* This order and judgment is not binding precedent, e xcept under the

doctrines of law of the case, res judicata, and col lateral estoppel. The court generally disfavors the citation of orders and judg ments; nevertheless, an order and judgment may be cited under the terms and condi tions of 10th Cir. R. 36.3. 

## F I L E D United States Court of Appeals Tenth Circuit 

### NOV 10 1997 

### PATRICK FISHER Clerk UNITED STATES COURT OF APPEALS
FOR THE TENTH CIRCUIT

FURR’S SUPERMARKETS, INC.; SMITH’S FOOD AND DRUG CENTERS, INC.,

Plaintiffs-Appellants,

v. UNITED FOOD AND COMMERCIAL WORKERS UNION, LOCAL 1564,

Defendant-Appellee. Nos. 97-2002 & 97-2020 (D.C. No. CIV-95-1511-LH/DJS)

(D. N.M.)

ORDER AND JUDGMENT *

Before KELLY, McKAY, and BRISCOE, Circuit Judges.

After examining the briefs and appellate record, th is panel has determined unanimously that oral argument would not materiallyassist the determination of these appeals. See Fed. R. App. P. 34(a); 10th Cir. R. 34.1.9. The c ases are therefore ordered submitted without oral argument.-2-

Plaintiffs, Furr’s Supermarkets, Inc. and Smith’s F ood & Drug Centers, Inc. (collectively, employers), brought suit to challeng e a labor arbitration decision favoring defendant United Food and Commercial Worke rs Union, Local Union #1564 (the union), in a dispute over the compensabi lity of certain employee training time. On cross-motions for summary judgme nt, the district court ruled for the union, thereby leaving the underlying arbit ration award undisturbed. For the reasons explained below, we affirm. The question resolved in arbitration was whether employers violated their collective bargaining agreements (CBAs) with the un ion when they refused to remunerate employees for time and expenses associat ed with completing an alcohol-server program mandated by statute and enfo rced by the state as a condition on employers’ liquor licenses. After det ermining that the matter could not be resolved by reference to any particularized CBA provision or past practice, the arbitrator turned to interpretation of the gene ral term “work” used in the CBAs. Presuming the parties intended their agreeme nts to be construed in compliance with the Fair Labor Standards Act (FLSA) , the arbitrator considered the implemental regulations regarding the status of training time, 29 C.F.R. §§ 785.27 - 785.30, as well as related case law, an d concluded in conformance therewith that the alcohol-server program constitut ed compensable work within the meaning of the CBAs.-3-

Our consideration of this case is guided by two dis tinct standards of review: one regarding the unique deference owed by all federal courts to the designedly nonjudicial disposition of the arbitrato r, and the other relating to the traditional matter of appellate review of the deter minations of a subordinate court. As for the former, [j]udicial review of an arbitral award . . . is amo ng the narrowest known to the law. The arbitrator’s factual finding s are beyond review, and, so long as the arbitrator does not ign ore the plain language of the collective bargaining agreement, so is his interpretation of the contract. As long as the arb itrator’s award draws its essence from the collective bargaining ag reement it must be upheld. Champion Boxed Beef Co. v. Local No. 7 United Food & Commercial Workers Int’l Union , 24 F.3d 86, 87 (10th Cir. 1994) (quotations and c itations omitted). As for the latter, “courts of appeals should apply ordinary, not special, standards when reviewing district court decisions upholding arbitration awards,” i.e., while “courts grant arbitrators considerable leeway when reviewing most arbitration decisions[,] . . . that fact does not mean that app ellate courts should give extra leeway to district courts that uphold arbitrators.” First Options of Chicago, Inc. v. Kaplan , 514 U.S. 938, 948 (1995). Accordingly, “[a]s in other cases in which the district court grants summary judgment, we revi ew the grant of summary judgment in [this] labor arbitration case de novo.” Champion Boxed Beef Co. , 24 F.3d at 87.-4-

Employers’ primary contention is that the arbitrato r improperly relied on extrinsic federal law and, consequently, arrived atan unauthorized decision that did not draw its essence from the CBAs. Secondaril y, employers argue that the arbitrator erred both in his application of federal law and in his construction of the CBAs’ provisions.

