658 F. 2d 1285 - Local of United Brotherhood of Carpenters and Joiners of America v. Fmc Corporation

If an Act that authorizes the federal courts to enforce arbitration provisions in contracts generally, but specifically denies authority to decree that remedy for "contracts of employment", were available, the Court would hardly spin such power out of the empty darkness of § 301. I would make this rejection explicit, recognizing that when Congress passed legislation to enable arbitration agreements to be enforced by the federal courts, it saw fit to exclude this remedy with respect to labor contracts.

Lincoln Mills was an action by a union to require an employer to arbitrate pursuant to the terms of a collective bargaining agreement.8 As Justice Frankfurter noted in his dissent "the court glaringly ignores the Arbitration Act," id. at 467, 77 S.Ct. at 926. It is true that the majority opinion does not mention the United States Arbitration Act (Federal Arbitration Act), but merely limited its comments to hold that § 301 granted jurisdiction to enforce such arbitration agreements on behalf of or against labor organizations, by also stating that "Congress adopted a policy which placed sanctions behind agreements to arbitrate grievance disputes, by implication rejecting the common-law rule, discussed in Red Cross Line v. Atlantic Fruit Co., 264 U.S. 109 (44 S.Ct. 274, 68 L.Ed. 582), against enforcement of executory agreements to arbitrate."9

There is additional reasoning pointing to the reluctance of the Supreme Court in fully accepting the Federal Arbitration Act on the issue of timeliness. In Hines v. Anchor Motor Freight, 424 U.S. 554, 96 S.Ct. 1048, 47 L.Ed.2d 231 (1976), cited and discussed in Mitchell, supra, the issue of timeliness10 was not raised by the employees, Hines and others, who were aggrieved by the decision of the joint area committee in the grievance process. Approximately two years after the decision upholding the discharge of the employees, the employees, having ascertained that the dishonest acts were attributable to a motel clerk, brought an action under § 301 against the employer and the union, the latter having been charged with the duty of fair representation of the employees. The Court of Appeals reversed the summary judgment in favor of the union, but upheld same in favor of the employer, Anchor. The Supreme Court reversed as to Anchor holding that a union's breach of duty as to fair representation relieves the employee of an express or implied requirement that disputes be settled through contractual grievance procedures and, if it seriously undermines the integrity of the arbitral process, the union's breach also removes the bar of the finality provisions of the contract. In the present case, we have nothing which suggests that the rule in Hines v. Anchor Motor Freight, supra, should be applicable.

A similar issue arose in Chauffeurs, Teamsters, etc. v. Jefferson Trucking, 628 F.2d 1023 (7th Cir. 1980), cert. denied, --- U.S. ----, 101 S.Ct. 942, 67 L.Ed.2d 111 (1981), where a discharged employee of a trucking company was ordered reinstated to employment with full seniority and back pay, pursuant to the decision of the Joint Grievance Committee under the collective bargaining agreement. The employer made no effort to move to vacate the award. When the employer refused to recognize the award, the employee's union filed an action to enforce the arbitration award. The employer then alleged affirmative defenses to the enforcement of the award. The trial court, and on appeal the Seventh Circuit, struck the affirmative defenses as being belated defenses which should have been asserted in a timely motion to vacate, modify or correct the award. The Court considered the United States Arbitration Act and noted that there was a division among the circuit courts of appeals as to its applicability in light of 9 U.S.C. § 1. However, perhaps anticipating Mitchell, the Seventh Circuit applied the Indiana statute providing for ninety days within which to file a motion to vacate an award. The opinion cites with apparent approval the case of Pizzuto v. Hall's Motor Transit Co., 409 F.Supp. 427 (E.D.Va.1976), which borrowed the three month limitation period prescribed in the Federal Arbitration Act in view of the fact that the Fourth Circuit had expressly excluded arbitration in "contracts of employment of ... (any) class of workers engaged in foreign or interstate commerce."11 While we do not rely upon Pizzuto, it is interesting that footnote 5 in Mitchell makes reference to the limitation period under the Federal Arbitration Act, 9 U.S.C. § 12 (1976), and further points out that in 42 states with specific limitation periods, 28 have a period of 90 days, 9 have shorter periods, 2 longer, and 3 states have periods based on the term of court.

