Title Pennsylvania Power Co. v. Local Union 272 - Int'l Brotherhood of Electrical Workers
Date 2001
By
Subject Other\Dissenting
Contents
174 276 FEDERAL REPORTER, 3d SERIES
21–23 The equitable doctrine of un- clean hands applies when a party seeking relief has committed an unconscionable act immediately related to the equity the par- ty seeks in respect to the litigation. Key- stone Driller Co. v. General Excavator Co.,
290 U.S. 240, 245, 54 S.Ct. 146, 78 L.Ed.
293 (1933). The doctrine is applicable in actions seeking relief under the Lanham Act. Ames Pub. Co. v. Walker–Davis Publ’n, Inc., 372 F.Supp. 1, 13 (E.D.Pa.
1974). Courts, however, do not close their doors when plaintiff’s misconduct has ‘‘no relation to anything involved in the suit, but only for such violations of conscience as in some measure affect the equitable relations between the parties in respect of something brought before the court for adjudication.’’ Keystone Driller, 290 U.S. at 245, 54 S.Ct. 146. The nexus ‘‘between the misconduct and the claim must be close.’’ In re New Valley Corp., 181 F.3d
517, 525 (3d Cir.1999).
Although we may sua sponte apply the doctrine,6 we choose not to do it. High- mark’s inappropriate use of a term in its
1999 advertisement does not excuse cur- rent deceptive and misleading advertise- ments to the public.
IV. CONCLUSION
In summary, we conclude that the plain- tiff offered sufficient evidence to prove that the challenged activities substantially affected interstate commerce. Highmark also established that the McCarran Act did not preclude relief under the Lanham Act for the deceptive and misleading represen- tations in UPMC’s February 2001 Ad. Fi- nally, the District Court did not abuse its discretion in granting Highmark’s applica-
tion for a preliminary injunction. Costs taxed against the appellant, UPMC.
,
PENNSYLVANIA POWER COMPANY, Appellant,
v.
LOCAL UNION NO. 272 OF THE IN- TERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, AFL– CIO.
No. 01–2116.
United States Court of Appeals, Third Circuit.
Argued Oct. 17, 2001.
Filed Dec. 21, 2001.
Employer brought action against un- ion seeking to vacate arbitration award. The United States District Court for the Western District of Pennsylvania, Gary L. Lancaster, J., declined to vacate award. Employer appealed. The Court of Appeals, Rosenn, Circuit Judge, held that arbitra- tion award had to be vacated on basis that arbitrator exceeded scope of arbitration provision and his decision failed to draw its essence from agreement.
Reversed.
Alito, Circuit Judge, filed a dissenting opinion.
6. Thus, if we wish to, we can apply the doc- trine. Harris v. City of Philadelphia, 47 F.3d
1333, 1342 (3d Cir.1995); Gaudiosi v. Mellon,
269 F.2d 873, 881 (3d Cir.1959).
PA. POWER CO. v. LOCAL UNION NO. 272, IBEW
Cite as 276 F.3d 174 (3rd Cir. 2001)
175
1. Arbitration O73.7(1)
Review of an arbitration award by the Court of Appeals is plenary, and the Court of Appeals applies the same standard as the District Court.
2. Labor Relations O462
An arbitration award ordinarily will not be vacated unless its essence is not drawn from the collective bargaining agreement; if the arbitrator’s interpreta- tion is in any rational way derived from the collective bargaining agreement, the arbitration award will not be disturbed. Labor Management Relations Act, 1947,
§ 301(a), 29 U.S.C.A. § 185(a).
3. Labor Relations O486
An arbitration award will not be va- cated just because the court believes its interpretation of the agreement is better than that of the arbitrator; it will be vacat- ed, however, if there is a manifest disre- gard of the collective bargaining agree- ment. Labor Management Relations Act,
1947, § 301(a), 29 U.S.C.A. § 185(a).
4. Labor Relations O479
An arbitration award based on a col- lective bargaining agreement may be set aside when an arbitrator manifested a dis- regard of his authorization, and instead dispensed his own brand of industrial jus- tice. Labor Management Relations Act,
1947, § 301(a), 29 U.S.C.A. § 185(a).
