Court Opinion

ID: 9459660
Source: CourtListenerOpinion
Date Created: 2023-08-04 21:27:35.366857+00
Date Added: 2024-06-11T17:36:16.173464
License: Public Domain

GODBOLD, Circuit Judge
(concurring in part and dissenting in part):
I concur in the opinion written by Judge Tuttle except for the last portion in which he concludes that the award, as interpreted, “must be deemed conclusive of the financial arrangements between the parties including any claim that the Company might have had for a refund of the overage in Sweet’s favor.”
When Sweet was discharged he was paid severance pay plus pay in lieu of notice. He filed a grievance contesting his discharge. Arbitrator Florey rendered an award which, (1) unambiguously said that Sweet should be reinstated forthwith, and (2) ambiguously said that Sweet should be “made whole” for any loss of earnings. The Company offered to reinstate Sweet but contended that from what it would have owed him as back pay there should be deducted his interim earnings and the severance and notice pay he had received, with the result that rather than the Company’s owing Sweet he was indebted to the Company in the amount of $4,274.-04, which the Company insisted he should pay. Sweet and the Union took the position that Sweet was entitled to the full amount of back pay, with nothing deducted therefrom. With the parties pursuing interpretations 180 degrees apart, the company asked for arbitration to determine what Florey’s award meant. The Union refused and filed suit to enforce Florey’s award.
The Company proceeded with the interpretive arbitration before arbitrator Horton, with the Union present but disputing his jurisdiction. Horton interpreted what Florey had said to mean the following:
—The award required the deduction of interim earnings, severance and dismissal pay, from earnings due Sweet by the Company. (|f 2).
—The Company owed Sweet nothing, since the deductions exceeded lost earnings by $4,274.04. (¶ 3).
—“The arbitrator does not have jurisdiction to award either party additional remedies.” (|[ 4).
■ — Sweet must be reinstated immediately. (|f 5).
In the subsequent proceedings in the District Court the court rejected the contention of the Union that arbitrator Horton was without authority, rejected the contention of the Union that Florey’s award meant that Sweet could keep all his back pay without any deductions, accepted the contention of the Company that monies paid to Sweet must be refunded, and directed the Union to return the money.1
In interpreting Florey’s award, Horton dealt first with the subject matter of whether the award required that there be deductions from accrued back *828pay. He answered that question in the affirmative. His next step was to consider the effect of making the deductions, and to that question he said two things — first, the Company doesn’t owe Sweet anything (¶ 3), and second, “the arbitrator does not have jurisdiction to award either party additional remedies” (If 4). Paragraph 3 is clear. What does paragraph 4 mean ?
Three significant paragraphs of Horton’s opinion dealt with the matter of return of the overage.
The Company requests the arbitrator to make Sweet’s reinstatement contingent upon his paying the Company the overage and that the arbitrator set a deadline within which Sweet may do this or forfeit his job. To grant the company’s requested remedy would create an award in the nature of granting monetary relief. Awards for money damages are based upon a violation of the working agreement and Sweet’s refusal to return the overage cannot be considered as a violation of the contract for its language does not cover such a situation. This reduces the question to one of whether the present arbitrator may fashion a remedy of the type requested by the Company. He is not convinced he has jurisdiction to do so. (emphasis added.)
* * * * * *
The arbitrator has not found, nor has he been cited, any case law or arbitration awards which provide that the employee’s reinstatement shall be contingent upon the return of dismissal or severance pay within a certain period of time, and this may be said to be particularly true where the arbitrator’s jurisdiction is confined to the interpretation and implementation of a former award. The arbitrator’s refusal to grant the relief requested by the Company does not prejudice the Company’s right to pursue any legal remedy it may have for the recovery of the overage. (emphasis added.)
It should be observed that Sweet or any other discharged employee similarly situated may or may not have retained the overage, or all of the same, and unable to raise the sum required to be paid by the deadline fixed by the arbitrator. In such a case, as here, this could result in the employee losing his job and its related benefits — a job from which it had been determined the employee had been unjustly discharged.
