Peco Foods Inc v. Retail Wholesale and Department Store Union Mid-South Council

Filing 34

MEMORANDUM OF OPINION. Signed by Judge L Scott Coogler on 2/15/2018. (PSM)

FILED
2018 Feb-15 PM 01:19
U.S. DISTRICT COURT
N.D. OF ALABAMA

UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
WESTERN DIVISION
PECO FOODS, INC.,
Plaintiff,
v.
RETAIL, WHOLESALE, AND
DEPARTMENT STORE UNION,
MIDSOUTH COUNCIL,
Defendant.

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7:16-cv-01345-LSC

MEMORANDUM OF OPINION
Before this Court is Defendant Retail Wholesale and Department Store
Union Mid-South Council’s(“RWDSU” or “the Union”) Motion for Attorney’s
Fees and Costs. (Doc. 26.) RWDSU is the prevailing party in this action brought
under Section 301 of the Labor Management Relations Act of 1947, as amended 29
U.S.C. § 185 (the “Act”). Plaintiff Peco Foods, Inc. (“Peco”) filed a timely
response in opposition. (Doc. 29.) The Union seeks fees and costs in the amount of
$22,430.50 (attorneys’ fees in the amount of $21,667.50 (96.30 hrs. x $225.00 per
hour = $21,667.50 + paralegal fees of $763.00 (10.90 hrs. x $70 = $763.00)). (Doc.
27 at 4, Doc. 27-1 at 9 & 13.) For the reasons stated herein, the Union’s motion is
due to be GRANTED.
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I.

BACKGROUND
This action arises out of the termination of Larry Richardson

(“Richardson”), a Peco employee, and the subsequent arbitration proceeding.
Richardson’s supervisor held a safety meeting where employees were reminded
that throwing ice was prohibited during work hours. (Doc. 17 at 2.) Richardson
responded by saying “I don’t throw ice, I throw lead.” (Id.) Recalling a recent
workplace shooting at another business, the supervisor reported the statement to
his superior. Peco’s Complex Human Resources Director launched an
investigation, which included questioning Richardson about the statement.
Richardson could not provide an explanation for his conduct. The following day,
with the approval of Peco’s Corporate Human Resource Director, Richardson was
terminated.
Richardson was a member of RWDSU, which had a collective bargaining
agreement (“CBA”) with Peco. The parties agreed to an arbitration regarding the
matter, and an award was ultimately rendered in the Union’s favor on July 15, 2016.
Peco filed its Complaint in August of 2016 to vacate the award. (Doc. 1.) RWDSU
counterclaimed, seeking enforcement. This court confirmed the arbitration award
in its Memorandum of Opinion. (Doc. 24.) As explained therein, each argument
Peco made in favor of vacatur required this Court to re-determine the arbitrator’s
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factual findings and merits of the arbitrator’s decision. (Doc. 24 at 12-13, 16-18.)
The arbitration decree did not provide for attorney’s fees, therefore the Union has
motioned for them. As grounds for the requested fees and costs, the Union
contends Peco brought this action without justification and contrary to settled law
regarding the limited nature of judicial review of labor arbitration awards. The
Court agrees.
II.

STANDARD OF REVIEW
Although section 301 of the Act 1 does not provide for attorney’s fee for its

violation, “[a] district court has authority to award attorney’s fees where it
determines that a party has without justification refused to abide by the award of an
arbitrator.” Int’l Union of Dist. 50, Mine Workers of Am. v. Bowman Transp., Inc.,
421 F.2d 934, 935 (5th Cir. 1970) 2 (per curiam) (citations omitted); see also Int’l
Ass. of Machinists and Aerospace Workers, District 776 v. Texas Steel Co., 538 F.2d
1116, 1122-23 (5th Cir. 1976). Here, though the arbitration decree did not provide
for attorney’s fees; this Court has the authority to award attorney’s fees and costs
using “its equity power if a party violates Section 301(a) of the [LMRA] in bad

1

29 U.S.C. § 185, Labor Management Relations Act (“LMRA”).
According to Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc),
decisions of the former Fifth Circuit handed down before the close of business on September 30,
1981 are binding on this Court. Slater v. U.S. Steel Corp. No. 12-15548 n.5 (11th Cir. 2017).
2

