Court Opinion

ID: 2684137
Source: CourtListenerOpinion
Date Created: 2014-07-17 04:00:52.970414+00
Date Added: 2024-06-11T13:13:48.858710
License: Public Domain

Not for Publication in West's Federal Reporter

          United States Court of Appeals
                        For the First Circuit

Nos. 13-1468, 13-1547

 RICHARD P. GAMBINO, as he is Administrator, LOCAL 103, I.B.E.W.
HEALTH BENEFIT PLAN; ELECTRICAL WORKERS' PENSION FUND, LOCAL 103,
  I.B.E.W.; ELECRICAL WORKERS' DEFERRED INCOME FUND, LOCAL 103,
 I.B.E.W.; JOINT APPRENTICESHIP AND TRAINING FUND; INTERNATIONAL
      BROTHERHOOD OF ELECTRICAL WORKERS LOCAL 103 OF BOSTON,
      MASSACHUSETTS; LAWRENCE J. BRADLEY, as he is Executive
      Secretary-Treasurer, NATIONAL ELECTRICAL BENEFIT FUND,

             Plaintiffs, Appellees/Cross-Appellants,

                                    v.

    ADA ALFONSO d/b/a ALFONSO ELECTRICAL SERVICES and ALFONSO
           ELECTRICAL CO.; OLD GOAT ENTERPRISES, INC.,

             Defendants, Appellants/Cross-Appellees.

          APPEALS FROM THE UNITED STATES DISTRICT COURT
                 FOR THE DISTRICT OF MASSACHUSETTS
            [Hon. Patti B. Saris, U.S. District Judge]

                              Before
                     Thompson, Circuit Judge,
                   Souter,* Associate Justice,
                    and Stahl, Circuit Judge.

          Stephen P. Kolberg, with whom Kolberg & Schneider, P.C.
was on brief, for appellants/cross-appellees.
          Indira Talwani, with whom Ira Sills, Alexander
Sugerman-Brozan, Kathryn S. Shea, and Segal Roitman LLP were on
brief, for appellees/cross-appellants.

     *
       Hon. David H. Souter, Associate Justice (Ret.) of the
Supreme Court of the United States, sitting by designation.
June 20, 2014

     -2-
          SOUTER, Associate Justice. This appeal is from a district

court order confirming an arbitration award against an employer who

failed to make contributions to benefit funds as required by the

governing collective bargaining agreement with a labor union. We

affirm.

                                I.

          International Brotherhood of Electrical Workers Local 103

("Union") is a union of electrical and construction laborers in

eastern Massachusetts. Employers who are party to a Collective

Bargaining Agreement ("CBA") with the Union must contribute to

funds ("Funds") that provide benefits to union members. Ada Alfonso

is one of those employers.

          The Funds sued Alfonso1 in federal court, alleging

delinquency in making contributions. While that action was pending,

the Union invoked the CBA to resolve the same dispute before a

joint labor-management arbitration committee ("Committee"). The

Committee ordered an award in the Union's favor.

          Alfonso filed a motion in court to vacate the arbitration

award, to which the Union responded by bringing its own judicial

     1
       The action was brought against Ada Alfonso, doing business
as Alfonso Electrical Services and Alfonso Electrical Company, and
against Old Goat Enterprises, Inc., of which Alfonso is the
majority owner and president. Alfonso is a signatory to the CBA and
Old Goat, while not a signatory, agrees that it is bound by it. The
parties agree that the resolution of this case will have identical
effect on each defendant. For ease, we refer to the defendants
collectively as "Alfonso."

                               -3-
action to confirm it. Thereafter, the actions by the Funds and the

Union were consolidated.

            The district court initially granted Alfonso's motion to

vacate the award, ruling that the Committee was biased because it

included several individuals who were also trustees of the Funds.

The court's decision rested in part on the fact that the Union had

presented no evidence that Alfonso knew in advance about the

Committee's membership. Later, however, the district court granted

the Union's motion for reconsideration, finding that new evidence

demonstrated that, when Alfonso agreed to the CBA arbitration

procedure, she had indeed known of the Committee's potential

composition. The court thus confirmed the arbitration award in a

judgment against Alfonso, who appealed. The Union cross-appealed on

an issue we find it unnecessary to reach, as explained in footnote

6, below.