It may be argued that the Oregon statute could not be borrowed because Carpenters could not bring a direct suit to vacate the arbitration award. Mitchell answers this proposition in footnote 3 by saying that a § 301 claim, which if successful would have the same effect, is "closely analogous" to such an action.

Recognizing that a twenty-day period for filing a § 301 claim is a relatively short period, we continue our discussion of the matter in the belief that the defendants' motions to dismiss the complaint should have been granted under Rule 12(b)(6), F.R.Civ.P.

Carpenters emphasizes the language of Justice Douglas in 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), where, in speaking of the arbitrator's function, he states that the arbitrator "is confined to interpretation and application of the collective bargaining agreement" and his "award is legitimate only so long as it draws its essence from the collective bargaining agreement." The only issue raised by Carpenters on this point is that the arbitrator found that the "drop changes" were first performed by the shipwrights (carpenters union), that a memorandum was issued by FMC that the former procedure was impractical "which in effect reassigned the work to Defendant Laborers and Painters." The trial court found it unnecessary to reach this issue.

We cannot agree that the arbitrator failed to draw the essence of his award from the collective bargaining agreements. A clearer illustration of a jurisdictional dispute cannot be presented. It was Carpenters who filed the grievance following FMC's November 1975 memorandum that it was impracticable for the shipwrights to handle the "drop changes" under the new procedure. For a very brief period in late 1974 and early 1975, the shipwrights had handled the "drop changes", but in the spring or early summer of 1975 the shipwrights' leadman found that he was having difficulty locating shipwrights who could make the changes as required by the sandblasters, painters and laborers, and the leadman agreed that this work could be taken over by the painters and laborers. This is the procedure which was then followed until Carpenters filed its grievance in May, 1976, at which time the work was reassigned to the shipwrights and, after two days of a weekend, it was taken over by the sandblast, painters' and laborers' crews. As the arbitrator noted, the earlier statement from FMC (prior to the May, 1976 grievance) merely provided that "only Carpenters would be allowed to rig and maintain such platforms", but that statement did not define what constituted "rigging or maintaining." Stated otherwise, while it is conceded that the shipwrights have the responsibility for the location, erection, or dismantling of any type of staging, including Albina Climbers, it does not necessarily follow that a new procedure involving a "drop change" must automatically be performed by Carpenters.

It should be noted that the award did not specifically assign the "drop changes" to the Painters and Laborers. Neither the decision nor the award made this assignment. The most that it did is to make an award "that the United Brotherhood of Carpenters and Joiners of America is not entitled to have assigned to employees whom it represents the work of making drop changes of Albina Climbers in the cargo tanks of vessels constructed by FMC Corporation at its Portland, Oregon, shipyard."

Carpenters alleges and concedes that the Jurisdictional Policy of the Metal Trades Department, AFL-CIO, was the controlling document under which the arbitration proceedings were conducted. Carpenters makes no attack upon the procedures used in selecting the referee (arbitrator) and, in any event, paragraph 4 of the Policy provides:

Regardless of method of selection, the referee's decision shall be binding upon all parties concerned unless or until a change is made as hereinafter provided.

Examining the Jurisdictional Policy touching jurisdictional disputes, we note that the collective bargaining agreements, in effect, are merely "no-strike" clauses to prevent work stoppages. As stated in paragraph 5 of the Policy, "no decision rendered as provided in Sections 3 and 4 above will prevent the International Unions involved from continuing negotiations for the purpose of effectuating a permanent settlement of the work which may be involved in dispute; nor will any of the decisions above referred to be used by any International Union to justify its permanent claim to the work involved." Thus, as we construe the award, it effectively precludes a work stoppage pending any permanent settlement by the International Unions involved.

