Case Name: JONES DAIRY FARM, Plaintiff-Appellee, v. LOCAL NO. P-1236, UNITED FOOD AND COMMERCIAL WORKERS INTERNATIONAL UNION, AFL-CIO, Defendant-Appellant
Court: United States Court of Appeals for the Seventh Circuit
Jurisdiction: United States
Decision Date: 1985-02-15
Citations: 755 F.2d 583
Docket Number: No. 84-1301
Parties: JONES DAIRY FARM, Plaintiff-Appellee, v. LOCAL NO. P-1236, UNITED FOOD AND COMMERCIAL WORKERS INTERNATIONAL UNION, AFL-CIO, Defendant-Appellant.
Judges: 
Reporter: Federal Reporter 2d Series
Volume: 755
Pages: 583–588

Head Matter:
JONES DAIRY FARM, Plaintiff-Appellee, v. LOCAL NO. P-1236, UNITED FOOD AND COMMERCIAL WORKERS INTERNATIONAL UNION, AFL-CIO, Defendant-Appellant.
No. 84-1301.
United States Court of Appeals, Seventh Circuit.
Argued Nov. 8, 1984.
Decided Feb. 15, 1985.
Posner, J., dissented and filed an opinion.
Kenneth R. Loebel, Habush, Habush & Davis, S.C., Milwaukee, Wis., for plaintiff-appellee.
Herbert P. Wiedemann, Foley & Lardner, Milwaukee, Wis., for defendant-appellant.
Before WOOD and POSNER, Circuit Judges and DUMBAULD, Senior District Judge.
The Honorable Edward Dumbauld, Senior District Judge, of the Western District of Pennsylvania, sitting by designation.

Opinion:
DUMBAULD, Senior District Judge.
There is a strong policy, the classical formulation of which is to be found in the Steelworkers' Trilogy that by stipulating for arbitration under a collective bargaining agreement the parties are entitled to the arbitrator's judgment regarding matters submitted for determination, which is more apt to be imbued with the atmosphere and flavor of the workplace than the academic ivory-tower pronouncements of a court. Hence the courts should be slow to interfere with the settlement procedure which the parties have bargained for.
But this rule applies only when and where the arbitrator is acting pursuant to the agreement embodying what the parties have accepted by their consensus ad idem. Hence if the arbitrator acts ultra vires or goes beyond the scope delegated to him by the agreement of the parties, a court may properly set aside such an exces de pouvoir.
The line is best drawn by the language of the Supreme Court in Enterprise, 363 U.S. at 597, 80 S.Ct. at 1361 that the arbitrator's award "is legitimate only so long as it draws its essence from the collective bargaining agreement."
What did the agreement in the case at bar provide, and what did the arbitrator do?
With regard to the disputed issue of contracting out the janitorial work formerly performed by appellant union, the contract expressly provided that nothing was stipulated in that regard but that the status quo should be preserved:
"With respect to the subcontracting of work, and the performance of work at this plant rather than elsewhere, each party retains its legal rights as in effect prior to the execution of this Agreement, and nothing in this Agreement shall be construed as adding to or subtracting from those rights."
In other words, both parties reserve their rights under existing law. They are to enjoy no more and no less than they would if the collective bargaining agreement did not exist.
And under existing law, in the absence of agreement to the contrary, the employer remains free to contract out if he so desires, even if the motivation for the decision is a wish to pay lower labor costs. H.K. Porter Co. v. NLRB, 397 U.S. 99, 106, 90 S.Ct. 821, 825, 25 L.Ed.2d 146 (1970); University of Chicago v. NLRB, 514 F.2d 942, 948-49 (7th Cir.1975).
But the arbitrator followed a contrary doctrine embodied in Milwaukee Spring Division of Illinois Coil Spring Co., 265 N.L.R.B. No. 28 (1982) which was then on appeal, and subsequently was repudiated by the Board upon reconsideration. Milwaukee Spring Division of Illinois Coil Spring Co., 268 N.L.R.B. No. 87 (1984).
Hence it cannot be said that the arbitrator's award "draws its essence from the collective bargaining agreement." (363 U.S. at 597, 80 S.Ct. at 1381, supra.). The agreement has no impact upon the issue in dispute. The arbitrator is simply expressing his opinion on a legal question, and courts (the bearers of expertise in such matters) are free to correct a mere mistake of law, as done by the District Court in its judgment setting aside and vacating the award.
The judgment of the District Court is
AFFIRMED.
. United Steelworkers v. American Manufacturing Co., 363 U.S. 564, 568, 80 S.Ct. 1343, 1346, 4 L.Ed.2d 1403 (1960); United Steelworkers v. Warrior & Gulf Navigation Co., Corp., 363 U.S. 574, 582-83, 80 S.Ct. 1347, 1352-53, 4 L.Ed.2d 1409 (1960); United Steelworkers v. Enterprise Corp., 363 U.S. 593, 596-97, 80 S.Ct. 1358, 1360-61, 4 L.Ed.2d 1424 (1960).
. Article V, sec. 1.