Rehearing and Rehearing En Banc Granted May 11, 1983.
JOHN R. GIBSON, Circuit Judge.
The United Electrical, Radio and Machine Workers of America, Local 1139 (the Union) appeals from portions of a district court
Litton and the Union are parties to a collective bargaining agreement (CBA) effective from October 1, 1979, to October 31, 1982. On November 24, 1980, Litton posted a notice to inform all bargaining unit employees that both of Litton's Minneapolis plants would be closed for inventory from March 23 through March 27, 1981, and that those employees who did not assist with inventory would be required to use vacation time during that week. Later that same day, the Union filed a grievance, claiming that the company violated section 11E of
After exhausting the grievance procedure, the parties submitted the dispute to an arbitrator. The arbitrator sustained the grievance and directed that:
The Union commenced an action in the United States District Court for the District of Minnesota to enforce the arbitrator's award. The Union moved for preliminary injunctive relief, and both parties cross-moved for summary judgment. The district court granted the Union's motion for injunction in part, ordering that Litton comply with the first part of the arbitrator's award that directed all workers who were required to take their vacations in March, 1981 be granted a second vacation. The district court refused, however, to order compliance with the second part of the arbitrator's award directing the vacation to be with pay. Subsequently, in a Memorandum and Order dated October 6, 1981, the district court held that the second part of the arbitrator's award could not be enforced because it was based on an erroneous factual assumption and because it was punitive, not compensatory. The district court also denied the Union an award of attorney fees. This appeal followed.
I. The Arbitrator's Award
In reviewing an arbitration award, a court does not reexamine the merits of the respective parties' claims, but gives deference to the arbitrator's decision so long as it "draws its essence" from the collective bargaining agreement. See, e.g., United Steelworkers of America v. Enterprise Wheel & Car Corp., 363 U.S. 593, 596-97, 80 S.Ct. 1358, 1360-61, 4 L.Ed.2d 1424 (1960); In re Arbitration between Grahams Service Inc. v. Teamsters Local 975, 700 F.2d 420 at 422 (8th Cir.1982); United Food & Commercial Workers, Local No. 222 v. Iowa Beef Processors, Inc., 683 F.2d 283, 285 (8th Cir.1982). Judicial deference to arbitration, however, does not grant carte blanche approval to any decision that an arbitrator might make. Piggly Wiggly Operators' Warehouse, Inc. v. Piggly Wiggly Operators' Warehouse Independent Truck Drivers Union, Local No. 1, 611 F.2d 580, 583 (5th Cir.1980). A court may vacate a labor arbitration award if the arbitrator makes a central factual assumption that is unsupported by the record, grants a punitive award in the absence of any provision for punitive awards and of any substantiating proof of willful or wanton conduct, or contravenes a limitation contained in the collective bargaining agreement.
All three of the foregoing grounds are implicated in the present case. The first two grounds served as the basis for the district court's decision; the third is raised on appeal. We affirm on all three grounds.
A. ARBITRATOR'S UNSUPPORTED FACTUAL ASSUMPTION
The district court summarized its first ground for vacating the award as follows:
Although a mere error in the determination of factual issues is not sufficient to disturb an arbitrator's award, NF & M Corp. v. United Steelworkers of America, 524 F.2d 756, 759 (3d Cir.1975), if the arbitrator assumes the existence of a fact that is central to the award, and an examination
At issue here is the arbitrator's factual assumption concerning a fifty-two week pay-period year. After carefully examining the record, we agree with the district court that the arbitrator's assumption is clearly without support. Moreover, we believe that the assumption is so central to the arbitrator's decision that but for the erroneous assumption a different result would have been reached. Under these circumstances, we conclude that the award cannot stand.
The Union contends, however, that the district court misinterpreted the arbitrator as stating an erroneous factual assumption, when he was "merely stating a hypothetical assumption to serve as an example." In view of the context in which the assumption appears, and the obvious connection with the decision rendered, the Union's contention must fail.
The Union also contends that the district court improperly considered evidence beyond the award itself and the collective bargaining agreement. We disagree. Although an arbitrator is not required to make formalized findings or to offer reasons for his decisions, when he does so, a court may properly consider them. See United Steelworkers of America v. Enterprise Wheel & Car Corp., 363 U.S. at 597, 80 S.Ct. at 1361; American Postal Workers Union v. United States Postal Service, 682 F.2d 1280, 1285 (9th Cir.1982). A court may also consider other evidence extrinsic to the award that will assist it in determining whether the award draws its essence from the collective bargaining agreement. See Truck Drivers & Helpers Union Local 784 v. Ulry-Talbert Co., 330 F.2d at 566 (outside testimony); Electronics Corp. of America v. International Union of Electrical, Radio & Machine Workers, Local 272, 492 F.2d at 1256 (underlying facts). We cannot say that the district court erred in considering the arbitrator's opinion or the post-arbitration deposition and affidavits.
