Court Opinion

ID: 3016381
Source: CourtListenerOpinion
Date Created: 2015-10-13 22:15:30.471676+00
Date Added: 2024-06-11T15:03:18.085501
License: Public Domain

No. 95-1376

Doerfer Engineering, a Division      *
of Container Corporation of          *
America, an Affiliate of the         *
Jefferson Smurfit Corporation,       *
                                     *
                   Petitioner,       *
                                     *
        v.                           *
                                     *
National Labor Relations   *
Board,                               *
                                     *
                   Respondent.       *

                                         On Petition for Review
                                         from the National Labor
                                         Relations Board.

     No. 95-1581

Doerfer Engineering, a Division      *
of Container Corporation of          *
America, an Affiliate of the         *
Jefferson Smurfit Corporation,       *
                                     *
                   Respondent,       *
                                     *
        v.                           *
                                     *
National Labor Relations   *
Board,                               *
                                     *
                   Petitioner.       *

                     Submitted:    September 13, 1995

                     Filed:    March 22, 1996

Before MCMILLIAN, HEANEY, and MURPHY, Circuit Judges.
HEANEY, Circuit Judge.

     Doerfer Engineering ("Doerfer") petitions us to review and set aside
the decision and order of the National Labor Relations Board ("Board").
The Board cross-applies for enforcement.        We grant Doerfer's petition and
set aside the Board's order.

                                   BACKGROUND

     The facts of the underlying labor conflict are undisputed.             Doerfer
unit employees were represented by Local 1740 of the International Union,
United Automobile Aerospace and Agricultural Implement Workers of America
("Union").    Since the company's inception, prior to the organization of its
employees, Doerfer permitted its employees to use plant facilities and
equipment for personal projects.    This arrangement has never been formally
incorporated into the written collective bargaining agreement between
Doerfer     and   the   Union.   Over   the   years,   however,   Doerfer   placed
restrictions on employee use of its equipment and premises, including the
need for prior company approval.        On January 4, 1993, the plant manager
gave the Union written notice that, effective immediately, Doerfer would
no longer permit its employees to use company equipment and premises.

          In response to the company's actions, the Union filed an unfair
labor practice charge under sections 8(a)(1) and (5) of the National Labor
Relations Act alleging that Doerfer should have given them an opportunity
to negotiate before unilaterally discontinuing the longstanding past
practice.    Shortly thereafter, the Union also filed a grievance pursuant
to the resolution procedure set forth in the parties' collective bargaining
agreement.    The Union claimed that Doerfer's actions violated the renewal
clause of their collective bargaining agreement by taking away the past
practice while the agreement was still in effect.        Doerfer responded that
its actions were within its management

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rights provided by the agreement because its decision was based on its
concern for company liability.   On February 3, 1993, the Board notified the
parties that it would defer the matter to arbitration both because Doerfer
had already agreed to submit the grievance to arbitration and because the
Board believed the issues raised by the charge could be resolved by such
binding arbitration.     The parties then agreed upon an arbitrator and
submitted the dispute to him.

     At the outset of the arbitration hearing, the parties discussed the
matter of whether the arbitrator had the authority to decide the matter
before him.     The arbitrator took the position that he had such power,
stating:

     I generally get this issue resolved right away, as to
     whether or not I have a right, the Arbitrator has the
     power either through the deferral of the NLRB placing the
     power upon me to rule or by agreement of the parties I
     have a right to decide this issue based strictly upon the
     merits.

Hr'g Tr. at 6.    Doerfer objected to his authority to arbitrate, stating
that the dispute did not fall under the collective bargaining agreement's
narrow definition of a grievance, and was therefore not arbitrable.     Hr'g
Tr. at 20-28.   The company's objection was noted for the record.   Hr'g Tr.
at 28.   The Union, on the other hand, took the position that the arbitrator
should decide the matter:

     I think, Mr. Arbitrator, the National Labor Relations
     Board in referring the case back to the grievance
     procedure and also reading from what I understand the
     Spielberg document and some other things, it does give
     the Arbitrator the authority to rule on these types of
     things. It is outside the contract language as such, but
     it's a practice that's been in effect for years and
     years.   We're going to try to show you that it's an
     employee benefit, it's not a management function, and
     it's something you ought to be dealing with.

