United States Court of Appeals

FOR THE EIGHTH CIRCUIT

___________

No. 99-1890

___________

International Paper Company, *

*

Appellee, *

* Appeal from the United States

v. * District Court for the Eastern

* District of Arkansas.

United Paperworkers International *

Union; United Paperworkers * [PUBLISHED]

International Union, Local 735; *

International Brotherhood of *

Electrical Workers, *

*

Appellants. *

___________

Submitted: December 15, 1999

Filed: June 12, 2000

___________

Before BEAM, HEANEY, and HANSEN, Circuit Judges.

___________

 BEAM, Circuit Judge

The United Paperworkers International Union, its Local, and the International

Brotherhood of Electrical Workers (collectively, "the Union") appeal the district court's

order vacating an arbitration award. We affirm the district court. 
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I. BACKGROUND

International Paper Company ("the Company") owns and operates a paper mill

in Pine Bluff, Arkansas. The production and maintenance workers at the mill are

members of the Union. The workers are covered by a collective bargaining agreement

(CBA) with the Company. The 1993 to 1998 CBA was in force at the time of the

dispute at issue in this case.

The CBA provides that "maintenance employees are generally expected to

perform operating maintenance, preventive maintenance and day-to-day equipment

repairs." CBA Article XVII § (B)(1)(b). Another provision in the agreement requires

the Company to employ a "crew sufficient to do the work required in each department,"

including maintenance. CBA Article XVII § (A)(1). The CBA also recognizes,

however, that "situations may arise which will necessitate the use of outside forces to

perform such work." CBA Article XVII § (B)(1)(b). In such cases, "when outside

forces are in the Mill to perform such work," the agreement provides for a "matching

hour penalty," that requires employees to be offered overtime to the same extent as the

outside forces. CBA Article XVII § (B)(1)(b). 

The parties' bargaining history shows that over time the parties have agreed to

accept more work by outside contractors. Before 1983, the agreement generally

prohibited subcontracting of maintenance work except in very limited circumstances.

Both the 1983 and 1990 agreements relaxed the maintenance subcontracting

restrictions.

The "crew sufficient" language was first proposed by the Union and added to the

CBA in 1970 in response to concerns that crews were often understaffed and it was

unfair, for example, to require three employees to do the work of four. The language

appeared in two places in the 1983 and 1990 agreements: in Article XVII, paragraph

(A)(1) (referring to all departments) and again in paragraph (C)(1)(a), the paragraph
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that refers to subcontracting of maintenance work. Although the first reference to

"crew sufficient" still appeared in the 1993-98 CBA, the second reference to the "crew

sufficient" language was deleted from the agreement. 

On February 15, 1994, the Company shut down a large piece of equipment for

eight hours of routine preventive maintenance work and hired an outside contractor to

perform the work. The Union filed a grievance asserting that the Company had

violated the terms of the contract by hiring outside contractors to perform routine

maintenance. The Union contended that the "crew sufficient" language required the

Company to maintain a maintenance work force of 186 general maintenance (GM)

engineers and that the Company had failed to maintain that work force level. Its

desired settlement was that the Company "hire enough GM's to replace retired GM's

and future GM's as they retire." The Company was also asked to "[s]top this practice

of using [outside workers] on [preventive maintenance] for shut-downs." The

Company denied the grievance asserting that the shutdown was a situation that

necessitated "the use of outside forces to perform such work" under the contract. 

The matter proceeded to arbitration. After a hearing, the arbitrator found that,

although the "crew sufficient" language of the contract did not require the Company to

maintain any particular number of maintenance employees, it obligated the Company

to hire enough employees to accomplish the work of the maintenance department. The

arbitrator thus found that the "employees of the Maintenance Department [had] the

right to perform operating maintenance work, preventive maintenance work, and dayto-day equipment repairs" and ordered the Company to "cease and desist from the

practice of using contractors or any outside forces to perform that work."

The Company appealed the decision to the district court. On cross-motions for

summary judgment, the district court found that the arbitrator's award "fails to draw its

essence from the contract" and vacated the award. The Union appeals. 
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II. DISCUSSION

The scope of judicial review of an arbitrator's decision is narrow. See Alvey,

Inc. v. Teamsters Local Union No. 688, 132 F.3d 1209, 1211 (8th Cir.1997). A court

may not reconsider the merits of an award even if the award rests on errors of fact or

on a misinterpretation of the contract. See id. As long as an arbitrator's award draws

its essence from the collective bargaining agreement, the award is legitimate. See id.

