Court Opinion

ID: 9475192
Source: CourtListenerOpinion
Date Created: 2023-08-05 05:19:34.201726+00
Date Added: 2024-06-11T17:44:33.504214
License: Public Domain

MANSMANN, Circuit Judge,
dissenting.
This appeal once again requires us to apply the standards governing the judicial review of arbitration awards. The law in this area is well-settled. We are required to affirm the arbitrator’s decision “so long as it draws its essence from the collective bargaining agreement.” United Steelworkers of America v. Enterprise Wheel & Car Corp., 363 U.S. 593, 597, 80 S.Ct. 1358, 1361, 4 L.Ed.2d 1424 (1960) (“Enterprise Wheel ”). The dispute before us involves the application of that law. Because I believe that the majority and the district court err in finding that the award does not draw its essence from the collective bargaining agreement, I would reverse the entry of summary judgment.
I.
“When the parties include an arbitration clause in their collective-bargaining agreement, they choose to have disputes concerning constructions of the contract resolved by the arbitrator.” W.R. Grace & Co. v. Local Union 759, International Un*168ion of United Rubber, Cork, Linoleum & Plastic Workers of America, 461 U.S. 757, 764, 103 S.Ct. 2177, 2182, 76 L.Ed.2d 298 (1983). The judicial scope of review over arbitrators’ decisions is therefore extremely narrow. “[A] federal court may not overrule an arbitrator’s decision simply because the court believes its own interpretation of the contract would be the better one.” Id.
Courts must defer even to arbitrators’ decisions which may be ambiguous. As the Supreme Court of the United States explained:
Arbitrators have no obligation to the court to give their reasons for an award. To require opinions free of ambiguity may lead arbitrators to play it safe by writing no supporting opinions. This would be undesirable for a well-reasoned opinion tends to engender confidence in the integrity of the process and aids in clarifying the underlying agreement.
Enterprise Wheel, 363 U.S. at 598, 80 S.Ct. at 1361 (footnote omitted). In the absence of a violation of a specific command of law, fraud, partiality, or other misconduct on the part of the arbitrator, a reviewing court may disturb an award “only where there is a manifest disregard of the agreement, totally unsupported by principles of contract construction and the law of the shop.” Id. at 1128 & n. 27. We will affirm an award “if the [arbitrator’s] 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.” Ludwig Honold Mfg. Co. v. Fletcher, 405 F.2d 1123, 1128 (3d Cir.1969).
II.
In arriving at its determination that the arbitrator’s award does not draw its essence from the collective bargaining agreement, the majority erroneously focuses on mathematical formulas and its own interpretation of the language of the agreement. I believe that the majority’s approach is error and that the arbitrator’s award should be affirmed.
The collective bargaining agreement provides that composing room employees, who are members of the defendant union, will receive increases equal to the weekly increases and cost-of-living adjustments negotiated by the New York Typographical Union No. 6 (“New York Union”) under its agreement with the Publisher’s Association of New York City (“Publishers’ Association”). The agreement also provides:
In the event that the Publishers’ Association of New York City is disbanded or ceases to negotiate for more than one daily newspaper in New York City, then the increases under this Contract shall be the average increases received by the New York Times, New York Daily News and New York Post, to the extent that there are increases granted to any employees under said contract.
It is the arbitrator’s interpretation of this provision which is at issue.
The Publishers’ Association did not participate in the negotiations with the New York Union in 1984. Instead, each of the three New York papers listed in section 7-09 reached separate agreements with the union. The employees of all three papers received a weekly wage increase of $38. The employees of the News and the Post also received a lump-sum profit-sharing provision. The employees of the Times, in lieu of a profit-sharing provision, received an additional weekly wage increase of $25.93 plus a $.72 cost of living increase.
The arbitrator decided that the plaintiff’s employees were entitled to the increases negotiated by the Times: $38 plus $25.93, in lieu of profit-sharing, and $.72, cost of living increase, or a $64.65 weekly increase. The arbitrator reasoned, in part:
If News and Post employee[s] received bonuses, which are not increases, and Times employees received permanent increases, the average of the increases can not be determined, but any increases granted to any employees under said contract shall be.
Concluding that the arbitrator’s award has no rational basis in the record, the *169majority rejects the decision. The majority explains:
To say that “the average of the increases can not be determined,” where one of the increases is $25.93, plus $.72 cost-of-living, and the other two are zero, is flawed arithmetic. The average can be determined. The average is $8.64, plus $.24, for a total of $8.88. The sum of $8.88 and $38.00 (the base wage increase granted by all three dailies, and conceded by The Ledger) is $46.88, the weekly wage increase determined by the district court to be owing to The Ledger’s composing room force.
The majority adds in a footnote:
Those who are troubled by the notion of an “increase” of “zero” may find it easier to think of increases of, respectively, $38 (The Post), $38 (The News) and $38 + $25.93 + $.72 (The Times). The average of these increases is also $46.88.