Hr'g Tr. at 30.

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     After a full evidentiary hearing, the arbitrator issued a detailed,
but confusing, opinion and award in favor of the company.     He stated that
the grievance was not arbitrable and was therefore denied, but he also
ruled on the merits of the dispute.       He determined that Doerfer had the
right to unilaterally terminate the practice of loaning tools, equipment
and materials and permitting use of company premises for personal use.

     Not surprisingly, after the arbitrator's decision, both parties
changed their respective positions on the arbitrability of the dispute.
The Union returned before the Board to urge that it should disregard the
arbitrator's opinion because of his determination that the grievance was
not arbitrable and because its conclusion was inconsistent with the
purposes and policies of the National Labor Relations Act.           Doerfer
requested that the Board respect the arbitrator's decision.     Both parties
stipulated that the arbitration proceedings were fair and regular and that
the parties had agreed to be bound by the award.      They also waived their
rights to a hearing and oral argument before an administrative law judge
and agreed to have the matter decided on the basis of the record and their
briefs.

     The Board decided the matter in favor of the Union.       Based on   the
arbitrator's statement that the grievance was not arbitrable, the Board
determined that he had not reached the merits of the unfair labor practice
issue.    As a consequence, the Board declined to defer to the arbitrator's
opinion.    The Board then found that the discontinued practice had been a
valuable part of the employees' terms and conditions of employment and that
Doerfer's failure to notify and provide the Union with an opportunity to
bargain violated its obligation to bargain in good faith with the exclusive
representative of unit employees.    This petition for review follows.

                                      4
                                    DISCUSSION

     Under the particular circumstances of this case, the Board abused its
discretion in failing to defer to the arbitrator's decision.            Throughout
the Union's handling of this labor dispute, it took the position that it
was one appropriate for arbitration.     It filed the grievance; it submitted
the dispute to arbitration; it argued at the arbitration hearing that the
arbitrator had authority to decide the issue; and, finally, it agreed to
be bound by the arbitrator's decision.        The Union cannot now be heard to
complain of the arbitrator's authority to decide the issue.

     Initially, the Board agreed that the matter was appropriate for
arbitration.   Yet, based on a selective reading of the arbitrator's opinion
and award, the Board determined that the merits of the dispute had not been
reached.   It then substituted its own decision for that of the arbitrator.
Quoting the first and final sentences of the arbitrator's opinion, the
Board concluded that the arbitrator's opinion provided a "clear statement"
that the issue was not arbitrable.            The Board ignored, however, the
majority of the arbitrator's opinion, in which the merits of the dispute
were adjudicated.

     We are fully aware that an arbitrator cannot exceed the authority
given to him by the collective bargaining agreement or decide matters
parties have not submitted to him.      See, e.g., Steelworkers v. Enterprise
Wheel & Car Corp., 363 U.S. 593, 597 (1960).         Nothing that we say here is
intended to depart from that general principle.           In this instance, the
Union argued that the arbitrator had the authority to resolve the matter
and it agreed to be bound by his decision.          While Doerfer challenged the
arbitrator's authority, the Union urged the arbitrator that the matter was
arbitrable.     It   cannot   now   change   its   position   simply   because   the
arbitrator reached an unfavorable conclusion on the merits.            Enforcement
of the Board's order in this case would go

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against     the   national   policy,   favoring     the   voluntary   arbitration   of
disputes.    E.g. Olin Corp., 268 N.L.R.B. 573 (1984).         A contrary decision would
encourage parties to renege upon their agreement to be bound by an
arbitrator's decision and to circumvent the grievance procedure by filing
an unfair labor practice charge whenever they felt they had a better chance
for favorable resolution before the Board.

                                       CONCLUSION

     Accordingly, Doerfer's petition to set aside the Board's order is
granted and the decision of the arbitrator is reinstated.

     A true copy.

            Attest:

                  CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.

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