I There is no blanket prohibition on the use of feder al law in conjunction with the arbitration of collective bargaining dispu tes. On the contrary, an arbitrator “may of course look for guidance from ma ny sources” including “‘the law’ for help in determining the sense of the agree ment,” United Steelworkers v. Enterprise Wheel & Car Corp. , 363 U.S. 593, 597, 598 (1960), provided the law i s used to clarify, not contradict, the CBA’s terms, s ee Alexander v. Gardner-Denver
Co. , 415 U.S. 36, 53 (1974). See generallyFrank Elkouri & Edna Asper Elkouri, How Arbitration Works 535-36 (Marlin M. Volz & Edward P. Goggin eds., 5th ed. 1997). Indeed, “[a]rbitrators often construe c ollective bargaining agreements in light of statutes and case law.” Id. at 486. Nonetheless, the arbitrator’s power in this regard is contingent upon authorization from the parties:

When the parties to a dispute agree to use the priv ate solution of arbitration, they control the appointment and th e authority of the arbitrator and by the submission agreement [stating the issue to be-5-

decided] can expressly regulate to what extent, if any, the arbitrator is to consider applicable law. . . . . . . Thus, for instance, they may expressly directthat the case be decided consistent with applicable law, or they may restrict the arbitrator’s authority to interpret the law. . . . Unless the parties specifically limit the powers of the arbitrator in deciding various aspects of the issue submitted, it is often presumed that they intend to make the arbitrator th e final judge on any questions that arise in the disposition of the issue, including not only questions of fact but also questions of contra ct interpretation, rules of interpretation, and questions, if any, wit h respect to substantive law. Id. at 516-18 (footnotes omitted); see, e.g. , Richmond, Fredericksburg & Potomac R.R. v. Transportation Communications Int’l Union , 973 F.2d 276, 279 (4th Cir. 1992) (rejecting “any sort of blanket prohibition o n an arbitrator’s recourse to legal authority,” because “the limits of an arbitrator’s authority are defined by the terms of the parties’ own submission”).
A Employers contend the parties’ submissions in this case, which asked only whether the CBAs had been violated, placed any cons ideration of FLSA regulations and case law beyond the reach of the ar bitrator. Employers argue this case thus resembles Interstate Brands Corp. v. Loca l 441 Retail, Wholesale & Department Store Union , 39 F.3d 1159 (11th Cir. 1994), in which the Eleve nth Circuit held an arbitrator exceeded his authority t o determine the parties’ contractual rights by applying Department of Transp ortation regulations in the-6-

course of resolving a dispute over the dismissal of a truck driver for drug use. We view the asserted resemblance as imperfect, in at least one critical respect. Unlike here, where FLSA regulations were used to fl esh out the meaning of a general CBA term, in Interstate Brands the DOT regulations were used to resolve a collateral, procedural issue that arose under the regulations themselves and had no direct roots in the CBA at all:

In this case, the arbitrator went beyond the collec tive bargaining agreement and undertook to interpret the DOT regulations requiring a “chain of custody” for the [urine] spec imen. The arbitrator resolved the issue of the admissibility of the drug test without reference to the contract at all. . . . In looking to the regulations, the arbitrator ackno wledged that it is DOT, not the contract, which mandates drug te sting for interstate truck drivers. It is DOT which has established the protocol for this program. What these procedures require is an issue wholly outside the scope of the collective bargaining agreement. Id. at 1162. Here, we cannot simply say, in similarly categorical terms, that the mandate of pay for work, and what constitutes work for purposes of that mandate, are matters wholly independent of the CBAs construe d by the arbitrator. On the other hand, we acknowledge that neither the parties ’ written submissions nor the arbitration provisions of the CBAs themselves affirmatively direct the arbitrator to consider extrinsic federal law as an interpretiv e aid.
B-7-

