Opinion
Civil Action No. 03-4968.
June 9, 2004
ORDER-MEMORANDUM
AND NOW, this day of June, 2004, upon consideration of the parties' cross-motions for summary judgment (Docket Nos. 18, 20), and all related submissions, IT IS HEREBY ORDERED that said crossmotions are DENIED. IT IS HEREBY FURTHER ORDERED that the abovecaptioned action is DISMISSED in accordance with the complete arbitration rule. The Clerk of Court shall CLOSE this case statistically.
The Trustees of the University of Pennsylvania ("University") brought this action against the Teamsters Union Local 115 ("Union") to vacate an arbitration award pursuant to § 301 of the Labor Management Relations Act ("LRMA"). The Union filed a counter-claim seeking enforcement of the arbitration award. After conducting discovery over a period of several months, the parties filed crossmotions for summary judgment. The Court scheduled oral argument on the cross-motions for June 2, 2004. In anticipation of the June 2, 2004 oral argument, the Court ordered the parties to file supplemental briefs addressing the application of the complete arbitration rule to this action. Both parties thereafter filed the requested supplemental briefing and oral argument on the crossmotions was held as scheduled. For the reasons which follow, the Court denies the cross-motions and dismisses this action in accordance with the complete arbitration rule.
The arbitration at issue in this case stems from a grievance filed by the Union, on behalf of Gallery Attendants working in the University's Museum of Archaeology and Anthropology ("Museum"), regarding the University's alleged elimination of overtime opportunities for the Gallery Attendants. The grievance proceeded to arbitration pursuant to the parties' collective bargaining agreement. The Arbitrator determined that the University violated the terms of the parties' collective bargaining agreement "by eliminating overtime opportunities for Gallery Attendants/Guide bargaining unit employees at the University's Museum on or about October 23, 2000 and continuing to present." (Univ. Ex. H-17 at 18.) The Arbitrator ordered the University to "resume scheduling Gallery Attendants for event overtime in the same manner [as] prior to October 23, 2000." (Id.) The Arbitrator also noted in his decision that he "still has not received enough information to factor a proper solution for the overtime lost by the bargaining unit employees and feels that this would best be accomplished by both parties reviewing the past records jointly and arriving at a conclusion to resolve this issue." (Id.) The Arbitrator also expressly "retain[ed] jurisdiction of the [lost overtime] issue for a period of ninety (90) days following the issuance of this award." (Id.) The Arbitrator's Award was transmitted to the parties on August 4, 2003. On September 3, 2003, the University filed the instant action.
The complete arbitration rule is "a prudential rule against a district court's reviewing an arbitration award that fails to resolve all issues presented in the arbitration proceeding."Union Switch Signal Div. Am. Standard Inc. v. United Elec. Radio and Mach. Workers of Am., Local 610, 900 F.2d 608, 610 (3d Cir. 1990). The Union Switch court discussed the policy underlying the complete arbitration rule:
The large number of cases presenting arbitration awards that defer determination of the remedy indicates that this is a common practice among arbitrators. In principle, there is nothing wrong with this practice. It is entirely reasonable for an arbitrator to `call time out' during an arbitration in the hope that a partial resolution will inspire the parties to work out their remaining differences on their own, thereby avoiding the time and expense of additional arbitration. But we must take care to ensure that the parties do not use these `time outs' as an opportunity to rush to court, either to preserve what they have just won, or (more often) to forestall a process that is not turning out as they might have wished. If this is allowed, the arbitrator's time will only be spared, if at all, at the great expense of vastly prolonged and unnecessary litigation, which is of course precisely what arbitration exists to avoid.Id. at 611. Union Switch also noted that a salutary effect of the complete arbitration rule is the avoidance of piecemeal litigation. Id.