Paragraph 6 of the Policy does state that employers shall refrain from transferring any work from one craft to another without the full and complete agreement of the crafts directly involved, and further imposes upon the employers the duty to avoid the creation of jurisdictional disputes by "arbitrarily" changing work from one craft to another whether by their own action or by the request of some particular craft. The arbitrator fully discusses the problem, giving the history of the new procedural change occasioned by "drop changes," and pointing out that at least on one occasion the shipwrights' leadman had agreed to the "drop changes" being made by the Painters and Laborers because of his inability to locate shipwrights capable of doing this work at the time and place required. We cannot find that the action by FMC was in any manner arbitrary, especially since FMC's prior statement did not define "rigging or maintaining" when the work was assigned to Carpenters prior to the invocation of the "drop changes" procedure.

Probably the clearest example of an arbitration award which failed to draw its essence from the collective bargaining agreements is International Brotherhood of Teamsters, etc. v. W.Pa. Motor Carriers Assoc., 574 F.2d 783 (3d Cir. 1978), where a dispute arose between the Motor Carriers Association and the Teamsters Local 249 with respect to "spotting" in Allegheny County, Pennsylvania. "Spotting" was described as a carrier instructing a driver to leave his trailer at a specified location, and not to remain with it during loading or unloading, thereby permitting the driver to be assigned other duties. In the collective bargaining agreement "spotting" was permitted except in Allegheny County, and this arrangement had existed since 1958. The collective bargaining agreement contained a Maintenance of Standards Clause which provided that said clause would not apply "to inadvertent or bona fide errors made by the Employers or the Union in applying the terms of conditions of this Agreement if such error is corrected within ninety (90) days from the date of the error," and further provided that "a request for relief from such error may be filed in writing with the appropriate Conference Area Committee." After the "spotting" restriction in Allegheny County had been in effect about seven years, the Association requested the Eastern Conference Joint Area Committee (ECJAC) to grant relief from the "spotting" restrictions. The Union protested the jurisdiction of the ECJAC, but the Committee took jurisdiction over the dispute and finally rendered its decision which eliminated all restrictions on "spotting" in Allegheny County. The Union then brought an action under § 301(a) of the Labor Management Relations Act, 29 U.S.C. § 185(a), seeking to have the award set aside as it did not draw its essence from the collective bargaining agreement. The Third Circuit, in vacating the award, stated that "The award will not be disturbed unless it can in no rational way be derived from the agreement or unless there is a manifest disregard of the agreement, totally unsupported by principles of contract construction and the law of the shop," and held that the controversy was not arbitrable as the parties had not agreed to submit the dispute to arbitration.12

In a recent case, F. W. Woolworth Co. v. Miscellaneous Warehousemen's Union, etc., 629 F.2d 1204 (7th Cir. 1980), cert. denied, --- U.S. ----, 101 S.Ct. 2016, 68 L.Ed.2d 324 (1981), a divided court found that the arbitration award "drew its essence" from the parties' agreement, viewed in the light of its language, the surrounding circumstances and the "law of the shop" because the provisions of the agreement were somewhat contradictory, thus making it appropriate for the arbitrator to interpret them and resolve the ambiguity. In that case three employees were discharged for absenteeism when they failed to telephone the employer in accordance with the company rules. The arbitrator found a "technical violation" by the employees, but reduced the discharges to suspensions and ordered backpay except for the suspension periods. In a later proceeding by Woolworth to vacate the award under § 301, summary judgment was granted to Woolworth and the award was vacated. On appeal by the intervening employees (the Union having elected not to appeal), the court reversed and, citing United Steelworkers of America v. Enterprise Wheel & Car Corp., 363 U.S. 593, 599, 80 S.Ct. 1358, 1362, 4 L.Ed.2d 1424 (1960), held that the lower court had no business overruling the arbitrator because the court's interpretation of the contract was different from that of the arbitrator. The key question was whether the arbitrator's interpretation could, in some rational manner, be derived from the collective bargaining agreement, viewed in the light of its language, its content, and any other indicia of the parties' intention. The Seventh Circuit further stated that "only when there is a manifest disregard of the agreement, totally unsupported by principles of contract construction and the law of the shop, may a reviewing court disturb the award," and the correctness of the arbitrator's conclusion as well as the propriety of his reasoning is not relevant to a reviewing court so long as the award complies with these standards.