5. Labor Relations O462
Arbitration award, that was based on interpretation of anti-discrimination provi- sion in collective bargaining agreement
(CBA) to require plant production and maintenance employees to have same ben- efits as supervisory employees, had to be vacated on basis that arbitrator exceeded scope of arbitration provision and his de- cision failed to draw its essence from agreement; anti-discrimination provision referred solely to acts of discrimination
between employer and union and its members, and agreement, as well as Na- tional Labor Relations Act (NLRA), spe- cifically excluded supervisory employees from its terms. Labor Management Rela- tions Act, 1947, § 301(a), 29 U.S.C.A.
§ 185(a).
6. Arbitration O56
A reviewing court can set aside an arbitration award if enforcement of the award violates public policy.
7. Arbitration O61
A reviewing court can overturn an arbitration award if the arbitrator’s deci- sion is not supported by the record.
James A. Prozzi (Argued), A. Patricia
Diulus–Myers, Jackson Lewis, Schnitzler
& Krupman, Pittsburgh, PA, Counsel for
Appellant.
Joshua M. Bloom (Argued), Gatz, Cohen, Segal, Koerner & Colarusso, P.A., Pitts- burgh, PA, Counsel for Appellee.
Before ALITO, BARRY, and ROSENN, Circuit Judges.
OPINION OF THE COURT
ROSENN, Circuit Judge.
In recent years, federal policy has en- couraged the arbitration of unsettled labor disputes as the terminal point in the griev- ance procedures of collective bargaining agreements. Under such policy, the judi- cial function is not to review the merits of an arbitration award but is limited to a determination of whether the award
‘‘draws its essence from the collective bar- gaining agreement.’’ United Steelworkers of Am. v. Enterprise Wheel and Car Corp.,
363 U.S. 593, 597, 80 S.Ct. 1358, 4 L.Ed.2d
1424 (1960). The narrow issue presented
176 276 FEDERAL REPORTER, 3d SERIES
to us by this appeal requires us to make such a determination.
Local Union # 272 of the International Brotherhood of Electrical Workers, AFL– CIO (the Union) initiated a grievance un- der its collective bargaining agreement
(the Agreement) with Pennsylvania Power Company (the Company) covering produc- tion and maintenance employees at its Bruce Mansfield Plant (the Plant) with respect to certain early retirement bene- fits. The Company offered these benefits in a separate cooperative agreement condi- tional upon the production and mainte- nance employees’ cooperation with man- agement’s efforts to improve efficiency. The grievance proceeded to arbitration and the arbitrator found that the Union and its member employees had failed to cooperate with the Company’s efficiency efforts. However, the arbitrator conclud- ed that the failure of the Company to provide early retirement benefits to the Union members but to provide them to its supervisory personnel constituted a viola- tion of its collective bargaining agreement with the Union. The award required the Company to provide voluntary retirement program (VRP) benefits to the Union member employees at the Plant.
The Company timely filed a complaint in the United States District Court for the Western District of Pennsylvania seeking to vacate the award. The District Court declined to vacate the award. We reverse.
I.
The Company is a public utility engaged in the generation of electric power at its Plant in Shippingport, Pennsylvania. The Union represents the production and main- tenance employees of the Plant,1 excluding office clerical employees, guards, other
professional employees and ‘‘supervisors as defined in the National Labor Relations Act as amended.’’ The Agreement became effective on February 16, 1996, for a peri- od of three years.
Article 1, section 3 of the Agreement provides that ‘‘ t he Company and the Un- ion agree that they will not discriminate, coerce, nor intimidate any employee be- cause of membership or non-membership in the Union.’’
The Company and the Union also sepa- rately agreed that they would ‘‘actively support and participate in a joint effort to improve the competitive position of the power plant represented by the Union.’’ To encourage productive and financial effi- ciency in the face of impending deregula- tion in the electric generation industry, and the consequent ‘‘period of transforma- tion,’’ the Cooperative Agreement provided that the Company would utilize a voluntary retirement benefits program if it needed to reduce its workforce at the Plant. In re- turn, the Union promised to cooperate with the Company in attaining production efficiency. The Cooperative Agreement expressly provided that both prerequi- sites—determining the necessity to reduce workforce and determining whether the Union had cooperated in attaining produc- tion efficiency—were within the sole dis- cretion of the Company. The Company incorporated similar cooperative agree- ments in the collective bargaining agree- ment with other unions at its other plants. In 1998, the Company notified the Union that there would be no workforce reduc- tions at the Plant. In addition, even if the workforce were to be reduced, it notified the Union that the Plant bargaining unit employees would not be provided volun- tary retirement benefits because the Com-
1. The Company operates other electric gener- ating plants in Pennsylvania and Ohio. They
are not covered by the collective bargaining agreement involved in this dispute.
