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adopting recommendation of magistrate judge
Summary of this case from Brotherhood of Maintenance of Way Emp. v. Union PacificOpinion
Civil Action No. 3:02-CV-1376-L
August 8, 2003
ORDER
Before the court are the Report and Recommendation of the United States Magistrate Judge ("Report"), filed April 21, 2003; Plaintiffs Objections to the Report and Recommendation of the United States Magistrate Judge, filed April 30, 2003; Defendant's Objections to the Findings and Recommendations of the United States Magistrate Judge, filed May 2, 2003; Defendant's Response to Plaintiffs Objections to [the] Report and Recommendation of [the] United States Magistrate Judge, filed May 13, 2003; and Plaintiff's Reply Brief to Defendant's Response to [the] Magistrate's Report and Recommendation, filed May 22, 2003.
Having considered the Report, response, reply, objections, and the applicable law, the court determines that the findings and conclusions of the magistrate judge are correct in that (1) the King award, as written, is ambiguous and therefore unenforceable, and needs to be remanded to Arbitrator King for clarification; and (2) the collateral issue regarding the alleged preclusive effect of the Hartsfield award is an issue for King, not the court, to address. The court accepts these findings and conclusions. Accordingly, the objections to the Report filed by both parties are overruled. I. Factual and Procedural Background
This case involves two labor grievances between Plaintiff Communications Workers of America-International Union of Electronic, Electrical, Machine, and Furniture Workers, AFL-CIO Local 787 (the "Union") and Defendant Alcatel, U.S.A. Marketing, Inc. ("Alcatel"). The Union serves as the exclusive bargaining representative for all production and maintenance employees located in Alcatel's Dallas County, Texas, electronic equipment plants. On May 2, 2000, the parties signed a Collective Bargaining Agreement ("CBA") that included a provision stating that, in the event of a dispute between the parties, the decision of an arbitrator is final and binding. On May 24, 2000, Alcatel sold all buildings on the Richardson Campus to a third party, leasing back three buildings from the third party, including a portion of Building 415. The third party also maintained campus-wide systems including utilities. On April 4, 2000, the parties signed an Amended Supplement to Labor Agreement, which by its terms was integrated into the CBA.
CBA, Article XI, Section 4 states:
The decision of the impartial arbitrator shall be final and binding upon the Company, the Union, and the employees, provided that the arbitrator shall not have jurisdiction to make an award which amends, alters, enlarges or ignores the provisions of this Agreement. . . .
(App. to Pl.'s Mot. for Summ. J. at 12).
Section 8 of the Supplemental Agreement provides:
As long as the Company is occupying the buildings on the present Richardson campus, or a part thereof, Bargaining Unit Facilities and Maintenance personnel will continue to maintain the buildings or any such parts. Should a clearly partitioned portion of a building be occupied solely by non-Company personnel, that portion of the maintenance will be performed by the landlord.Id. at 59.
In the months following, the Union filed two grievances related to the performance of maintenance work in the leased buildings, both culminating in arbitration. It filed the first grievance, hereinafter referred to as the `Coates grievance,' on August 30, 2000. The Coates grievance was arbitrated on November 6, 2001, before Arbitrator Otis King. He sustained the grievance on January 31, 2002, ordering Alcatel "to make whole the three (3) full time bargaining unit employees who were removed from the maintenance of the equipment in Building 415 for the period from August 25, 2000, through August 25, 2001," including "all pay and benefits to which they would be entitled had they not been removed from the positions, less whatever amounts they may have received during the period." (App. to Pl.'s Mot. for Summ. J. at 62). The second grievance, hereinafter referred to as the "Maintenance grievance," was filed in October or November 2000. The Maintenance grievance was arbitrated on November 19, 2001, before Arbitrator William Hartsfield, who issued a decision in favor of Alcatel on January 29, 2002, two days prior to the King award. The court notes that because the Coates grievance was filed before the Maintenance grievance, an issue concerning future application of the Hartsfield award was not specifically submitted to the arbitrator.