We need not decide as a general matter whether an e xplicit, affirmative authorization is necessary, however, because we con clude employers essentially conceded the issue during the hearing before the ar bitrator. See, e.g. , In re Arbitration Between United Indus. Workers v. VirginIslands , 987 F.2d 162, 168-69 (3d Cir. 1993); Jones Dairy Farm v. Local No . P-1236, United Food & Commercial Workers Int’l Union , 760 F.2d 173, 175-76 (7th Cir. 1985). The following exchange at the arbitration hearing provi ded an ample basis for the arbitrator’s presumption that FLSA regulations and case law--already interjected by the parties in their pre-hearing briefs, see Appellants’ Appendix at 59, 62--could properly be referred to for interpretive guidance: [Employers’ counsel]: As I understand the union’s po sition, they’re taking the position that this is work withi n the meaning of the collective bargaining agreement. Admittedly, there is no specific definition of work. And how the industry regards the issue of work, which has both independent and contractual meaning under Fair Labor Standards Act, and under just practice, in ge neral, is very relevant, because we’re not talking about specific contract language here. We’re talking about the union taking the pos ition that this falls into the general category of the word “work.” [Union counsel]: We would agree that to figure out w hat “work” means, you’ve got to look at the act, and you’ve go t to look at other laws, and we absolutely agree that you have to lookat the Fair Labor Standards Act. Because what the company did relate s to the Fair Labor Standards Act, then I think it’s going to compel the arbitrator to rule in our favor, because the rule says you can ’t -- you can’t look at a contract in a way that causes the contract to violate the law.

. . . .1 We would certainly agree that the parties did not a uthorize the arbitrator to

resolve independent statutory claims under the FLSA . Indeed, it is uncertain whether such authorization could be given, particul arly in this collective bargaining context, where the individual assent of the workers involved is absent. See generallyCole v. Burns Int’l Sec. Servs. , 105 F.3d 1465, 1472-83 (D.C. Cir. 1997) (distinguishing statutory and contractual cla ims and discussing validity of agreements to arbitrate former in CBA and non-CBA c ontexts after Gilmer v. Interstate/Johnson Lane Corp. , 500 U.S. 20 (1991)). -8- [Employers’ counsel]: It’s extremely relevant becaus e the Fair Labor Standards Act applies to all of these compani es, and the State of New Mexico will not enforce a law inconsistent w ith the federal guidance of the Fair Labor Standards Act. Id. at 125-26. Employers insist they nevertheless preserved the po int in their post-hearing brief, which passingly asserted in a footnote that “the Union’s [FLSA] argument is inappropriate in this forum” because “[i]t is th e Department of Labor that has jurisdiction to interpret and enforce the [FLSA],” id. at 49 n.3. However, as DOL jurisdiction extends to the disposition of statutory--not contractual--claims, this conclusory objection does not address the arbitrato r’s authority to consider FLSA regulations when construing and enforcing CBAs. 1 Employers further confused the matter by later indicating their point was thatthe CBAs were clear enough that resort to federal law was simply not necessaryfor a ruling in their favor, though, if used, it would bolster their interpretat ion. See id. at 51. This position, if it implied anything about the arbitrator’s autho rity, suggested such authority included the use of extrinsic law to clarify ambigu ous CBA terms. Finally, we-9-

note employers had full opportunity to argue the me rits of the case in relation to FLSA law. Indeed, the arbitrator’s decision reveal s his reasonable understanding that employers expected him to consider FLSA law. In short, employers “did not . . . make clear that [they] w[ere] preserving [a] challenge for eventual presentation to a court if the arbitrator ruled in the union’s favor.” Jones Dairy Farm , 760 F.2d at 175. And, as our preliminary discussion of the question above shows, it is by no means obvious that the arbitrator exceeded his authority in deciding the C BA dispute as he did. Bearing in mind that “‘any doubts concerning the scope of a rbitrable issues should be resolved in favor of arbitration, whether the probl em at hand is the construction of the contract language itself or an allegation of waiver ,’” we hold employers failed to preserve any objection in this regard. N ghiem v. NEC Elec., Inc. , 25 F.3d 1437, 1440 (9th Cir. 1994) (quoting Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc. , 473 U.S. 614, 626 (1985)) (alteration in original ).

