Opinion ID: 2061245
Heading Depth: 1
Heading Rank: 4

Heading: Analysis of Applicable Law

Text: Our prior case law has clearly circumscribed our function and breadth of review. The defining case on this issue is Sergeant Bluff-Luton Education Ass'n v. Sergeant Bluff-Luton Community School District, 282 N.W.2d 144 (Iowa 1979). There we adopted the view established by federal cases in interpreting our Public Employment Relations Act, Iowa Code chapter 20 (1977). We said: In determining the proper extent of judicial scrutiny of arbitration awards under our new P.E.R. Act, it is again appropriate to consider the federal practice. The Labor Management Relations Act states the arbitration process is to be favored in resolving labor-management disputes. Section 203(d) of that act, 29 U.S.C. § 173(d), provides: (d) Final adjustment by a method agreed upon by the parties is declared to be the desirable method for settlement of grievance disputes arising over the application or interpretation of an existing collective-bargaining agreement. In recognition of that philosophy, the United States Supreme Court adopted a narrow scope of judicial involvement in the process in the Steelworkers trilogy. Citing the trilogy's Enterprise Wheel case, we have said that [t]he function of the courts is strictly limited to a determination of the arbitrator's authority and existence of an arbitrable dispute. Ordinarily courts may not inquire into the merits of the decision itself. Teamsters Local 394 v. Associated Grocers of Iowa Cooperative, Inc., 263 N.W.2d 755, 757 (Iowa 1978). The Teamsters case and the Steelworkers trilogy all involved private-sector contracts. However, we have alluded to the same concept in a prior P.E.R.A. case, West Des Moines Community School District v. West Des Moines Educational Support Personnel, 265 N.W.2d 625, 626 (Iowa 1978) (per curiam), where we said that it is clear the arbitrator merely interpreted the [collective bargaining] contract in a way the school district would not and in a manner we might not. But this does not render the arbitrator's interpretation an alteration. Despite the fact there is no equivalent of the forceful statement in the federal statute favoring arbitration, we conclude this was the intent of the P.E.R.A. provision for binding arbitration. There are several reasons to favor a broad scope of arbitrator authority and therefore a corresponding restriction of judicial involvement in the process. Arbitration is a faster process, draws on the expertise of persons in the field, and is less expensive. To allow a court to second guess an arbitrator by granting a broad scope of review would nullify those advantages. Most important, limited judicial review gives the parties what they have bargained forbinding arbitration, not merely arbitration binding if a court agrees with the arbitrator's conclusion. See American Manufacturing, 363 U.S. at 567, 80 S.Ct. at 1346, 4 L.Ed.2d at 1406. As stated in Enterprise Wheel, 363 U.S. at 599, 80 S.Ct. at 1362, 4 L.Ed.2d at 1429, a plenary review by a court of the merits of a dispute under a collective bargaining agreement would make meaningless the provisions [of the agreement] that the arbitrator's decision is final, for in reality it would almost never be final. We adopt the rationale of the Steelworkers cases for even though this is a public employee agreement we have discovered no tenable basis for distinction on that ground alone. Sergeant Bluff-Luton Educ. Ass'n, 282 N.W.2d at 147 (footnotes omitted). The first issue to determine is whether the parties agreed to arbitration. Here they clearly did. Next Sergeant Bluff instructs: Once arbitrability of the issue is established, the sole question to be determined by the court on review is whether the arbitrator's award drew its essence from the collective bargaining agreement. It is not the function of the court to determine whether the arbitrator has resolved the grievance correctly. Id. at 148. To understand the term essence of the agreement we said: We also believe the trial court's finding that the arbitration award was not drawn from the essence of the agreement is erroneous. The essence of a collective bargaining agreement is an extremely broad concept. It requires a casting aside of traditional views of contract law in favor of a multitude of other considerations, including not only the written and unwritten agreements, themselves, but also the practices of the parties or the industry in general. In John Wiley & Sons, Inc. v. Livingston, 376 U.S. 543, 84 S.Ct. 909, 11 L.Ed.2d 898 (1964), the court, recognizing the unique character of collective bargaining agreements, held a successor employer may be bound by its terms, even though it was not a party to the agreement. The court said: While the principles of law governing ordinary contracts would not bind to a contract an unconsenting successor to a contracting party, a collective bargaining agreement is not an ordinary contract. Id., 376 U.S. at 550, 84 S.Ct. at 914, 11 L.Ed.2d at 904-05. The essence of the agreement was discussed in Warrior & Gulf, as follows: The labor arbitrator's source of law is not confined to the express provisions of the contract, as the industrial common lawthe practices of the industry and the shopis equally a part of the collective bargaining agreement, although not expressed in it. The