In the

United States Court of Appeals

For the Seventh Circuit

____________

No. 02-1952

BUTLER MANUFACTURING COMPANY,

Plaintiff-Appellee,

v.

UNITED STEELWORKERS OF AMERICA,

AFL-CIO-CLC and LOCAL 2629,

UNITED STEELWORKERS OF AMERICA,

Defendants-Appellants.

____________

Appeal from the United States District Court

for the Central District of Illinois.

No. 01-C-1149—Joe Billy McDade, Chief Judge.

____________

ARGUED OCTOBER 30, 2002—DECIDED JULY 17, 2003

____________

Before FLAUM, Chief Judge, and BAUER and DIANE P.

WOOD, Circuit Judges.

DIANE P. WOOD, Circuit Judge. Agreements to arbitrate

disputes have been a common feature of collective bargaining agreements for quite some time. They are entitled to a

hospitable reception in the courts, so that they can play

their role of reducing industrial strife and maintaining a

harmonious workplace. In this appeal, we must decide

whether the district court correctly concluded that a labor

arbitrator exceeded the scope of his contractual authority

when he resolved a dispute between Butler Manufacturing

Company and Michelle McMahill, who was a member of the

United Steelworkers of America, Local 2629 (the Union).
2 No. 02-1952

Butler claimed, and the district court agreed, that the arbitrator strayed too far beyond his powers when he applied

the Family and Medical Leave Act (FMLA), 29 U.S.C.

§ 2601 et seq., to help resolve the dispute, which concerned

possible excuses for some of McMahill’s absences. The court

therefore granted Butler’s motion for summary judgment in

its suit to vacate the arbitral award, which it brought under

Section 301 of the Labor Management Relations Act, 29

U.S.C. § 185. We conclude that the award should have been

enforced, both because it had an adequate basis in the parties’ Collective Bargaining Agreement (CBA), and independently because both parties agreed to allow the arbitrator

to take the FMLA into account in his decision. We therefore

reverse.

I

Butler manufactures pre-engineered metal buildings in

its Galesburg, Illinois, plant. Shifts operate around the

clock, seven days per week. The Union represents various

Butler employees, including McMahill, who was hired in

August 1994 to work the midnight to 7:00 a.m. shift. Butler

and the Union were parties to a CBA that was in effect at

all times relevant to this appeal. 

In 1995, Butler and the Union jointly executed a Memorandum of Understanding (MOU) that set forth and incorporated into the CBA a detailed absenteeism policy. Based

on the absenteeism policy that had been in place for the prior fifteen years, the 1995 MOU establishes a point system

pegged to the frequency and types of employee absences.

The policy assesses points for what are called “absence occurrences” attributable to personal or family member illness

or personal business. Failure to report an absence prior to

the start of a shift results in the imposition of absence

occurrence points. When an employee accumulates six or

more absence occurrence points within a six-month period,

she is subject to discipline. The MOU also sets forth the
No. 02-1952 3

various disciplinary steps, which build up from oral warnings, written reprimands, suspension, to termination. 

The basic concept of the MOU absenteeism policy is that

“employees are expected to be at work every scheduled

workday and to be there on time. The reasons for absences

should be limited to those of a necessary and compelling

nature.” Butler defined an absence of a necessary and compelling nature as one involving “an emergent situation that

required urgent action on the part of the employee, and

[that] was beyond the control of the employee and [for

which] a reasonable alternative to work absence did not exist.” In 1996, Butler tweaked the absenteeism policy after

it conducted a 20-month review of its employees’ medical

absences. 

Several years later, in October 1999, Butler notified

McMahill that she had three or more non-compelling absences during the preceding six months. She was told that

“until April 6, 2000 personal, non-occupational medical absences submitted by you for compelling reason absence

consideration will only be approved if they fall within the

sick leave provisions of the Agreement, or are qualified under the FMLA, or are clearly of an emergency nature.” 

