NOT RECOMM ENDED FO R FULL- TEXT PUBLI CATION File Name: 05a0470n.06 Filed: June 7, 2005 No. 03-2451 UNITED STATE S COURT OF APPEA LS FOR THE SIXTH CIRCUIT
BIXBY MEDI CAL CE

NTER, I NC. AND H ERRICK MEMORIAL

HOSPITAL , INC., Plaintiffs- Appellant s , v. MICHI GAN NURSES ASSOCIATI ON, Defendant-Appellee
. ) ) ) ) ) ) ) ) ) ) OnAppeal from the Uni ted States District Court for the Eas t ern District of Michigan

Before: BOGGS, C hief Judge; a nd KENNEDY and MARTIN , Circuit

Judges. BOGGS, Chief Judge. Plaintiffs appeal the district court’s decision to enforce an
ar bitrat ion award entered in favor of the De fendants. After reviewing the a greement and the arbitrator’s award, we believe the arbitrator’s conclusion that the grieva nces tha t prompted

this case
were timely filed and her a war d or dering

the Plainti ffs to stop

any further unilater al chang es in insuranc e cover

age dr aw their essence from the a

greement. We the

refore affirm.

I This dispute a

rises fr om chang es in th e health ins urance program at the B ixby Medical Center (“Bixby”)and Herrick Memorial Hospital (“Herric k” ) (c ollectively, “the Hospitals”) . Defendant Michigan Nurses A ssociation (“MNA” ) repre sents the nurses in both Hospitals and, at

the time th eseNo. 03-2451

Bixby Med. Ctr. v. Mich. Nurses Ass’n

1 The parties a

nd arbitr ator primarily

discuss the Bixby

agree ment. Our

decision is the same under both opinions and we see no re ason to alter their terminology . For this reason, we refer to the contract betwee

n Bixby and MNA a s the Ag

reemen t. - 2 - disputes a rose, did so throug h two sepa

rate bargaining units. The relationship between Bixby and its nurses was controlled by a Collective Bargaining Ag reement that was in effect from October 1, 1997 to June 30, 2000 (“Agreement”). A similar Collective Bar gain ing Agreement (“He rrick Agreement”), effective from December 7, 1999 to Oc tober 31, 200 2, govern ed the re lationship between Herrick and its nu

rses. 1 See J.A. 131-65 . Both of these agreements cover ed the Hospit

als’ insurance obligations to the nurses, and they also had nearly

identical grievance proce dures. As of July 1, 200 1, th e two M NA barga inin g u ni ts have been consolidated into one, and nurse-hospital relations are governed by an agreement between MN A and the Lena

wee He alth Alliance (the “Lenawee Agreement”), an org anization containing both Bixby and Her rick. The Hospitals decided to change aspects of their health insuranc e covera ge effective as of January 1, 2000. Some of these changes decre ased coverage. F or example, the Hospitals increased prescription

co-payme

nts by 50%. Other c hanges increased cover age; under one of the plan’s options, the Hospitals lowered coverage deductibles from $200 to $150 for singles and from $400 to $300 for families. The leaders of the Bixby and Her rick bargaining units filed two nearly identical “classaction” grievances in late Aug ust and e ar ly Se

ptember 2000 cha

llengin g these chang es in coverage. The Hospitals denied both grievances on the substantive g round that the Agreement’s provisions did not re quire the hospital to

maintain a

consis tent leve l of he alth i nsura nce cov erage and on the procedural ground that the grievance s were untimely. The parties appeared before a nNo. 03-2451

Bixby Med. Ctr. v. Mich. Nurses Ass’n

- 3 - arbitrator on August 21, 2002. The arbitrator issued an opinion and award in which

she determined that the grievances were timely filed and ordere d th e Hospitals to no longer make any unilateral changes to their insurance cove rage. Su bs eq ue nt ly, the Hospitals filed a claim in federal district seeking to vac ate the awar d
. MNA counter-claimed, requesting that the award be enforced and that the case also be r emanded to the arbitrator for further inquiry into remedies. Both parties brought motions for

summary judgmen t. The district court issued an oral opinion upho ldingthe arbi trator’ s award

but deny ing MNA’ s reques t to remand. Plaintiffs have timely

appealed to this court, challenging whe ther the grievances wer

e filed ina timely mann er and whe ther t he arbi trato r’s rem edy depart s from the co ntract . Thou gh defenda nts cross -claime d at the di strict co urt leve l, they

do not cro ss-appe al to this c ourt.

