Opinion
No. 4:02CV00309 RWS
January 14, 2003
MEMORANDUM AND ORDER
Teamsters Local Union No. 688 and SuperValu are parties to a collective bargaining agreement (cba). In accordance with the cba, the parties submitted a dispute concerning the terms of the cba to an arbitrator. The arbitrator found in favor of Supervalu. The Union then filed this action on the ground that the arbitrator failed to draw the essence of his decision from the cba. The Union also alleges that the arbitrator engaged in affirmative misconduct when he failed to consider certain evidence. The parties have filed cross-motions for summary judgment and the facts are undisputed.
Because the arbitration award draws its essence from the cba and the arbitrator did not act improperly, the Court will enter summary judgment in favor of Supervalu and against the Union.
I.Facts
Supervalu is a grocery retail wholesaler and distributor. Supervalu has a warehouse distribution center in St. Louis, Missouri. The Union is a collective bargaining representative for Supervalu's warehouse employees at the St. Louis center. Supervalu and the Union entered into a collective bargaining agreement (the "cba"). The term of the cba is from June 23, 1998, through June 30, 2003.
The St. Louis warehouse center provided services to both Shop `N Save retail outlets, which are owned by Supervalu, and independent retail outlets located in the St. Louis region. In February of 2001, Supervalu announced its decision to discontinue servicing independent retail outlets from its St. Louis warehouse. The St. Louis warehouse would instead become solely dedicated to servicing Supervalu's Shop `N Save facilities. All independent retail outlets in the St. Louis area who wished to continue business with Supervalu would be serviced from Supervalu's warehouse located in Champaign, Illinois. As a result of this restructuring, Supervalu placed twenty (20) employees of the St. Louis warehouse on layoff status in April 2001.
In March 2001, the Union filed a grievance alleging that Supervalu had transferred the servicing of independent retail outlets from the St. Louis warehouse to the Champaign, Illinois warehouse which resulted in a violation of Article 12 of the cba. Article 12, section 2, provides in relevant part as follows:
Section 2(a): All merchandise for resale which is delivered to a retail outlet owned by the Employer ("owned means more than fifty percent ownership) in the Greater St. Louis Area, shall be delivered from the warehouse(s) of the Employer covered by the Collective Bargaining Agreement
(b) Except as provided in paragraph (a) hereof, the Employer may discontinue servicing a retail outlet at any time, but if he desires to transfer the servicing of a retail outlet to a warehouse(s) of the Employer not covered by this Collective Bargaining Agreement such transfer shall be subject to the provisions of paragraph (f) of this section
(c) All merchandise for resale which is delivered by the Employer to a retail outlet within the Greater St. Louis Area shall be delivered from the warehouse(s) of the Employer covered by this Collective Bargaining Agreement.
(f) Specific waivers and exceptions to the requirements of this Section may be made by mutual agreement between the Employer and the Union at any particular warehouse operation based on sound business consideration and providing there will be no reduction in the work force as a result. The above specific waivers and exceptions will be reduced to writing and signed by the Employer and the Union.
Section 3: Section 2 of this Article 12 shall not apply to an Employer so long as there is no reduction in the Employer's present work force as a result of any action which would otherwise have been limited by Section 2.
Supervalu denied the Union's grievance. Supervalu claimed that they did not transfer any work to the distribution center in Champaign, Illinois. Supervalu also claimed that Article 12, section 2 was not applicable because the discontinuation of services to independent retailers did not result in a reduction to the "present work force", as required by Article 12, section 3.
In accordance with Article 7, Section 6 of the cba, the Union submitted the dispute for arbitration. On July 31, 2001, arbitrator Charles J. Marino presided over an arbitration hearing during which the Union introduced evidence concerning purported transfers of work that occurred at other facilities not subject to the cba. Counsel for Supervalu initially objected to such documents on the grounds that they where inadmissible hearsay. The Union's counsel responded by arguing that they were trying to save time and that they could have the documents authenticated if necessary. After a recess, Supervalu's counsel withdrew the hearsay objection but questioned the relevancy of the documents. The Union subsequently did not attempt to authenticate the documents concerning the transfer of work at Supervalu Js other facilities.
Supervalu presented testimony at the hearing that the term "present work force" was intended by the parties to mean those employees on the "guarantee employment list" as of June of 1998. The arbitrator also heard testimony that all union employees as of June of 1998 were included on the "guarantee employment list." The Union presented contradictory testimony.
