Opinion
Case No EDCV 03-00086-VAP (SGLx)
June 5, 2003
Plaintiff Shank/Balfour Beatty and Defendant International Union of Operating Engineers, Local Union No 12's Cross Motions for Summary Judgment came before the Court for hearing on June 2, 2003. After reviewing and considering all papers filed in support of, and in opposition to, the Motions, as well as the arguments advanced by counsel at the hearing, the Court GRANTS Local 12's Motion and DENIES Shank's Motion
I. PLAINTIFF'S ALLEGATIONS
The Metropolitan Water District of Southern California is building a water distribution pipeline and water tunnel, the Inland Feeder Project ("Project"), in San Bernardino and Riverside Counties, California (Compl. ¶ 5.) Several labor organizations, including Defendant International Union of Operating Engineers, Local Union No 12 ("Local 12") entered into the Inland Feeder Project Labor Agreement ("PLA"). (Id.) Plaintiff Shank/Balfour Beatty ("Shank") agreed to abide by the terms and conditions of the PLA during the duration of Shank's work on the Project. (Id. ¶ 6.)The PLA adopts and incorporates certain provisions of the local collective bargaining agreements of the unions which signed the PLA. (Id. ¶ 7) The local collective bargaining agreements are referred to in the PLA as "Schedule A'S" (Id.) The Local 12 2002-2004 Master Labor Agreement is one of the Schedule A's referred to in the PLA. (Id.)
The PLA provides that:
Where a subject covered by the provisions of this Agreement is also covered by a Schedule A, the provisions of this Agreement shall prevail. Where a subject is covered by the provisions of a Schedule A and is not covered by this Agreement, the provisions of the Schedule A shall prevail.
(Id. at 8; Parties' Stipulated Exhibits for Cross-Motions for Summary Judgment, Ex. 2 at 26, PLA Art II, § 4(a))
In 2002, Shank and Local 12 disputed a provision of the PLA regarding the correct rate of pay when two shifts are worked for tunnel work on the Riverside Badlands portion of the Project. The parties submitted this dispute, over whether or not the PLA prevails over certain provisions of the Local 12 Schedule A, to arbitration on August 23, 2002, before Arbitrator Howard S. Block (the "Arbitrator"). (Id. ¶¶ 9, 10.) On November 26, 2002, the Arbitrator issued his final award in favor of Local 12 and against Shank (Id. ¶¶ 11.)
II. PROCEDURAL HISTORY
On January 26, 2003, Shank filed a Complaint to vacate the arbitration award. On May 5, 2003, Local 12 filed a Motion for Summary Judgment ("Local 12 Mot."). On May 6, 2003, Shank filed a Motion for Summary Judgment ("Shank Mot ") On May 19, 2003, Shank filed an Opposition to Local 12's Motion for Summary Judgment ("Shank Opp'n"). On May 19, 2003, Local 12 filed an Opposition to Shank's Motion for Summary Judgment ("Local 12 Opp'n"). On May 23, 2003, Shank filed a Reply. On May 23, 2003, Local 12 filed a Reply
The parties have stipulated to all the facts by filing a "Stipulation of Undisputed Pacts for Cross-Motions for Summary Judgment". The parties also filed "Stipulated Exhibits for Cross-Motions for Summary Judgment."
III. DISCUSSION
A. LEGAL STANDARD
A court must confirm an arbitral award unless the arbitrator has "dispense[d] his own brand of industrial justice" by making an award that does not "draw[ ] its essence from the collective bargaining agreement"United Steelworkers v. Enterprise Wheel Car Corp. 363 U.S 593, 597 (1960); Hawaii Teamsters and Allied Workers Union, Local 996 v. United Parcel Service, 241 F.3d 1177, 1181 (9th Cir. 2001).