The precise terms of the reference to arbitration are not revealed by the record, nor does Carpenters allege same. It would appear that, although the arbitrator was not required to give his reasons for his award, he did so in a complete decision. What Carpenters now contends is not that the award failed to draw its essence from the agreement, but that the award was erroneous because of the initial "drop changes" procedure had been assigned to Carpenters. All parties knew that was the situation; there would have been no need for an award if this was the only finding to be made by the arbitrator. In light of the broad discretion vested in the arbitrator and the absence of any proof of language in the submission, the arbitrator had a perfect right to exercise his latitude of judgment and decide the issue as stated in the award. Lynchburg Foundry Company v. United Steelworkers, 404 F.2d 259, 261 (4th Cir. 1968).

In our case it was Carpenters who filed the grievance and, consistent with its collective bargaining agreement with FMC, had agreed that the dispute would be settled by the unions involved. Carpenters thereafter agreed to the settlement of the dispute in accordance with the Jurisdictional Policy of the Metal Trades Department and further agreed, at the commencement of the hearing before the arbitrator, that jurisdiction to settle the dispute was vested in the arbitrator.13 Bearing in mind that the scope of the collective bargaining agreement between Carpenters and FMC specifically provided for the settlement of jurisdictional disputes by the unions, and the fact that there was at least some ambiguity as to the meaning of the term "rigging or maintaining" in light of the new procedure involving "drop changes", it ill behooves Carpenters to now complain that the award did not draw its essence from the collective bargaining agreement. We conclude that the controversy was intended to be within the scope of the arbitration clauses of both collective bargaining agreements here presented. The nature and substance of the arbitrator's decision adequately demonstrated that it was drawn from the essence of these bargaining agreements.

Having concluded that the essence of the award was drawn from the collective bargaining agreements, we have nothing left in this case other than Carpenters' desire to vacate the award solely for the purpose of having the matter again submitted to arbitration in the hope that another arbitrator will render a contrary decision, despite the fact that the three unions had agreed that the first arbitrator's decision would be final and binding. We cannot sanction such a procedure and, under the teaching in Mitchell, we must treat this § 301(a) action as a suit to vacate the award of arbitration. Such being the case, there must exist appropriate grounds for vacating the award. Aside from the allegation that the essence of the award was not drawn from the collective bargaining agreements, the complaint alleges no basis upon which relief could be granted and would be grounds for dismissal under Rule 12(b)(6). Under ORS 33.320, the basis for exceptions to an award14 closely parallels the grounds for vacating an award under the Federal Arbitration Act, 9 U.S.C. § 10. The same grounds are set forth under the Uniform Arbitration Act, 5 Am.Jur.2d, Arbitration and Award, at 168, p. 645; Uniform Arbitration Act § 12, which also provides that notice of a motion to vacate, modify, or correct an award must be served upon the adverse party or his attorney within three months after the award is filed or delivered. Since grounds for relief against the award do not clearly and unmistakably appear in Carpenters' complaint, it is subject to a Rule 12(b)(6) dismissal.15 While Carpenters, not having been a signator to the Pacific Coast Master Agreement, perhaps could have declined arbitration in the first instance, it is too late for Carpenters to complain after having voluntarily agreed to arbitrate and having participated therein without objection. As stated in 5 Am.Jur.2d, Arbitration and Award, § 22, p. 537, "The right of the third party to an independent determination may be lost by waiver or estoppel, however, if he consents to, and participates in, arbitration proceedings that affect his own rights and liabilities."

Since the complaint, with attached exhibits, fully states the case, and since we must decline the invitation to again permit arbitration for the sole purpose of possibly obtaining a conflicting award, Carpenters has failed to state a case on which any relief can be granted.

AFFIRMED.

CANBY, Circuit Judge, concurring.

I concur totally with the introduction and Part I of Judge Hoffman's opinion, which establish clearly that the present action is barred by limitations. Since the district court did not reach the question whether the arbitrator's decision drew its essence from the collective bargaining agreement, I would not rule upon it here.