Some courts have found that where an arbitrator awards back pay without specifying the amount and retains jurisdiction to resolve any remaining or unforeseen issues as to such relief, the reservation of jurisdiction does not render the arbitrator's decision nonfinal. See, e.g., Dreis Krump Mfg. Co. v. Int'l Ass'n of Machinists and Aerospace Workers, 802 F.2d 247, 251 (7th Cir. 1986) (referring to calculation of back pay as a ministerial task). However, the unresolved remedial issue over which the Arbitrator retained jurisdiction in the instant case does not merely involve a simple calculation of back pay. In fact, the Arbitrator did not even determine that back pay was the appropriate remedy for the overtime opportunities lost by the Gallery Attendants. Instead, the Arbitrator ordered the parties to craft "a proper solution for the overtime lost." (Univ. Ex. H-17 at 18.) As the University pointed out in its briefs and during oral argument, back pay is only one of many potential remedies for lost overtime opportunities. Indeed, while the Union has advocated a back pay remedy, the University maintains that providing the Gallery Attendants with future overtime opportunities is a more appropriate solution. The parties' task of reaching a "proper solution" for overtime lost by the Gallery Attendants is further complicated by their serious disagreement as to whether the Gallery Attendants were even deprived of overtime opportunities in the first place. Thus, in the realistic event that the parties do not jointly negotiate a proper solution for the overtime opportunities lost by the Gallery Attendants, the Arbitrator would, pursuant to his express retention of jurisdiction, be authorized to resolve significant remedial issues. Courts have not hesitated to invoke the complete arbitration rule where, as here, "the determination of damages d[oes] not merely involve a simple calculation, but require[s] resolution of significant issues." Local 36, Sheet Metal Workers Int'l Ass'n, AFL-CIO v. Pevely Sheet Metal Co., Inc., 951 F.2d 947, 949 (8th Cir. 1992); see id. (applying complete arbitration rule where the arbitrator still had to, inter alia, take evidence relating to damages and devise a method to calculate damages); cf. In re Abbotts Dairies of Pennsylvania, Inc., Bankr. Nos. 84-02623F, 84-0624F, 84-0625F, 1994 WL 603143, at *1 (E.D. Pa. Oct. 31, 1994) (affirming bankruptcy court's application of complete arbitration rule because "there remain serious differences of opinion regarding the debtors' obligations" and "the parties cannot agree on the amounts due"). The Court further notes that the arbitration award at issue in the instant action is no more complete than the award at issue inUnion Switch. In Union Switch, the arbitrator sustained the grievance, ordered make whole relief, directed the parties to negotiate concerning that relief, and retained jurisdiction to resolve any remedial disputes. Union Switch, 900 F.2d at 609. While the Union Switch panel ultimately did not apply the complete arbitration rule because of the unique procedural posture of the case, the court did make clear that the lower court "committed serious error" by entertaining an action arising from an incomplete arbitration award. Id. at 610.
In Union Switch, the employer initially filed a complaint in federal district court seeking to vacate an arbitration award in favor of the union. The court granted summary judgment in favor of the union. No appeal from this order was taken. After the parties in were unable to reach an agreement as to the make whole relief ordered by the arbitrator, the union indicated that the dispute should be resubmitted to the arbitrator. The employer refused, arguing that the dispute as to the calculation of make whole relief constituted a separate grievance, and that the arbitrator's jurisdiction ended when he issued his opinion and award, despite his attempt to retain jurisdiction. The union thereafter filed a pleading in federal district court, bearing the same caption as the original action, entitled "Union's Motion to Remand to Arbitrator." The court denied this motion and the union appealed. Because the Union Switch panel was required to treat as final the unappealed judgment of the district court on the employer's action to vacate the arbitration award, the court had "no choice" but to "proceed to address the Union's `Motion to Remand'" on appeal. Id. at 610.
The applicability of the complete arbitration rule to the instant action is reinforced by the policies underlying the rule. A decision by this Court granting the University's motion for summary judgment and vacating the Arbitrator's liability determination could well produce piecemeal litigation. Indeed, the Court's decision could subsequently be reversed by the United States Court of Appeals for the Third Circuit ("Third Circuit") on appeal, in which case the matter would be remanded to the Arbitrator for resolution of the remedial issues left open by the Award. Either party could thereafter file another action in this Court for review of the Arbitrator's final remedial determination. See id. at 610-11 (finding "no legitimate reason for allowing such piecemeal litigation" as contemplated by the scenario set forth above) (quoting Pub. Serv. Elec. Gas Co. v. Sys. Council U-2, 703 F.2d 68, 70 (3d Cir. 1983)). Similarly, if the Court presently were to confirm the Award as rendered and remand the matter to the Arbitrator for further proceedings on the lost overtime issue, either party could elect to repetition the Court for review of the remedial determination ultimately made by the Arbitrator. On the other hand, by dismissing the instant action in accordance with the complete arbitration rule, "the arbitration would . . . continue through to a determination of the appropriate . . . relief," at which point this Court, if a new action were filed, "would be in a position to resolve all of the issues presented by this nexus of operative facts." Id. at 611 (emphasis in original). Furthermore, application of the complete arbitration rule to the instant case serves the rule's expressed policy of preventing parties from using an arbitrator's "entirely reasonable" decision to "call time out" as an opportunity to seek judicial intervention. Id. While the University's premature action would have ideally been disposed of several months ago upon a motion to dismiss, see id. at 614, dismissal at this juncture will avoid the investment of additional time and expense in unnecessary litigation, which "is of course precisely what arbitration exists to avoid." Id. at 611.