"[T]he question of interpretation of the collective bargaining agreement is a question for the arbitrator It is the arbitrator's construction which was bargained for; and so far as the arbitrator's decision concerns construction of the contract, the courts have no business overruling him because their interpretation of the contract is different from his" United Steelworkers, 363 U.S at 599. "The key question is `whether the arbitrator's interpretation could in some rational manner, be derived from the collective bargaining agreement, viewed in light of its language, its content, and any other indicia of the parties' intention.'" Desert Palace. Inc, v Local Joint Executive Board of Las Vegas, 679 F.2d 789, 791 (9th Cir. 1982) (quoting Local 1020, United Brotherhood of Carpenters v, FMC Corp., 658 F.2d 1285, 1294 (9th Cir. 1981)). See also Tristar Pictures, Inc. v. Director's Guild of America, Inc., 160 F.3d 537, 540 (9th Cir. 1998); Van Waters Rogers. Inc v. International Brotherhood of Teamsters/Chauffeurs. Warehousemen and Helpers of America, 56 F.3d 1132, 1135 (9th Cir. 1995).
"If, on its face, the award `represents a plausible interpretation of the contract in the context of the parties' conduct', judicial inquiry ceases and the award must be affirmed," Desert Palace. 679 F.2d at 791 (quoting Edna H. Pagel, Inc. v Teamsters Local 595, 667 F.2d 1275, 1278-79 (9th Cir. 1982)). "The correctness of the arbitrator's reasoning and conclusion `is not relevant to a reviewing court so long as the award complies with these standards.'" Desert Palace, 679 F.2d at 791 (quoting Local 1020. United Brotherhood of Carpenters, 658 F.2d at 1294).
A court will "overturn an arbitrator's award only when it is clear from the arbitral opinion or award that the arbitrator did not base his decision on an interpretation of the collective bargaining agreement, or that he disregarded what the parties put before him and instead followed his own whims or biases." Garvey v Roberts, 203 F.3d 580, 588-89 (9th Cir 2000).
B. DISCUSSION
Shank argues that the Arbitrator "ignored the plain and clear terms of the PLA and decided that the terms of the MLA would prevail. Thus, the award did not draw its essence from the agreement and must be vacated." (Shank Mot. at 1-2.) Shank points to the PLA, Article X, Section 4(a) which states, "If two shifts are worked, each shall consist of eight (8) hours of continuous work exclusive of a one-half (1/2) hour non-paid lunch period" (Id. at 10, citing Parties' Stipulated Exhibits for Cross-Motions for Summary Judgment ("Stipulated Exs "), Ex. 2 at 31.)
The subject language of the PLA, Article X, Section 4(a), in its entirety, is as follows:
Shift work may be performed at the option of the Contractor(s) upon three (3) days' prior notice to the union, unless a shorter notice period is provided in the applicable Schedule A, and shall continue for a period of not less than five (5) working days Saturdays and Sundays, if worked, may be used for establishing the five (5) day minimum work shift. If two shifts are worked, each shall consist of eight (8) hours of continuous work exclusive of a one-half (1/2) hour non-paid lunch period. Any third shift shall consist of six and one half (6 1/2) hours of continuous work exclusive of one-half (1/2) hour non-paid lunch period for eight (8) hours straight time pay without any premium or differential, (For tunnel work, when a three-shift schedule is in effect, all shifts shall be compensated at 8 hours straight time for 7 1/2 hours worked. No wage premium or differential shall be paid for any shift on this schedule)
Stipulated Exs., Ex 2 at 31.
The Arbitrator rejected Shank's argument and found that the PLA language was ambiguous.
The Arbitrator has read, reread and pondered the foregoing language of PLA Article X, Section 4(a) but simply cannot ascertain, with reasonable certainty, what compensation provisions would apply for tunnel work when a two-shift schedule is in effect While the Arbitrator must admire the resourceful arguments advanced by Employer's Counsel on this point, the contract language is simply not clear.
Any doubt as to what the parties intended is clarified by the express language of Schedule "A" provision Article XVI, Section U which, it is noteworthy, is captioned "SPECIAL RULES AND CONDITIONS FOR TUNNELS . . ." Section 9(c) States:
`When two (2) or more shifts are worked for three (3) or more consecutive days, seven and one-half (7 1/2) hours shall constitute a day's work, for which eight (8) hours straight-time at the applicable rate shall be paid. . . .'