B. PUNITIVE NATURE OF AWARD
The district court summarized its second ground for vacating the award as follows:
We concur in the district court's analysis. This case is very similar factually to Westinghouse Electric Corp., Aerospace Division v. International Brotherhood of Electrical Workers, Local Union No. 1805, 561 F.2d 521 (4th Cir.1977), cert. denied, 434 U.S. 1036, 98 S.Ct. 771, 54 L.Ed.2d 783 (1978), one of the cases relied on by the district court. In Westinghouse the Fourth Circuit affirmed the arbitrator's finding that the employer had violated the collective bargaining agreement by allowing insufficient time for negotiations with the Union; however, it vacated that portion of the arbitrator's award that ordered three additional days of paid vacation to employees who took their vacation during a vacation shutdown. The court reasoned that such an award was not compensatory, but punitive:
Westinghouse Electric Corp., Aerospace Division v. International Brotherhood of Electrical Workers, Local Union No. 1805, 561 F.2d at 523-24.
As in Westinghouse, the affected employees here did not sustain any monetary loss as a result of the inventory shutdown. Each employee was paid the exact number of vacation days to which each was entitled under the collective bargaining agreement; the inventory shutdown affected only the timing of the payment. As the district court concluded, to award an extra week's paid vacation under these circumstances would be a punitive award, unauthorized by the agreement.
The Union tries to distinguish Westinghouse from this case by arguing that the employees here were "forced" to take their vacation during the inventory shutdown. There is no evidence in the record, however, that the affected employees suffered any harm as a result of Litton's actions.
C. VIOLATION OF EXPRESS CONTRACTUAL PROVISIONS
Although not discussed in the district court's Memorandum and Order, we believe there is a further, even more fundamental, reason for vacating the arbitrator's award, namely, the violation of express provisions in the collective bargaining agreement.
Section 11A of the collective bargaining agreement sets forth the specific amounts of paid vacation that employees are entitled to receive:
Employees with one year of service 5 days Employees with two years of service 10 days Employees with five years of service 12 days Employees with eight years of service 15 days Employees with fifteen years of service 20 days Employees with twenty-five years of service 25 days
Section 21C of the collective bargaining agreement directs that "[t]he arbitrator's decision shall be within the terms of this Agreement" and that "[h]e shall not add to, subtract from, alter, or change the terms."
Despite these express provisions, the arbitrator ordered that the compensatory vacation time be with pay, reasoning that: "[T]o merely grant an unpaid week off for a summer vacation equates to imposing on the grievants what virtually amounts to a lay-off. No recognized principle of equity permits such a penalty on the prevailing party in a contractual dispute." However, an arbitrator does not sit to dispense his own brand of industrial justice; he sits to apply the agreement between the parties. By ordering that the compensatory time off be with pay, the arbitrator bestowed an unauthorized windfall to those employees who voluntarily chose not to work during the inventory shutdown which those employees who did work did not receive.
The Union contends that this court should not give effect to section 21C in light of this court's decision in Western Iowa Pork Co. v. National Brotherhood Packinghouse & Dairy Workers, Local No. 52, 366 F.2d 275 (8th Cir.1966), which construed a similar provision. In Western Iowa Pork this court observed that such language was another way of articulating the principle enunciated in United Steelworkers of America v. Enterprise Wheel & Car Corp., 363 U.S. at 597, 80 S.Ct. at 1361, that an arbitrator is "confined to interpretation and application of the collective bargaining agreement." The court held that the provision did not clearly take the dispute or the award outside of the specifically granted authority of the arbitrator.
The issue presented here, however, is far different from that presented in Western Iowa Pork. Here the court is dealing not with a question of ambiguous terms in a collective bargaining agreement, but with a remedial award that violates explicit contractual provisions. If the parties meant anything when they drafted sections 11A and 21C, and if it is true that an award is legitimate only so long as it draws its essence from the collective bargaining agreement, the monetary portion of the arbitrator's award cannot stand. We reject the Union's contention that section 21C is a mere boilerplate provision.
