followed in effecting a

separation is barred by the broad prohibitory language of Article

12.1.A.” Das Award, J.A. 92. 

What is most noteworthy, however, is that, when Loeb’s

opinion is read as a whole, it is clear that Arbitrator Loeb

obviously understood that he was bound by Arbitrator Das’s

decision. It is also clear that Loeb did not mean to say that a

probationary employee may gain access to the grievance

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procedure to challenge his or her separation solely on the

grounds of alleged noncompliance with ELM procedures.

Rather, he parroted the command from the Das Award: “A

dispute as to whether or not the Postal Service’s action

separating the employee occurred during his or her probationary

period is arbitrable because that is a precondition to the

applicability of Article 12.1.A.” Loeb Award, J.A. 66 (quoting

Das Award, J.A. 93). 

Loeb did not hold that the employer must adhere to ELM

procedures; rather, he seems to suggest nothing more than that

the factors listed in the ELM are among those that might be

relevant in deciding whether an employee has been separated

within her probationary period. And, as noted above, before he

discussed the ELM, Loeb listed the facts that he found to be

controlling and none of these facts had to do with any alleged

breach of the ELM by USPS.

It is hardly surprising that Loeb looked to the ELM for

affirmation, because Das also looked to the ELM in deciding the

meaning of “separation” under Article 12. Das said:

The Unions also are correct in pointing out that Article

12 does not define what constitutes a separation. That

definition is provided, however, in Section 365.11 of the

ELM which states:

Separations are personnel actions that result in

employees’ being removed from the rolls of the Postal

Service.

Das Award, J.A. 88. Furthermore, the Das decision does not say

that an arbitrator cannot look to the ELM for guidance. Rather,

what Das says is that probationary employees may not pursue an

action in arbitration based solely on a claim that the employer

failed to follow the “procedures” under the ELM. Das Award,

J.A. 90. Loeb never assumed that the issue in this case was

whether the Postal Service failed to follow ELM procedures.

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Rather, Loeb clearly stated that the issue before him was

whether the grievant was terminated during her probationary

period:

Regardless of how the Union chooses to characterize the

nature of the grievance or how badly it feels that the Service

transgressed the requirements in Section 365.327 of the

ELM, the issue before the Arbitrator is not the process the

Service employed when it terminated the Grievant, but

whether she was discharged during her probationary period.

Loeb Award, J.A. 66. Nothing in the Das Award barred Loeb

from addressing the issue of whether the grievant was

discharged during her probationary period; and nothing in Das’s

decision barred Loeb from looking to the ELM to gain some

guidance on how to determine whether an employee was in fact

terminated during her probationary period. 

In the end, the most that can be said is that the Loeb Award

is somewhat confusing in its gratuitous observations about the

ELM and arguably dubious in its judgment on the merits. But

there can be no doubt whatsoever that the Loeb Award draws its

essence from the parties’ agreement and the Das Award. It does

not matter whether we agree with Loeb’s reasoning or judgment,

so long as we find that his award rested on his construction of

the CBA. See Madison Hotel v. Hotel & Rest. Employees, Local

25, AFL-CIO, 144 F.3d 855, 859 (D.C. Cir. 1998) (en banc)

(“[I]t is enough to sustain the award that the arbitrator,

permissibly drawing on the sources just mentioned as well as on

the explicit provisions of the contract itself, purported to be

interpreting the contract in rendering his final decision.”)

(internal quotation omitted). 

As noted above, under Enterprise Wheel and its progeny,

the arbitrator has a right to be wrong in his interpretation of the

parties’ CBA. The parties bargained for Arbitrator Loeb to be

the reader of their CBA. In other words, “the parties have

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necessarily bargained for the arbitrator’s interpretation of the

[arbitral] law and are bound by it.” Am. Postal Workers Union

v. U.S. Postal Serv., 789 F.2d 1, 6 (D.C. Cir. 1986). Arbitrator

Loeb did not “render[ ] a judgment based on external legal

sources, wholly without regard to the terms of the parties’

contract.” Id. at 8. Nor is he accused of any misconduct. Am.

Postal Workers Union, AFL-CIO v. U.S. Postal Serv., 52 F.3d

359, 362 (D.C. Cir. 1995) (stating that an arbitrator influenced

by bribery or fraud could be viewed as “dispensing his own

brand of industrial justice”). Rather, he looked to and relied on

the proper sources of his authority, so it cannot be said that he

“dispense[d] his own brand of industrial justice.” Enterprise

Wheel, 363 U.S. at 597. USPS and the APWU authorized

Arbitrator Loeb “to give meaning to the language of the

agreement.” Misco, 484 U.S. at 38. Were this court to vacate

the arbitrator’s award, we would simply be substituting our own

interpretation of Article 12.1.A and the Das decision for

Arbitrator Loeb’s. We have no authority to do this. 

C. The Decision of the Fourth Circuit Has No Preclusive

Effect in This Case

Finally, USPS contends that, because the decision by the

Fourth Circuit in United States Postal Serv. v. American Postal

Workers Union, AFL-CIO, 204 F.3d 523, conclusively

determined the same issues the Loeb Award purported to

address in a proceeding involving the same parties, collateral

estoppel precludes enforcement of the Loeb Award. USPS Br.

at 34. We disagree.

“Under collateral estoppel, once a court has decided an

issue of fact or law necessary to its judgment, that decision may

preclude relitigation of the issue in a suit on a different cause of

action involving a party to the first case.” Novak v. World Bank,

703 F.2d 1305, 1309 (D.C. Cir. 1983) (quoting Allen v.

McCurry, 449 U.S. 90, 94 (1980)). However, “[c]ollateral

estoppel is generally inappropriate when the issue is one of law

USCA Case #08-5056 Document #1160537 Filed: 01/23/2009 Page 16 of 18
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and there has been a change in the legal context after the first

decision.” Pharm. Care Mgmt. Ass’n v. District of Columbia,

522 F.3d 443, 447 (D.C. Cir. 2008); see also Montana v. United

States, 440 U.S. 147, 161 (1979) (observing that collateral

estoppel has no application when there has been change in the

legal context). The legal context has changed in this case,

because the contractual principle applied by the Fourth Circuit

is not the same as the principle subsequently announced by Das

and applied by Loeb. 

The Fourth Circuit said that the parties’ agreement

“precludes an arbitrator from determining whether a

probationary employee was actually separated in the first

place. . . . In other words, so long as the matter involves

probationary employees and the question of separation, no

grievance may be brought.” U.S. Postal Serv., 204 F.3d at 528.

Arbitrator Das completely rejected this construction of the

contract when he held that:

A dispute as to whether or not the Postal Service’s action

separating the employee occurred during his or her

probationary period is arbitrable because that is a

precondition to the applicability of Article 12.1.A. 

Das Award, J.A. 93. Arbitrator Loeb followed Das, as he was

authorized to do. 

In short, the Fourth Circuit decision is not in the least bit

binding in this case. The parties bargained for Das’s

interpretation of the contract, not the Fourth Circuit’s contrary

construction, and Loeb followed Das. See Am. Postal Workers

Union, 789 F.2d at 6-7 (“Since the arbitrator is the ‘contract

reader,’ his interpretation of the law becomes part of the contract

and thereby part of the private law governing the relationship

between the parties to the contract.”). 

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III. CONCLUSION

For the reasons stated above, the judgment of the District

Court is reversed. The case is remanded to the District Court

with instructions to enter judgment for the appellant. 

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