                                 II.

            We review de novo the district court's decision to

confirm the arbitration award. Doral Fin. Corp. v. Garcia-Velez,

725 F.3d 27, 31 (1st Cir. 2013). Against that decision, Alfonso

argues that (i) the CBA does not permit arbitration of the type of

dispute present here; (ii) the Committee's decision was not final

and binding; (iii) the Union waived its right to arbitration; and

                                 -4-
(iv) she did not consent to a proceeding with biased arbitrators.

None of these challenges has merit.2

                                  A.

            Alfonso   contends   that   the   following   arbitration

provisions of the CBA are too narrow to embrace the dispute in this

case.

            1.4 During the term of this Agreement, there
            shall be no stoppage of work either by strike
            or lockout because of any proposed change(s)
            in this Agreement or dispute over matters
            relating to this Agreement. All such matters
            must be handled as stated herein.

            1.5   There   shall  be    a  Labor-Management
            Committee3 of three (3) representing the Union
            and three (3) representing the Employers. It
            shall meet regularly at such stated times as
            it may decide. However, it shall also meet
            within forty-eight (48) hours when notice is
            given by either party. It shall select its own
            Chairman and Secretary. The Local Union shall
            select the Union representatives and the
            Chapter4    shall   select   the    management
            representatives.

            1.6 All grievances or questions in dispute
            shall be adjusted by the duly authorized

        2
       If we were to vacate the arbitration award, Alfonso argues
that she should not have to resubmit her dispute to what in her
view would be another biased Committee. Because we affirm the
confirmation of the award, we do not reach this argument.
        3
       Elsewhere the CBA refers to a "Joint Conference Committee."
The parties' use of the terms implies that the Labor-Management
Committee and the Joint Conference Committee are one and the same.
        4
       "The Chapter" refers to Electrical Contractors Association
of Greater Boston, Inc., Boston Chapter, National Electrical
Contractors Association ("NECA"). We refer to the Chapter as
"NECA."

                                 -5-
          representatives of each of the parties to this
          Agreement. In the event that these two are
          unable to adjust any matter within forty-eight
          (48) hours, they shall refer the same to the
          Labor-Management Committee.

          1.7 All matters coming before the Labor-
          Management Committee shall be decided by
          majority vote. Four (4) members of the
          Committee, two (2) from each of the parties
          hereto, shall be a quorum for the transaction
          of business but each party shall have the
          right to cast the full vote of its membership
          and shall be counted as though all were
          present and voting.

          1.8 Should the Labor-Management Committee fail
          to agree or to adjust any matter, such shall
          then be referred to the Council on Industrial
          Relations for the Electrical Contracting
          Industry for adjudication. The Council's
          decisions shall be final and binding.

According to Alfonso, the reference in section 1.4 to disputes over

"matters relating to this Agreement" covers only interpretive

disagreements about the very terms of the CBA, and does not extend

to a collection dispute like this one. She points to a section of

the document that imposes the CBA's terms on non-signatories whom

employers might oversee, such as subcontractors: "As a remedy for

violations of this section, the Labor-Management Committee . . .

[is] empowered . . . to require an Employer to . . . pay into the

affected . . . funds . . . any delinquent contributions to such

funds which have resulted from the violations." Alfonso says that

if the CBA's general arbitration provisions were sufficiently broad

to embrace all collection disputes there would have been no need to

                               -6-
empower the Committee explicitly to award delinquent contributions

to remedy violations "of this section."

           Alfonso's argument against imputing redundancy to the CBA

is not, however, the only interpretive guide at hand. This case

arises under section 301 of the Labor Management Relations Act

("LMRA"), 29 U.S.C. § 185, and in section 301 cases the Supreme

Court has directed that, if there is any doubt, an arbitration

clause should be interpreted to embrace a particular dispute. See

United Steelworkers of Am. v. Warrior & Gulf Nav. Co., 363 U.S.

