Court Opinion

ID: 9471505
Source: CourtListenerOpinion
Date Created: 2023-08-05 03:34:23.532433+00
Date Added: 2024-06-11T17:42:26.735887
License: Public Domain

ROSENN, Circuit Judge,
dissenting.
In an effort to deal with a growing problem of excessive absenteeism, Ciba-Geigy devised a plan that it submitted in advance to the union for its consideration and reaction. After making some amendments to the plan to satisfy certain union objections, the company proceeded to implement the plan. Protesting that the plan violated the collective bargaining agreement, the union filed a grievance, pursuant to Article XVIII, which ultimately terminated in final binding arbitration. The arbitrator specifically held that the Absentee Control Procedure implemented by Ciba-Geigy was consistent with the collective bargaining agreement and that the company did not violate the National Labor Relations Act by implementing it. I dissent because I believe the Board abused its discretion by declining to defer to the arbitration decision and I would grant Ciba-Geigy's petition for review.
*1128“In labor law, arbitration is clearly the preferred method for resolving disputes between the union and the employer.” Butler Armco Independent Union v. Armco Inc., 701 F.2d 253, 255 (3d Cir.1983). There is a strong federal policy in favor of the peaceful settlement of labor disputes by arbitration. See United Steelworkers of America v. Enterprise Wheel & Car Corp., 363 U.S. 593, 596, 80 S.Ct. 1358, 1360, 4 L.Ed.2d 1424 (1960). When the parties have agreed to an arbitration proceeding to construe, their contract, “[i]t is the arbitrator’s construction which was bargained for; and so far as the arbitrator’s decision concerns construction of the contract, the courts have no business overruling him because their interpretation of the contract is different from his.” Id. at 599, 80 S.Ct. at 1362. Under the Supreme Court’s ruling, an arbitrator’s award should be upheld so long as it “draws its essence from the collective bargaining agreement.” Id. at 597, 80 S.Ct. at 1361. This court has held that
a labor arbitrator’s award does “draw its essence from the collective bargaining agreement” if the interpretation can in any rational way 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 principles of contract construction and the law of the shop, may a reviewing court disturb the award.
Ludwig Honold Manufacturing Co. v. Fletcher, 405 F.2d 1123, 1128 (3d Cir.1969).
Although the National Labor Relations Board has its own independent responsibility to interpret and enforce the National Labor Relations Act, the Board has also recognized the need to defer to arbitration awards. In Spielberg Manufacturing Co., 112 N.L.R.B. 1080 (1955), the Board announced that it would defer to an arbitrator’s award if:
(1) the proceedings have been fair and regular;
(2) the parties agreed to be bound by the arbitrator’s award;
(3) the unfair labor practice issue was presented to and considered by the arbitrator (“issue presented” standard); and
(4) the award is not repugnant to the purposes and policies of the Act (“repugnant to the Act” standard).
Under the Board’s policy, “it must defer to private arbitration which complies with [those] guidelines.... ” NLRB v. Motor Convoy, Inc., 673 F.2d 734, 736 (4th Cir.1982). The Board’s standards for deferral were approved by this court in NLRB v. General Warehouse Corp., 643 F.2d 965 (3d Cir.1981).
The Board will defer not only to prior arbitral decisions, but it will decline to exercise its authority over an unfair labor practice complaint if it believes that arbitration over the contract provisions will resolve the statutory issue. In Collyer Insulated Wire, 192 N.L.R.B. 837 (1971), the Board refused to adjudicate a dispute in which the unfair labor practice determination depended upon an interpretation of the contract. The Board stated: “When the parties have contractually committed themselves to mutually agreeable procedures for resolving their disputes during the period of the contract, we are of the view that those procedures should be afforded full opportunity to function.” Id. at 842-43. When the NLRB defers under Collyer, it does so in the expectation that an arbitrator’s interpretation of the contract will decide the unfair labor practice question. Of course, if the arbitrator chooses not to resolve the unfair labor practice issue, see NLRB v. Al Bryant, Inc., 711 F.2d 543, 550 (3d Cir.1983); Hammermill Paper Co. v. NLRB, 658 F.2d 155, 161 (3d Cir.1981), cert. denied,- U.S. -, 103 S.Ct. 1767, 76 L.Ed.2d 341 (1983), or answers the contractual question on grounds that do not address the statutory charge, see NLRB v. General Warehouse Corp., 643 F.2d 965, 970 (3d Cir.1981), then the Board may exercise its jurisdiction to determine whether a party has violated the Act.
In the present case, the parties negotiated a provision submitting contract disputes to binding arbitration. When Ciba-Geigy *1129implemented the new Attendance Control Procedure, the union voluntarily filed a grievance to be adjudicated by an arbitrator pursuant to the collective bargaining agreement. Subsequently, the union lodged an unfair labor practice complaint with the Board. The Regional Director, acting under Collyer, deferred consideration of the unfair labor practice charge pending the outcome of the grievance procedure.
The parties then submitted the dispute to what they understood to be binding arbitration. The parties stipulated that the following two issues would be presented to and resolved by the arbitrator:
ISSUE I.