The issue in the Coates grievance was as follows:
Whether the Company [Alcatel] violated the collective bargaining agreement by not utilizing bargaining unit personnel to perform maintenance work on the utility equipment owned by Phase On Capital Advisors located in Building 415? If so, what shall be the remedy?Id. at 63.
The parties appear to disagree on the filing date of the grievance; however, this discrepancy is immaterial to the issues raised. The issue in the Maintenance grievance was as follows:
The Union maintains the sole issue is whether the Company violated the CBA. The Company [Alcatel] asserts [that] three issues exist, namely, whether the arbitration is timely or whether the Union waived the matter at issue; whether there was a violation of the CBA; and what remedy is appropriate.Id. at 72.
The Hartsfield award stated:
Accordingly, these eight employees suffered no damages as a result of any violation of the Supplemental Agreement. . . .
Even if the Supplemental Agreement was violated, the violation did not cause any retroactive damages and no prospective relief is sought.
This Award is in full resolution of all claims submitted to this Arbitration. All claims not expressly herein granted are hereby denied.Id. at 76 (emphasis added).
On July 1, 2002, the Union filed a Complaint to Enforce Arbitration Award against Alcatel pursuant to 29 U.S.C. § 1985, alleging that Alcatel refused to comply with King's award. On July 8, 2002, the court referred the case to United States Magistrate Judge William F. Sanderson, Jr., for pretrial management pursuant to 28 U.S.C. § 636(b)(1)(B-C), Fed.R.Civ.P. 72(b), and the local rules of the Northern District of Texas. Alcatel on September 13, 2002, filed an Answer and Counterclaim, requesting, inter alia, the court to deny and dismiss the Union's complaint, enter judgment in favor of Alcatel confirming and enforcing the Hartsfield award, enter declaratory judgment proclaiming that Alcatel has fully complied with the King award, or, in the alternative, that the King award is unenforceable and must be vacated. Both parties filed motions for summary judgment — Alcatel on February 21, 2003, the Union on February 28, 2003.
In his Report, the magistrate judge recommended that the court dismiss Alcatel's counterclaim to enforce the Hartsfield award for want of jurisdiction, deny both parties' motions for summary judgment, and remand the Coates grievance to Arbitrator King to clarify his award. The Union and Alcatel filed objections to the Report. The court addresses each party's objections in turn.
II. Standard of Review
Judicial review of arbitration awards is limited. Weber Aircraft, Inc. v. Gen. Warehouseman Helpers Union Local 767, 253 F.3d 821, 824 (5th Cir. 2001). Courts "have no business weighing the merits of the grievance," for when the judiciary does so, "it usurps a function which . . . is entrusted to the arbitration tribunal." Major League Baseball Players Ass'n v. Garvey, 532 U.S. 504, 509-510 (2001) (quoting United States Steelworkers v. Am. Mfg. Co., 363 U.S. 564, 568 (I960)). It is only when the arbitrator strays from interpretation and application of the CBA and effectively "dispense[s] his own brand of industrial justice" that his decision may be unenforceable. Garvey, 532 U.S. at 509 (quoting United States Steelworkers v. Enter. Wheel Car Corp., 363 U.S. 593, 597 (1960)). "As long as an arbitrator is even arguably construing or applying the contract and acting within the scope of his authority," the fact that "a court is convinced he committed serious error does not suffice to overturn his decision." E. Assoc. Coal Corp. v. United Mine Workers of Am., Dist. 17, 531 U.S. 57, 63 (2000) (quoting United Paperworkers Int'l Union, AFL-CIO v. Misco, 484 U.S. 29, 38 (1987)).