PA. POWER CO. v. LOCAL UNION NO. 272, IBEW
Cite as 276 F.3d 174 (3rd Cir. 2001)
177
pany had determined that the Union had not met the qualifying conditions. In the meantime, the Company did offer such voluntary retirement benefits to bargain- ing unit employees at its other plants be- cause the Company had determined that the unions representing those employees had cooperated with the Company and met the qualifying conditions. The Company also offered voluntary retirement benefits to supervisory personnel at both the Bruce Mansfield Plant and its sister plants.
As a result of the disparate treatment between the Plant bargaining unit employ- ees and their supervisors with respect to the VRP benefits allegedly ‘‘paid out of their own pension plan,’’ the Union filed a grievance under the collective bargaining agreement on April 20, 1998. The Union submits that it ‘‘did not claim that its members were entitled to the VRP bene- fits under the cooperative agreement, nor did it ever claim that the supervisors were party to the cooperative agreement or within the same bargaining unit.’’ The Union processed the grievance to arbitra- tion.
The monies funding the Company pen- sion benefits program are provided solely by the employer and maintained in a com- mon fund.2 The same pension plan covers all employees, both bargaining unit em- ployees and supervisory personnel.
The arbitrator found that since the Un- ion had not cooperated with the Company in attaining production efficiency that the Cooperative Agreement was not violated. Next, the Union claimed that the Company violated the anti-discrimination provision of the collective bargaining agreement.
First, the Union alleged that providing such benefits to bargaining unit employees at other plants without providing them to the Bruce Mansfield Plant bargaining unit employees violated the anti-discrimination provision. The arbitrator disagreed. The arbitrator reasoned that bargaining unit employees at other plants were not simi- larly situated to the Bruce Mansfield Plant bargaining unit employees because the for- mer had cooperated with the Company in attaining production efficiency and the lat- ter had not.
Second, the Union claimed that the Company violated the anti-discrimination provision because it offered retirement benefits to supervisory personnel at the Plant but denied them to the bargaining unit employees. This argument found fa- vor with the arbitrator. He reasoned that because pension payments for supervisors and the production and maintenance em- ployees were drawn from the same fund and supervisors were subject to the same qualifying conditions, the disparate treat- ment amounted to a violation of the anti- discrimination provision of the collective bargaining agreement. Therefore, the ar- bitrator directed that the voluntary retire- ment benefits be afforded to qualified bar- gaining unit employees at the Plant. Challenging the award on legal and poli- cy grounds, the Company timely filed suit in the United States District Court pursu- ant to section 301(a) of the Labor Manage- ment Relations Act, 29 U.S.C. § 185(a) to vacate the arbitration award. The com- plaint alleged the following grounds: (1) the arbitrator’s decision did not derive its essence from the Agreement; (2) the
2. The Union in its brief argues that ‘‘the pot of money used to pay the supervisory person- nel was funded by the supervisory personnel and the bargaining unit employees.’’ (Br. at
2) This is erroneous; at oral argument coun- sel for the Union acknowledged that only the
Company funds the retirement pension plan. The amount of monies paid into the pension fund by the employer on behalf of the Union member employees, however, was the subject of collective bargaining.
178 276 FEDERAL REPORTER, 3d SERIES
award directly conflicts with Article VIII
§ 2.d of the Agreement which bars the arbitrator from changing or adding to any provisions of the Agreement; (3) the arbi- tration award violates public policy; and
(4) the arbitrator’s decision is not sup- ported by the record. Both parties cross- moved for summary judgment. The Dis- trict Court denied the Company’s motion but granted the Union’s motion. The Dis- trict Court held that the arbitration award neither violated public policy nor ignored the clear language of the Agreement, and was supported by the record.
II.