Did the company violate the collective bargaining agreement of April 16, 1977, by establishing an Absentee Control Procedure on or about May 1, 1978?
ISSUE II.
Did the company violate section 8(a)(1) and (5) of the National Labor Relations Act as amended by implementing the Absentee Control Procedure effective on or about May 1, 1978?
The two sides then presented evidence to the arbitrator.
The arbitrator issued an award finding that Ciba-Geigy did not violate the collective bargaining agreement or the Act. He ruled that, with one minor exception, the new procedure was not inconsistent with the established absence provisions. The arbitrator also held explicitly that the implementation of the new procedure did not violate the Act.
The arbitrator provided reasons why the establishment of the new procedure did not give rise to an unfair labor practice. One of the grounds stated by the arbitrator was that the new procedure conformed to the contract.1 By including an item in a eollee-five bargaining agreement, a party waives its right to insist upon bargaining over the issue for the duration of the agreement. The parties negotiated and reached agreement over absentee provisions in the contract. They were bound by the collective bargaining agreement’s terms. The arbitrator ruled that the Attendance Control Procedure was consistent with and did not violate the contract.
Binding arbitration agreed upon by the parties plays a valuable and necessary function in the disposition of the majority of grievances that arise annually in industrial relations; it is a dispute disposition mechanism in our society that has had a very constructive impact on the caseloads of the federal courts and the Board. Under Spielberg, the Board must respect the authority freely given by the parties to an arbitrator to interpret the provisions of the collective bargaining agreement, and should defer to the arbitrator’s ruling. Even Judge Gibbons’ dissent in NLRB v. Pincus Brothers Inc.-Maxwell, 620 F.2d 367, 384-99 (3d Cir.1980), which advocated limiting the deferral doctrine, stated that the Board should defer to the arbitrator in “section 8(a)(5) and section 8(b)(3) cases involving contract interpretation matters in which the interpretation of the contract by the agreed upon method [binding arbitration] in effect eliminates the predicate for the charge.” Id. at 399. In his interpretation of the Attendance Control Procedure and the provisions of the contract in this case, the arbitrator found that “the procedure did not create conflict with or change the existing Agreement except in one section.... ” The company immediately remedied this one inconsistency. The arbitrator has interpreted the contract and held that its terms permitted Ciba-Geigy to implement the attendance procedure without violating the Act. *1130It is a case in which the interpretation of the agreement eliminated the predicate for the charge.
Neither this court nor the Board may reverse an arbitrator’s award merely because it would interpret the contract differently, “or simply because the arbitrator’s analysis is opaque.” Arco-Polymers, Inc. v. Local 8-74, 671 F.2d 752, 756 (3d Cir.), cert. denied, - U.S. -, 103 S.Ct. 63, 74 L.Ed.2d 65 (1982). The Board must defer to an arbitrator’s award if it meets the Spielberg requirements even if the Board disagrees with the contract interpretation. NLRB v. Pincus Brothers Inc.-Maxwell, 620 F.2d 367, 374 (3d Cir.1980). This court has held that “[a]s a result of both judicial and Board deference to arbitration awards, an arbitrated result could be sustained which is only arguably correct and which could be decided differently in a trial de novo.” Id.
The question of whether Ciba-Geigy violated the Act by implementing the Attendance Control Procedure was expressly presented to, considered by, and resolved by the arbitrator. To the extent that the arbitrator construed the collective bargaining agreement to permit the implementation of the procedure, the arbitration merely consisted of a question of contract interpretation, the resolution of which, even if it were incorrect, was not clearly repugnant to the policies of the Act. Prior to the arbitration, the Regional Director withheld further action under Collyer operating under the proper assumption that the interpretation of the contract would resolve the unfair labor practice issue. Nevertheless, after the arbitrator issued the award, the Board chose to ignore the arbitrator’s findings and reached its own conclusions. Because the arbitrator’s award met the requirements of Spielberg Manufacturing Co., 112 N.L.R.B. 1080 (1955), and NLRB v. General Warehouse Corp., 643 F.2d 965 (3d Cir.1981), the Board abused its discretion by declining to defer. I would grant, therefore, Ciba-Gei-gy’s petition for review of the Board’s order.

. The majority also rejects an alternative ground upon which the arbitrator based his decision, that the new procedure could be instituted under the residual rights theory. Under NLRB v. Pincus Brothers Inc.-Maxwell, 620 F.2d 367 (3d Cir.1980), “where there are two arguable interpretations of an arbitration award, one permissible and one impermissible, the Board must defer to the decision rendered by the arbitrator.” Id. at 377. Although I have reservations about the majority’s statement that this court has already rejected the residual rights theory, I do not address the residual rights issue because I conclude that the Board abused its discretion by not deferring to the arbitrator’s ruling that the Attendance Control Procedure conformed to the contract.