Court Opinion

ID: 3022097
Source: CourtListenerOpinion
Date Created: 2015-10-13 22:26:05.534651+00
Date Added: 2024-06-11T11:47:32.319382
License: Public Domain

United States Court of Appeals
                             FOR THE EIGHTH CIRCUIT
                                    ___________

                                    No. 98-1354
                                    ___________

Bureau of Engraving, Inc.,            *
                                      *
            Appellant,                *
                                      * Appeal from the United States
     v.                               * District Court for the
                                      * District of Minnesota.
Graphic Communications International *
Union, Local 1B,                      *
                                      *
            Appellee.                 *
                                 ___________

                             Submitted: November 19, 1998
                                 Filed: January 6, 1999
                                     ___________

Before BEAM, MAGILL, and MORRIS SHEPPARD ARNOLD, Circuit Judges.
                           ___________

MAGILL, Circuit Judge.

        The Bureau of Engraving, Inc. appeals from the district court’s denial of its
motion to vacate two labor arbitration awards that provided two employees monetary
damages for missed overtime opportunities. The Bureau contends that these awards
failed to draw their essence from the collective bargaining agreement. We agree and,
thus, reverse.
                                           I.

      The Bureau of Engraving, Inc. (Bureau) and the Graphic Communications
International Union, Local 1B (Union) have been parties to several collective
bargaining agreements that have regulated the distribution of overtime opportunities
to Bureau employees. Between April 1988 and March 1995, the applicable agreements
mandated that overtime opportunities be allocated under a system of equalization.
Under this system, if the Bureau improperly overlooked an employee for overtime, it
would simply offer him or her the next available overtime opportunity--the so called
“make-up” remedy.

       When the parties negotiated their current collective bargaining agreement
(CBA),1 they agreed to eliminate the equalization system of overtime distribution
because it caused too many complaints. In its place, the parties agreed to a straight
rotation system of overtime distribution. Under this system, the first eligible employee
on an overtime list receives the next available overtime opportunity. If that employee
declines the opportunity or is not available, the Bureau offers the overtime to the next
employee on the list.

       Although the CBA modifies the method for allocating overtime, it does not set
forth any specific remedy for failure to follow that allocation scheme. While
negotiating the current CBA, the Union proposed a monetary remedy for breach of the
overtime provisions. The Bureau, however, rejected this remedy. See Plocker Arb.
Award at 3, reprinted in J.A. at 109. No other remedy, apparently, was proposed, and
the CBA contains no provision governing remedies for breach of the overtime
provisions.

      In 1995 and 1996, the Bureau breached the CBA by skipping two employees

      1
       The current CBA is effective from April 1, 1995 through March 31, 2000.

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when it was their turn in the overtime rotation.2 Both employees filed grievances
seeking monetary awards for the Bureau’s breaches. The Union sought arbitration of
both disputes before separate arbitrators.3 In both arbitrations, the Union argued that
the arbitrators should impose a monetary remedy for breach of the overtime provisions
because the Bureau’s prior practice of offering a make-up opportunity was inconsistent
with the new straight rotation system. The Union argued that the make-up remedy
might not make the employees whole because the next opportunity might not be for the
same number of hours or pay, the next opportunity might not arise for a long period
of time, the employee might be “up” in the rotation when the make-up opportunity
arises, and the employee might not be able to work during the make-up opportunity.
In contrast, the Bureau argued that the CBA did not allow for a monetary remedy and,
in any event, that the make-up remedy was consistent with the parties’ past practices
and did not disrupt the straight rotation system. Both arbitrators independently
concluded that a make-up remedy was not appropriate and ordered the Bureau to
remedy its breaches with monetary damages.4

       The Bureau filed a motion to vacate the awards in the district court, arguing that
they failed to draw their essence from the CBA. The Union filed a cross-motion to

      2
       In this appeal, the Bureau does not dispute the finding that it breached the CBA.
      3
       The arbitration provision of the CBA provides:

      All disputes and grievances arising over the interpretation of, or
      adherence to, the terms and provisions of the Collective Bargaining
      Agreement, including any questions of the arbitrability of any dispute or
      grievance, shall be subject to resolution by the procedure set forth in the
      Grievance and Arbitration language of Section 3.

Collective Bargaining Agreement § 3(a), at 2, reprinted in J.A. at 12.
      4
      The arbitrators awarded the grievants compensation for a total of 12.5 hours of
missed overtime at the Sunday double-time rate.

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confirm the awards. The district court granted summary judgment to the Union and
entered judgment confirming the awards. The Bureau appeals from this judgment.

                                            II.

       The Bureau argues that we must reverse the district court’s judgment enforcing
the arbitrators’ awards because they failed to draw their essence from the parties’ CBA.
We agree.