III. Discussion
A. Union's Objection
The court begins by addressing the Union's objection. The Union objects to the magistrate judge's determination that the King award is ambiguous and recommendation that the Coates grievance be remanded to Arbitrator King for clarification. It contends that King's "make whole" award is an unambiguous, enforceable "make whole" remedy. The court disagrees. An arbitration award may only be enforced as written. Oil, Chem. Atomic Workers Int'l Union, Local 4-367 v. Rohm Haas, Tex. Inc., 677 F.2d 492, 494 (5th Cir. 1982). It "is the arbitrator's construction which was bargained for . . . the courts have no business overruling him because their interpretation of the contract [CBA] is different from his." Enter. Wheel Car Corp., 363 U.S. at 599. Put another way, the court should not resolve ambiguity in the original award, as this was a task for the arbitrator, and "the normal course of action . . . is for the court to remand the matter to the original arbitrator for clarification." San Antonio Newspaper Guild Local No. 25 v. San Antonio Light Div., 481 F.2d 821, 825 (5th Cir. 1973) (citing Hanford Atomic Metal Co. v. Gen. Elec. Co., 353 F.2d 302, 307-308 (9th Cir. 1966)).
Having reviewed the Report, the above objection, and the applicable law, the court agrees with the magistrate judge that the summary judgment materials before the court demonstrate clearly the patent ambiguity in the King award. As written, the King award does not elucidate the identity of the three employees Alcatel is to "make whole," and does not specify the amount of compensation to which each was entitled absent a violation of the CBA. Because it is impossible to determine what additional compensation would be necessary to make each unidentified employee "whole," the court cannot enforce the King award as written.
This court cannot perform the arbitrator's duty of ensuring an arbitration award is lucid — in this case, identifying specific persons and amounts — as the court cannot address the merits of a controversy. "The question of interpretation of the [CBA] is a question for the arbitrator." Enter. Wheel Car, 363 U.S. at 599.
The Union also contends in support of its objection that the Coates grievance need not be remanded to Arbitrator King for clarification, arguing that remand is premature and therefore improper, because the parties are capable of negotiating a resolution pursuant to the remedy ordered by him. The Union thus seeks to defer remand and requests that the court order the parties to attempt to implement the King award pursuant to the tenet of good faith, but it favors remand, and opposes vacatur, if the parties cannot resolve any alleged ambiguity.
The law pertaining to the Union's contention is clear. Where the parties have elected to submit their disputes to arbitration, "they should be completely resolved by arbitration, rather than only partially resolved." San Antonio Newspaper Guild Local No. 25, 481 F.2d at 825 (quoting Hanford Atomic Metal Co., 353 F.2d at 307-308). Remand to the arbitrator is "the appropriate disposition of an enforcement action when an award is patently ambiguous . . . [I]n such a case a remand is necessary to clarify precisely what the court is being asked to enforce." Rohm Haas, Tex. Inc., 677 F.2d at 495. Consequently, the court will not direct the parties to confer and negotiate a resolution pursuant to the King award, which, as written, is ambiguous. The court, however, agrees with the Union insofar as it requests the court to remand the case to Arbitrator King for clarification. Fifth Circuit precedent and judicial efficiency demand that the King award be remanded for clarification. See San Antonio Newspaper Guild Local No. 25, 481 F.2d at 825 (quoting Hanford Atomic Metal Co., 353 F.2d at 307-308); Rohm Haas, Tex. Inc., 677 F.2d at 495. Accordingly, the court overrules the Union's objection.
B. Alcatel's Objections
The court now focuses on Alcatel's objections. Alcatel presents arguments, including an array of objections, urging the court to enter a declaratory judgment that it has fully complied with the King award, or, in the alternative, that the King award is unenforceable and must be vacated. Specifically, Alcatel contends that (1) the King award is unenforceable because it fails to "draw its essence" from the CBA, since Arbitrator King did not consider the preclusive effect of the Hartsfield award; (2) its counterclaim to enforce the Hartsfield award should not be dismissed, as the Hartsfield award is final and binding; (3) the magistrate judge should have granted Alcatel's motion for summary judgment, since it has complied with the King award as a matter of law; and (4) the magistrate judge should have resolved the ambiguity present in the King award by reference to the findings in the Hartsfield award.