II As a fall-back position, employers contend the arbi trator’s reliance on extrinsic federal law, even if proper, undercuts any judicial deference to his resulting decision. With this supposition as licen se, employers launch an extensive challenge on the merits. In our view, th is whole line of argument reflects a basic misconception about collective-bar gaining arbitration, suggesting-10-

that its unique status vis-à-vis the courts is a va riable contingency based on the particular subject in dispute, rather than an inher ent consequence of its institutional function.
A Judicial review of arbitration decisions is limited “[b]ecause a primary purpose behind arbitration agreements is to avoid t he expense and delay of court proceedings.” ARW Exploration Corp. v. Aguirre , 45 F.3d 1455, 1463 (10th Cir. 1995) (quotation omitted); see Elkouri & Elkouri, supra , at 10 (arbitration saves “time, expense, and trouble” where “costly, prolong ed, and technical procedures of courts are not well adapted to the peculiar need s of labor-management relations”). That primary purpose remains regardle ss of the factual or legal content of the decision. See Northrop Corp. v. Triad Int’l Mktg. S.A. , 811 F.2d 1265, 1269 (9th Cir. 1987) (“To now subject [an arb itrator’s legal conclusions] to de novo review would destroy the finality for which the pa rties contracted and render the exhaustive arbitration process merely a prelude to the judicial litigation which the parties sought to avoid.”). Thus, even “[a]n arbitrator’s erroneous interpretat ions or applications of the law are not reversible. Only ‘manifest disregard’ of the law is subject to reversal.” ARW Exploration Corp. , 45 F.3d at 1463 (citation omitted) (quoting and following Wilko v. Swan , 346 U.S. 427, 436-37 (1953)); accordRichmond ,-11-

973 F.2d at 281; Northrop Corp. , 811 F.2d 1269. Our record does not suggest any such “willful inattentiveness to the governing law. ” ARW Exploration Corp. , 45 F.3d at 1463 (quotation omitted). On the contrary, the arbitrator’s extensive, thoughtful analysis of the pertinent FLSA regulatio ns and case law reflect “a good faith effort to apply the law as he perceive[d] it. ” Richmond , 973 F.2d at 281. We therefore must decline employers’ invitation to engage in a substantive reconsideration of the merits of the parties’ dispu te.
B There are, however, two particular objections advan ced by employers in this regard that warrant additional comment, if onl y to help clarify the extent and significance of the judicial deference thus far dis cussed in fairly abstract terms. First, employers argue the arbitrator’s award violates CBA “no-modification” provisions, see Appellants’ Appendix at 42, 44 (“the arbitrator sh all not have the power to add to, subtract from or in any way modifythe terms of this Agreement, and shall limit his decision strictly to the interp retation of [its] language”), and “zipper clauses,” see id. at 42, 45 (“each [party] agrees that the other sha ll not be obligated to bargain collectively with respect to a ny subject matter not specifically referred to or covered in this Agreeme nt”). The arbitrator considered these provisions and deemed them consistent with hi s decision. He indicated that he was adhering to the former by interpreting, not modifying, the CBAs, and-12-

concluded that the latter “preclude[] either party from demanding the other to negotiate over [new] subject[s],” but “do[] not pla ce any restrictions on the Arbitrator, who has the authority to interpret the language agreed upon between the parties.” Id. at 168. Whether or not we would reach the same co nclusions, we cannot say the arbitrator “ignore[d] the plain lang uage of the [CBAs],” and, consequently, his expressed understanding thereof i s beyond our review. Champion Boxed Beef Co. , 24 F.3d at 87. Employers’ second objection is that the arbitrator failed to accord proper deference to an opinion letter of the Wage-Hour Adm inistrator applying the FLSA regulations and reaching a contrary conclusion unde r fairly similar circumstances.
A court , of course, must defer to an agency’s interpretati on of its own regulation unless “plainly erroneous or inconsistent with the regulation,” Auer v. Robbins , 117 S. Ct. 905, 911 (1997) (quotations omitted), an d should even be “hesitant to contravene” an informal agency opinion interpreting a statute, Townsend v. Mercy Hosp. , 862 F.2d 1009, 1012-13 (3d Cir. 1988) (following Skidmore v. Swift &
Co. , 323 U.S. 134, 140 (1944)). But, again, a fundame ntal purpose of arbitration, particularly of CBA claims, is to provide a distinc t alternative, substantively and procedurally, to traditional adjudication; arbitrat ion is not simply litigation in another forum, but an entirely different species of dispute resolution, one better understood, rather, as a continuation of the collec tive bargaining process itself:-13- “. . . Arbitration is the means of solving the unfo reseeable by molding a system of private law for all the problem s which may arise and to provide for their solution in a way which wi ll generally accord with the variant needs and desires of the parties. The processing of disputes through the grievance machinery is actuall y a vehicle by which meaning and content are given to the [CBA]. . . . The grievance procedure is, in other words, apart of the continuous collective bargaining process.” Cole , 105 F.3d at 1473-74 (quoting United Steelworkers v. Warrior & Gulf Navigation Co. , 363 U.S. 574, 581 (1960)). Thus, “arbitrators pe rform functions different from those performed by courts.” Id. at 1474. They exercise a uniquely informed, broad-ranging, and autonomous judgment, and “it was [t]his judgment and all that it connotes that was bargained for”--n ot the conventionalized and constrained legal analysis of a court--when the parties included the arbitration provision in their CBAs. Id. (quotation omitted).