574, 582-83 (1960); see also AT & T Techs., Inc. v. Commc'ns

Workers of Am., 475 U.S. 643, 650 (1986) ("[T]here is a presumption

of arbitrability . . . ."). Here, we can hardly say that the text

of the CBA commands Alfonso's interpretation beyond all doubt. On

its face, the phrase "matters relating to this agreement" in

section 1.4 can cover disagreements stemming from the contractual

relationship of parties to the CBA. And because the CBA is the

source of employers' obligations to contribute to the Funds, such

disagreements would seem to include contribution disputes.

           Thus,    both        the   statutory    presumption     and    the

comprehensive language of the arbitration clause itself point to

arbitrability in this instance, a conclusion buttressed by the CBA

article   devoted   to     the    Funds   themselves,    which   warns   that

consequences will result "[t]o the extent an individual Employer

becomes   delinquent,      as    determined   by   the   Joint   Conference

                                      -7-
Committee." Accordingly, the specific language Alfonso points to is

most harmoniously read, not as defeating arbitrability here but as

guaranteeing it elsewhere as a belt-and-suspenders provision,

making it clear that even if an employer tries to circumvent its

obligations under the CBA through, for example, subcontracting,

resultant losses to the Funds are remediable through arbitration.

Hence, we think the dispute in this case was arbitrable under the

CBA.

                                       B.

            Alfonso argues that the Committee's award was not fit for

enforcement because it was not final and binding, a conclusion she

rests on the fact that in referring to Committee decisions, the CBA

does not use the phrase "final and binding." Against this silence,

she contrasts language from the CBA elsewhere, providing that

"[s]hould the Labor-Management Committee fail to agree or to adjust

any    matter,   such   shall   then   be    referred   to   the   Council   on

Industrial Relations for the Electrical Contracting Industry for

adjudication. The Council's decisions shall be final and binding."

And she claims support for her reading in what she sees as the

character of the Committee's procedures, being so cursory that they

must not have been meant to produce final, binding decisions.

            But whether the Committee's award is final and binding

turns on whether Committee arbitration "is the parties' chosen

instrument for the definitive settlement of grievances under the

                                       -8-
[CBA]." Elec. Contractors Ass'n of Greater Bos., Inc. v. Local

Union 103, Int'l Bhd. of Elec. Workers, 458 F.2d 590, 592 (1st Cir.

1972) (emphasis omitted) (quoting Gen. Drivers, Warehousemen &

Helpers, Local Union No. 89 v. Riss & Co., 372 U.S. 517, 519 (1963)

(per curiam)). And that choice need not be the product of any magic

words. See Riss & Co., 372 U.S. at 519 ("It is not enough that the

word 'arbitration' does not appear in the collective bargaining

agreement . . . .").

          We think that the CBA reveals the parties' intent to use

Committee arbitration for the definitive settlement of grievances

such as the one here, by words pointing adequately to the finality

of a Committee decision. As quoted before, section 1.4, which

appears under the heading "Grievances - Disputes," provides that

"[a]ll . . . matters [relating to the CBA] must be handled as

stated herein." The subsequent sections, also reproduced above,

proceed to spell out the grievance hierarchy: disputes are to be

resolved in the first instance by representatives of each party,

failing which the Committee is to try its hand, followed by the

Council if necessary. If we were to accept Alfonso's position,

binding arbitration awards could result only when the Committee

fails to resolve a matter, necessitating review by the Council;

matters that the Committee succeeded in resolving would never reach

finality. That would be so absurd that the more likely reading of

the "final and binding" language describing the Council's decisions

                               -9-
does not imply that decisions reached by the other grievance bodies

are tentative, but instead stresses the administration hierarchy:

the Council is the end of the road. Thus the mere availability of

a higher order procedure was not meant to render the process one

step down impotent when it produces a decision.

          We see nothing to disturb this conclusion in what Alfonso

calls the cursory treatment of her case by the Committee. She

directs us to no authority, and we have found none, to support her

apparent position that grievance procedures must approximate those

of the courtroom for them to produce binding results. Again, the

touchstone is the parties' intent to use certain processes to

resolve disputes, Elec. Contractors Ass'n, 458 F.2d at 592, and

Alfonso has provided no indication that she did misunderstand or

could   have   misunderstood   the        character   of   the   Committee's

proceedings when she became party to the CBA.

