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# United States Court of Appeals For the Seventh Circuit

No. 13-2468

U NI T E D S T E E L, P AP E R AND F ORE S TR

Y , R UB B E R , M ANUF A CTURI N G

, E N E RGY , A L L I E D I ND US TRI ALAND S E R VI C E W ORKE RS I NT E R

NAT I O NALUN I O N

, AFL-CIO , CLC and L O C AL U N I O N 193-G, Plaintiffs-Appellants ,

v.

PPG I ND US TRI E S

, I N C ., Defen dant-Appellee.

Appe al f ro m the Uni ted S tates Distri ct Co urt fo r the Central Distri ct o f Di stric t o f Il l i noi s. No. 09 -2 30 6

— Harold A . Ba ker, Judg e.

A RGU E D D E C E MB E R 6, 2013

— D E C I D E D M A Y 9, 20142 No. 13-2468

Before K AN N E and R OVN E R , Circ uit Judges , and D URKI N , District Judge. *

R OVN E R , Circ uit Judge. Plainti ffs Uni ted St eelwork ers and Local Uni on 193-G (collecti vely, “the Unio n”) and defendant P P G In d u s tr i e s d i s agr eed about whether PPG tim ely presente d bargaining propo sals u n d e r a c ollective bargaining agr eement. The parties enter ed i nto arbi tr ation, a nd the arbi tr ator ruled that so me propo sals were tim ely and other s were not. The U nio n then fi led sui t to enforce the arbi tr ator ’s award. See 29 U.S.C. § 185(a). Accordi ng to the Uni on, PP G violated the

awa r d by i mplementing certain economi c propo sals that the arbi tr a tor had deemed unti mely. The di stric t court gr anted

sum mary judgment to PPG, conclu ding that t he arbi tr ator ’s

a wa r d di d not preclude PPG from i mplementing those propo sals

. Th e Uni on arg ues on appeal t hat the di stric t court mi scons tr ued the award. But nei ther the tex t of the arbi tr ator ’s deci si on nor the arbi tr ation recor d su pport s the Uni on’s d e sir e d interpr etat i on of the award. To accept the Uni on’ s arg uments, we would have to sub stanti vely alter the award in the Union’s f avo r. Because w e may not do so, we affi rm. I.
PPG manuf actures flat glass at a faci li ty located in Mt. Zion, Illi noi s. The Uni on repr esents a bar g ai ning uni t compri sing production and maintenance employees at the Mt. Zion plant. The relat i onshi p between PPG and t he U ni on has long been gov erned by a collective bargaining agr eement.

Of the Uni ted States Distri ct Co urt fo r the Nor thern Distri ct of Il l i no i s, * sitti ng b y desi gna tio n.No. 13-2468 3

PPG i nformed the Uni on in April 2009 that i t wanted to modi fy the agr eement in an effort to reduce labor costs. Art i cle XXX IV, Section 2 of the agr e e me nt speci fi es how the parties can pro pose modi fi cati ons t o the agr eement. A party seeking to alter the agr eement mus t prov i de 30 days’ notic e of i ts intent to seek changes. The parties are then required to meet in conference at least 10 days before the agreement expires. Any propo sed changes “shall be presented not later than t he fi rst day of the confere nc e ” by the party seeki ng to modi fy the agr eement. After PPG i nformed the Uni on of i ts intent to mo d ify t he agr eement, the parties’ repr esentat ives atte nded an informal meetin g on May 14, 2009. At the meetin g PPG explain ed why i t was seekin g to alter the agr eement and set fort h, in g eneral te r ms, i ts desi red changes. Accordi ng to PPG, i ts labor costs exceeded i ts competi tor s’ by $1 0 an ho ur; to remain competi

t ive i t required a reducti on in labor costs from $37 to $ 2 7 p e r hour. One possi

ble method of achi eving thi s reducti on in costs, PPG explain ed, would be to i mplement a “two-tier” wage sy st e m, i n whi ch “fi rst-tier” wages would be pai d to exis tin g employees and lower “second- tier” compens ation wo uld be pai d to new hi res and employees recalled fr o m l a y o ff. PPG i ntended to buy out some existing employees, ther eby reduci ng the numb er of work e r s r e cei ving fi rst-tier compens ation. PPG had recently i mplemented a si mi lar system at i ts plant in Fr esno, Cali fornia.
The U nio n asked whether i t would be possi ble to achi eve the $10 per hour labor-cost reducti on wi thout requi ring wage
conces sio ns from exis tin g employees. PPG responded that i t was i ndi fferent about how to achi eve the cost reducti ons, but4 No. 13-2468 suggested that i mplementing o nl y the “Fr esno patter n”—the two-tiered system—would not be enough to meet the $10 tar get