In so holding, the majority ignores the admonition of Professor Summers, which it quotes in its decision:
The court should give full recognition to the expertness of the arbitrator and due deference to the choice of the parties, and substitute its judgment for that of the arbitrator only when he was so palpably wrong that to allow his decision to stand would undermine confidence in the arbitration process itself. The test, however, can not be embodied in immutable words, for it is an attitude of tolerance and humility, not a mathematical formula.
Summers, Judicial Review of Labor Arbitration, 2 Buffalo L.Rev. 1, 24 (1952). By focusing on what it calls the “flawed arithmetic” of the arbitrator, the majority fails to concentrate on what should be the central determination: whether there is any rational basis in the record for the award.
Although it is ambiguous in part, the arbitrator’s decision does draw its essence from the collective bargaining agreement. The arbitrator found that the Times employees had received wage increases for purposes of section 7-09. The arbitrator also found that the Times employees received those increases in lieu of the profit-sharing plans received by the News and the Post employees. Both the profit-sharing plans and the Times increases were equivalent to approximately a 4% increase in wages.
The arbitrator implicitly found that the parties to the collective bargaining agreement did not anticipate the use of profit-sharing plans as compared to traditional wage increases. Indeed, the record reflects that the profit-sharing schemes were adopted because the News and the Post were in financial trouble — the Times was not. The arbitrator apparently desired to afford some weight to the profit-sharing plans but concluded that it was impossible to average the three plans. Thus, he awarded the full amount of the Times increases.
The arbitrator’s award is supported by evidence in the record indicating that under previous “me too” wage provisions the plaintiff had paid increases equal to the total value of the benefits package negotiated by the New York Union. The only two witnesses at the arbitrator’s hearing both testified that in the New York negotiations the parties negotiated a lump sum increase which included wages and other benefits. David Crocket, Vice-president and newspaper representative of the New York Union, testified:
Well, let’s say we negotiate $12. We did that in 1965, exactly $12. Then we decided from the $12 to allocate, if the members so desire by referendum, vote monies to welfare, to pension, to anything else they may want to buy under the contract.
Albert Chodash, a member of the defendant who participated in the negotiations with the plaintiff, testified that the defendant would receive the full amount of any package negotiated by the New York Union. Mr. Chodash explained under cross-examination by the plaintiff’s counsel:
There is no direct provision for a bonus. However, it was understood that any monies received by New York Typo*170graphical Union we would get. As an example, you mentioned vacations. If they received — and I’m using an arbitrary figure of $20 and they took $10 to buy vacations, while you may not allow us to buy vacations, you would have given us the $20. You have through the 10 years, whatever the amount was, no matter what they did with it.
In light of the testimony at the hearing, I am unwilling to find that the arbitrator’s award does not have a rational basis in the record. The arbitrator may legitimately draw upon the history between the parties, the so-called “law of the shop,” in addition to principles of contract construction. Ludwig Honold Mfg. Co., 405 F.2d at 1128. In the absence of a direct conflict between the award and the language of the collective bargaining agreement, we should enforce the arbitrator’s interpretation of the agreement and the law of the shop. See Super Tire Engineering Co. v. Teamsters Local Union No. 676, 721 F.2d 121, 124 (8d Cir.1983), cert. denied, — U.S. -, 105 S.Ct. 83, 83 L.Ed.2d 31 (1984).
The majority errs when it ignores the arbitrator’s view and applies its own principles of contract interpretation. United Steelworkers of America, AFL-CIO v. American Smelting & Refining Co., 648 F.2d 863, 869 (3d Cir.1981) (“Although these are forceful arguments as a matter of contract interpretation, courts are not free to refuse to vacate arbitration awards merely because they might have interpreted the contract differently were it up to them in the first instance.”), cert. denied, 454 U.S. 1031, 102 S.Ct. 567, 70 L.Ed.2d 474 (1981). The courts are not permitted to “disturb ambiguous, unclear, and even deliberately opague arbitration opinions because ‘the policy in favor of the peaceful resolution of labor disputes through arbitration outweighs any damage which arbitration might cause.’ ” Arco-Polymers, Inc. v. Local 8-74, 671 F.2d 752, 755 (3d Cir.) (quoting Amalgamated Meat Cutters & Butchers Workmen of North America, Local 195, AFL-CIO v. Cross Brothers Meat Packers, Inc., 518 F.2d 1113, 1120 (3d Cir.1975)), cert. denied, 459 U.S. 828, 103 S.Ct. 63, 74 L.Ed.2d 65 (1982). Indeed, as we said in Ludwig Honold Mfg. Co., “ ‘whether the arbitrators misconstrued a contract’ does not open the award to judicial review.” 405 F.2d at 1128 (citation omitted).
I believe the arbitrator’s award can be interpreted as having a rational basis in the record. The strong national policy favoring the arbitration of labor disputes requires no more than that.
III.
Because I believe that the arbitrator’s award “draws its essence from the collective bargaining agreement, I would reverse the decision of the district court and reinstate the award of the arbitrator.