After McMahill received notice that she could not miss

any more work that did not qualify as personal sick leave,

an emergency, or under the FMLA, she missed three additional days. On November 4, 1999, she missed one complete

shift to remain at home with her husband, who had been

injured in a fight. Six days later, McMahill missed another

shift in order to stay home with her sick son. Then, on December 23, 1999, McMahill was absent again because her

other son was ill. McMahill asked Butler to find that each

of these absences was supported by a compelling reason,

but each time Butler refused and charged her with an additional absence occurrence. On January 6, 2000, McMahill

missed yet another shift. This time she sought and obtained
4 No. 02-1952

permission to take a personal leave of absence. By the end

of McMahill’s leave there was some confusion over her employment status in light of a conversation that she had with

one of her superiors while on leave. Nevertheless, McMahill

returned to work on February 3, 2000. This was several

days after the expiration of her leave of absence, and she

had not obtained the Company’s approval to extend her

leave. The Company held a disciplinary hearing on February 7, 2000, after which it terminated her for excessive absenteeism.

The Union contested McMahill’s termination. When the

parties were unable to reach an agreement, they submitted

the dispute to arbitration. A full hearing was held before an

arbitrator selected by both parties. At the hearing, the arbitrator heard testimony from two Butler employees, one Union officer, and McMahill herself. Following the hearing,

each side filed a brief for the arbitrator’s consideration. In

its brief, Butler argued that McMahill lacked justification

for missing an entire shift to look after her injured husband. It specifically invited the arbitrator to look to the

FMLA in resolving the question of justification, by arguing

that “[t]he documentation provided for this absence prior to

the grievant’s termination clearly showed that it was not

qualified under FMLA.” Likewise, Butler’s brief asserted

that McMahill’s second absence related to her son’s illness

was not covered by the FMLA. 

After considering the parties’ oral and written presentations, the arbitrator ruled that McMahill’s absences on November 4 and 10, 1999, and on December 23, 1999, were

each qualified absences under the FMLA. Accordingly, he

found her termination unsupported by just cause and ordered her reinstated with half back-pay.

Unhappy with the outcome in arbitration, Butler filed

this § 301 action in federal court, seeking an order vacating

the arbitrator’s award. On cross-motions for summary judg-
No. 02-1952 5

ment, the district court found that the arbitrator acted

outside of his contractual authority when he turned to the

FMLA to assess the propriety of Butler’s termination of

McMahill. It found that the parties had not incorporated

the FMLA into their agreement, and therefore that the

arbitrator was not free to rely on that law in considering

McMahill’s termination.

II

A court’s role in reviewing an arbitral award is quite

limited. Apart from the general reasons for setting aside

any arbitral award found in the Federal Arbitration Act, 9

U.S.C. § 10, the court may consider only whether an arbitrator exceeded the scope of the authority conferred upon

her by the parties’ actions and agreements. Northern

Indiana Pub. Serv. Co. v. United Steel Workers of Am., 243

F.3d 345, 346-47 (7th Cir. 2001). With few exceptions, as

long as the arbitrator does not exceed this delegated authority, her award will be enforced. This is true even if the

arbitrator’s award contains a serious error of law or fact.

Major League Baseball Players Assoc. v. Garvey, 532 U.S.

504, 509 (2001) (per curiam); Nat’l Wrecking Co. v. Int’l

Bhd. of Teamsters, Local 731, 990 F.2d 957, 960 (7th Cir.

1993). Otherwise, as we have pointed out in the past,

arbitration would just be the first of a series of steps that

always culminated in court litigation, and it would lose its

raison d’être. See Flexible Mfg. Sys. Pty. Ltd. v. Super Prods.

Corp., 86 F.3d 96, 100 (7th Cir. 1996). We review the

district court’s decision to grant Butler summary judgment

and vacate the arbitrator’s award de novo. Amax Coal Co.

v. United Mine Workers of Am., Int’l Union, 92 F.3d 571,

574 (7th Cir. 1996). 

In order to assess whether the arbitrator exceeded his

contractual authority to resolve the parties’ dispute, we look

first at the specific provisions of the CBA and the agreement to arbitrate it contains. In addition, we may also
6 No. 02-1952

consult the parties’ submissions in arbitration to see if

there was a post-dispute agreement to submit additional

questions to the arbitrator. 