II We review de novo the district court’s grant of summary judgment in an arbitrated labor dispute. Eisenmann Corp. v. Sheet Metal Workers Int’l Assoc . Local No. 24 , 323 F.3d 375, 380 ( 6th Cir. 2003). Our review of the arbitrator’s dec ision itself, however, is strikingly de ferential. Ibid. We review the arb itrat or’s aw ard and reason ing “ only to determine whet her the arbitrator was ‘argu ably construing or

applying the

contract and acting within thescope of his authority.’” Beacon Journal Publ’g Co. v. AkronNewspaper Guild , 114 F.3d 596, 599 ( 6thCir. 1997) (quot ing United Paperwork

ers Int’l Union v. Misco, Inc. , 484 U.S. 29 , 38 (1987 )); Int’l Ass’n of Machinists and AerospaceWork

ers v. Lourdes Hosp. , 958 F.2d 154, 156 ( 6th

Cir. 1992). To this end, we inquireNo. 03-2451

Bixby Med. Ctr. v. Mich. Nurses Ass’n

- 4 - whether the arbi tration a ward “d raws itsessence from

the collective bargaining ag reement.” Beacon Journal , 114 F.3d at 599 (quot ing United Steelworkers of Am. v. En ter. W

heel & Car Co. , 363 U.S. 593, 59 7 ( 19 60 )) . T o a ss is t u s i n t hi s i nq ui ry, this court has identified four factors to consider when deciding whether an award fails to “draw its esse nce” from

the agree

ment: “1)it conflicts with express terms of t

he agr eement; (2) it impose s additional requi rements n ot express ly

provided for inthe agreement; (3) it is not rationally supported by

or deriv ed from the agre ement; or (4) it is based
on gener al consid eration s of fair

ness and e quity

instead of the exact terms of the agreeme nt.” Id. at 600 (citations omitted). Though we have commented that our re view is not toothless when the arbitrator completely disreg ards the contract, id. at 599, we are guided in our review by the Supre me Court’s persistent

reminder that “if an ‘arbitrator is even arg uably construing

or applying

the contract

. . . ,’ the fact that ‘a court is convinced he committed serious error does not suffice to overtu rn his decision.’” Major League Baseball Players Ass’n v. Garvey , 532 U.S. 504, 509 (2001) (per cu riam) (quoting Eastern Associated Coal Corp. v. United Mine W orkers , 531 U.S. 57, 62 (2000) (quoting Misco , 484 U.S. at 38)). A We initially conclude that the g rievances were timely

filed. We b egin by looking at the arbitrator’s opinion because it is her reasoning that we ar e called on

to review. See ibid. (emphasizing the defe

renti al standard of review a pplied to the arbitrator’s contractual interpretation). After summarizing the Hospital’s evidence as to timeliness, the arbitrator concluded that MNA , as distinct from the insured individual, only lear ned of the changes in health

insuranc e cover

age in l ate August or earl y Septembe r and tha t it filed the grievances timely thereafter. Such a conclusionNo. 03-2451

Bixby Med. Ctr. v. Mich. Nurses Ass’n

2 Appellee argue s that, as

d efere ntial as this standard is, it is not deferential enough for a chall enge to the ar

bitrator ’s decis ion on whe ther an a ward wa s timely . MNA cla ssifies su c h objections as procedural and therefore argues that our review of the arbitrator’s decision concerning suchissues is only for bad faith or misconduc t. Because we affirm the ar bitrator’s decision according to the standard of review decided in Wyandot , we nee d not revi sit our previ ous ho ldin g. - 5 - al lows only

one inter

pretation of the a

rbitrator’s rea soning: she conc luded tha t MN A had a n independent

right under the Agreeme

ntto follow the grievance procedur e laid out in the Agree

ment. Only then is it relevant for the arbitrator to inquire into when MNA first lea rned of the changes and the relation of the union’s discovery and its subsequent filing of the grievance s. Thus, we must inquire whether the arbitrator’s reasoning that MNA had

an independent right to file grievances “draw s its essence from the collective barga ini ng agree ment.” Wyandot, Inc. v. Local 227, United Fo od and Comm ercial W orkers , 205 F.3d 922, 927 (6th Cir. 2000) (applying the standard to timeliness challenge). 2 Th e A gr ee me nt is na tu ra ll y, a nd ne ce ss ar il y, ou r lodesta r in resolving this question. Several sections of the Agree ment’s grievance procedur e follow: Section 6.0. Purpose of Grievance Procedure
. It is the in tent o f the partie