“Put most simply, the arbitrator is the parties’ of ficially designated ‘reader’ of the contract. He (or she) i s their joint alter ego for the purpose of striking whatever supplementarybargain is necessary to handle the anticipated unanticipated o missions of the initial agreement. . . . In the absence of fraud o r an overreaching of authority on the part of the arbitrator, he is spea king for the parties, and his award is their contract. . . . In sum, the arbitrator’s aw ard should be treated as though it were a written stipu lation by the parties setting forth their own definitive construc tion of the contract.” Id. at 1474-75 (quoting Theodore J. St. Antoine, Judic ial Review of Labor Arbitration Awards: A Second Look at Enterprise Wheeland its Progeny , 75 Mich. L. Rev. 1137, 1140 (1977)) (footnote omitted)

.-14-

This remains true where, as here, the arbitrator in forms his judgment by reference to external law. “In [such] cases, altho ugh public law is relevant to determining what contractual rights the parties enj oy, the rights themselves are still privately created contractual rights, not pub licly created statutory rights,” id. at 1475, and, thus, “‘ the arbitrator’s award implements the parties’ agre ement to be bound by his analysis of the statute, rather tha n by the statute itself, ’” id. (quoting St. Antoine, supra , 75 Mich. L. Rev. at 1143) (alteration in original ). Requiring the arbitrator to defer to an agency’s in terpretation of the pertinent regulations would turn the parties’ arbitration agr eement on its head. The broad, binding authority they privately agreed to vest in a nonjudicial arbitrator would be superseded by the Wage-Hour Administrator--on the b asis of a judicialprinciple of administrative deference. Further, in policing arbitration for compliance with that legal principle (and all the administrative law it would bring into play), the courts would clearly be engaged in improper “merits ” review of arbitrators’ decisions. We conclude the weight, if any, to be a ccorded agency opinions was solely a matter for the arbitrator’s judgment. Cf. Sullivan, Long & Hagerty, Inc. v. Local 559 Laborers’ Int’l Union , 980 F.2d 1424, 1429 (11th Cir. 1993) (“An arbitrator’s decision allocating the burden of proo f among the parties or in fixing the legal framework for evaluation of a grievance o rdinarily cannot be reviewed in federal court.”). See generallyPublic Serv. Co. v. International Bhd. of Elec.-15-

Workers , 902 F.2d 19, 20 (10th Cir. 1990) (“[T]he power of arbitrators concerning every body of law is broader than the po wer of courts concerning those same bodies of law.”)

III Finally, we must address a matter of appellate proc edure. Employers have filed two motions to supplement the record. We deny both. In the first, they ask to add evidentiary materials omitted from their sum mary judgment submission, assertedly on account of the page limitation set ou t in D.N.M. R. 10.5 (restricting exhibits accompanying motion to fifty pages). Empl oyers never sought leave to exceed this page limitation in the district court. They are in no position to request such relief now, in an attempt to overturn the dist rict court’s determination of the case on the record as developed, without objection, below. See generallyReid v. Oklahoma , 101 F.3d 628, 630-31 (10th Cir. 1996) (“As a court of review, we may examine additional documents culled from the distri ct court file and consider new legal authority, but we may not enlarge the evident iary record to include material unavailable to the district court . . . .”), cert. denied , 117 S. Ct. 1707 (1997). In their second motion, employers ask to submit the de cision of another arbitrator, who addressed a CBA claim similar to those arbitrat ed here. The proffered decision would not be material to our disposition o f this appeal.-16-

The judgment of the United States District Court fo r the District of New Mexico is AFFIRMED. Plaintiffs-Appellants’ motions to supplement the record are denied.

Entered for the Court

Monroe G. McKay Circuit Judge