. Before the meetin g adjo urned, the Uni on requested that PPG prov i de the details of the Fr esno arr angement. The Uni on also asked PPG to calc ulate the labor-cost reducti on s th a t could be achi eved based on the Fr esno two-tier model alone, wi thout

conces si ons from current employ ees. On May 28, 2009, PPG sent a n e -mai l to the Uni on that detailed potent i al labor cost reducti ons and followed up on the May 14 conver sati on. The e-mai l inclu ded a chart calc ulati ng 1 the esti m a te d a verage labor costs, inclu ding benefi ts, under the two-tier system wi thout any conces s i on s from current employees. PPG calc ulat e d that, wi thout conces si ons from current employees, the company’s tot al labor costs per hour would be $30.21, sti ll more than $3 per hour above PPG ’s $27 tar get

. The e-mai l e x plained: “We can save more money by more Ti er 1 folks leaving and being replaced at [] Ti er II rat es for the hi gher ski ll jo bs. That would certainly be the best scen ario. However , [we] really thi nk i t wi ll be di ffi cult to get to the $27 wi thout si gni fi cant conces si ons from current employ ees.”

T he Uni on contends tha t the v ersi on of the chart i t rece i v ed was 1 “garbled” and i mpossi b l e to understand. We dec l i ne to consi der this

ass erti on, which the Uni on mentio ned fo r the fi rst time i n i t s r e p l y b ri ef,

see Marcatante v. City of Chicag o , 65 7 F.3d 43 3, 43 8 (7 th Ci r. 20 11 ), and which the Uni on di d not present i n i ts statem ent of mat eri al facts b efo re the di stric t cour t, see Everroad v. Scott Truck Sys., Inc. , 60 4 F.3d 47 1, 47 6 (7 th Ci r. 20 10 ). In any event, the Uni on do es not as se rt tha t i t had any pro b l ems compr ehendi ng the b od y of the e-mail , whi c h e xp l ained the chart’s signi fi cance.No. 13-2468 5

The parties’ offi ci al negot i atin g conference began on June 1, 2009, whi ch was the last day to present new propo sals under the c ol l e c tive bargaining agr eement. PPG deli ver ed a n op e n in g statement i n whi ch i t reiterat ed i ts desi re to reduce labor costs t o $ 2 7 per hour and i mplement a two-tiered wage structu r e

. On that day, PPG di d not present particu lar dollar amounts of wage or benefi t cuts tar get ed at reachi ng the $27 per hour goal. Instead PPG i ntro duced, and the parties di scu ssed, sev eral non-economi c bargaining pro p o sa ls such as changes to the drug-testing poli cy and over tim e admini strat i on. During the next two days of th e conference, June 2 and 3, P PG put forward other propo sals

. Among those propo sals wa s
a t wo -ti er wage system that set fort h compens ation cuts for employees on both tiers at speci fi ed doll a r a m oun ts. The Uni on responded that i t was not required to bargain about propo sals made on June 2 and 3, becau se Art i cle XXX IV, Section 2 of the collecti ve bargaining agr eement barred new propo sals from be in g m a de after the conference’s fi rst day. PPG di sagreed. The Uni on fi led a gr i evance, and the parti es arbi tr ated the followi ng qu esti ons: “Di d [PP G] vi olate A rt i cle XXXIV, S ecti on 2? If so, what should be the remedy?”
After taking evidenc e and consi dering the parti es’ wri tte n and or al sub mi ssi ons, the a r bi tr ator i ssu ed an opin i on ruling some propo sals tim ely and other s unti mely. After recounting the hi stor y of the parties’ di spute, the arbi tr ator conclu ded that by the begi nning of the bargaining conference, the Un io n “knew or should have know[n] some o f [P PG’s] economi c propo sals —speci fi cally [PP G’s] labor c ost go als as well asthe two-tier wage structure.” The arbi tr ator deter mined that PPG6 No. 13-2468