1 The District Court exercised sub- ject matter jurisdiction pursuant to section
301(a) of the Labor Management Relations Act, 29 U.S.C. § 185(a). This Court has appellate jurisdiction pursuant to 28
U.S.C. § 1291. Our review is plenary, and we apply the same standard as the District Court in reviewing the arbitration award. Exxon Shipping Co. v. Exxon Seamen’s Union, 73 F.3d 1287, 1291 (3d Cir.1996). For almost a half century, the United States Supreme Court has consistently held that courts exercise a narrow and deferential role in reviewing arbitration awards arising out of labor disputes. See, e.g., United Paperworkers Int’l Union, AFL–CIO v. Misco, Inc., 484 U.S. 29, 36,
108 S.Ct. 364, 98 L.Ed.2d 286 (1987); W.R. Grace & Co. v. Local Union 759, Int’l Union of the United Rubber, Cork, Linole- um and Plastic Workers of Am., 461 U.S.
757, 764, 103 S.Ct. 2177, 76 L.Ed.2d 298
(1983). Most recently, in Major League
Baseball Players Association v. Garvey,
532 U.S. 504, ––––, 121 S.Ct. 1724, 149
L.Ed.2d 740 (2001), and Eastern Associat- ed Coal Corporation v. United Mine Workers of America, District 17, 531 U.S.
57, 62, 121 S.Ct. 462, 148 L.Ed.2d 354
(2000), the United States Supreme Court
reaffirmed that principle. The rationale for the court’s limited role is to ensure that the federal policy of encouraging arbitra- tion of labor disputes is not subverted by excessive court intervention on the merits of an award. United Steelworkers of Am.,
363 U.S. at 596, 80 S.Ct. 1358.
In light of the federal policy encouraging arbitration awards, there is a strong pre- sumption in their favor. Newark Morning Ledger Co. v. Newark Typographical Un- ion Local 103, 797 F.2d 162, 165 (3d Cir.
1986). However, the Supreme Court has at the same time made it clear that courts will intervene when the arbitrator’s award does not ‘‘draw its essence from the collective bargaining agreement’’ and the arbitrator is dispensing his or her own
‘‘brand of industrial justice.’’ United
Steelworkers of Am., 363 at 597, 80 S.Ct.
1358.
2, 3 Thus, an arbitration award ordi- narily will not be vacated unless its es- sence is not drawn from the collective bar- gaining agreement. W.R. Grace & Co.,
461 U.S. at 764, 103 S.Ct. 2177. To put it differently, if the arbitrator’s interpreta- tion is in any rational way derived from the collective bargaining agreement, the arbitration award will not be disturbed. Ludwig Honold Mfg. Co. v. Fletcher, 405
F.2d 1123, 1128 (3d Cir.1969). An arbitra- tion award will not be vacated just because the court believes its interpretation of the agreement is better than that of the arbi- trator. W.R. Grace & Co., 461 U.S. at 764,
103 S.Ct. 2177. It will be vacated, howev- er, if there is a ‘‘manifest disregard’’ of the agreement. Ludwig Honold Mfg. Co., 405
F.2d at 1128.
4 In United Paperworkers Interna- tional Union, the Supreme Court made clear that an ‘‘arbitrator may not ignore the plain language of the contract.’’ 484
U.S. at 38, 108 S.Ct. 364. Accordingly,
PA. POWER CO. v. LOCAL UNION NO. 272, IBEW
Cite as 276 F.3d 174 (3rd Cir. 2001)
179
this Court has held that ‘‘where there is a manifest disregard of the agreement, total- ly unsupported by principles of contract construction and the law of the shop’’ a reviewing court can vacate the award. Exxon Shipping Co., 73 F.3d at 1295; see also Ludwig Honold Mfg. Co., 405 F.2d at
1128 (noting limited review but stating that arbitrator’s interpretation must still be derived from agreement). In other words, an award may be set aside when an arbitrator manifested a disregard of his authorization, and instead ‘‘dispense d his own brand of industrial justice.’’ Newark Morning Ledger Co., 797 F.2d at 165
(quoting United Steelworkers of Am., 363
U.S. at 597, 80 S.Ct. 1358).
