Opinion ID: 2820784
Heading Depth: 2
Heading Rank: 1

Heading: Drawing Its Essence From the Agreement

Text: The Company argues that the McKee Award should be vacated because it fails to draw its essence from the CBA in the following respects: First, Arbitrator McKee failed to consider the parties' bargaining history and improperly considered prior -9- arbitration awards in his interpretation of the term qualified. Second, Arbitrator McKee imposed new obligations and improperly departed from previous arbitration awards in his interpretation of the term temporarily scheduled or assigned. Third, Arbitrator McKee improperly ignored previous arbitration awards and undisputed evidence when he found that CSRs performed higher-classified work.
The Company begins by arguing that Arbitrator McKee ignored the undisputed bargaining history of the CBA in his interpretation of the term qualified. [I]f an arbitrator attempts to interpret a written agreement that is silent or ambiguous without considering the parties' intent, his award will fail to draw its essence from the [agreement]. Boise Cascade, 309 F.3d at 1082 (citing Bureau of Engraving, Inc. v. Graphic Commc'ns Int'l Union, Local 1B, 164 F.3d 427, 429 (8th Cir. 1999)). Thus, the Company contends that the McKee Award failed to consider the parties' intent by failing to consult the undisputed bargaining history of the term qualified. The Company cites both Boise Cascade, 309 F.3d at 1084 and Bureau of Engraving, 164 F.3d at 429, as two analogous cases in which this court vacated arbitration awards when the arbitrator did not consider evidence of the parties' intent. We reject the Company's argument, however, because Arbitrator McKee did in fact address the parties' intent by explicitly considering the bargaining history introduced by the Company. Arbitrator McKee found that whatever the Company negotiated for, it is clear that the Union did not agree to change the language or otherwise bow to their interpretation of the term qualified. Our narrow review precludes us from reviewing the factual accuracy of Arbitrator McKee's finding. See Boise Cascade, 309 F.3d at 1084. Arbitrator McKee's interpretation of the term qualified followed prior arbitration awards. [A]n arbitrator generally has the power to determine whether a prior award is to be given preclusive effect . . . . Trailways Lines, Inc. v. Trailways, -10- Inc. Joint Counsel, 807 F.2d 1416, 1425 (8th Cir. 1986) (citing Conn. Light & Power Co. v. Local 420, Int'l Bhd. of Elec. Workers, 718 F.2d 14, 20 (2d Cir. 1983)); see also W.R. Grace & Co. v. Local Union 759, Int'l Union of United Rubber, Cork, Linoleum & Plastic Workers of Am., 461 U.S. 757, 764–65 (1983) (holding that an arbitrator's conclusion that he was not bound by a prior arbitrator's decision was binding on the federal courts). Thus, Arbitrator McKee's reliance on the interpretation of the term qualified in the U-Verse arbitration and his Senior Report Clerks arbitration decision was within his purview and is not subject to our review.
Next, the Company argues that the McKee Award misconstrues the term temporarily scheduled or assigned and thus imposes a new obligation on the Company not bargained for in the CBA. The Company relies upon our decision in Keebler to support its position. 80 F.3d 284 (8th Cir. 1996). Because Keebler is not apposite, we are unpersuaded. In Keebler, a company and its union entered into a CBA and subsequently a side agreement to the CBA governing the sales and delivery of food products. Id. at 286. When a dispute arose, the parties settled the dispute and issued a settlement letter governing the settlement. Id. When a second dispute arose, the case was arbitrated. Id. This court vacated the arbitrator's award in favor of the union because we found that the arbitrator based his award on the settlement letter and not on the language of the CBA or the side agreement. Id. at 288 (The arbitrator found that [the company]'s obligation to obtain [the union's] agreement arose under the settlement letter, to which the arbitrator apparently also looked to discern the parties' intent under the [CBA] and the side agreement.). In this case, however, Arbitrator McKee based his award solely on the ambiguous language temporarily scheduled or assigned found in the CBA. -11- Arbitrator McKee's interpretation relied upon previous arbitration decisions that addressed the same issue in Senior Report Clerks and U-Verse. The interpretation that a work assignment is temporary until the Company has changed the job description of the lower-job classification to include the higher-classified work was first articulated by McKee in Senior Report Clerks, then adopted by Arbitrator Dana Eischen in his U-Verse decision. Arbitrator McKee recognized, however, that this interpretation was contrary to the interpretation of temporariness in the Heinsz and Fowler Awards. As we stated in Trailways, we recognize that there may be situations where an arbitrator will refuse to defer to a prior award involving the same issue, including when '(1) [t]he previous decision was clearly an instance of bad judgment; (2) the decision was made without the benefit of some important and relevant facts or considerations; or (3) new conditions have arisen questioning the reasonableness of the continued application of the decision.' 