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faith, vexatiously, wantonly or for oppressive reasons.” Varnes v. Local 91, Glass
Bottle Blowers Assoc., 674 F.2d 1365, 1369 (11th Cir. 1982); 29 U.S.C.A. § 301(a).
“In the context of challenges to awards under the FAA, [the Eleventh Circuit]
ha[s] provided “notice” that ‘[it] is exasperated by those who attempt to salvage
arbitration losses through litigation that has no sound basis in the law applicable to
arbitration awards’ and has warned litigants that ‘[it is] ready, willing, and able to
consider imposing sanctions in appropriate cases.’” United Steel, Paper & Forestry,
Rubber, Mfg., Energy, Allied Indus. & Serv. Workers Int'l Union v. Wise Alloys, LLC,
807 F.3d 1258, 1271 (11th Cir. 2015) (citing B.L. Harbert Int'l, LLC v. Hercules Steel
Co., 441 F.3d 905, 913–14 (11th Cir. 2006), abrogated on other grounds by Frazier
v. CitiFinancial Corp., LLC, 604 F.3d 1313, 1321 (11th Cir. 2010)). This Circuit has
“declined to order sanctions when at least some plausible argument supported the
challenge or the challenge raised an argument [] not addressed yet.” Id. at 1271
(citing Gonsalvez v. Celebrity Cruises, Inc., 750 F.3d 1195, 1198 (11th Cir. 2013) (per
curiam); Hercules Steel, 441 F.3d at 914. Judicial review of a labor-arbitration
decision pursuant to [a collective bargaining] agreement is very limited.” Major
League Baseball Players Ass'n v. Garvey, 532 U.S. 504, 509 (2001); see also United
Steel, 807 F.3d at 1271 (“[W]e review a labor arbitration award for ‘whether
[it] is irrational, whether it fails to draw its essence from the collective bargaining
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agreement or whether it exceeds the scope of the arbitrator's authority.’”
(quoting Osram Sylvania, Inc. v. Teamsters Local Union 528, 87 F.3d 1261, 1263
(11th Cir. 1996))).
III.

DISCUSSION

A. Jurisdiction
While jurisdiction is not disputed by the parties, it is incumbent upon the
Court to determine whether ruling on the pending motion is within its power.
RWDSU timely made their Motion for Attorney’s Fees within the 14 –day time
period required by Federal Rule of Civil Procedure 54(d)(2)(B). A month after the
Court granted summary judgment in favor of RWDSU (doc. 24), Peco filed its
Notice of Appeal. (Doc. 30.) It is well-settled that “[t]he filing of a notice of appeal
is an event of jurisdictional significance—it confers jurisdiction on the court of
appeals and divests the district court of its control over those aspects of the case
involved in the appeal.” Green Leaf Nursery v. E.I. DuPont De Nemours & Co., 341
F.3d 1292, 1309 (11th Cir. 2003) (citation omitted). However, a district court may
retain jurisdiction for the purpose of “entertaining motions on matters collateral to
those at issue on appeal.” Mahone v. Ray, 326 F.3d 1176 (11th Cir. 2003). This
Circuit has held that a district court may consider a motion for attorneys' fees after
a notice of appeal has been filed in the underlying case. See Rothenberg v. Sec. Mgmt.
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Co., Inc., 677 F.2d 64, 65 (11th Cir. 1982); see also Briggs v. Briggs, 260 Fed. Appx.
164, 165 (11th Cir. 2007) (per cuiam) (citing Rothenberg for same proposition).
Accordingly, the Court determines it possesses jurisdiction over RWDSU’s
Motion for Attorney’s Fees despite the fact that the underlying case is currently on
appeal.
B. Basis for a Grant of Attorney’s Fees
Given the “very limited” nature of judicial review of labor-arbitration
decisions pursuant to CBAs, Peco must have had “at least some plausible argument
support[ing] [its] challenge” in order to avoid a grant of attorney’s fees in favor of
the Union. Garvey, 532 U.S. at 509; United Steel, 807 F.3d at 1271. The Court finds
that Peco did not.
Because the scope of review for a labor arbitration award is so narrow, Peco’s
only chance for prevailing was for the Court to substitute its judgment for the
arbitrator’s and to engage in a review of the merits of the decision—something it
cannot do. See Drummond Coal Co. v. UMWA, Dist. 20, 748 F.2d 1495, 1497 (11th
Cir. 1984) (“[t]he courts are not to engage in a review of the merits of the
arbitrator’s decision.”). As this Court stated in its Memorandum of Opinion
regarding Peco’s challenge of jurisdiction, “it is clear that any review this Court