s hereto that the Procedure set forth herein shall serve as a means for the peaceful settlement of all disagre ements th at may aris e between them concerning the interpretation or application of this Agreement, wi thout any i nterruptio n or dis turbance o f any sort whatsoever

in the normal operation of the Center. Nurses are required to follow and use this Proce

dure in case they ha

ve any g rievances concerning the interpretation or application of this Agreement . . . . Section 6.1. Definition of Grievance . A grie vance u nder this Agree ment is a dispute, claim or complaint arising under a nd durin g the te

rm of this l abor Ag

reemen t. Grievances are limited to matters of interpretation or application of this Agreement

. . . . Section 6.2. Steps of

Grievance Procedure
. If a Nurse has such a grievance , it shall be handled i

n the following ma

nner, ea ch succe ssive Step

to be followed unle ss the grievancewas settl ed or aba ndoned a t the pre ceding

Step, and if a written grievanceNo. 03-2451

Bixby Med. Ctr. v. Mich. Nurses Ass’n

- 6 - is se tt le d a t a ny S te p, it s d is po si ti on sh al l b e s ig ne d b y t he employee or by his/her Staff Council representative who acted for he r. (a) Step 1. A verbal discussion betwee n the em ployee and his/her Department

Director or

designe e shall

take place within five (5) day s after the occurrence, or withi n five (5) day s after t he date t he employ

ee should reasonably

have known of the occurrence. . . .

. . . Section 6. 5. Timelin ess . (a) No grievance shall be conside red at any Step unless it is filed and processed within the respective time limits according to the Procedure set forth in this Agreement , unless extended by mutual written ag reement. . . . Failure to comply with the time limit for the first (1st) Step shall be deemed waiver of the grievance. J.A. 87-90 (emphases added). We believe that the g rievance proc e dure, read as a whole, can be construed as allowing MNA to independently file grievances. The parties stated in § 6.0: “It is the intentof the parties . . . that the [grievance p]ro cedure . . . shall serve as a means for the peace ful settlement

of all dis agreeme

nts that may arise be

tween them concerning the interpretation or applicationof this Ag

reemen t. . . .” MN

A is a par

ty to the Agr eeme nt both imp licitly, as the representative of the em

ployees in the

barga ining uni t, and expli citly , as one o f the stat ed parti es to the agree ment. This

langua ge cou ld therefore be read as conte mplating MNA having

an independent right to use the

grieva nce proc edure. S e ction 6.1, where the parties define a g rievance, offers no reason t o believe that MNA would not ha

ve a rig ht to file i ts own gr ievance s. Rather, the only lang

uage suggesting

MNA cannot individually chal lenge the Hospit als’ actions via the grievance procedure is that found in the many sub-sections of § 6.2, which lay out the individual steps a

grievant must take in pursuing a gr ievance to cooperative settlement or arbitration.No. 03-2451

Bixby Med. Ctr. v. Mich. Nurses Ass’n

- 7 - The la ng ua ge in th is se ct io n c le ar ly s pe ak s t o s te ps ta ke n b y a singular nurse pursuing

a grievance. But in the context of

a labor Agree ment, it is not bey

ond doubt that such te

rms should

be meant to preclude the ability

of the nurses’ labor representative, MNA, f rom filing grievances. Moreove r, as discussed above, s ections o f the Ag reemen t itself pr ovide af fir m ative guidance that MNA can ind epende

ntly pursue grievances. The par ties, of which MNA is one, wrote that the grievanc e procedure would be a way for the parties to resolve disputes “that may arise between them .” J.A. 87 (emphas is added). The Agreement’s definition of a g rievance in no way

excludes MNA from being able to fileone. Sec tion 6.0 pr ovides us w

ith additional rea son to believe MNA can i

ndepend ently file grievances in that it obligates nurses to follow the g rievance procedure listed in § 6.2. I t is therefore of little wonder that § 6.2 begins deta iling the steps to be taken ““[i]f a [n]urse has such
a grievance . . . .” One could c onstrue the nurse-specific languag e in § 6.2 as simply directed a t the
common occurr

