Opinion ID: 4547478
Heading Depth: 1
Heading Rank: 2

Heading: The CBA Violation

Text: The Labor Management Relations Act (LMRA) establishes a federal policy that arbitration is “the desirable method for settlement of grievance disputes arising over the application or interpretation of an existing collective-bargaining agreement.” 29 U.S.C. § 173(d). Section 301 of the LMRA gives federal courts jurisdiction over “[s]uits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce.” Id. § 185(a). However, because “[t]he federal policy of settling labor disputes by arbitration would be undermined if courts had the final say on the merits of awards,” United Steelworkers v. Enter. Wheel & Car Corp., 363 U.S. 593, 596 (1960), and the parties to an agreement with an arbitration clause have bargained for the arbitrator’s judgment, United Steelworkers v. Am. Mfg. Co., 363 U.S. 564, 568 (1960), “[t]he function of the court is very limited when the parties have agreed to submit all questions of contract interpretation to the arbitrator,” id. at 567–68. Specifically, the Supreme Court has instructed that: [T]he arbitrator’s award settling a dispute with respect to the interpretation or application of a labor agreement must draw its essence from the contract and cannot simply reflect the arbitrator’s own notions of -5- industrial justice. But as 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. United Paperworkers Int’l Union v. Misco, Inc., 484 U.S. 29, 38 (1987). Under this standard, we will vacate an arbitrator’s award where “relevant language was not considered by the arbitrator” or it appears that “the arbitrator has not interpreted the specific contract at issue.” George A. Hormel & Co. v. United Food & Commercial Workers, Local 9, 879 F.2d 347, 351 (8th Cir. 1989). We will also vacate an award where the arbitrator’s CBA interpretation “so directly contradicts the plain meaning of the parties’ agreement that it effectively rewrites it.” Boise Cascade Corp. v. Paper Allied-Indus., Chem. & Energy Workers (PACE), 309 F.3d 1075, 1081 (8th Cir. 2002). And we have explained that, “where the plain language of the parties’ agreement is silent or ambiguous with respect to a disputed issue, an arbitrator is obliged to consider other relevant sources of the parties’ intent,” such as their past practices. Id. at 1082. Otherwise, the arbitrator cannot be said to have considered “the entire agreement.” Id. (cleaned up). Here, the parties authorized the arbitrator to decide whether Exide violated the CBA by unilaterally changing FMLA leave administrators. See PSC Custom, LP v. United Steel, Paper & Forestry, Rubber, Mfg., Energy, Allied Indus. & Serv. Workers Int’l Union, Local No. 11-770, 763 F.3d 1005, 1010 (8th Cir. 2014) (“When two parties submit an issue to arbitration, it confers authority upon the arbitrator to decide that issue.” (cleaned up)). However, the parties stipulated that the arbitrator’s decision “shall be based solely upon an interpretation of the provisions of [the CBA]. The arbitrator shall not have the right to amend, take away, modify, add to, or change any of the provisions of [the CBA].” Exide argues that three aspects of the arbitrator’s decision exceeded his authority under this provision. -6- First, Exide argues that the arbitrator failed to consider relevant language because he did not discuss the CBA’s management-rights provision. We disagree. At the beginning of his opinion, the arbitrator set forth Exide’s argument that it had authority to change FMLA leave administrators under the management-rights provision, as well as the Union’s response to that argument. In his findings and conclusions, the arbitrator distinguished FMLA leave administration from other management functions on the basis that “[a]dministrative processing and evaluating employees’ requests for statutory leave under the FMLA is not core entrepreneurial activity as it does not change the scope, direction or nature of the enterprise.” And later in the opinion, the arbitrator stated: “As for Article II, Management Rights, it does not specifically reference or identify leave administration as reserved solely to management.” The arbitrator thus considered the CBA’s management-rights section. We have “no business” second-guessing his interpretation of it. See Am. Mfg. Co., 363 U.S. at 568. Next, Exide argues that the arbitrator effectively rewrote the CBA by deciding paragraph 154 of the CBA incorporated Exide’s entire “Human Resources Policies and Procedures” document. Exide notes that paragraph 154 states: “The Exide Technologies FMLA Policy is hereby incorporated, in its entirety as part of [the CBA].” Exide contends that only pages one through five of the policies-and-procedures document, which describe Exide’s FMLA policy, were incorporated into the CBA. In its view, pages five and six, which describe Exide’s FMLA procedures, were not incorporated. Whatever the merits of this argument, the arbitrator interpreted the CBA’s language and decided that the incorporated “FMLA Policy” was the entire policies-and-procedures document attached to the CBA. “Because the arbitrator had the authority to adopt one reasonable interpretation of the CBA over the other, his interpretation must not be disturbed.” PSC Custom, 763 F.3d at 1010. Finally, Exide argues that the arbitrator failed to consider its past practice of using third-party administrators for its short- and long-term disability leave policies. -7- However, the arbitrator did consider this practice. He decided that, because Exide’s FMLA leave procedures had been incorporated into the CBA but its short- and long-term disability leave procedures had not, “the conditions in the instant grievance are different from the conditions for the practice asserted by [Exide].” After careful review, we conclude that the arbitrator “interpreted the specific contract at issue,” Hormel, 879 F.2d at 351, and did not “effectively rewrite[] it,” Boise Cascade, 309 F.3d 1075 at 1081. Because the arbitrator was “arguably construing or applying the contract and acting within the scope of his authority,” there is no basis for vacating the arbitrator’s finding that Exide violated the CBA. See Misco, 484 U.S. at 38.