5 As noted before, the arbitrator ruled that notwithstanding the Union’s failure to comply with the qualifying condi- tions of the Cooperative Agreement for voluntary retirement benefits, to the ex- tent the Company afforded Plant supervi- sory personnel voluntary retirement bene- fits it must afford the same benefits to the Plant bargaining unit employees. He reached this result on the basis of the collective bargaining agreement’s prohibi- tion of discrimination.
The arbitrator reasoned:
Company witness Lubich made it clear that both groups were in the same pen- sion plan, designed for all Ohio Edison and Pennsylvania Power bargaining-unit employees and Management personnel. Thus, the Company’s making these VRP benefits available to Supervisory person- nel at Bruce Mansfield even though they failed to meet the qualifying conditions, while denying those benefits to Bruce
Mansfield bargaining-unit employees for failure to meet the same conditions con- stituted improper discrimination, in vio- lation of Article I, Section 3 of the Agreement.
The Company here does not seek a judi- cial review of the merits of the arbitrator’s award. The Company does not complain that the arbitrator erred in his interpreta- tion of the Agreement. On the contrary, it claims that the arbitrator acted outside the scope of his contractually delegated au- thority. The Agreement specifically pro- vides that the arbitrator may not alter or amend it. The Company contends that when the arbitrator ruled that the Compa- ny violated the anti-discrimination provi- sion of the Agreement the arbitrator al- tered and amended the Agreement, acted outside the scope of his authority, and failed to draw his decision from the es- sence of the Agreement.
In making this award, we agree with the Company that the arbitrator exceeded his powers under the Agreement. Moreover, he altered the Agreement in direct viola- tion of its provision that he had no power to do so. He wrote into the contract that the Plant production and maintenance em- ployees shall have the same benefits as the supervisory employees. The Agreement specifically excludes supervisory employ- ees from its terms. Furthermore, the Na- tional Labor Relations Act (NLRA) ex- cludes supervisors from the bargaining unit or from inclusion in a collective bar- gaining agreement. Supervisors are not employees for collective bargaining pur- poses under the NLRA.3
3. Congress amended the National Labor Rela- tions Act in 1947 to specifically exclude su- pervisors from the definition of ‘‘employee.’’ The exclusion, 29 U.S.C. § 152(3), provides in pertinent part: ‘‘The term ‘employee’ shall include any employee TTT but shall not in-
clude an individual employed TTT as a super- visor.’’
This exclusion ‘‘was accompanied by the congressional declaration in a new section
14(a)’’ providing in pertinent part that:
180 276 FEDERAL REPORTER, 3d SERIES
Nothing in the labor contract between the parties provides that production and maintenance employees shall have the same benefits as supervisory employees, particularly voluntary retirement benefits. Nothing in the anti-discriminatory provi- sion of the contract between the employer and its union employees remotely provides a basis for a determination that the Com- pany discriminated against its Union em- ployees because it did not offer the same VRP benefits it afforded its supervisors. Congress understood that the dynamics of industry and commerce required that loy- alty owed by supervisory personnel to their employer excludes them from collec- tive bargaining for rank and file employ- ees. The one is ordinarily paid on an hourly basis to comply with federal wage and hours laws and the statutory provi- sions for overtime pay after 40 hours of work per week. Supervisors are ordinari- ly paid on a salary basis and are not subject to the same overtime provisions of the law. Benefits usually differ between the two groups with respect to health, life insurance, bonus and other benefits. Nothing in the Agreement, including the anti-discrimination provision, requires that supervisors and bargaining unit employees shall receive the same wages, vacations, or other benefits on the same basis as super- visors. The discriminatory provision of the Agreement refers solely to acts of discrimination between the Company and the Union and its members. This provi- sion of the contract is common in many labor contracts. It apparently finds its genesis in sections 8(a) and (b) of the National Labor Relations Act, 29 U.S.C.
§§ 158(a), (b) relating to unfair labor prac- tices. Section 8(a)(3) provides in pertinent
part that it shall be an unfair labor prac- tice for an employer to discriminate ‘‘in regard to hire or tenure of employment or any term or condition of employment to encourage or discourage membership in any labor organization.’’ 29 U.S.C.