At the conclusion of the hearing, the parties then submitted their respective briefs to the arbitrator to assist him in his decision. On December 26, 2001 the arbitrator issued his Opinion and Award. The arbitrator framed the issues as follows:
1. What is meant by the term "present work force?"
2. Did the Employer violate Article 12 of the Collective Bargaining Agreement
When it discontinued servicing numerous retail stores from the St. Louis, Missouri, warehouse? If so, what shall the remedy be?
The arbitrator found that Article 12, Section 2 is inapplicable because there was no reduction in the "present work force." The arbitrator defined the term "present work force" contained in Article 12, Section 2 to mean those employees referred to on the "guarantee employment list" provided for in Article 26. In the arbitrator's summary of the case the arbitrator stated: "Article 12, Section 3, specifically provides that Article 12, Section 2, is inapplicable where there is no change in the present work force, those employees on the guarantee list. Therefore the Employer did not violate Article 12."
The arbitrator also concluded that Supervalu did not transfer any supervision, employees, tools or equipment to the Champaign Distribution Center, nor did the Company require any independent retailer to take its business to the Champaign Facility. In reaching this conclusion the arbitrator found that some of the Union's documents were not authenticated by any witness and were hearsay. The arbitrator stated: "At the hearing, the Employer objected to the introduction of documents introduced by the Union which indicated that work was being transferred. Those exhibits lacked any witness, and after a study by the arbitrator, the objections are sustained."
The Union filed this complaint on March 1, 2002 seeking an order vacating and setting aside the arbitrator's award. The Union claims that the arbitrator failed to draw the essence of his decision from the cba. Specifically, the Union maintains that the arbitrator altered or amended the cba by adding language to Article 12. The Union also claims that the arbitrator created a procedural aberration that rose to the level of affirmative misconduct when he sustained "phantom objections" made by Supervalu.
The Union now moves for summary judgment arguing that the arbitration award should be vacated as a matter of law. Supervalu also moves for summary judgment arguing that the arbitration award must be upheld and enforced as a matter of law.
I. Discussion
A. Standard of Review
When considering a motion for summary judgment, the Court must determine whether the record, when viewed in the light most favorable to the non-moving party, shows any genuine issue of material fact. Fed.R.Civ.P. 56(c). See generally, Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); Anderson v. Liberty Lobby. Inc., 477 U.S. 242, 249-50 (1986). A party seeking summary judgment bears the initial burden of informing the court of the basis for its motion and identifying those portions of the record, which it believes demonstrate the absence of a genuine issue of material fact.Celotex, 477 U.S. at 323. There is, however, no express or implied requirement in Rule 56 that the moving party must support its motion with affidavits or other materials negating the opponent's claim.Id. The burden is not on the moving party to produce evidence showing the absence of a genuine issue of material fact, even with respect to an issue on which the nonmoving party bears the burden of proof. Id. at 325. Instead, "the burden on the moving party may be discharged by `showing' — that is, pointing out to the district court — that there is an absence of evidence to support the nonmoving party's case." Id. As long as the record before the court demonstrates that there is no genuine issue of material fact, summary judgment should be granted. Id. at 323. When faced with a motion for summary judgment meeting the standard set forth above, the non-moving party may not rest upon the mere allegations or denials of its pleadings alone, but must introduce affidavits, depositions, answers to interrogatories, or admissions on file designating specific facts showing that there is a genuine issue of material fact for trial.Celotex, 477 U.S. at 324; Jetton v. McDonnell Douglas, Corp., 121 F.3d 423, 427 (8th Cir. 1997); Noll v. Petrovsky, 828 F.2d 461, 462 (8th Cir. 1987). Further, a plaintiff facing a motion for summary judgment must designate specific facts showing a genuine issue of material fact on each essential element of his claim. Id.
B. Analysis
i. Essence of the CBA
The scope of judicial review of arbitration awards under collective bargaining agreements is extremely limited. United Food and Commercial Workers v. Shop `N Save Warehouse Foods. Inc., 113 F.3d 893, 894 (8th Cir. 1997). The Supreme Court has determined that a labor arbitration award is legitimate "as long as the arbitrator's award `draws its essence from the collective bargaining agreement1 and is not merely `his own brand of industrial justice." United Paperworkers Int'l Union v. Misco. Inc., 484 U.S. 29, 36 (1987) (quotingUnited Steelworkers v. Enterprise Wheel and Car Corp., 363 U.S. 593, 597 (1960)). "The courts are not authorized to reconsider the merits of an award even though the parties may allege that the award rests on errors of fact or on misinterpretation of the contract." Id." As long as the arbitrator is even arguably construing or applying the contract and acting within the scope of his authority, that a court is convinced he committed serious error does not suffice to overturn his decision." Id.