The University challenges the continued vitality of the complete arbitration rule in the Third Circuit. The University asserts that courts in this Circuit have never once invoked the rule to dismiss an action involving a challenge to an arbitration award, even in cases where its application would be expected. However, none of the four cases cited by the University support this proposition. The University misreads Teamsters Local 312 v. Matlack, Inc., 118 F.3d 985 (3d Cir. 1997), as entertaining an action to vacate an arbitration award where the arbitrator had not yet resolved the substantive issues before him. However, the arbitrator in Matlack had, in fact, rendered a final decision on all of the issues before him, including those pertaining to the substance of the grievance; indeed, the court vacated the arbitrator's decision on the substantive issues based on fundamental procedural irregularities. In Tenet Healthsystem MCP, LLC v. Pennsylvania Nurses Ass'n Local 712, Civ. A. No. 01-2201, 2002 WL 4637 (E.D. Pa. Dec. 20, 2001), the court addressed the merits of an action to vacate an arbitration award even though the arbitrator's decision did not specify the amount of back pay awarded. However, as discussed above, arbitration awards that leave unresolved tasks of a ministerial nature, such as the calculation of back pay, are considered sufficiently final for judicial review. In any event, there is no indication inTenet Healthsystem that the arbitrator had expressly retained jurisdiction to resolve any back pay disputes of the parties. In Super Fresh Food Markets, Inc. v. United Food Commercial Workers Local Union 1776, 249 F. Supp.2d 546 (E.D. Pa. 2003), the court addressed the merits of a petition to vacate an arbitration award where the arbitrator had retained jurisdiction over the grievance for six months to ensure that the parties were complying with the remedies in the award. However, the arbitrator's award in Super Fresh was final because she had fully resolved the issues presented in the grievance by finding a violation of the collective bargaining agreement and specifically ordering remedies. In Philadelphia Newspapers, Inc. v. Newspaper Guild of Greater Philadelphia, Local 10, Civ. A. No. 86-6192, 1987 WL 17744 (E.D. Pa. Sept. 28, 1987), the court entertained cross-motions for summary judgment regarding the enforcement of an arbitration award even though the arbitrator had retained jurisdiction to resolve any disputes concerning the implementation of the award. However, as in Super Fresh, the arbitration award in Philadelphia Newspapers was final because the arbitrator found a violation of the collective bargaining agreement and ordered a complete remedy; the retention of jurisdiction related only to the implementation of the final award.
While the Court has found only one post-Union Switch case from this Circuit that applied the complete arbitration rule,see Abbotts Dairies, 1994 WL 60314 (cited supra), the Court has no reason to doubt its continued validity, especially givenUnion Switch's recognition that the rule is grounded in "the consistent teachings of this court and . . . every other Court of Appeals that has considered . . . [the] issue." 900 F.2d at 610; see also Dluhos v. Strasberg, 321 F.3d 365, 369-70 (3d Cir. 2003) (stating that "the essence of arbitration . . . is that, when the parties agree to submit their disputes to it, they have agreed to arbitrate these disputes through to completion") (quotingHarrison v. Nissan Motor Corp., 111 F.3d 343, 350 (3d Cir. 1997)) (emphasis added). Indeed, the dearth of cases from this Circuit addressing the complete arbitration rule bears out theUnion Switch panel's belief that "the opinions in this case will have an educational function so that what happened here, an apparent nonrecognition of the finality problem, will not be repeated." Id. at 614.