807 F.3d at 1425 n.16 (quoting F. Elkouri & E. Elkouri, How Arbitration Works 428 (BNA 4th ed. 1985)). Arbitrator McKee explained his declination of deference to a prior award involving a similar dispute by stating his disagreement with the prior decisions's interpretation of the contract's provisions. According to Arbitrator McKee, the Heinsz and Fowler Awards interpreted temporariness in a manner that gave the Company an incentive to violate the CBA as long as they violated it consistently for a given amount of time (or at least until the higher-classified job functions were performed long enough by lower-classified employees to be considered a permanent part of their job). Arbitrator McKee concluded that this interpretation was erroneous because it gave the Company the unilateral ability to render the temporariness requirement meaningless. In sum, Arbitrator McKee's decision to follow certain arbitration awards and not others, based upon those awards' factual and legal differences, does not authorize us to vacate his award under Trailways. -12-
The Company also argues that the McKee Award inexplicably departed from the Heinsz Award's interpretation of performing higher-classified work. Unlike in the issue of temporarily assigned work, Arbitrator McKee failed to distinguish prior similar arbitral awards involving the same performance of higher-classified work. In Trailways, we commented on our grave concerns when an arbitrator did not give precedential effect to a prior arbitration award. 807 F.2d at 1425. Trailways involved two grievances regarding an employer's no beard policy. Id. at 1417. The two grievances were raised by different groups of employees represented by the same union. Id. Both grievances were arbitrated. Even though the arbitrations involved the same company, the same union, essentially the same issue, and interpretation of the same contract, id. at 1425, they reached different conclusions. Id. at 1418–19. Whereas the first arbitration award found for the company, the second arbitration award did not discuss the similar nature of the two grievances and why, in light of this fact, the [first arbitration award] was not to be given preclusive effect. Id. at 1425. [A]lthough not the basis of our decision, we stated that [i]f an arbitrator does not accord any precedential effect to a prior award in a case like this, or at least explain the reasons for refusing to do so, it is questionable when, if ever, a 'final and binding' determination will evolve from the arbitration process. Id. at 1425–26. On the issue of performing higher-classified work, Arbitrator McKee did not apply the Trailways standard by at least explaining his reasons for departing from the Heinsz Award. While Arbitrator McKee did not have to follow the Heinsz Award, he at least should have explained his departure—as he did for the temporariness issue outlined above—under Trailways. 807 F.2d at 1425–26; see also Am. Nat'l Can Co. v. United Steelworkers of America, 120 F.3d 886, 891–92 (8th Cir. 1997) (acknowledging the burden on arbitrators under Trailways, but nevertheless finding that Trailways was satisfied because the arbitrator specifically identified the critical factual differences -13- between the arbitral decisions cited by ANC and the case before him and, based upon those material distinctions, determined that no preclusive effect should be accorded the two prior decisions.). Nevertheless, an arbitrator's error in failing to give precedential or preclusive effect to a previous arbitration award is not alone sufficient to vacate an arbitration award. Am. Nat'l Can Co., 120 F.3d at 892 (finding that inconsistency with another award is not enough in itself to justify vacating an award . . . [and] that neither award will be set aside where both draw their essence from the collective bargaining agreement. (alterations in original) (quoting McGraw Edison, Wagner Div. v. Local 1104, Int'l Union of Elec., Radio & Mach. Workers, 767 F.2d 485, 489 (8th Cir. 1985))). Therefore, as long as Arbitrator McKee's interpretation draws its essence from the CBA, we will uphold the award, despite the Heinsz Award precedent. See id. at 893. Taking into account Arbitrator McKee's findings that the CSRs performed work that was not a part of their job classification but was a part of the SRs' job classification, we conclude that Arbitrator McKee's interpretation drew its essence from the CBA. The applicable language of § 7 requires compensation to employees who do[] work in a position with a higher established maximum rate of pay. While the Heinsz Award interpreted this language to require that the work at issue was exclusively performed by higher job classifications, Arbitrator McKee interpreted the key [a]s whether the functions being performed by the lower-rated job title are 'clearly attributable' to a higher-paid job. While the two interpretations are not perfectly congruous, we cannot say that Arbitrator McKee's interpretation fails to draw its essence from the CBA. Therefore, we will not vacate the McKee Award based on the arbitrator's interpretation of the CBA or its inconsistency with the Heinsz Award. -14-