ence of an individ

ual nurse filing a grievance, a s the Agreement requires nurses to follow the procedure laid out in the section. Becau se the grievance procedur e is ambiguous about

who can file grievances, the arbitrator
was construi

ng the a greement in det

ermi ning that MNA can independently pursue a grievance according to the procedure. This is certainly not the only

possible in

terpretation of t

he Agr eement. But our deferential

standard of

review prohibits inquiry into what would be the best interpretation of the parties’ grievance proc edure. We are bound to inquire on ly whether the a rbitrator was argua bly construing the agreement. Garvey , 532 U.S. at 50 9; see als o ibid. (“It is only when the arbitrator strays from interpr

etation and application of the agreement . . . that his decision may be unenforceable.”) After

reviewing the arbitrator’s rea soning and the Agreement betwee n the par ties,No. 03-2451

Bixby Med. Ctr. v. Mich. Nurses Ass’n

- 8 - we can only conc lude that she w as constr uing the parties’ agree

ment. It is not our place to disturb the arbitrator’s interpretation. Inreachi ng this conclusion, we cast no doubt on our previous decision in Wyandot , 205 F.3d 922. In Wyandot , the union filed a g rievanc e on the e

mplo yee’s be

half seventeen day s after her termination, which vio lated the plain ter ms of the g

rievanc e proce dure tha

t require d any

possible grievanceto be initiated within afive-day window. Id. at 924-25. In concluding that the g rievance had been timely filed, the arbitrator, we held, had disreg arded the plain and unambiguous terms of the agreement. Id. at 929-30 . We would r each the same con clusion in this case if the arbitrator

had concluded

that MNA’ s griev ances w ere tim ely fil ed despit

e stating that the u

nion had f

ailed to follow the steps in

the grievance procedur

e. But the arbitrator made no such conclusion and the Hospitals do not make any such a llegation. Rather, unlike in Wyandot , the question is whether MNA, under the particular agreement it signed with the Hospitals, had an independ ent rig ht to file grieva nces, not whether the party followed the procedures. The arbitrator wasarguably construing the contr act in concluding

that MNA h ad that r

ight. The only question as to whether MNA followed the grievance pro cedu re in this c ase is whether the arbitrator

corre ctly concluded tha

t it only had notice of the cha nges in late August or
ear ly September. We further affirm the arbitrator’s c onclusion that MNA followed the grievanc e procedure by

timely filing its grie

vances within five day s of learning of the chang es. Whether the Hospitals notified MNA of

the chan ges be fore la

te Augu st or ear

ly Se ptember is a factual question for whichour review is even more circumscribed. See Garvey , 532 U.S. at 509 (“When an arbitrator resolves disputes regarding the application of a c on tr ac t,
. . . t he ar bi tr at or ’s ‘i mp ro vi de nt , e ve n s il ly,No. 03-2451

Bixby Med. Ctr. v. Mich. Nurses Ass’n

- 9 - factfi ndin g’ does not provide a basis for a reviewing c ourt to refuse to enforcethe award.”) (quoting Misco , 484 U.S. at

39). The arbitrator decided that the Hospitals’ possible earlier notification to the
nurses individually did not constitute notice to the MNA leadership, who re mained unaware of the changes until late August or early September. Therefore, the arbi trator c oncluded , MNA cou ld file
a grievance within five day s of its leadership’s discovery . Regardless of whe ther we w ould have reached the same conclusion, we will not

disturb the arbitrator’s factual determination. Theref ore, the arbitrator was “arguably construing or applying

the contract,” in deciding that MNA’sgrievances were timely. Beacon Journal , 114 F .3d at 599 (q uoti ng Misco , 484 U.S. at 36). B We further conclude that the arbitrator’s award of relief dr aws its essence from the agree ment. The Supreme Court has cautioned courts to be deferential when re viewing the remedies ordere d by

an arbit rator: [A]n arbitra tor . . . isto bring his informed judgment to bear i n order t o reach a fair solution of a problem. This is especially true when it comes to formula ting re medies. There the need is for

flexibi lity in meeting a wide variety of situations. The draftsmen may never ha ve thoug ht o f what spec ific remedy should be a

warded to me et a p ar ti cu la r c on ti ng en cy. United Steelworkers of Am. v. Enter. Whee l & Car Corp. , 363 U.S. 593, 597 (1960 ), quoted in Misco , 484 U.S. at 41. The Court has since reiterated the limited role courts play in this area , noting that “where it is contemplated that the arbitrator will determine remedies for contra ct violations that he finds, co

urts have no authority to disag ree with his honest judgment in that respect.” Misco , 484 U.S. at 38, quoted in Armco Employees Indep. Fed’n, Inc. v. Armco Steel Co. , 65 F.3d 4 92, 496 (6 th Cir. 1995). Even applying such deference, this court has had occ asion to vacate an arbitrator’s awar dNo. 03-2451