The foregoing contract language expressly covers the disputed point in this case, namely, how employees performing tunnel work on a two shift schedule should be compensated
To summarize, the Employer's [Shank's] arguments are based on an inference as to how the disputed point in this case should be resolved. On the other hand, Schedule A deals precisely with the disputed point. Were the Arbitrator to conclude otherwise, he would be rendering the Schedule "A" language superfluous
(Stipulated Exs., Ex. 10 at 82-83)
Here, the Arbitrator determined that the PLA, Article X, Section 4(a) language was ambiguous in regard to what compensation provisions would apply for tunnel work when a two-shift schedule is in effect. He states, "the Employer's arguments are based on an inference as to how the disputed point in this case should be resolved. On the other hand, Schedule A deals precisely with the disputed point." (Id. at 83.)
"As bears repeating, `SO far as the arbitrator's decision concerns construction of the contract, the courts have no business overruling him because their interpretation of the contract is different from his.'"Hawaii Teamsters, 241 F.3d at 1183 (citing United Steelworkers, 363 U.S. at 599) (emphasis added by the Ninth Circuit).
Shank cites Phoenix Newspapers, Inc v. Phoenix Mailers Union Local 752, International Brotherhood of Teamsters. 989 F.2d 1077, 1082-83 (9th Cir. 1993) in support of its contention that Desert Palace does not apply where there is no contractual ambiguity. (Shank Mot. at 9.) In Phoenix Newspapers, the Ninth Circuit held that while the arbitrator's award drew its essence from the collective bargaining agreement, the arbitrators remedy was not one that the parties would have devised based on their bargaining history. Phoenix Newspapers, 989 F.2d at 1082. Hence, Desert Palace was held inapplicable to the arbitrator's remedy. (Id. at 1082-83.) While Shank correctly cites the rule, it does not apply here, where a contractual ambiguity exists.
Similarly, Shank's reliance on S.D Warren Co v. United Paperworkers, 845 F.2d 3 (1st Cir. 1988), cert denied 488 U S. 992 (1988), Georgia Pacific Corp. v Local 21, 864 F.2d 940, 944 (1st Cir. 1984), and Morgan Serv. v. Local 323 Chicago Central States, 724 F.2d 1217, 1224 (6th Cir. 1984) is misplaced None of these cases are controlling, and moreover, the cited language presupposes a lack of contractual ambiguity
In S.D. Warren, twelve employees had been discharged for possession of marijuana on the worksite. (S D. Warren. 845 F.2d at 6) While Rule 7(a) of the collective bargaining agreement allowed for the discharge of an employee for the "[p]ossession, use or sale on Mill property of . . . marijuana," the arbitrator substituted the penalty of suspension. (Id.) The First Circuit held, "In this case the unambiguous language of the management rights' contract and Mill Rule 7(a) does not Contemplate that the arbitrator determine remedies' for those violations." (Id. at 8) (emphasis added).
In Georgia-Pacific Corporation, an employee was discharged for dishonesty when he reported sick for work and instead traveled approximately 150 miles to play in a golf tournament (Georgia-Pacific. 864 F.2d at 942.) Section 22, B 1(5) of the collective bargaining agreement stated, "Any employee may be discharged for just cause Without limiting the generality of the foregoing some of the causes for immediate discharge are . . . dishonesty." (Id.) While the arbitrator concluded that Section 22, B.1(5) was unambiguous on its face, he also concluded that he had "normal authority" to mitigate the discharge penalty because of the employees record. (Id. at 943-44.) The First Circuit concluded that the arbitrator had acted by fiat. "We cannot condone the tergiversation of such plain and unambiguous language (of Section 22, B.1(5)), even by an arbitrator." (Id. at 946)
Finally, in Morgan Services, an employee was discharged for insubordination (Morgan Services. 724 F.2d at 1218.) The employee had refused to conduct daily customer inventories as requested by his supervisor. (Id., at 1218-1219.) Article IX of the collective bargaining agreement stated "[a]ny employee may be discharged without regress [sic] if proven guilty of . . . insubordination." (Id. at 1119) Article XIII featured a "Management Rights" clause, which provided that "an employee will be subject to immediate discharge" for
"[I]nsubordination, including refusal to obey reasonable orders of any supervisor during work time" (Id. at 1119-20.)