Looking first at the pre-dispute agreement to arbitrate

contained in the CBA, we find that it is a broad one, that

commits the parties to arbitrate any “differences as to the

meaning and application of this Agreement, other than with

respect to the right of the Company to contract or subcontract work.” Article 10, paragraph 91. As long as the

arbitrator’s award draws its essence from the parties’ CBA,

it must be enforced. United Paperworkers Int’l Union v.

Misco, Inc., 484 U.S. 29, 36 (1987) (quoting United Steelworkers of Am. v. Enterprise Wheel & Car Corp., 363 U.S.

593, 597 (1960)); Dean v. Sullivan, 118 F.3d 1170, 1171 (7th

Cir. 1997). In deciding whether an award draws its essence

from the parties’ agreement, the reviewing court must do no

more than assure itself that “the arbitrator’s interpretation

can in some rational manner be derived from the collective

bargaining agreement.” Dean, 118 F.3d at 1171 (quoting

Nat’l Wrecking, 990 F.2d at 960). 

Several provisions of the CBA are relevant to the question

of what law the arbitrator was authorized to apply. Two

paragraphs in Article 2 of the CBA address issues of

workplace discrimination and employment opportunities.

They are as follows:

12. Section 5. The Company and Union agree that

neither will discriminate against any employee because

of race, color, religion, sex, age, national origin, disability or Vietnam Era Veteran status.

13. Butler Manufacturing Company offers equal opportunity for employment, advancement in employment,

and continuation of employment to all qualified individuals in accordance with the provisions of law and in

accordance with the provisions of this Agreement for

the represented employees covered by it. 
No. 02-1952 7

The Union argued that these provisions gave ample

authority for the arbitrator to take the FMLA into account,

as he interpreted the absenteeism policy and the question

whether some or all of McMahill’s absences were justified.

The district court disagreed. It labeled the language of Article 2, paragraph 13, as nothing but boilerplate anti-discrimination commitments that did not necessarily pull the

FMLA into the agreement. If there were some kind of “clear

statement” rule that applied to CBAs, and to the match between a CBA and an arbitrator’s authority, perhaps this

would have been right. But there is no such rule. Instead,

as we noted above, the standard asks only whether the arbitrator’s interpretation can rationally be linked to the

CBA. Here, a broader look at the two provisions above demonstrates that the arbitrator’s award did draw its essence

from the parties’ agreement. Article 13, for example, does

not say only that there will be “equal opportunity for employment . . . in accordance with the provisions of this

Agreement. . .,” which is the portion the district court

quoted. In the ellipsis between the word “employment” and

the last phrase comes the phrase “in accordance with the

provisions of law.” We have no reason to think that this

reference to external law is either surplusage or “mere

boilerplate.” (We note, incidentally, that we have no hesitation in holding parties to the “boilerplate” in their contracts, equally with more obviously negotiated terms. Rissman v. Rissman, 213 F.3d 381, 385 (7th Cir. 2000).) We find

that Article 2, paragraph 13 conferred on the arbitrator the

authority to consider the FMLA. For this reason, there is no

need to consider whether the savings provision contained in

Article 13, paragraph 131, provided additional authorization for the arbitrator to consider external law, as the

Union urges. 

Indeed, a contrary holding would be quite troublesome, in

light of the Supreme Court’s green light for the arbitration
8 No. 02-1952

of employment disputes of all kinds in its recent decision in

Circuit City Stores, Inc. v. Adams, 532 U.S. 105 (2001). The

Court has made it clear that arbitrators are capable of handling statutory claims, and that parties may make effective

agreements that commit such claims to an arbitral process.