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would undertake would have to be on the merits of the arbitrator’s construction.”
(Doc. 24 at 12.)
The Court ruled that it could not set aside the award based on Peco’s
challenge of the arbitrator’s decision that Peco did not have just cause in firing the
employee. (Doc. 24 at 12-13.) Granting such a request would require engaging in a
review of the arbitration award’s merits. As for Peco’s back pay and vagueness
challenges, granting vacatur on those grounds also would have required a second
guessing of the arbitrator’s factual finding of mitigation. (Doc. 24 at 16-18.)
As for Peco’s public policy challenge, the Court ruled that it could not upset
the award without interfering with the arbitrator’s factual findings, “simply
because it disagrees with them.” United Paperworkers Int’l Union, AFL-CIO v.
Misco, Inc., 484 U.S. 29, 37-38 (1987). “[T]he fact that it is inquiring into a
possible violation of public policy [does not] excuse a court for doing the
arbitrator’s task.” Id. at 45. In granting Summary Judgment for RWDSU, this
Court held that even assuming arguendo that Peco had proven a public policy
sufficient to vacate an arbitration award, it failed to clearly show a violation of that
public policy. (Doc. 24 at 15.) The Court went further, though, and held that even
had Peco shown this evidence, it was still asking the Court to impermissibly
interfere with the arbitrator’s factual findings. (Doc. 24 at 16.)
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All in all, Peco’s argument in its Opposition that “multiple reasons
supported vacatur of the Award,” (doc. 29), falls flat. Indeed, as outlined in the
Court’s Memorandum of Opinion (doc. 24), every reason asserted by Peco would
have ultimately required an impermissible review of the arbitration decree’s merits
and an exchange of the arbitrator’s finding of facts with the Court’s own. Thus, its
suit to vacate the award was “without justification.” Bowman, 421 F.2d at 935; see
also Int’l Assocs. of Machinists, District 776 v. Texas Steel Co., 538 F.2d 1116, 1122,
(5th Cir. 1976) (“we refuse to countenance frivolous and wasteful judicial
challenges to conscientious and fair arbitration decisions”).
In its Opposition, Peco cites Delta in support of its position that enforcing
the arbitration award would be to violate the very narrow public policy exception,
and it uses an Eleventh Circuit ruling affirming the denial of attorney’s fees to
contend that Delta “arguably supported” its position. (See Doc. 29 at 3.) Delta Air
Lines, Inc. v. Air Line Pilots Ass’n, Int’l, 861 F.2d 665, 670-71 (11th Cir. 1988); see
also Ala. Gas Corp. v. Gas Fitters Local Union No. 548 of United Ass’n, AFL-CIOCLC, 599 Fed. Appx. 382 (11th Cir. 2015) (per curiam) (cert. denied), affirming
Ala. Gas Corp. v. Gas Fitters Local Union No. 548 of United Ass’n, AFL-CIO-CLC,
2014 WL 3622713 at *5 (M.D. Ala. July 23, 2014) (affirming denial of a union’s

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requests for attorney’s fees after dismissal of plaintiff’s appeal of arbitration award
on public policy grounds).
The plaintiff in Alabama Gas, “admitted to the statements attributed to him
and to the possession of the firearm in his personal vehicle in Alagasco’s parking
lot.” Ala. Gas, 2014 WL 3622713 at *2. Unlike the plaintiff in Hercules Steel, Peco
“ha[d] the benefit of the notice and warning” provided by Hercules as well as
Alabama Gas. In Alabama Gas, the district court denied the union’s motion for
attorney’s fees because Delta “arguably support[ed]” the company’s position
“despite ultimately being inapposite to the facts.” Ala. Gas, 2014 WL 3655713 at
*5. Thus, the company “did not take a wholly unreasonable position in challenging
the arbitration award.” Id. at *5. Here, Richardson’s misconduct was not integral to
the performance of his employment duties, he violated neither federal agency
regulations, nor the criminal law forming the basis of a dominant and well-defined
public policy, and the arbitrator’s decision to reinstate him was not a clear violation
of any such public policy. Id. Unlike the plaintiff in Alabama Gas, where potentially
threatening comments were made in conjunction with the plaintiff owning a gun
and having it on company premises, here, there was no evidence that Richardson
either owned a gun or intended to actually “throw lead.” (Doc. 17 at 2.)

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“[T]he offending arbitrator’s award which properly results in [a] setting it
aside must be so offensive that one is to be seen only rarely.” Delta, 861 F.2d at
670. The egregiousness of the employee’s behavior in Delta rose to the level of
rareness necessitating a setting aside. Id. (reversing arbitrator’s decision, that
airline had no “just cause” for discharging pilot who flew passenger plane while
intoxicated, holding that it violated clearly established public policy and could not
be enforced). In contrast, here, the Court stands by its ruling as set out in its
Memorandum (doc. 24), that the arbitrator’s determination that Richardson’s
conduct did not rise to the requisite level for a set aside was correct. As such,
imposition of attorney’s fees is warranted.
In sum, Peco attempted to salvage an arbitration loss through litigation that
had no sound basis in the law and should pay the Union’s costs of defending such
an unnecessary and groundless action. See United Steel, 807 F.3d at 1275
(“[A]ttorneys' fees and expenses may be awarded when a party on the losing end
of an arbitration decision seeks to overturn that decision without any real basis for
doing so.” (internal quotations and citations omitted )).

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V.

CONCLUSION

For the reasons stated above, the Union’s motion for attorney’s fees and
costs in the amount of $22,430.50 is due to be GRANTED. A separate Order
consistent with this Opinion will be entered.
DONE and ORDERED on February 15, 2018.

_____________________________
L. Scott Coogler
United States District Judge
190685

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