“has preserv ed these propo sals .” The opinio n cl osed wi th a three -sentenc e “Award”:
The Company’s propo sal reg ardin g $10 reducti on in costs is a viab le contract propo sal as i s the two-tiered system. A lso, the Company’s non-econo mic propo sals made on June 1, 2009 are proper for consi derat i on. The Company p r o posals made on June 2 and 3, 2009 are di screti onary i tems for barg aining. After the arbi tr ator i ssu ed hi s opin i on, PPG put forward i ts final o ff er, whi ch i nclu ded a two-tier wage system that cut exis tin g employees’ c ompensati on. In the wake of the arbi tr ator ’s deci si on, PPG remov ed several items from i ts prev i ous offer beca us e the i tems had been propo sed after June 1 and

were not di rectly relat ed to the $10 per hour reducti on in labor costs or the two-tiered system. For e x a mple, PPG remov ed propo sals that would have restr i cted c e rt a in s e verance benefi ts and alter ed the pensi on agr eement. The Uni on responded that, despi te the changes, the offer violated the arbi tr at or ’s awar d, and it threat ened to go to court to “enforce” the award. The Uni on di d not make any more propo sals of i ts own. Ultim ately PPG deter mined that the parties we r e a t an i mpass e and uni later ally i mplemented the final offer.
The Union t hen filed this laws ui t inthe Centr al Di stric t of Illi noi s under the Labor Management Relations Act, seeki ng to

“ [c] onfi rm and enforce” the arbi tr ation award by rescinding PPG ’s uni later al i mplementati on of i ts fin a l offer and awardi ngNo. 13-2468 7 back pa y a nd o t her relief. See 29 U.S.C. § 185(a) (author i zi ng 2 sui ts “for viol a t io n of contracts between an employer and a labor or g ani zation”). Both parties moved for sum mary ju d gm ent, and the di stric t court gr anted sum mary judgment to PPG

. The court consi dered the arbi tr ator ’s opin i on and the

recor d before the arbi tr ator and deter m in e d th a t the Uni on was
aware on or before June 1 that economi c co nc e ss i ons from exis tin g employees were on the table. Recognizing tha t t he arbi tr ator had approv ed as tim ely PPG ’s propo sals to cut labor costs by $10 per hour and i mplement a two-tier wage system, the court conclu ded that the a rb i tr a tor ’s award di d not prohibi t PPG from uni later ally i mplementing i ts fin al offer, inclu ding the economi c conces si ons that the Uni on opposed. The Uni on moved for reconsi derat i on and the court denied the motion.
II.
The Uni on rais es a myriad of arg uments o n a p p eal, all driving home the sa me ba si c point: the di stric t court mi sconstrued the arbi tr ation awar d

. The Uni on arg ues that the arbi tr ator ’s deci si on was a resou nd ing win for i ts si de; i t beli eves t ha t the arbi tr ator rej ected as unti mely almost all of PPG ’s economi c propo s a l s a n d b a rr e d P P G fro m i mplementing these rej ected pr o p o sals. If the di stric t court had proper ly 3

Bo th partie s also unsuccessfull y pursued unf ai r l ab or practic e charges 2 b efo re the Natio nal Labor Rel atio ns Board.