§ 158(a)(3). Section 8(b) provides in perti- nent part that it is an unfair labor practice for a labor organization or its agents: ‘‘(1) to restrain or coerce (A) employees in the exercise of the rights guaranteed in Sec- tion 157 of this title TTT (2) to cause or attempt to cause an employer to discrimi- nate against an employee in violation of subsection (a)(3) of this section or to dis- criminate against an employee with re- spect to whom membership in such organi- zation has been denied or terminated.’’ 29
U.S.C. § 158(b). Because supervisors are not ‘‘employees’’ under the NLRA for pur- poses of collective bargaining, an employ- er’s affording retirement benefits to super- visors but not providing them to union member employees cannot possibly consti- tute discrimination between employees es- pecially under the anti-discrimination sec- tion of the Agreement. Carried to its logical conclusion, the arbitrator’s reason- ing would require an employer to provide its rank and file employees with the same benefits it provides its supervisors unless the employer establishes separate, inde- pendent funding for benefits for supervi- sors and another for non-supervisors, even though the funding is provided entirely by the employer. This is neither the law nor industry practice. It is highly impractical, costly and may even be unmanageable with large companies that have multiple bargaining units in one plant or more, and many separate collective bargaining agree-
N o employer subject to this Act shall be compelled to deem individuals defined herein as supervisors as employees for the purpose of any law, either national or local, relating to collective bargaining.
Robert A. Gorman, BASIC TEXT ON LABOR LAW,
UNIONIZATION AND COLLECTIVE BARGAINING 34
(1976).
PA. POWER CO. v. LOCAL UNION NO. 272, IBEW
Cite as 276 F.3d 174 (3rd Cir. 2001)
181
ments, to maintain, separate funds, invest- ments, records, and reports.
The District Court concluded that the arbitrator’s decision did not bring the su- pervisors under the terms and conditions of the Agreement, including the Coopera- tive Agreement. Rather, the District Court reasoned that the arbitrator simply concluded that ‘‘no explanation was given as to why supervisory personnel, unlike bargaining unit employees, were not sub- ject to qualifying conditions for VRP bene- fits and such a lack of explanation amount- ed to discrimination in contravention of the
Agreement .’’ However, the employer had no obligation whatsoever to disclose in the grievance and arbitration proceedings its arrangements, contracts or obligations to its supervisors. Such explanation was irrelevant and we can see no evidentiary or legal reason for their production.
The arbitrator had strayed far beyond the scope of the arbitration. A require- ment that an employer disclose its contrac- tual terms for benefits to its supervisors in a proceeding to which they are not a party, or else face an order that they provide similar benefits to their Union production and maintenance employees, has no basis in reality, law, or industry practice. Cer- tainly no such requirement is contained in the Agreement between the Company and the Union. What the arbitrator has wrought here not only alters and amends
the collective bargaining agreement but far exceeds the permissible powers of the arbitrator. Were it applied generally in the marketplace, it would wreak conster- nation and havoc throughout American in- dustry. The award amounts to nothing more than the arbitrator’s personal brand of justice with which we do not agree.
III.
6, 7 Accordingly, the arbitrator’s de- cision conflicts with the express provisions of the Agreement between the Company and the Union. The arbitrator has written into the contract a provision obligating the Company to pay its Union employees vol- untary retirement benefits to which indis- putably it never agreed and as to which the Union employees concededly were not entitled.4 The arbitrator’s effort to justify the alteration of the collective bargaining agreement on the basis of an irrelevant discrimination clause in the Agreement is unreasonable and impermissible. The ar- bitrator has exceeded the scope of the arbitration provision and his decision fails
5to draw its essence from that Agreement.
The judgment of the District Court will be reversed and the case remanded with direction to the District Court to vacate the award. In directing that the award be vacated, we do not preclude the Union from applying to the District Court for a
4. In Appalachian Regional Healthcare, Inc. v. United Steelworkers of America, AFL–CIO, Lo- cal 14398, 245 F.3d 601, 605 (6th Cir.), cert. denied ––– U.S. ––––, 122 S.Ct. 350, 151
L.Ed.2d 264 (2001), the court vacated an ar- bitrator’s award because it conflicted with the express provisions of the collective bargaining agreement between the Company and the Un- ion. The court stated: ‘‘Even if we were to credit the arbitrator’s construction of the Agreement as against its conflict with express provisions, we would still have to vacate the award as it imports notions not found in the Agreement itself.’’ Id. at 606.