Bixby Med. Ctr. v. Mich. Nurses Ass’n

- 10 - when his award sanctions an employ er for conduct concerning a right given unquestionably to the employer. See Beacon Journal , 114 F.3d at 600 (“Beacon Journalhas the exclusive ri ght to schedule vacations. Consequently, [it] did not violate a specific provision of the collective barg aining agreement

by doing something

it had a right

to do . . . .” ); Lourdes Hosp. , 958 F.2d at 157 (“We do notbelieve that the exercise of a right specific ally

given in the barg aining a

greement, the r

ight to schedule, can be abused or that a re medy exists for such an alleg ed abuse.”). Inthe pres ent case , the Ag reemen t contain s two sect

io ns relev ant to the lev el of hea lth insurance benefit s. Under § 12.2 of the Agreement, nurse s are to receive the same health insuranc e
as all other employee s. Section 12.7, however, states that the Hospitals retain the right to select or change insuranc e carr

iers, or to become a self-insurer, “provided the leve l of such benefits remains substantia lly the same.” J.A. 104. The arbitrator construed the Agr e ement , in l igh t of these two sections , to mean tha

t the Hospitals had an obligation to maintain substantially the sa me level of benefit s even ab sent a change in carrie rs. This is a fair

construction of the

parties’ agree

ment. As “it is the arb itrator' s view . . . of the me aning o f the con tract tha t [the part ies] have agreed

to accept,” we will not question the arbitrator’s interpretation. Misco , 484 U.S. at 37-38. The arbitrator was still faced with an unanticipated circumstanc e. See Enter. Wheel , 363 U.S. at 597 (noting that a particul ar dispute may raise que stions the contract does not resolve). As happened here, some individual changes in insurance c overage increased healthc are benefits while others decreased benefits. See part I, supra. In evaluating a set of changes, it is often unclear whether the ov erall leve l o f b en ef it s r em ai ns “s ub st an ti al ly t he sa me .” Fa ce d w it h t hi s d if fi cu lt y, the arbitra

tor “re ach[ed] a

fair solu tion” to the probl em. Misco , 484 U .S. at 41 (qu otin g Enter.No. 03-2451

Bixby Med. Ctr. v. Mich. Nurses Ass’n

3 Section 12.7 dict at es that, should the Hospitals attempt to change insurance car riers, the Hospitals must provide written notice to MNA and, if asked to by the union, “explain a

nd discuss all matters related to a change of c arriers.” We hesitate to read those pro cedure s as unequ ivocally binding on how the ho spitals and union will proceed on changes in health insurance without any change ininsurance carrier. Moreover , even were we to read the steps set f

orth in § 12 .7 to apply to situations where the employe r alters insurance coverage without chang ing the insurance carrier, we are not convinced that the Hospitals discharge the ir obligation to “explain and discuss” changes with the union if they

fail to se cure MN

A’s cons ent to cha

nges in coverage. More to the point, an arbitrator would be “ argua

bly construi ng or a pply ing the c ontract

” in conc lu ding co nse nt was necessary . Misco , 484 U.S. at 38. - 11 - Wheel , 363 U.S. at 597). To insure that the l evel of be nefits remained substantially the sa me, the arbitrator ordered only

prospective relief

to MNA. She ordered

that, go ing for

ward, th e Hospita

ls must provide MNA with notice of what changes it wishes to make to its insur

ance coverag e and must obtain MNA’s consent before making such changes. I

n these negotiations, the arbitrator decided, the standard would be whether benefits remain substantially the same. The arbitrator’s rem ed y d oes no violence to the parties’ agree ment. Unlike the situations presented in Beacon Journal , 114 F.3d at 600, and Lourdes Hospital , 958 F.2d at 157, and contrary to the Hospitals’ argument, the Hospitals did not have the unfettered r ight under the Agr eement to change insurance coverage . The Agreemen t ga ve them a right to change only insurance carriers , provided that cove rage would rema

in substan tially the same . The Ag

reemen t is silent o n what must be done when the Hospitals change benef its but keep the same carrier. 3 This gap in the Agreement is the sort of “particular contingency ” to which an arbitrator’s “informed judgme nt” shoul d b e brought to bear. Enter. Wheel , 363 U.S. at 597. The arbitrator made sure to indicate that the standard in such ne gotiations was stil l that ben efits wou ld remain substantia

lly t he same. There is
no reason that the Hospitals could not seek arbitration if MNA’s negotiating proved unr easonable.No. 03-2451