Relying on Carpenters' District Council of Greater St. Louis v. Anderson, 619 F.2d 776 (8th Cir.1980), the Union further contends that a "stipulation" by the parties gave the arbitrator express authority to fashion the remedy he did, even if it could be found that the arbitrator exceeded his authority under the contract. Here, however, there was no "separate stipulation" to settle a lawsuit, as there was in Carpenters'. What the Union attempts to characterize as a "stipulation" is a request that Litton made to the arbitrator that he state the remedy if he found a violation. We do not read this request to be a waiver of express limitations in the collective bargaining agreement.
We have considered the Union's remaining contentions and find them to be without merit.
II. The Union's Claim for Attorney Fees
The Union contends that the district court improperly denied its application for attorney fees that were incurred in this litigation. Since there is no statutory authorization for awarding attorney fees, and since we find no exceptional circumstances such as bad faith, we cannot say the district court abused its discretion in denying the Union an award of attorney fees. See Alyeska Pipeline Service Co. v. Wilderness Society, 421 U.S. 240, 247, 258-59, 95 S.Ct. 1612, 1616, 1622, 44 L.Ed.2d 141 (1975); General Drivers, Local No. 120 v. Sears, Roebuck & Co., 535 F.2d 1072, 1077 (8th Cir.1976); Richardson v. Communications Workers of America, 530 F.2d 126, 132 (8th Cir.), cert. denied, 429 U.S. 824, 97 S.Ct. 77, 50 L.Ed.2d 86 (1976).
The judgment of the district court is affirmed.
ARNOLD, Circuit Judge, concurring in part and dissenting in part.
I agree that there was no abuse of discretion in denying the Union's motion for attorneys' fees. As to Part I of the Court's opinion, however, I respectfully dissent.
On November 24, 1980, Litton notified its employees that there would be an inventory shutdown during one week in March and that all employees who did not work then would have to take that week as paid vacation. Litton had, in the past, closed during the summer months and had not forced employees to take paid vacation during the inventory shutdown. That same day the union filed a grievance claiming that Litton was acting in violation of the collective-bargaining agreement. The parties did not resolve their dispute. From March 23 to March 27 the company closed to take inventory and assigned work to all employees who had volunteered to assist with inventory and to approximately 180 other bargaining-unit employees. There was no work for 101 employees, and they were forced to take their paid vacation in March. Pursuant to Section 21 of the Collective Bargaining Agreement (Designated Record p. 64-66) the parties submitted their dispute for arbitration.
A hearing was held on May 1, 1981, and a decision was rendered on June 15, 1981. The arbitrator looked to the terms of the contract. Section 11E provides:
Section 11G states in part:
The arbitrator construed Section 11G as providing Litton no right to require that employees take vacation at a time not within the "vacation season." The "vacation season" included the summer months and not March. (D.R. 19). By forcing some employees to take their vacations during an inventory shutdown in March, Litton violated the terms of the contract. This holding is not in dispute.
In order to remedy the breach of contract, the arbitrator decided (1) that employees who had to take paid vacation in March were entitled to a second vacation during the summer months, and (2) that the second vacation should be a paid vacation. In his opinion the employees suffered a real loss compensable in money when they were forced to take paid vacation in March. He specifically found the following:
I am not sure I should have awarded this particular kind of relief, or indeed that the arbitrator was correct in interpreting the contract. But those questions are, in all but the clearest cases, the arbitrator's business, not ours. Moreover, we are admonished to be particularly deferential when reviewing an arbitrator's remedy.
United Steelworkers of America v. Enterprise Wheel & Car Corp., 363 U.S. 593, 597, 80 S.Ct. 1358, 1361, 4 L.Ed.2d 1424 (1960). It is difficult for judges to say what harm, if any, the employees in this case suffered. Courts simply do not have the expertise that labor arbitrators have to resolve disputes between labor and management and determine an appropriate award.
United Steelworkers of America v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582, 80 S.Ct. 1347, 1352-53, 4 L.Ed.2d 1409 (1960). In view of the Supreme Court's clear command that we defer to an arbitrator's judgment, and especially to his remedy, I would enforce the arbitrator's award in its entirety.
The Court gives three reasons for setting aside the arbitrator's award: (1) The arbitrator, incorrectly assuming that Litton could not lay off employees, improperly awarded paid vacation as compensation for being laid off in March; (2) the remedy constitutes an unwarranted award of punitive damages; and (3) the award contravenes a limitation contained in the collective-bargaining agreement.