As an initial matter, the court notes that Alcatel has constructed its counterclaim, motion for summary judgment, and objections upon a central assumption: the Hartsfield award precludes enforcement of the King award because it was issued two days before Arbitrator King's decision and therefore was part of the parties' CBA when the King award was announced. In this regard, Alcatel contends that the King award does not "draw its essence" from the parties' CBA. See Enter. Wheel Car Corp., 363 U.S. at 597 (stating an award "is legitimate only so long as it draws its essence from the [CBA]").
Defendant cites art. XI, § 4 of the CBA, which states:
The decision of the impartial arbitrator shall be final and binding upon the Company [Alcatel], the Union, and the employees, provided that the arbitrator shall not have jurisdiction to make an award which amends, alters, enlarges or ignores the provisions of this Agreement, nor shall the arbitrator have jurisdiction to determine that the parties by practice or implication have amended or supplemented this Agreement.
(App to Def.'s Mot. for Summ. J. at 33).
When parties submit issue[s] to an arbitrator, "they have in effect empowered him to decide the issues stated in the grievance," and do so "without reservation," knowing that the arbitrator is "not free to reinterpret the parties' dispute and frame it in his own terms." Piggly Wiggly Operators' Warehouse v. Piggly Wiggly Operators' Warehouse Indep. Truck Drivers Union, Local No. 1, 611 F.2d 580, 584 (5th Cir. 1980); see also Int'l Chem. Workers Union v. Day Zimmermann, Inc., 791 F.2d 366, 369 (5th Cir. 1986) ("It is appropriate for the `arbitrator to decide just what the issue was that was submitted to it and argued by the parties.'") (quoting Waverly Mineral Products Co. v. United Steelworkers of Am., 633 F.2d 682, 685 (5th Cir. 1980)).
Whether an arbitrator's award "can be given an effect akin to res judicata or stare decisis with regard to future disputes that may arise between the parties, neither the district court nor this court [court of appeals] should decide," because "that issue itself is a proper subject for arbitration." New Orleans S.S. Ass'n v. Gen. Longshore Workers, 677 F.2d 492, 494 (5th Cir. 1982), aff'd sub nom., Jacksonville Bulk Terminals, Inc. v. Int'l Longshoremen's Ass'n, 450 U.S. 1029 (1981). Simply put, "the court may not . . . broaden the scope of the award by deciding the issue of the precedential effect of the award." Nat'l Elevator Indus., Inc. v. Int'l Union of Elevator Constructors, 647 F. Supp. 976, 978 (S.D. Tex.), aff'd, 806 F.2d 259 (5th Cir. 1986), cert., denied, 481 U.S. 1015 (1987).
The Fifth Circuit approaches res judicata in the context of labor arbitration by granting deference to the second arbitrator pursuant to the longstanding parameters of Enterprise Wheel Car Corporation. See W.R. Grace Co. v. Local Union No. 759 v. Int'l Union of the United Rubber, Cork, Linoleum, Plastic Workers of Am., 652 F.2d 1248, 1254 (5th Cir. 1981), aff'd, 461 U.S. 757, 765 (1983). In "general, it is established that an arbitrator will follow a prior award on controlling facts under the same contract . . . but if such award exceeds the arbitrator's jurisdiction or authority, does not draw its essence from the CBA, it cannot be considered to be binding." Id. at 1252-1253. A "federal court may not second guess" the decision of the second arbitrator. Id. at 765 (citing Enter. Wheel Car Corp., 363 U.S. at 599).
"Because the authority of arbitrators is a subject of collective bargaining, just as is any other contractual provision, the scope of the arbitrator's authority is itself a question of contract interpretation that the parties have delegated to the arbitrator." W.R. Grace Co., 461 U.S. at 765; see generally Timothy J. Heinsz, Grieve It Again: Of Stare Decisis, Res Judicata Collateral Estoppel in Labor Arbitration, 38 B.C. L. Rev. 275, 281-285 (1997).