If one were to turn around and find that the parties were

compelled to arbitrate a labor dispute, but that statutory

claims had to be the subject of separate litigation, the end

result would be wasteful duplication of proceedings, at best,

and an undermining of arbitral tribunals, at worst. We

note, however, that this case does not require us to confront

a different issue that the Supreme Court has reserved:

namely, whether a union can waive an employee’s right to

judicial review of statutory claims. See, e.g., Wright v. Universal Maritime Serv. Corp., 525 U.S. 70, 79-82 (1998).

McMahill prevailed in the arbitration, and so she has no

quarrel with the fact that the arbitrator resolved her

statutory claim, and Butler waived any right it might have

had to keep statutory claims out of the arbitration by its

submissions to the arbitrator, to which we now turn.

Even if the CBA had been vaguer about the relevance of

statutory protections to the parties’ agreement, in this case

there is a second reason for finding that the arbitrator

stayed well within his authorized powers. As we noted

briefly above, during the course of the arbitration, it became

clear that both sides were willing to allow the arbitrator to

consider the FMLA. Once again, at a very broad level the

Supreme Court has acknowledged that agreements to

arbitrate might be reached before any dispute has arisen

(as in the CBA here), or they might be reached after the

dispute. See generally Mitsubishi Motors Corp. v. Soler

Chrysler-Plymouth, Inc., 473 U.S. 614, 633 (1985). The only

task, as in the case of a pre-dispute agreement, is to make

sure that the parties really have entered into an agreement

to resolve the post-agreement dispute through arbitration.
No. 02-1952 9

In cases where the parties expand the scope of arbitral

authority through their submissions to the arbitrator, it is

important to look both at the contract’s arbitration provisions and the parties’ submissions to determine first what

authority the arbitrator was given, and second whether that

authority was exceeded. See Am. Postal Workers Union v.

Runyon, 185 F.3d 832, 835-36 (7th Cir. 1999); cf. General

Motors Corp. v. Pamela Equities Corp., 146 F.3d 242, 246

(5th Cir. 1998); John Sorrell & Co. v. Local Union 304A of

the United Food & Commercial Workers, 913 F.2d 544, 560

(8th Cir. 1990); United Food & Commercial Workers, Local

Union No. 7R v. Safeway Stores, Inc., 889 F.2d 940, 946

(10th Cir. 1989); Mobil Oil Corp. v. Indep. Oil Workers

Union, 679 F.2d 299, 302 (3d Cir. 1982). In the case of

submissions (as opposed to a clear post-dispute agreement

to arbitration), the court must also make sure that the

arbitrator’s consideration of the new issue would not violate

any other provision of the agreement, see Safeway Stores,

Inc., 889 F.2d at 946, assuming that the parties did not

observe whatever formalities were required to modify the

underlying agreement itself.

During the arbitration hearing, witnesses who testified on

Butler’s behalf explained that McMahill received a letter

informing her that for the next six months, only FMLAapproved absences or absences due to an emergency would

be approved; all other absences would result in the accrual

of additional absence occurrence points. In order to resolve

the dispute that the parties submitted, the arbitrator had

no choice but to consider whether the three absences that

Butler relied on to justify terminating McMahill were

FMLA-approved or of an emergency nature. If he had not

done so, he would have failed to discharge the duty delegated to him by the parties to resolve their dispute.

Likewise, the post-hearing brief that Butler filed with the

arbitrator contained explicit references to the FMLA.
10 No. 02-1952

Butler’s brief stepped through the three absences in order

to demonstrate that none were FMLA qualified. Not only

did Butler present its position on why these absences were

not FMLA qualified to the arbitrator, it also shored up this

analysis with citations to federal court decisions construing

the FMLA. As Butler put it, “[t]o construe the FMLA to include conditions which, although minor in their initial

stages, could evolve into serious illnesses would bring into

the statute virtually every common malady, and that is in

direct conflict with Congress’ intent.” In making this argument, Butler invited the arbitrator to find that McMahill’s

absences because of her husband’s injuries or her children’s

sicknesses were insignificant maladies not covered by the

FMLA. Only after the arbitrator disagreed with Butler’s

application of the FMLA to these particular absences did

the company argue that he lacked authority to consider this

issue in the first place. 

