Opinion ID: 31282
Heading Depth: 2
Heading Rank: 3

Heading: Remand of the Back-Pay Award to the Arbitrator

Text: 28 The parties dispute the Arbitrator's make whole back-pay award. In the Union's grievance, the Union requested its desired remedy: Reinstate Troy Guidry and make him whole in salary, benefits, and seniority. As the parties could not agree on the issue to be arbitrated, the Arbitrator framed the issue consistent with the scope of his duties under the CBA. The issue to be arbitrated was: Did proper cause exist for the discharge? If not, what is the appropriate remedy. After a two-day hearing, the Arbitrator awarded that Guidry be made whole with back-pay, benefits, and/or seniority. The Union contends that the back-pay award is unambiguous and that Guidry is entitled to full back-pay. Thus, the Union maintains that remand for clarification of the backpay award is unnecessary. The Company contends that the back-pay award should be calculated taking into account Guidry's interim earnings. 29 The back-pay award in this arbitration and the arguments advanced by the parties most closely mimic those considered in International Union of Operating Engineers, Local No. 841 v. Murphy Co., 82 F.3d 185 (7th Cir.1996). In Murphy, our sister Circuit held that [t]he rule is that an arbitrator's failure to impose a duty to mitigate or to exclude certain benefits from an arbitration award is to be understood to mean that none exists. We assume the award did not mention offsets because none was granted. Id. at 189 (internal quotations and citations omitted). The Arbitrator in Murphy determined that the company did not have proper cause to discharge the Union employees and awarded that the employees shall be reinstated to the employment and made whole. Id. at 187. During the appeal process, the company and the Union disputed the scope of the made whole award. Id. at 188. The Union filed a Motion to Enforce the Arbitration Award in federal district court. The company countered that the award was ambiguous and should be remanded to the arbitrator for clarification because the back-pay award should consider offsets of interim income. Id. The district court disagreed with the company finding that the company waived the offsets issue. Id. The Seventh Circuit affirmed explaining that the Company waived this issue by failing to raise the issue of offsets before the Arbitrator during the hearings or in its post-hearing briefs and by failing to challenge the arbitration award within the 90-day limitation period pursuant to the FAA, 9 U.S.C. § 11(b). Id. at 188 (The same result would obtain under the LMRA.). Because the remedy sought by the Union in Murphy was for the employees to be reinstated and be made whole with back wages and fringe benefits, the Seventh Circuit, assume[d] that an arbitrator's failure to mention offsets in his ruling means that no offset was granted, not that the ruling was ambiguous. Id. at 189-90. We are persuaded by the reasoning of the Seventh Circuit. Similarly, we hold that the Arbitrator's silence on offsets in this case, without more, means that no offset was granted. 30 The Company argues that this case is more similar to the dispute presented in San Antonio Newspaper Guild Loc. 25 v. San Antonio Light Div., 481 F.2d 821 (5th Cir.1973). Although we were persuaded with the company's argument in San Antonio Light Div. that the arbitration award was ambiguous with respect to whether the make whole with back-pay award should be offset by interim income, that case was presented to us in a significantly different procedural posture than the present case. Id. at 822. In San Antonio Light Div., the dispute over whether the back-pay award should take into account interim earnings was resolved through arbitration in favor of the company. The Arbitrator awarded, among other things, reinstatement and that the Grievant shall be made whole for any loss in earnings. Id. at 822. Upon a dispute over the scope of the make whole with back-pay award, the company determined that the grievant was overcompensated by his severance and other interim earnings and therefore, that the grievant was obligated to repay the company. Id. at 822. The Union disagreed and the company filed a grievance against the Union seeking return of the excess compensation. Id. at 823. The Arbitrator found in the company's favor, and the Union appealed. Id. Relying in part on the Supreme Court's admonition that `[i]t is the arbitrator's construction which was bargained for,' we affirmed the arbitration award. Id. at 825 (quoting United Steelworkers of America v. Enterprise Wheel and Car Corp., 363 U.S. 593, 599, 80 S.Ct. 1358, 4 L.Ed.2d 1424 (1960)). In the present case, Article 18 of the CBA provides that the decision of the arbitrator shall be final. Thus, we must give deference to what the parties bargained for, i.e., that the Arbitrator's decision is final. 31 In the present case, the Company did not raise the issue of offsets before the Arbitrator but raised it for the first time as an affirmative defense in its Answer to the Union's Motion to Enforce the Award filed in federal court. We agree with the Seventh Circuit that if we hold that the Arbitrator's award is ambiguous, we only encourage employers to withhold evidence or comment on important issues, thereby undermining arbitration as a valuable tool for expeditiously and inexpensively resolving employer-employee disputes. Murphy, 82 F.3d at 190. Such is the situation in the present dispute. Because the Union requested a make whole back-pay remedy, the Company should have known that the issue of damages was before the arbitrator and so should have addressed it in a timely and complete fashion. Id. Accordingly, Guidry is entitled to the entire sum of back-pay in accordance with the arbitration award. 3