Bixby Med. Ctr. v. Mich. Nurses Ass’n

- 12 - The arbitrator’s remedy is “a fair solution” to the problem presented, ibid. , and we w ill not question it. Incrafti ng a r em ed y that serv es to eff ectuate the arbi trator’ s interpr

etation o f the con

tract, that the Hospit

al must mai

ntain subs tantially

the same level of benefit s , the arbitrator’s award “draws its essence from the collective barg aining agreement,” a nd therefore, “the awa

rd is leg itimate.” Misco , 484 U.S. at 36.

III For the r easons st ated above, we A

FFI RM the judg

ment of the

district c ourt.No. 03-2451

Bixby Med. Ctr. v. Mich. Nurses Ass’n

- 13 - Ke nn ed y, Circuit Judg e, conc urring in part, and dissenting in part. I ag ree with the major ity that the arbitrator was entitled to conclude that the employe r had agreed in Section

6.0 to sett

le all disagr eements between it and the union by arbitration an d that, in the absence of a provision governing the procedure to be used

when the union itse lf

files a grievance ag ainst the employer, the procedure provided for arbitration by nurses would be utilized ins ofar as its specif ic provisions were notinappropriate for resolving a dispute betwee n the u nion and the e

mploy er. Howe ver, bec ause Ibeliev e that t

he arbitrator’s remedy

requiring the employ

er to obtain the union’s consent before implementing a chang e in benefit s does not d

erive its essence from the a

greement, but rather adds
an addition al requirement not provided for in the agre ement based upon the arbitrator’s view of industrial justice, I respectfully dissent. Section 12.7 of the collective bargaining a greement reserves to the employ er the rig ht to change insurance carriers provided that the leve l of benefits remain substantially the same . Moreover, this secti on provide s that bef ore th e employer may

implement a change in carriers, the employer must provide the union with notice , and, upo n a request from the union, to explain and discuss with the union all matters related to the change. The a rbitrator interpreted this secti o n as providing an impli ed requirem ent that the employ er must ke ep bene fits substa ntially the same regar dless of whether the employ er changes insurance c arriers. I ag ree with the panel th at, in reaching this conclusion, the arbitrator was arguably construing the agreement. I n fashioning relief, however, rather than simply find that the employer has the

obligation to keep benefit s substant ially the same and to notify, explain to, and discuss with the unionregarding changes in benefits, all that is required by

section12.7 when there is a change in c arriers, the arbitrator added the additionalNo. 03-2451

Bixby Med. Ctr. v. Mich. Nurses Ass’n

4 The union ’s “state

ment of the

grieva nce” sup ports the interpre tation tha t a lthough the benefit s must remain sub stanti ally the same, the e mployer may

initially change

the benefits. The gr ievance r eads, “Employe r changed insurance and [bene fits are] not substantially the same as previous coverage.” The union simply asked the arbitrator to determine whether the e mployer’s change in benef

its result ed in benefit s that wer

e not subst

antially the same as previous coverage , and, if so, to make the union’s members whole. By requiringthat the employer f irst obtain the union’s consent before implementing a chang e in benefits, the union received more than it even asked for.
- 14 - requirement

that the e mploy er must fi rst obtai n the u nion ’s con sent b efore i mplem entin g a change in benefits, a requirement not found in the agre ement nor one rationally derived from it. It is true, of course, that the employ er could arbitrate the union’s failure to consen t t o a proposed change in coverag e that the employer believes results in substantially thesame benefits. H owever, the arbitrator’s requirement that the employ er first get the union’s consent befo r e implementing the change shifts the burden of who must initiate arbitration to the employer and, thus, strips from the employer

the right to first implement a change to the insuranc e coverage. 4 The union argue s, in response, that the agreement does not give the employer the unfettered

right to cha nge insurance coverage, and, since the c ontract is silent onwhat the employer ’s rights or limitations are when it chang es benef

its without c

hanging carriers, the arbitrator was per mitted to bring her informed judgment to bear to fill this gap by concluding that the employ er must first get the union’s consent before changing

benefits. It does no t follow from the fact that the agree ment does not accord the employ er the affirmative right to change covera ge that the employer in fa

ct does not have that right. Rather, where
anagreement between mana gement and a union

is silent on a subject, management retains discretion over that subject. As the Supreme Court noted:No. 03-2451