Thus, "[i]n deciding whether an award draws its essence from the agreement, we must decide whether the award is simply a mistaken interpretation of the contract that we must uphold, or whether it violates the fundamental principle that 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." Int'l Paper Co. v. United Paperworkers Int'l Union, 215 F.3d 815, 817 (8th Cir. 2000). An arbitrator may look outside the collective bargaining agreement to assist in the interpretation of the agreement, but he must construe the collective bargaining agreement without amending it.Id. (citing Keebler Co. Milk Drivers and Dairy Employees Union, 80 F.3d 284, 288 (8th Cir. 1996)). When an arbitrator does not draw his conclusion from the essence of the collective bargaining agreement or ignores the plain language of the agreement, a reviewing court may vacate the arbitration award. Keebler, 80 F.3d at 287 (citing Iowa Mold Tooling Co., Inc. v. Teamsters Local Union No. 828, 16 F.3d 311, 312 (8th Cir. 1994)).
The Union argues that the arbitrator's award does not draw its essence from the cba because the arbitrator exceeded the authority the parties agreed to give him. The Union points out that Article 7, Section 6 of the cba provides that "the arbitrator shall not have the power to alter or amend any portion of the collective bargaining agreement." The Union claims that the arbitrator exceeded the authority issued to him by construing Article 12, Section 3 of the agreement to include language of Article 26.
Article 12, Section 3 of the cba states that Article 12, Section 2 shall not be applicable so long as there is no reduction in Supervalu's "present work force." The parties agree that the phrase "present work force" was not defined in the agreement. The parties disagreed about the appropriate definition of "present work force." The Union claimed that "present work force" meant those employees who were employed in the St. Louis facility at the time of the transfer. On the other hand, Supervalu claimed that "present work force" included only those employees who were employed at the time the cba was ratified. The arbitrator heard conflicting testimony about the parties' intended meaning of the phrase from both Supervalu and the Union. Because of the disagreement, the first issue the arbitrator identified for arbitration in his opinion was "what is meant by the term "present work force."
The arbitrator defined "present work force" according to ordinary usage to mean "the immediate or present employees as distinguished from employees in a future time." The arbitrator then concluded that there was no reduction in the present work force because none of the employees on the guaranteed employment list were impacted by the transfer. The arbitrator concluded that the term "present work force" contained in Article 12, Section 3, applies only to those employees on the guarantee list, as provided for in Article 26.
Supervalu argues that the parties bargained for the arbitrator's interpretation of the phrase "present work force" and that is what they received. Supervalu claims that the arbitrator merely looked at the agreement as a whole when determining the definition of "present work force." Supervalu also claims that there is no language in Article 12, Section 3 which prohibits consideration of Article 26 and the guarantee list in construing the meaning of "present work force." Finally, Supervalu argues that the arbitrator's interpretation of the term "present work force" is consistent with its ordinary meaning.
The arbitrator's decision did draw its essence from the cba. While the arbitrator may not add language or amend the agreement, he may interpret ambiguous language to the extent such language exists. Manhattan Coffee Co. v. International Bhd. of Teamsters, Chauffeurs, Warehousemen Helpers, Local No. 688, 743 F.2d 621, 623 (8th Cir. 1984). A court may not may not disturb an arbitrator's award if the arbitrator is interpreting ambiguous language of the agreement, even if the interpretation is erroneous. Keebler, 80 F.3d at 288. In this case it is clear that the term "present work force" was ambiguous and required interpretation by the arbitrator. Both sides presented testimony about the intended meaning of the phrase and argued vehemently in favor of their respective positions in post-hearing briefs. After weighing the evidence presented to him and applying the ordinary meaning to the term "present" in the context of the agreement, the arbitrator then defined "present work force." In doing so, he did not amend or alter the agreement, but instead interpreted ambiguous language of the agreement. This court does not sit to determine whether the arbitrator's interpretation was erroneous.
While the Union seems to agree that the term "present work force" was ambiguous, it argues that the arbitrator's interpretation of the phrase improperly added language to the agreement. An arbitrator may look to other provisions of a collective bargaining agreement to assist him in the interpretation of that agreement. See Keebler, 80 F.3d at 287-288. It is of no consequence that Article 12, Section 3 made no reference to Article 26. The parties bargained for the arbitrator's interpretation of "present work force," and it was appropriate for the arbitrator to consider testimony about the parties' intent, ordinary usage and other provisions of the agreement to aid him in his interpretation of that phrase. The Union presented the same kind of evidence as Supervalu and cannot now complain that the arbitrator's decision-making process was faulty simply because he ultimately accepted Supervalu's position instead of the Union's.