       “The district court’s denial of a motion to vacate an arbitration award is not
entitled to any special deference on appeal, and this Court reviews its conclusions of
law de novo.” Homestake Mining Co. v. United Steelworkers, Local 7044, 153 F.3d
678, 680 (8th Cir. 1998). In contrast, our review of an arbitrator’s award is deferential.
“As long as the arbitrator’s award ‘draws its essence from the collective bargaining
agreement,’ and is not merely ‘his own brand of industrial justice,’ the award is
legitimate.” United Paperworkers Int’l Union v. Misco, Inc., 484 U.S. 29, 36 (1987)
(quoting United Steelworkers v. Enterprise Wheel & Car Corp., 363 U.S. 593, 597
(1960)). Although we may not vacate an award if the arbitrator was arguably
construing or applying the CBA, see Misco, 484 U.S. at 38, we may reverse an award
that either fails to draw its essence from the CBA or is contrary to the plain language
of the agreement. See Keebler Co. v. Milk Drivers & Dairy Employees Union, Local
No. 471, 80 F.3d 284, 287 (8th Cir. 1996) (citing Iowa Mold Tooling Co. v. Teamsters
Local Union No. 828, 16 F.3d 311, 312 (8th Cir. 1994)).

        We believe that the awards failed to draw their essence from the CBA. The
essence of the CBA is derived not only from its express provisions, but also from the
industrial common law. See United Steelworkers v. Warrior & Gulf Navigation Co.,
363 U.S. 574, 581-82 (1960). The industrial common law includes the past practices
of the industry and the shop, see id., as well as the parties’ negotiating history and other
extrinsic evidence of their intent. See International Woodworkers v. Weyerhaeuser

                                            -4-
Co., 7 F.3d 133, 136-37 (8th Cir. 1993); Fairview Southdale Hosp. v. Minnesota
Nurses Ass'n, 943 F.2d 809, 811-12 (8th Cir. 1991).

        It is undisputed that the CBA is silent regarding remedies for breach of the
overtime provisions. If 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 CBA. See Weyerhaeuser, 7 F.3d at 136-37; see also CSX Transp.,
Inc. v. United Transp. Union, 29 F.3d 931, 936 (4th Cir. 1994) (“In construing any
contract, including a collective bargaining agreement, determining the intent of the
parties is the essential inquiry”; if the written agreement is silent, the arbitrator may
consider past practices and bargaining history to fill gaps). Accordingly, we must
“consider whether it is at all plausible to suppose that the remedy [the arbitrators]
devised was within the contemplation of the parties and hence implicitly authorized by
the agreement.” Independent Employees’ Union of Hillshire Farm Co. v. Hillshire
Farm Co., 826 F.2d 530, 533 (7th Cir. 1987) (quotations omitted).

       Here, the industrial common law and evidence of the parties’ intent militates our
conclusion that the awards failed to draw their essence from the CBA. Prior to April
1, 1995, the Bureau offered a make-up remedy when it breached the overtime
provisions. Thus, a monetary award cannot find support in the parties’ past practices.
More importantly, the parties’ collective bargaining history clearly shows that a
monetary remedy was contemplated and excluded from the CBA. The Bureau
presented uncontroverted evidence that the Union proposed a monetary remedy for
breach of the overtime provisions and that the Bureau explicitly rejected that proposal.
Because this evidence shows that the Bureau did not anticipate a monetary award for
breach of the overtime provisions, we conclude that the awards were not within the
contemplation of the parties and, therefore, not implicitly authorized by the CBA. See
Phoenix Newspapers, Inc. v. Phoenix Mailers Union Local 752, 989 F.2d 1077, 1082
(9th Cir. 1993) (vacating arbitrator’s award when employer rejected same remedy in
prior collective bargaining agreement negotiations). In sum, the arbitrators’ awards

                                          -5-
failed to draw their essence from the CBA because (1) the CBA was silent regarding
remedies, (2) the awards were inconsistent with the parties’ past practices, and (3) the
awards directly contravene the Bureau’s clear intent not to be bound by a monetary
remedy during CBA negotiations. The awards here were not derived from an
interpretation of the CBA. Rather, the arbitrators were dispensing their own brand of
industrial justice. See Enterprise Wheel, 363 U.S. at 597 (“The draftsmen may never
have thought of what specific remedy should be awarded to meet a particular
contingency. Nevertheless, an arbitrator is confined to interpretation and application
of the collective bargaining agreement; he does not sit to dispense his own brand of
industrial justice.”).

       The Union cites Daniel Constr. Co. v. International Union of Operating
Engineers, Local 513, 738 F.2d 296, 300 (8th Cir. 1984), for the proposition that an
arbitrator may craft an award not specifically provided for in a collective bargaining
agreement. While this may be true, the arbitrators here have crafted a remedy
specifically excluded from the CBA and in direct contravention with the parties’ past
practices and intent. We, therefore, conclude that Daniel does not require a different
result in this case.

                                          III.

      We conclude that the arbitrators’ awards failed to draw their essence from the
CBA. The CBA was silent regarding the appropriate remedy for breach of the
overtime provisions, but the arbitrators’ imposed awards that were inconsistent with
the parties’ past practices and their intent as evidenced by their CBA negotiations.
Accordingly, we reverse the district court’s order and remand with instructions to
vacate the awards.

                                          -6-
A true copy.

      Attest:

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

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