Al though the Uni on at times as se rts tha t aspects of the arb i trator’s 3 opi nio n are amb i guous, i ts counsel acknowled ged at or al argumen t tha t the Uni on i s “go i ng fo r b ro ke”; i t seeks a fed eral- cour t or der b arring PPG fro m i mple menting the chall enged pro posal s rather tha n a remand to all ow the (co ntinued. ..)8 No. 13-2468

construed the arbi tr ation award, the Uni on contends, i t would have enter ed sum mary j udgment i n the Uni on’s favor

. Despi te labeling i ts sui t as an acti on to “enforce” the award, the U nio n i n sub stance asks the federal courts to alter i t; to wri te in the margins of the arbi tr ator ’s decisio n and add language favor able to the Uni on. But the federal courts have an
e xt re m e l y l i m i te d role in rev i ewing an arbi tr ator ’s deci si on th a t i nterpr ets a collecti ve bargaining agr eement. A court wi ll no t

ov ert urn an arbi tr ator ’s award, even i f the arbi tr ator ’s deci si on i s wrong on the law o r the facts; an arbi tr ator ’s award i s unenf or ceable only i f he “stray s from interpr etat i on and appli cati on of the agr eement and effecti vely di spens es hi s own brand of i ndus tr i al justic e.” Majo r League Baseba ll Players Ass’n

v. Garvey, 532 U.S. 504, 509 (2001) (internal quotat i on ma r k s
a nd brackets omi tte d); see Johnson Controls, Inc. v. Edman Controls, Inc. , 712 F.3d 1021, 1025–26 (7 t h Ci r. 2013); Local 15, Int’l Bhd. of Elec. Workers v. Exelon Corp. , 4 9 5 F.3d 779, 782–83 (7th Ci r. 2007). A court wi ll enforce the arbi tr ator ’s award as wri tte n and “may not interj ect i tself into the arbi tr ation process by elaborat i ng o n or rewriti ng an arbi tr ator ’s award.” United Steelworkers of Am. v. Danly Machine Corp. , 852 F.2d 1024, 1027 (7th Ci r. 1988); see Brown v. Witco Corp. , 340 F.3d 209, 216 (5th Ci r. 2003) (“[A] court i s r e q ui red to enforce an arbi tr ation award only as wri tte n by the arbi tr ator .”). If the arbi tr ator ’s deci si on as wri tte n i s “too ambi guous to be enforced,” a court may remand the case to the arbi tr ator for clarifi cati on. Bhd. of

( ...c onti nued) 3 arb i trator to clari fy h i s deci sio n. See Bhd. of Loco mot ive Eng ’rs v. U nion Pac. R.R. Co. , 5 00 F.3 d 5 91 , 5 92 (7 th Ci r. 2 00 7)

.No. 13-2468 9 Locomotive Eng’rs v. Union Pac. R .R. Co. , 500 F.3d 591, 592 (7th Ci r. 2007). But such a remand i s di sfavored, and a court should, i f possi ble, resolv e ap p a r ent ambi gui ties by exami ning the arbi tr ator ’s opini on and the recor d. See id. ; Tri-S tate Busin ess Machines, Inc. v. Lanier Worldwide, Inc. , 221 F.3d 1015, 1017 (7th C ir. 2000); Teamsters Local No. 579 v. B & M Transit, In c

. , 8 8 2 F.2d 274, 278–79 (7th Ci r. 1989); Danly Machine Corp. , 852 F.2d at 1 0 2 7

. W e rev i ew de novo the di stric t court’s gr ant of sum

mary judgment. But l e r Mfg. Co. v. United Steelworkers of Am. , 336 F.3d 629, 632–33 (7th Cir. 2003).
The Uni on arg ues that the di stric t court should ha v e recog ni zed that the arbi tr ator barred PPG from i mplementing any p ro posals that adversely affect exis tin g emp loyee s (those receiving fi rst-tier compens ation). The Uni on con c e d es that the arbi tr ator approv e d w a ge cu ts for e m p l oy e e s re c e i ving secondtier compens ation, but i t arg ues that the arbi tr ator di d not approv e wage cuts for exis tin g employees. Nothing in the tex t of the arbi tr ator ’s opin i on indi cate s t hat he made such a di sti ncti on, so the Uni on relies instead on the arbi tr a tion

recor d. The U nio n contends that by June 1 (the deadline for

new propo sals ), PPG never suggested cuts to exis tin g employees’ wages. Therefore , according to the U nio n, the arbi tr ator could not possi

bly have appro ved t hese cu ts as ti mely.
As t he di stric t court corr ectly conclu ded, however , the

recor d before the arbi tr ator establi shes that by June 1, PPG had rais ed the possi