A court is required to enforce an arbitrator's award even if the court believes the arbitrator committed serious error. Midwest Coca-Cola Bottling Co, v. Allied Sales Drivers, Local 792, 89 F.3d 514, 517 (8th Cir. 1996). As long as the arbitrator arguably construes or applies the collective bargaining agreement, acting within the scope of his authority, and drawing his conclusion from the essence of the agreement, his award is legitimate. Id. The arbitrator was acting within his authority when he interpreted "present work force" and his conclusion that the phrase referred to the employees that were employed at the time of ratification was an arguable interpretation of the cba. Were this Court asked to construe the terms of the cba, it might well reach a different result. That, however, is not the relevant legal inquiry when deciding whether to confirm or vacate an arbitration award. Because the arbitrator's decision drew its essence from the cba, it must be upheld.
ii. Procedural Aberrations and Affirmative Misconduct
A court may also vacate an award when an arbitrator's procedural aberrations rise to the level of affirmative misconduct. Misco, 484 U.S at 41 n. 10. However, the Court has cautioned that procedural aberrations that rise to the level of affirmative misconduct are "very rare." Id. The Court has remained steadfast in its conclusion that a district court "does not sit to hear claims of factual or legal errors by an arbitrator as an appellate court does in reviewing decisions of lower courts." Id. at 38. Thus, a "serious error" involving an evidentiary ruling is not enough to overturn an arbitration award.See Major League Baseball Players Association v. Steve Garvey, 532 U.S. 504, 510 (2001) (holding that a serious error in the arbitrator's factual findings concerning credibility is not enough to overturn an arbitrator's decision). An arbitrator's procedural error must amount to bad faith or affirmative misconduct to warrant judicial intervention.
The Union claims that the arbitrator committed a procedural aberration that amounted to affirmative misconduct when he rejected the evidence of the Union that indicated that work was being transferred at other facilities. The Union argues that the arbitrator sustained hearsay objections that were not made. The Union further contends that it was misled by the arbitrator into believing that its exhibits had been admitted into evidence and that this amounted to affirmative misconduct. The courts have provided little or no guidance as to the standard to apply in assessing whether an arbitrator's rulings are simply erroneous or whether they rise to the level of affirmative misconduct and must be vacated. Garvey, 532 U.S. at 512 (Stevens, J., dissenting). However, the Federal Arbitration Act does supply guidance in determining when arbitrator misconduct will empower a court to set aside a arbitration award. While the Federal Arbitration Act does not apply to this case, the Supreme Court has recognized that the "federal courts have often looked to the Act for guidance in labor arbitration cases . . ."Misco, 484 U.S. at 41 n. 9. Under the Act, "the federal courts are empowered to set aside arbitration awards on [procedural] grounds only when `the arbitrators were guilty of misconduct . . . in refusing to hear evidence pertinent and material to the controversy.'"Id at 40 (quoting 9 U.S.C. § 10(c)). Furthermore, 9 U.S.C. § 10(c) requires that an arbitrator's misconduct be of the sort "by which the rights of any party have been prejudiced." 9 U.S.C. § 10(c).
In this case, the arbitrator's evidentiary ruling does not amount to affirmative misconduct. The arbitrator ruled in favor of Supervalu after determining that there had been no reduction in the "present work force." The Union supplied the arbitrator with the exhibits in question to show that Supervalu had violated Article 12, Section 2 by transferring work from the St. Louis warehouse to other facilities. The exhibits had no bearing on the arbitrator's decision concerning the definition of "present work force." The arbitrator ruled the exhibits inadmissable and refused to rely on them, even though he accepted them at the hearing. The Court finds nothing improper about the arbitrator's refusal to consider irrelevant evidence in reaching his decision. Because the Union was not prejudiced by the arbitrator's failure to consider irrelevant exhibits, the arbitration award will not be vacated on this ground.
III. Conclusion
The court finds that the arbitration award was drawn from the essence of the cba. In addition, the Court finds that the arbitrator did not engage in affirmative misconduct when he failed to consider certain exhibits presented by the Union. Therefore, the Union is not entitled to summary judgment vacating the arbitration award as a matter of law. Supervalu, however, is entitled to summary judgment on plaintiffs complaint.
Accordingly,
IT IS HEREBY ORDERED that Defendant SuperValu, Inc.'s Motion for Summary Judgment [#20] is GRANTED.
IT IS FURTHER ORDERED that Plaintiff Local Union No. 688's Motion for Summary Judgment [#21] is DENIED.