5. A reviewing court can set aside an arbitra- tion award if enforcement of the award vio- lates public policy. Eastern Assoc. Coal Corp.,
531 U.S. at 62–63, 121 S.Ct. 462; Exxon Shipping Co., 73 F.3d at 1291. An award can also be overturned if the arbitrator’s decision is not supported by the record. United Indus. Workers v. Virgin Islands, 987 F.2d 162, 170
(3d Cir.1993). In light of our ultimate dispo- sition, we need not reach the Company’s al- ternative arguments that the arbitration award should be vacated because it violated public policy or that the arbitrator’s decision was unsupported by the record.
182 276 FEDERAL REPORTER, 3d SERIES
remand of the proceedings to the arbitra- tor. Costs taxed against the appellee Un- ion.
ALITO, Circuit Judge, dissenting.
Just last Term, the Supreme Court re- minded us how narrow our proper scope of review is in a case such as this. In East- ern Associated Coal Corporation v. United Mine Workers of America, 531 U.S. 57,
121 S.Ct. 462, 148 L.Ed.2d 354 (2000), the Court wrote that when an ‘‘employer and union have granted to the arbitrator the authority to interpret the meaning of their contract’s language,’’ ‘‘ t hey have ‘bar- gained for’ the ‘arbitrator’s construction’ of their agreement, TTT a nd courts will set aside the arbitrator’s interpretation of what their agreement means only in rare instances.’’ 531 U.S. at 61–62, 121 S.Ct.
462 (citation omitted). The Court contin- ued:
Of course, an arbitrator’s award ‘‘must draw its essence from the contract and cannot simply reflect the arbitrator’s own notions of industrial justice.’’ Pa- perworkers v. Misco, Inc., 484 U.S. 29,
38, 108 S.Ct. 364, 98 L.Ed.2d 286 (1987).
‘‘But as long as an honest 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 deci- sion.’’ Ibid.
Eastern Associated Coal Corporation, 531
U.S. at 62, 121 S.Ct. 462; see also Major League Baseball Players Association v. Garvey, 532 U.S. 504, 121 S.Ct. 1724, 1728,
149 L.Ed.2d 740 (2001).
The majority in this case overturns the arbitrator’s decision because the majority strongly disagrees with his interpretation of the collective bargaining agreement. The arbitrator held that the collective bar- gaining agreement obligates the employer to provide voluntary retirement benefits to union-member employees on the same terms as supervisors. In so construing the agreement, the arbitrator relied on
article 1, section 3 of the agreement, the so-called anti-discrimination provision, which states that the company may not
‘‘discriminate’’ against ‘‘any employee be- cause of membership or non-membership in the Union.’’ Tracing this clause to Sec- tions 8(a) and (b) of the National Labor Relations Act, 29 U.S.C. § 158(a) and (b), the majority disagrees with the arbitra- tor’s interpretation, reasoning that ‘‘ b e- cause supervisors are not ‘employees’ un- der the NLRA for purposes of collective bargaining, an employer’s affording retire- ment benefits to supervisors but not pro- viding them to union member employees cannot possibly constitute discrimination between employees under the anti-discrim- ination section of the Agreement.’’ Maj. Op. at 180–81. The majority goes on to observe that the arbitrator’s reasoning is supported by ‘‘neither the law nor industry practice’’ and ‘‘is highly impractical, costly and may even be unmanageable’’ for some companies. Maj. Op at 181.
I find the majority’s interpretation of the collective bargaining agreement more persuasive than the arbitrator’s, but I can- not agree that the arbitrator’s decision did not ‘‘draw its essence from the contract’’ or that the arbitrator was not ‘‘even arguably construing the contract.’’ As noted, the arbitrator’s decision drew its essence from and was based on a construction of the anti-discrimination section. That the arbi- trator probably misconstrued that provi- sion is beside the point. The parties bar- gained for the arbitrator’s construction of the agreement, and that is what they got. By intervening to rescue the Pennsylvania Power Company from one of the conse- quences of its bargain, the majority has exceeded the proper scope of our court’s authority. I must therefore respectfully dissent.
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