bi li ty of compens atio n cu ts for e xi sting employees. At the May 14 meetin g, PPG explain ed that i mplementing the “ Fr esno patter n”—the two-tiered system—would not be suffi ci ent on its own to achi eve t he desi red r educti on in labor10 No. 13-2468

costs. In a May 28 follow-up e-mai l, PPG calc ulated the esti mated savi ngs from i mplementing the two-tiere d system wi thout conces si ons from exis tin g employees and deter mined that i t fell mo r e than $3 per hour short of PPG ’s cost-cu tting goals. The e-mai l conclu ded: “[We] really think i t wi ll be di ffi cult to get to the $27 wi thout si gni fi cant conces si ons from current employees.” PPG rais ed th e p o ssibi li ty of compens ation cuts for exis tin g employees by June 1, and thi s court may not “i nterj ect i tself i nto the arbi tr ation process” by reading into the arbi tr ator ’s opin i on a conclu si on that propo sed wage cuts for exis tin g employees we re unti mely. See Danly Machine Corp. , 852 F.2d at 1027.
In a si mi lar vein, the Uni on arg ues that the di stric t court should have recog ni zed that the arbi t r a tor barred PPG from cutti ng employees’ benefi ts (as oppo sed t o wages). Alt hough the arbi tr ator ’s opin i on does not di sti ngui sh betwee n wages and benefi ts, the Uni on insi sts that a di stincti on can be gleaned from the arbi tr ator ’s refer ence to a two-t ie r wage structure. Relying on the arbi tr ator ’s use of the word “wage” in describi ng the two-tier propo sal, the Uni on arg ues “i t i s clear that

. . . the arbi tr ator di d no t mean to approv e benefit reducti ons for employees i n ei ther t he lower tier or the hi gher t i er.”
But i t does not follow from the arbi tr ator ’s use of the word “wage” th a t he meant to di sti ngui sh between wages and be ne fits, let alone to rule unti mely any propo sals cutti ng benefi ts. Nor i s the Uni on’s posi tion supp or ted by the arbi tr ation recor d. In fact , PPG ’s May 28 e-mai l, whi ch i temi zed the esti mated labor costs for di fferent catego ries of employees under a pos sib l e two-tier system, inclu ded a ro w entitled “benefi ts”; according to that ch a r t, the amount of hourlyNo. 13-2468 11

benefi ts for second- tier empl o y e e s was “$0.00,” a si gni fi cant reducti on from t he “$9.99” for o ther cate gor i es of employees. In arg uing that the di stric t co ur t should have recog ni zed a di sti ncti on between wages and benefi ts, the Uni on again seeks relief that the arbitrato r did n ot g rant.
Fin ally, the Uni on contends that, by a l l o wing PPG to decrease the wages and ben e fits of exis tin g employees, the di stric t court err oneously render ed the arb i tr ator ’s award “meaningless.” We rej ect thi s arg ument, becau se the Uni on i s wrong when i t asserts that the court “interpr eted the award as i mposing no obli gation whatsoever on PPG .” It is true, as the U nio n poin ts out, that the arbi tr ator ruled some propo sals unti mely and declared that propo sals fi rst intro duced on June 2 and 3 were “di screti onary i tems fo r bar gaining.” But the Uni on overlo oks changes that PP G did make to i ts offer in the wake of the arb it r a tor ’s deci si on. PPG remov ed several propo sals that were i ntro duced after June 1 and di d not relat e to hourly labor cost reducti ons or the i mplementati on of a twotier employment system. For exam p l e, P P G ’s f inal offer exci sed propo sa ls that li mi ted severance benefi ts and alter ed the pensi on agr eement. At or a l arg ument, the Uni on’s atto rney acknowledged these changes but di smi ssed them as insi gni fi

cant compared to the wage conces si ons. But PPG ’s changes made in response t o t he arbi tr ator ’s award undermine the Uni on’s arg ument that the award, as interpr eted by both PPG and t he di stric t court, imp osed “no obli gation whatsoever on PPG .” The award may not have been as favor able to the Uni on as i t wanted, but i t was not “meaningless.”12 No. 13-2468

III.
For the for ego i ng reasons, we AFF IRM the j udgment of the di stric t court

.