The arbitrator found that the employee's actions constituted insubordination. (Id. at 1221) The arbitrator, however, found it impossible to determine the meaning of the phrase "without redress" in Article IX and ordered the employee's reinstatement. (Id. at 1220.) The Sixth Circuit affirmed the district court's holding that "the provision allowing the Company to discharge an employee `without redress' unambiguously vested [the Company] with the sole discretion in determining the proper sanction for insubordination." (Id.)
In addition, as Block's determination is based on an interpretation of the PLA and the Schedule A, it certainly "concerns construction of the contract" (Id.) Accordingly, the Arbitrator's decision and award is not vacated.
C. REQUEST FOR ATTORNEYS PEES
Local 12 argues that it is entitled to attorneys' fees. (Local 12 Mot. at 13-15.) "[A] court may assess attorneys' fees `when the losing party has acted in bad faith, vexatiously, wantonly, or for oppressive reasons'" Petroleum and Industrial Workers v. Western Industrial Maintenance, 707 F.2d 425, 428 (9th Cir. 1983) (quotingAlyeska Pipeline Service Co v Wilderness Society. 421 U.S. 240, 258-259 (1975)) Local 12 argues that Shank's present action to vacate the Arbitrator's award is brought in bad faith, vexatiously or for oppressive reasons (Id. at 14.)
As Local 12 points out, the Ninth Circuit has held that an unjustified refusal to comply with an arbitrator's award may equate to an act taken in bad faith, vexatiously, or for oppressive reasons. Local 12 Mot. at 14 (citing International Union of Petroleum and Industrial Workers v. Western Industrial Maintenance. 707 F.2d 425, 428 (9th Cir. 1983)). In Petroleum and Industrial Workers, the employer ignored the arbitral award. (Petroleum and Industrial Workers, 707 F.2d at 427.) The union then petitioned the district court for confirmation of the arbitration award (Id.) Here, by contrast, Shank brought the case for a court decision (Shank Opp'n at 6.) Shank also cooperated by stipulating to the record. (Id.) Shank has not undertaken acts that evidence bad faith.
Shank asserts that attorneys' fees cannot be awarded without a specific finding of bad faith Shank Opp'n at 5 (citing Fink v. Gomez, 239 F.3d 989, 992 (9th Cir. 2001)) In fact, the Ninth Circuit has held, "sanctions are available if the court specifically finds bad faith or conduct tantamount to bad faith. Sanctions are available for a variety of types of willful actions, including recklessness when combined with an additional factor such as frivolousness, harassment, or an improper purpose" Fink. 239 F.3d at 994.
Local 12 emphasizes that "this is the second time that Shank sought judicial review of an arbitrator's decision" regarding an interpretation of the PLA. (Local 12 Mot at 14.) The first case, however, concerned an entirely separate dispute, i.e., the number of Engineer — Oilers required to be assigned to each of two cranes operated by Shank.Shank/Balfour Beatty v International Union of Operating Engineers, Local Union No. 12, No. 99-439, 2000 WL 33777677, at *1 (C.D. Cal Oct. 2, 2000)
The Court finds that Shank did not act in bad faith, vexatiously, or for oppressive reasons in bringing this action to vacate the Arbitrator's award. Shank's position, while unavailing, was not frivolous, and there is no evidence the action was brought to harass Local 12 or for any other improper purpose Local 12's request for attorneys fees is denied.
IV. CONCLUSION
For the reasons above, Local 12'S Motion for Summary Judgment is granted, and Shank's Motion for Summary Judgment is denied. Local 12's request for attorneys fees is denied.