Quite clearly, Horton said that there was no way in which he could order Sweet to pay what would amount to money damages because the failure to return the overage was not a violation of the working agreement and, therefore, was not within the scope of arbitration under the contract. Equally clearly, Horton construed Florey’s award to leave open to the Company the right to seek recovery of the overage through “any legal remedy it may have.” The quoted language dovetails exactly with Horton’s earlier statement that an award could not be made in the arbitration because Sweet’s failure to return the money did not violate the working agreement. Horton’s interpretation was that whether the Company could recover the money by reason of legal relationships and obligations existing between it and Sweet in the penumbra outside the working agreement was a matter left open for other forums. In short, he construed Florey’s award and implemented it to the extent he considered possible, and he recognized that further implementation must occur in a judicial proceeding. Indeed any other conclusion by Horton would have been inappropriate. “[A]n arbitrator is confined to interpretation and application of the collective bargaining agreement; he does not sit to dispense his own brand of industrial justice.” United Steelworkers v. Enterprise Corporation, 363 U.S. 593, 597, 80 S.Ct. 1358, 1361, 4 L.Ed.2d 1424, 1428 (1960).
It is at least arguable whether the matter of return of the overage was, as Horton thought, outside the scope of his arbitral power or was a part of the “merits” of the controversy over inter7 *829pretation which he was brought in to arbitrate. And it is arguable as well whether Horton’s task was a proper function for an arbitrator. See footnote 2 of majority opinion and accompanying text. The majority avoid these questions by concluding that in the peculiar circumstances it would be pointless to remand the first award to Florey for yet another interpretation and that an appropriate resolution is to accept Horton’s interpretation as binding. Judge Tuttle’s opinion says, “we think that Arbitrator Horton’s award in this instance, having resolved the dispute between the parties, should be given full effect,” and repeats, “we accept as binding on the parties Arbitrator Horton’s interpretation which, we think, finally and fully resolves the issue between the parties.” That pragmatic approach is an appropriate one. But the “full resolution” reached by Horton included his determination that the overage issue was beyond the scope of arbitration and was a matter to be pursued in legal proceedings. The majority do not give “full effect” to his award but only carry it out to the extent it resolved the dispute, and insofar as it held the overage issue unresolvable in arbitration they reject the award and construct a new award on their own.2 Stated in shorthand, that new award is that the overage issue has been resolved by arbitration because the parties intended it to be resolved, although the arbitrators did not resolve it and Horton found it to be unresolvable. Stated at somewhat greater length, what my brothers have done is to say that the Company lost its right to seek return of the overage, not because Florey said that Sweet was entitled to keep the money — Florey said no such thing — and not because Horton said that Florey had said any such thing — Horton said no such thing — but rather because it was intended by the parties that Horton’s award (interpreting Florey’s award) be final and binding with respect to all financial dealings between the parties. I must confess that I am baffled by that reasoning. The fact that the parties and Horton desired and intended that Horton’s award be a full implementation settling all matters does not mean that it did settle everything. ' Horton, as the interpreter of Florey’s award, found that the first award did not settle everything. He found that he, as second arbitrator, lacked the power to settle everything. All members of the panel agree that his interpretations are to be accepted. Yet the majority sweep all this away and grant to Sweet a favorable judgment on a disputed matter the merits of which neither arbitrator reached.
As a supporting reason, my brothers say that to treat the awards as dispositive of all issues accords with the Company’s position that it was satisfied with Horton’s award and sought to implement that award. Indeed the Company did seek enforcement of Horton’s award. But it did so with the accompanying contention, made in the District Court and on appeal, that Horton’s award finally disposed of the refund issue by obligating Sweet to repay the overage and to do so forthwith. That contention was accepted by the District Court, but on appeal the Company lost on that point. The fact that the Company argued that the awards settled all issues, including settling the refund issue in its favor, is not probative at all that the awards settled all issues, including settling the refund issue in Sweet’s favor. This would be true in any event— *830it seems to me not even arguable when the awards specifically left the matter open.
The appropriate result in this case is, of course, to leave the Company open to seek recovery by legal remedies. Whether it is entitled to recover would be determined in such a proceeding, if brought.

. Obviously the direction to the Union was wrong. The money had not been paid to it.

. Note the reference by Chief Judge Brown in Safeway Stores v. American Bakery, Inc., 390 F.2d 79 at 81 (CA5, 1968) to “slip [ping] off into that habit, easy for Judges, of deciding the merits” of arbitration matters. “The question of interpretion of the collective bargaining agreement is a question for the arbitrator. It 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.” United Steelworkers v. Enterprise Corp., supra, at 599, of 363 U.S., at 1362 of 80 S.Ct., at 1429 of 4 L.Ed.2d (1960).