Butler cannot have it both ways. Principles of estoppel

prevent a party to arbitration from taking a position before

the arbitrator that invites consideration of external law,

losing in arbitration, and then seeking relief from the unfavorable arbitral award in federal court by arguing that

the arbitrator lacked authority to consider the law in the

first instance. AGCO Corp. v. Anglin, 216 F.3d 589, 593

Cir. 2000) (“If a party willingly and without reservation allows an issue to be submitted to arbitration, he cannot await the outcome and then later argue that the arbitrator lacked authority to decide the matter.”). Without a

reservation of rights, Butler took the position in arbitration

that McMahill’s absences were not FMLA qualified. Its

failure to reserve the question of the applicability of the

FMLA means that it has waived that argument. Dean, 118

F.3d at 1172-73. We would undermine the concept of

finality in arbitration if we allowed Butler to prevail on its

claim that the arbitrator lacked authority to consider the

FMLA after Butler not only failed to reserve this question
No. 02-1952 11

in arbitration, but actually placed the FMLA at the center

of the parties’ dispute.

Perhaps anticipating that we might reach this conclusion,

Butler asks that we affirm the district court’s opinion

vacating the arbitral award because the arbitrator’s order

failed to make explicit how the parties’ agreement or submissions authorized him to consider the FMLA. The district

court was persuaded that the arbitrator’s failure to refer to

the CBA or to offer any other explanation for the source of

his authority to consider the FMLA meant that the arbitrator’s “decision does not draw its essence from the contract,

but instead reflects his own notions of industrial justice in

light of the rights given employees under the FMLA.”

While we acknowledge that the arbitrator did not include

any explanation of this point in his written award, that fact

does not mean that there is no “justifiable basis” for the

arbitrator’s decision. Arbitrators are normally not required

to write any opinion at all, see Enterprise Wheel, 363 U.S.

at 598; Sullivan v. Lemoncello, 36 F.3d 676, 683 (7th Cir.

1994), and it is worth reiterating that a court’s review of an

arbitral award does not proceed under the same principles

that would apply if it were reviewing a decision of the Social

Security Administration or a bankruptcy court. Using

whatever materials are available, the court must enforce

the arbitral award “[s]o long as the [arbitrator’s] interpretation can in some rational manner be derived from the

agreement, viewed in the light of its language, its context,

and other indicia of the parties’ intention.” Amoco Oil Co. v.

Oil, Chem. & Atomic Workers Int’l Union, Local 7-1, Inc.,

548 F.2d 1288, 1294 (7th Cir. 1977); see also Dean, 118 F.3d

at 1171; Mobil Oil Corp., 679 F.2d at 302. As we have

already explained, Article 2, paragraph 13 of the CBA allowed the arbitrator to consider external law and the parties framed the arbitration proceedings to force consideration of the FMLA. In short, this arbitral award should be

enforced because it is supported by the terms of the parties’

agreement and thus lay well within the arbitrator’s author-
12 No. 02-1952

ity despite the fact that the arbitrator’s opinion did not spell

this out. 

Finally, Butler makes a last ditch effort to save the

district court’s order vacating the arbitral award by arguing

that the arbitrator’s decision so grossly misapplied the

FMLA that it constitutes a manifest disregard of law. We

rejected a similar argument in George Watts & Son, Inc. v.

Tiffany & Co., 248 F.3d 577 (7th Cir. 2001), which recently

clarified that an arbitral decision is in manifest disregard

of the law only when the arbitrator’s award actually orders

the parties to violate the law. Id. at 580. That the arbitrator

in this case may have misunderstood the FMLA is simply

not relevant. Id. at 579. Butler agreed to resolve this dispute in arbitration and cannot now complain that the bargained-for result—an arbitrator’s resolution of the dispute—is not what it would have obtained in court. 

III

For these reasons, we VACATE the district court’s order

and ENFORCE the arbitral award. 

A true Copy:

Teste: 

 ________________________________

Clerk of the United States Court of

Appeals for the Seventh Circuit 

USCA-02-C-0072—7-17-03