Nor does the award of a paid vacation constitute punitive damages. The arbitrator clearly believed that the employees, by having to take their vacations in March, suffered compensable harm. An award of paid vacation during the summer remedied this harm and insured that their "summer vacation" not be a mere lay-off.
Finally, in my view, the arbitrator did not exceed his authority by granting the employees a paid summer vacation in addition to the number of paid vacation days the employees would normally have under the contract. The agreement sets out the number of vacation days a worker should normally receive, but it does not limit the arbitrator's authority to fashion a remedy where, as in this case, there has been a breach of contract. A collective-bargaining agreement cannot explicitly regulate all aspects of labor-management relations, and it is the arbitrator's duty to fill in gaps. United Steelworkers of America v. Warrior & Gulf Navigation Co., supra, 363 U.S. at 580-81, 80 S.Ct. at 1352. The contract may not specify the relief that is required for every conceivable contractual violation, but absent express limitations, and as long as the remedy is not clearly unfair, courts should enforce the arbitrator's award. See General Telephone Co. v. Communications Workers of America, 648 F.2d 452, 457 (6th Cir.1981); Carpenters' District Council of Greater St. Louis v. Anderson, 619 F.2d 776, 778 (8th Cir.1980); Fabricut, Inc. v. Tulsa General Drivers, Warehousemen, and Helpers, Local 523, 597 F.2d 227, 229 (10th Cir. 1979); Local 369, Bakery & Confectionery Workers International Union of America v. Cotton Baking Co., 514 F.2d 1235, 1237 (5th Cir.1975), cert. denied, 423 U.S. 1055, 96 S.Ct. 786, 46 L.Ed.2d 644 (1976).
It is true that the arbitrator's award gives the employees 50 paid weeks of work and two paid weeks of vacation, more than they would have received had the contract not been broken. This Court gives the workers 50 paid weeks of work, one paid week of vacation, and one unpaid week of vacation, for a total yearly pay less than they would have received had the contract not been broken. They get just as much vacation as the contract provides for, but they are deprived of their right to take their vacation during the preferred time of year, a right guaranteed by the contract as construed by the arbitrator. This right is surely worth something. The arbitrator did not think it was trivial, and I believe he was within his rights in so deciding. If there is a doubt as to remedy, it is not unfair to
I would enforce the award in full, and therefore I respectfully dissent in part.
An alternate set of grounds for vacating an arbitration award is contained in the United States Arbitration Act, 9 U.S.C. § 10 (1976). A split has developed among the courts of appeals as to whether the United States Arbitration Act applies to suits involving the arbitration of collective bargaining agreements. At least four circuits, the First, Second, Sixth, and Seventh, have recognized the Act's applicability. See Electronics Corp. of Am. v. International Union of Elec., Radio & Mach. Workers, Local 272, 492 F.2d at 1258; Bell Aerospace Co. Div. of Textron, Inc. v. Local 516, 500 F.2d 921, 923 (2d Cir.1974); Chattanooga Mailers Union, Local No. 92 v. Chattanooga News-Free Press Co., 524 F.2d 1305, 1315 (6th Cir.1975); Pietro Scalzitti Co. v. International Union of Operating Eng'rs, Local No. 150, 351 F.2d 576, 579-80 (7th Cir.1965). The Fourth Circuit has taken the opposite position. See Sine v. Local No. 992 Int'l Bhd. of Teamsters, 644 F.2d 997, 1002 (4th Cir.), cert. denied, 454 U.S. 965, 102 S.Ct. 507, 70 L.Ed.2d 381 (1981). The Third Circuit seems to have developed a conflict on the issue. Compare Newark Stereotypers' Union No. 18 v. Newark Morning Ledger Co., 397 F.2d at 596 & n. 2, 598-99 (recognizing applicability) with Ludwig Honold Mfg. Co. v. Fletcher, 405 F.2d 1123, 1127 & n. 18 (3d Cir.1969) (denying applicability). The Fifth Circuit has expressly reserved judgment. See General Warehousemen & Helpers Local 767 v. Standard Brands, Inc., 579 F.2d 1282, 1294 n. 9 (5th Cir.1978) (en banc), cert. dismissed, 441 U.S. 957, 99 S.Ct. 2420, 60 L.Ed.2d 1075 (1979). The Eighth Circuit has not squarely decided the issue.
Our examination of the record reveals no support for this conclusion.