Bixby Med. Ctr. v. Mich. Nurses Ass’n

- 15 - Collective barga

ining ag reemen ts regu late or r estrict t he exerc ise of man

ageme nt functions; they do not oust management from the performance of them. Manageme

nt hires a nd fires , pa ys and promotes, supervises and pl ans. All th ese are par t of its fun

ction, an d absent a collective barga

ining ag reemen t, it may be exercised fr

eely except as limited

by public law and by t he willin gness of employ ees to work under the particular, unilaterally imposed condition s. United Steelworkers of Am. v. Warrior & Gulf Navigation Co. , 363 U.S. 574, 583 (1960). We had the oppor tunity to apply this lang uage f rom Warri

or & Gulf in Appalachian Regional Healthcare, Inc. v. United Steelworkers of America , 245 F.3d 601 (6 th Cir. 2001). In Appalachian , a dispute between an employer a

nd the union representing its employ ees concerning

the emplo ye

r’s authority to require part-tim e employ

ees to work mor e than their scheduled shifts was submitted to an arbitrator. 245 F.3d at

603-04. The arbitrator concluded that the employ er could not r

equire p arttime employees to work more thantheir schedul ed shifts because “[t]here is no provision [in the collective barg ainin

g ag reement] permitting

the Employer” to do so. Id. at 606 (e mphasis in original). This Court reversed, holding that the “arbitrator created a limitation on [the employer]’s management

rights that is not found in the Agreement.” Id . In reaching this conclusion, we noted that a collective bargaining ag

reement “need not include provisions permitting management action
on every conceiv able emp loy

ment matte

r; rathe r, on issue s not discu ssed in the Agree ment, management

retains discretion.” Id . (cit ing Warrior & Gulf Navigation Co. , 363 U.S. a t 583). Si mi la rl y, the fact that there is no affirmative language in the collective bargaining ag reement “permitting” the employer her e to change insurance cove rage does not support the conclusion that the employer is without the authority to do so.No. 03-2451

Bixby Med. Ctr. v. Mich. Nurses Ass’n

- 16 - Furthermore, altho ugh th e agreem ent do es not give th e empl oyer the un fette red ri gh t to change insurance coverage, but r ather is silent on what must be done when the em ployer cha

n ges
covera ge without a

corresponding change

in carriers, this does not give thearbitra tor free reign t o craft a remedy

devoid of any c onnection to the agreement. Rather, in cra fting the r emedy, the arbitra tor must ar

guably be constr uing the agree ment. If the arbi trator ne ed not (or

did not) i nterp ret se ction 12.7's “notice , explain, a nd discuss ” provisions as apply

ing to the context here where there was not a cha nge in carriers (even thoug h the arbitrator did interpret section 12.7's “substantially the same benefit s” provis ion as app lyin g to this context), then i t is d iffic ult t o dis cern ho w the a rbitr ator w as at al l cons truin g t h e contract. The arbitrator does not point to any other provision in the agreement that it relied upon in fashioning her award. Rather, she simply asserts t he follow ing: “Health insurance benefits are an integ ral and critical component of the employees’ working condition s. . . . Management has an obligat ion not to erode those benefits; the [union] has a duty to preserve them. Consequently , the provisions of the insurance package must be protected fromunilateral action by the employer. Mana

gement must notify the

[union] about contemplated modifications and seek its approval.” This conclusion does not rely upon the pa rties’ agreement. I f the arbitrator did n ot rely upon the agreement

infashioning relief, then

her requirement that the employ er must first obtain the union’s consent before implementing change s to insurance coverage would simply reflect the arb i trator’s own brand of

industrial justice. The prohibition against an arbitrator dispensing her own br and of industrial justice was forcefully stated by the Supreme Court in United Steelworkers of America v. Enterprise Wheel &