labor arbitrator is usually chosen because of the parties' confidence in his knowledge of the common law of the shop and their trust in his personal judgment to bring to bear considerations which are not expressed in the contract as criteria for judgment. [ United Steelworkers v. Warrior & Gulf Navigation Co., ] 363 U.S. at 581-82, 80 S.Ct. at 1352, 4 L.Ed.2d at 1417. The essence of the agreement even draws upon other vaguely defined concepts of the particular industry having their roots in considerations of fairness, reasonableness and practicality. For example, Warrior & Gulf refers to such matters as productivity of a particular interpretation, its effect on the morale of the shop, and its effect in increasing or diminishing the tension of the employees. Id. The essence of the agreement has been held to even transcend the terms of the written agreement to allow benefits after expiration of the contract itself. See, e.g., Nolde Brothers, Inc. v. Local No. 358 Bakery and Confectionery Workers Union, 430 U.S. 243, 251, 97 S.Ct. 1067, 1072, 51 L.Ed.2d 300, 308 (1977) (duty to arbitrate under terms of collective bargaining contract held to survive its termination). Id. at 150. Based on this analysis of arbitration law, we upheld the arbitrator's decision by saying: Examination of these principles leads us to conclude that, while the arbitrator asserted an inability to interpret the contract and a reliance upon management rights and duties, his decision was based upon the practices of the parties, or the industrial common law as shown by the school district's application of the salary provisions to all of its other teachers. This is part of the essence of the agreement. While we might, as the trial court did, reach a different conclusion in dealing with these teachers' complaints, we are not free to do so. Once it is determined the arbitrator's award is drawn from the essence of the agreement, our consideration of the relative merits of the controversy must terminate. We conclude the arbitrator's award was based upon the essence of the collective bargaining agreement and that the trial court therefore erred in refusing to enforce it. Id. This construction of our law was confirmed in Iowa City Community School District v. Iowa City Education Ass'n, 343 N.W.2d 139 (Iowa 1983). There we again upheld the arbitrator's decision in finding that it was drawn from the essence of the agreement. In describing the role of the arbitrator, we said: Put most simply, the arbitrator is the parties' officially designated reader of the contract. He (or she) is their joint alter ego for the purpose of striking whatever supplementary bargain is necessary to handle the anticipated unanticipated omissions of the initial agreement. Thus, a misinterpretation or gross mistake by the arbitrator becomes a contradiction in terms. In the absence of fraud or an overreaching of authority on the part of the arbitrator, he is speaking for the parties, and his award is their contract. That is what the final and binding language of the arbitration clause says. In sum, the arbitrator's award should be treated as though it were a written stipulation by the parties setting forth their own definitive construction of the labor contract. (emphasis in original). St. Antoine, Judicial Review of Labor Arbitration Awards: A Second Look at Enterprise Wheel and Its Progeny, 75 Mich. L.Rev. 1137, 1140 (1977). .... . . . The United States Supreme Court has summarized the role of courts in reviewing arbitration awards: Arbitrators are judges chosen by the parties to decide the matters submitted to them, finally and without appeal. As a mode of settling disputes, it should receive every encouragement from courts of equity. If the award is within the submission, and contains the honest decision of the arbitrators, after a full and fair hearing of the parties, a court of equity will not set it aside for error, either in law or fact. A contrary course would be a substitution of the judgment of the chancellor in place of the judges chosen by the parties, and would make an award the commencement, not the end, of litigation. Burchell v. Marsh, 58 U.S. (17 How.) 344, 349, 15 L.Ed. 96, 99 (1855). Iowa City Community Sch. Dist., 343 N.W.2d at 142-43. Further limiting our scope of review we said: Courts do not presume that an arbitrator has exceeded his authority merely because they disagree with the arbitrator's reasoning: An arbitrator's award does draw its essence from the collective bargaining agreement so long as the interpretation can in some rational manner be derived from the agreement, viewed in the light of its language, its context, and any other indicia of the parties' intention; only where there is a manifest disregard of the agreement, totally unsupported by principle of contract construction and the law of the shop, may a reviewing court disturb the award. [citations omitted]. Neither the correctness of the arbitrator's conclusion nor the propriety of his reasoning is relevant to a reviewing court, so long as his award complies with the aforementioned standards to be applied by the reviewing court in exercising its limited function. [citation omitted]. Amoco Oil Co. v. Oil, Chemical & Atomic Workers International Union, Local 7-1, 548 F.2d 1288, 1294 (7th Cir.), cert. denied, 431 U.S. 905, 97 S.Ct. 1697, 52 L.Ed.2d 389 (1977). Id. at 144.