                                     C.

          Alfonso says that the Union waived its right to arbitrate

by first having the dispute litigated in court. Of course, she

recognizes that it was the Funds, not the Union, that brought the

initial judicial action, so she claims an identity of interest

between the two, and argues that individuals who drove the Funds'

litigation were also instrumental in the Union's decision to call

for arbitration.

                                 -10-
            It is true that by engaging in litigation, a party may

waive its right to arbitrate. See Creative Solutions Grp., Inc. v.

Pentzer Corp., 252 F.3d 28, 32 (1st Cir. 2001). To determine

whether waiver has occurred, we consider, among other things,

whether a party has actually participated in any preexisting

litigation and whether the opposing party has been prejudiced. See

id. Doubts are to be resolved against a finding of waiver. See id.

            Here, there is a basis for doubt, at the least. The right

to arbitrate springs from the CBA, and because the CBA is an

agreement between employers and the Union, not the Funds, the Funds

lacked any right to call for arbitration. And Alfonso has directed

us to no authority, nor have we found any, to support her argument

that the Funds' decision to litigate waived the Union's ability to

arbitrate.5 In any event, there is no need for us to explore when,

if ever, one party's litigation efforts will waive another party's

arbitration rights, since the record before us fails to show any

prejudice    to   Alfonso   from   the    sequential   character   of   the

proceedings. Indeed, the Funds seem to have protected Alfonso from

the potential prejudice of inconsistent or duplicative obligations

by agreeing to be bound by the results of the Union's arbitration

proceedings.

     5
       The sole case she cites, Taylor v. Sturgell, does not
address waiver of arbitration rights; instead, it holds that there
is no "virtual representation" exception to the general rule
against nonparty claim preclusion. 553 U.S. 880, 904 (2008).

                                   -11-
                                      D.

           Alfonso claims that the award should be vacated because

she did not consent to arbitrators of a sort she characterizes as

biased. Under the CBA, the Union and NECA (which represents the

employers) each has authority to select three arbitrators for the

Committee. In Alfonso's case, two of those selected by the Union

and one of the arbitrators selected by NECA were also trustees of

the Funds. According to Alfonso, these three arbitrators were

biased, as being subject to a statutorily imposed fiduciary duty to

act   solely   in   the   interest   of     the   Funds'   participants   and

beneficiaries. See Employee Retirement Income Security Act of 1974

("ERISA"), 29 U.S.C. § 1104(a)(1).

           The parties agree that, although this action arises under

the LMRA, the Federal Arbitration Act ("FAA"), 9 U.S.C. § 1 et

seq., provides guidance on the issue of arbitrator neutrality.

Under the FAA, an arbitration award may be vacated on the ground of

"evident partiality . . . in the arbitrators," 9 U.S.C. § 10(a)(2),

understood as requiring "more than just the appearance of possible

bias," but less than bias in fact, JCI Commc'ns, Inc. v. Int'l Bhd.

of Elec. Workers, Local 103, 324 F.3d 42, 51 (1st Cir. 2003). It

arises where "a reasonable person would have to conclude that an

arbitrator was partial to one party to an arbitration." Id.

(quoting Nationwide Mut. Ins. Co. v. Home Ins. Co., 278 F.3d 621,

626 (6th Cir. 2002)(internal quotation marks omitted)).

                                     -12-
          But parties can agree to have partisan arbitrators. See,

e.g., Delta Mine Holding Co. v. AFC Coal Props., Inc., 280 F.3d

815, 821 (8th Cir. 2001) (cited by JCI Commc'ns, 324 F.3d at 51).

And once parties have agreed to a method of arbitration, they can

demand no more impartiality than the degree inherent in that

method. See, e.g., Sheet Metal Workers Int'l Ass'n, Local No. 162

v. Jason Mfg., Inc., 900 F.2d 1392, 1398 (9th Cir. 1990); Merit

Ins. Co. v. Leatherby Ins. Co., 714 F.2d 673, 679 (7th Cir. 1983);

Nationwide Mut. Ins. Co. v. First State Ins. Co., 213 F. Supp. 2d

10, 17 (D. Mass. 2002) (all cited by JCI Commc'ns, 324 F.3d at 51).