A court cannot interfere with the arbitrator's award unless the contract is not susceptible

of the arbitrator's interpretation. See Kewanee Machinery Div. v. Local Union No. 21,

593 F.2d 314, 318 (8th Cir.1979).

In deciding whether an award draws its essence from the agreement, we must

decide whether the award is simply a mistaken interpretation of the contract that we

must uphold, or whether it violates the fundamental principle that "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." United Steelworkers v.

Enterprise Wheel and Car Corp., 363 U.S. 593, 597 (1960). Although an arbitrator

may look to outside sources to aid in interpreting a collective bargaining agreement, he

must construe the contract and he may not amend it. See Keebler Co. v. Milk Drivers

and Dairy Employees Union, 80 F.3d 284, 288 (8th Cir.1996). 

We agree with the district court that the award does not draw its essence from

the contract. The award effectively nullifies the contract language stating that

"situations may arise which will necessitate the use of outside forces to perform such

[preventive maintenance] work." The failure of the CBA to define those situations does

not justify writing them out of the contract altogether. Moreover, the course of dealing,

bargaining history, and industry custom supports the Company's contention that a

shutdown may qualify as such a situation. In addition, an injunction banning the use

of all maintenance subcontracting ignores the agreement's express provision of a

"matching hour penalty" in the event of the use of such outside contractors. The Union
1The dissent contends that the court simply disagrees with the arbitrator's

construction of the agreement and implies that the court engages in result-oriented

jurisprudence. This is simply wrong.

The arbitrator's decision does not draw its essence from the contract because it

is expressly contrary to the terms of the agreement. The arbitrator framed the question

thusly: "Did the Company violate the contract by its assignment of preventive

maintenance work to outside contractors on February 15, 1994? If so, what shall be

the remedy?" He never answered the framed question "yes" or "no." If he had done

so, he would have been forced to decide if the eight-hour shutdown was a "situation"

where the CBA permitted the Company to bring in outside contractors to do the work

pursuant to the provisions of Article XVII § (B)(1)(b). Instead, he issued a blanket

injunction against the Company ever hiring outside workers to do preventive

maintenance work. That blanket prohibition eviscerates and writes out of the CBA the

language that permits the Company to hire outside workers to do preventive

maintenance work in certain "situations." The real issue, avoided by the arbitrator but

clearly within and the object of his statement of the issue, was whether the eight-hour

shutdown was one of those "situations" where the CBA gave the Company the right to

bring in outside workers. The arbitrator did not interpret the contract, he rewrote it.

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concedes that even if the Company were to employ a "crew sufficient" in the

maintenance department, there would still be situations that required outside

contractors to do maintenance work. Thus, we find that the arbitrator's broad

injunction banning the use of outside contractors for all preventive maintenance

contravenes the contract.1

The Union's reliance on the "crew sufficient" language as essentially a condition

precedent to the Company's use of outside contractors for maintenance is misplaced.

We find no support in the record for the contention that the Company agreed to

maintain any specific number of maintenance employees. The record supports the

Company's contention that the "crew sufficient" language in the agreement is aimed at

the problem of overworked employees and not the outside-contracting-of-maintenancework issue. This is shown by the bargained-for deletion of the "crew sufficient"
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language in the portion of the contract dealing specifically with subcontracting

maintenance work.

 

III. CONCLUSION

For the above reasons, the judgment of the district court vacating the arbitrator's

award is affirmed. 

HEANEY, Circuit Judge, dissenting.

The majority overturns the arbitrator's award simply because it disagrees with

the arbitrator's decision. The Supreme Court and our court have consistently

disapproved such activism.

I. BACKGROUND

The facts giving rise to this case are quite simple. On February 15, 1994, the

Company shut down a paper machine to perform eight hours of routine maintenance

work. It assigned that work to an outside contractor, rather than to its Union

employees. The Union filed a timely grievance objecting to the assignment. The

parties agreed to arbitrate the dispute. The CBA provides that the decision of the

arbitrator shall be final and binding.

At the outset of the hearing, the Union and the Company were unable to agree

on the issue to be arbitrated, but stipulated that the arbitrator should frame the issue.

The arbitrator framed the issue as follows: “Did the Company violate the Contract by

its assignment of preventive maintenance work to outside contractors on February 15,

1994? If so, what shall be the remedy?” (J.A. at 57.)
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In defense of its position, the Company claimed that it was permitted by the

CBA to use non-Union employees to perform routine maintenance work. Article XVII

§ (B)(1)(b) of the CBA states:

The Company recognizes that maintenance employees are generally

expected to perform operating maintenance, preventative maintenance and

day-to-day equipment repairs. However, situations may arise which will

necessitate the use of outside forces to perform such work.

(J.A. at 108.)