Car Corp. , 363 U.S. 593 (1960) (emphasis added):No. 03-2451

Bixby Med. Ctr. v. Mich. Nurses Ass’n

5 In Beacon Journal Publishing Company v. Akron Newsp aper Guild , 114 F.3d 596, 600-601, cited by t he ma jo ri ty, we reversed the arbitrator’s substantive de cision that the employer violated the agreement

when it scheduled vacations because the employer had the

specific right in the agree ment to do so. Howe

ver, we vacate d the arb itrator’ s award because the union was “[u]nab le to point t o a contractual basis ” support ing it. Id . at 601. We noted that “the arbitrator imposed his own brand of ‘industrial justice’ . . . by cr afting [an awar

d] that do[es ] not even a

rguab ly derive [itself] from the contract.” Id . at 600. Rather, we continued, “[i]t appears that the arbitrat or imposed [this award] inan effort to form a ‘better solution’ for the par ties than that

which co uld be fou nd in the te

rms of the agreement itself.” Id
. This, we noted, “is in direct contravention of the principle that awards notbe based on principles of fairness, but instead on precise te r ms of the c ollective bargaining agreement.” Id . S im il ar ly, if the arbitrator was not interpreting section 12.7 as applying he

re where there is a change in coverag e but not a change in carriers, then the arbitrat or’s award would erroneous ly be based on principles of fairness and not on the prec ise terms of the collective bargaining agr

eement. - 17 - When an arbit

rator is c ommissione d to interpre t and apply the collec tive bargaining agree ment, he is to bring his informed judgment to bear in order to reach a fair solution of a problem. This is especially true whe n it comes to formulating remedies. There the nee d is for f lexibility in meeting a wide variety of situations. The draftsmen may never ha v e thought of wha t s pe ci fi c r em ed y sh ou ld be aw ar de d t o m ee t a pa rt ic ul ar co nt in ge nc y. Neve r theless, an arbitrator is confined to interpretation and application of the collective bargaining agreement; he does not sit to dispense his own brand of industrial justice
. 363 U.S. at

597 (emphasis adde d). Thus, although we must certainly give the arbitrator a fair shar e of deference in fashioning re lief, if the relief awarded by the ar bitrato r is not derived from the interpretation

and application of the agreement, or eve n a single provision in the agreement, such a s section 12.7, then the award must be vacated. 5 If the a rbitr ator was i nter pret ing s ecti on 12. 7's “

notic e, exp lain, and discus s” provisions when crafting the remedy, the

n it is difficult to see how the arbitrator’s requirement that theemploy er also obtain the union’s consent before implementing a chang e to insurance coverage could be anything butan additional requirement not found in or rationally der ived from the agreement. Our decision in Ford Motor Company v. Plant Protection As socia tion National , 770 F.2d 69 (6 th Cir. 1985)isNo. 03-2451

Bixby Med. Ctr. v. Mich. Nurses Ass’n

- 18 - analog ous. In Ford Motor , the agreement between the union a nd For d provided that “where the intr o duction of new or advanced technolog y at a plant loca

tion affects the job responsibilities of included employees, loca

l management will discuss the matter with the Uni on. Such di scussion w ill take place in

advance of implementation of such technologica l change as is practicable.” 770 F.2d at 72. From this language, the arbitrator found that “Ford [had] agree d . . . to meet and discuss new techn ology with [the union] before adopting it.” Id . at 73. The arbitrator then went on to order Ford to “bargain such chang es affirmatively .” Id
. at 73. We reversed, noting that “[t]here was nothing inthe agreement . . . which required Ford to barga in either affirmatively

or otherwise on this matter.” Id
. at 75. We concluded t hat the “a rbitrator exceed ed his aut hority in requir ing For d to barg ain affirmatively”

as “[t]his award imposed an obligation on Ford not found in the agreement.” Id
. at 75. Similarly, here, the only provision of the agreement that deals with insurance provides only that the employer must g ive the union notice of a change and explai n and disc

uss all mat

ers rela ted to the chan ge. The arbitra tor’s re quireme

nt that the employ er first obtain the union’s consent before implement

ing a change th

us adds an

additiona l require ment not fo

und in the a

greement. Since Ibelieve that the arbitrator was not arguably construing the contract in requiring the employer to obtain the union’s consent before implementing a change in covera ge, but rather added
anadditional requirement not found or rationally derived from the agreeme nt but based solely upon the arbitrator’s own view of industrial justice, I respectfully dissent.