          This law is key. Assuming, without deciding, that the

trustees of the Funds on the Committee were subject to evident

partiality,6 the short answer is that Alfonso consented to a

process subject to this level of bias. It is true, as Alfonso

notes, that the CBA is silent as to the composition of the

Committee aside from providing that both the Union and NECA "shall

select . . . representatives." Contrary to Alfonso's protest,

     6
       The Union would prefer that we not make this assumption. In
fact, in what it characterized as "an abundance of caution," the
Union cross appealed precisely because it wanted us to vacate the
district court's finding of evident partiality, presumably worried
about the impact this finding may have on future cases. We decline
to take up the issue, however, for its resolution could not alter
our disposition of this case, and the district court's finding of
evident partiality has no binding precedential effect outside of
this litigation. See Am. Elec. Power Co. v. Connecticut, 131 S. Ct.
2527, 2540 (2011) ("[F]ederal district judges, sitting as sole
adjudicators, lack authority to render precedential decisions
binding other judges, even members of the same court.").

                               -13-
however, the word "select" does not, standing alone, imply that the

representatives selected will be impartial, and although the CBA

itself did not give Alfonso notice of the Committee's composition,

other things did. The Union's constitution calls for the Union's

business manager both to serve as a trustee of the Funds and to

perform all duties specified in the Union's bylaws, including

sitting   as   a   member   on   all   employer-Union   committees.   These

documents, in other words, guarantee that one of the Union's

representatives on the Committee will also be a trustee of the

Funds. Alfonso has been a member of the Union since 2000,7 six

years before she became party to the CBA as an employer, and

although she contends that she never received copies of the Union's

constitution or bylaws, she does not dispute that these documents

were available to her.8

           Similarly, on the management side, since 2006, the year

Alfonso became an employer party to the CBA, NECA has appointed the

same individual to serve both as a trustee of the Funds and as a

representative to the Committee. There is nothing in the record to

rebut an affidavit of NECA's executive director saying that Alfonso

     7
       As the district court noted, it may seem strange that
Alfonso is both a member of the Union and an employer, but the
parties do not appear to dispute this point.
     8
        The Union's constitution also calls for the Union's
president to act as an ex-officio member of all committees, which
would include the Labor-Management Committee. And, while no
document calls for the Union's president to serve as a trustee of
the Funds, he has done so since 1996.

                                       -14-
would have had knowledge of these appointments: she was part of

NECA's membership committee and, through Old Goat, was a voting

NECA member until 2010.

          In sum, the record before us reflects that when Alfonso

became an employer signatory to the CBA, and so agreed to resolve

disputes through Committee arbitration, she had notice that the

Committee could, and indeed would, contain some trustees of the

Funds. Having agreed to that method for resolving disputes, she can

demand no more impartiality than naturally comes with it.9

     9
       At times, Alfonso's bias argument slides into one sounding
in a kind of administrative due process. She complains that the
arbitration proceeding lasted less than an hour and consisted
almost entirely of party argumentation and document submission, as
opposed to witness testimony with its accompanying opportunity for
cross examination. Similarly, according to Alfonso, the Committee
refused to require the Union to produce documents she had
subpoenaed and witnesses she had summonsed.

     It is true that "[a]rbitration proceedings must meet the
minimal requirements of fairness," which include "a hearing on the
evidence." Ramirez-De-Arellano v. Am. Airlines, Inc., 133 F.3d 89,
91 (1st Cir. 1997) (internal quotation marks omitted). And, under
the FAA, an arbitration award may be vacated if the arbitrators
"refus[ed] to hear evidence pertinent and material to the
controversy." 9 U.S.C. § 10(a)(3). But "[w]e cannot vacate an
arbitral award based on sheer speculation alone." Garcia-Velez, 725
F.3d at 33.

     Alfonso leaves us to speculate. She does not explain what
further information could have come to light during the proceedings
that would have altered the Committee's award, and she points to
nothing in the record that causes us to doubt the adequacy of her
hearing.

                               -15-
                              III.

          The district court's order confirming the arbitration

award and the corresponding judgment against Alfonso are AFFIRMED.

                              -16-