The arbitrator agreed that the governing provision was Article XVII(B)(1)(b).

However, he found that the language in the second sentence of this Article was

ambiguous in that it did not define what type of “situations” would arise that would

permit the company to use outside contractors for work that Union employees are

typically entitled to perform. He construed the ambiguity against the Company because

it authored this provision. 

The arbitrator then stated:

As described by the Company[,] the disputed work involved

checking rotating equipment bearings that could only be checked while

the equipment was not operating, and referred to that work as "preventive

maintenance." The Company has conceded that such work is normally

performed by General Mechanics in the Maintenance Department, but

argues that the use of contractors in this instance was justified by (a) the

necessity to complete it within the scheduled time frame of 8 hours, (b)

not all the work could be performed by General Mechanics, (c) all

available General Mechanics were being utilized, and (d) the decision to

use a contractor was justified as opposed to interrupting work in other

areas of the Mill, and was based on sound business practices.
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Under other circumstances such reasons for the decision could be

sound, but the problem with the Company's rationale in these

circumstances is that it is based on exceptions which are not authorized

by the Contract, such as Article XVII(B)(2). The Contract doesn't say

routine maintenance work will be performed by General Mechanics

"except" when there is a time scheduling problem, or "except" when all

the General Mechanics are being utilized, or "except" when work in other

areas would have to be interrupted, or "except" when the decision to use

contractors is based on sound business practices.

The Company has no absolute right to employ contractors at will.

It must do so within the restrictions imposed by the Contract. The

decision to use contractors can't be justified on the basis of enlightened

management, labor costs, work efficiency, area priorities, available

manpower, etc. The question is simply what is allowed by the Contract.

(J.A. at 70-71 (emphasis added).)

Because the Company's use of outside contractors to perform maintenance work

was not specifically permitted by the CBA, he ruled that such use of outside contractors

in this circumstance violated the CBA.

II. DISCUSSION

It is well established that federal policy strongly favors arbitration as a means of

resolving labor disputes. See United Paperworkers Int'l Union v. Misco, 484 U.S. 29,

37 (1987); Kewanee Mach. Div. v. Local Union No. 21, Int'l Bhd. of Teamsters, 593

F.2d 314, 316-17 (8th Cir. 1979). Accordingly, our review of an arbitrator's decision

is “extremely limited.” United Food & Commercial Workers, Local No. 88 v. Shop

'N Save Warehouse Foods, Inc., 113 F.3d 893, 894 (8th Cir. 1997). We must construe

the arbitrator's award broadly, resolving all doubts in favor of its validity. See id. at

895. “Because the parties have contracted to have disputes settled by an arbitrator
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chosen by them rather than by a judge, it is the arbitrator's view of the facts and of the

meaning of the contract that they have agreed to accept.” Misco, 484 U.S. at 37-38.

Contrary to the majority's assertion, the arbitrator did not nullify any contract

language. He simply construed the CBA in a manner that was unacceptable to the

Company and unacceptable to the majority. The arbitrator disregarded a portion of the

CBA that he found too ambiguous to be given any meaning. Absent that portion of the

CBA, he found no support for the Company's position.

The arbitrator then ordered the Company to comply with the CBA. The majority

asserts that this part of the award bans the use of all maintenance subcontracting,

contravening the plain language of the CBA. I disagree. The arbitrator's award

recognized that the Company may still use outside contractors, but required that the

Union workforce be fully utilized before the Company used outside contractors to

perform routine maintenance.

Because the majority is not satisfied that the arbitrator's decision was the right

one, it undertakes its own review and substitutes its own interpretation of the contract

for that of the arbitrator. This conflicts directly with the Supreme Court's restriction on

such practices. “[A]s 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 Shop 'N Save Warehouse Foods, 113 F.3d at 895; John Morrell & Co.

v. Local Union 304 A of the United Food & Commercial Workers, 913 F.2d 544, 559

(8th Cir. 1990). The arbitrator's result is fully supported by the record. Therefore, the

decision should not have been disturbed by the district court, nor should it be disturbed

by this court. Accordingly, I cannot join in the majority's affirming opinion.
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III. CONCLUSION

When we review arbitration cases, whether or not this court would reach the

same conclusion as the arbitrator is not the issue. Rather, we are obligated to broadly

consider whether there is any support in the record for the arbitrator's award,

irrespective of whether we believe the arbitrator reached the right conclusion. We are

not permitted to micro-manage the business of arbitration. The arbitrator's award is

what the parties bargained for, and the award is supported by the record. Under the

well-settled precedent of the Supreme Court and this court, the award must stand. I

respectfully dissent.

A true copy.

Attest:

CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.