This case differs factually from the arbitration in W.R. Grace Co. Here, unlike in W.R. Grace Co., the second arbitrator [King] has made no ruling regarding the precedential force of the award issued by the first arbitrator [Hartsfield]. Though the court has viewed no evidence suggesting that Alcatel, before the present litigation, believed arbitration of the Coates grievance to be unnecessary, it has considered Alcatel's contention that Arbitrator King did not have the Hartsfield award before him, and, consequently, lacked the opportunity to determine whether the award has a preclusive effect on the Coates grievance. Moreover, as Magistrate Judge Sanderson stated:
Alcatel has presented no cases analogous to the present circumstances where the parties proceeding with separate, albeit arguably related, grievances in which the first arbitration preceded the second, but in which the decision on the second was issued mere days prior to the first arbitration decision and in which a court has given preclusive effect to the first decision. Therefore, I am of the opinion that Alcatel's preclusion argument is without merit and the decision of Mr. King should be examined without resort to Mr. Hartsfield's.
Report at 3.
In light of the information above, the court cannot address Alcatel's preclusion argument without quantifying the substantive issues that the parties have committed to arbitration. Accordingly, it cannot delineate the controlling facts governing each award; to do so would usurp the jurisdiction and authority of Arbitrator King. See W.R. Grace Co., 461 U.S. at 765; New Orleans S.S. Ass'n, 677 F.2d at 468. Whether the Hartsfield award precludes enforcement of the King award is an issue for Arbitrator King, not the court, to address. See Rohm Haas, Tex. Inc., 677 F.2d at 493-494. Accordingly, the court overrules Alcatel's objection that the King award fails to "draw its essence" from the CBA because of the preclusive effect of the Hartsfield award. For these same reasons, Alcatel's additional objections relying upon its preclusion argument are hereby overruled.
"Remand to the arbitrator is the appropriate disposition of an enforcement action when . . . the language of the award has generated a collateral dispute." Rohm Haas, Tex. Inc., 677 F.2d at 495. Moreover, "even when the arbitrator's award may properly be vacated, the appropriate remedy is to remand the case for further arbitration proceedings." Garvey, 532 U.S. at 511 (reversing the Ninth Circuit, which had resolved the dispute on the merits); Int'l Chem. Workers Union v. Columbian Chem. Co., No. 02-30185, 2003 WL 21088001, at *8 (5th Cir. May 30, 2003). The court expresses no opinion regarding whether the King award should be vacated; however, even if the court were to believe that it should, remand to Arbitrator King would remain the appropriate course of action. See Enter. Wheel Car Corp., 363 U.S. at 599; Garvey, 532 U.S. at 509; Columbian Chem. Co., 2003 WL 21088001. Here, a remand is necessary to clarify precisely what the court is being asked to enforce. See Oil, Chem. Atomic Workers Int'l Union, Local 4-367, 677 F.2d at 495; Rohm . Haas, Tex. Inc., 677 F.2d at 495.
Alcatel raises additional objections to the magistrate judge's Report that are unrelated to its preclusion argument: (1) the King award does not draw its essence from the parties' CBA because Arbitrator King wrongfully awarded punitive damages without finding compensatory loss; (2) the King award is arbitrary and capricious; and (3) the magistrate judge should have awarded Alcatel its attorney's fees. These objections are hereby overruled. The court refuses to decide the issues and believes matters concerning damages or attorney's fees may properly be addressed by Arbitrator King upon remand. See Enter. Wheel Car Corp., 363 U.S. at 599; Garvey, 532 U.S. at 509. IV. Conclusion
Accordingly, for the reasons stated in the magistrate judge's Report and those stated herein, the court denies Plaintiffs Motion for Summary Judgment; denies Defendant's Motion for Summary Judgment; dismisses for want of jurisdiction Defendant Alcatel's counterclaim to enforce the Hartsfield award; overrules the objections made by both parties; and remands the Coates grievance to Arbitrator King for clarification of the arbitration award issued on January 31, 2002.
The effect, if any, of the Hartsfield decision on the Coates grievance is a matter for Arbitrator King to address and resolve.
It is so ordered