Chicago Regional Council of Carpenters, United Brotherbood of Carpenters and Joiners of America v. Unique Casework Installations, Inc.

Filing 61

OPINION AND ORDER: The Union's motion to vacate the March 15, 2015 second supplementary award and order 44 is granted. Signed by the Honorable Sara L. Ellis on 10/5/2015: Mailed notice(rj, )

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
CHICAGO REGIONAL COUNCIL OF
CARPENTERS, UNITED BROTHERHOOD
OF CARPENTERS AND JOINERS OF
AMERICA,
Plaintiff,
v.
UNIQUE CASEWORK INSTALLATIONS,
INC.,
Defendant.

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No. 14 C 2911
Judge Sara L. Ellis

OPINION AND ORDER
After prevailing in arbitration against Defendant Unique Casework Installations, Inc.
(“Unique”), Plaintiff Chicago Regional Council of Carpenters, United Brotherhood of Carpenters
and Joiners of America (the “Union”) filed suit to enforce the arbitration award. Unique
responded by filing affirmative defenses and counterclaims, seeking to vacate the award and also
asserting a claim of race discrimination against the Union. The Court struck and dismissed
Unique’s affirmative defenses and counterclaim seeking to vacate the arbitration award, but
allowed Unique’s race discrimination counterclaim to proceed. After the Union’s motion for
judgment on the pleadings to enforce the arbitration award was fully briefed, the arbitrator issued
a second supplementary award on March 15, 2015, vacating his previous award in favor of the
Union. The Union now seeks to vacate the March 15, 2015 second supplementary award [44].
Because the Court finds that the arbitrator exceeded his authority in issuing the March 15, 2015
second supplementary award, the Court grants the Union’s motion to vacate.

BACKGROUND
The Union and Unique are bound by the provisions of a collective bargaining agreement
(the “CBA”). The CBA provides for a grievance process, whereby disputes not resolved by an
informal process are to be submitted to arbitration. The CBA further provides that, “[i]n the
event that a party refuses to arbitrate or fails to comply with the decision of the Arbitrator, the
other party has the right to avail itself of any lawful means necessary to compel compliance,
including but not limited to, judicial intervention.” Doc. 47-4, § 18.6. The CBA also sets forth
procedures for the selection of a job steward.
In November 2013, Unique refused to accept the Union’s appointed steward at a jobsite
at Northwestern University. The Union demanded arbitration of the claim. A hearing was held
on January 16, 2014 before arbitrator Edwin Benn, who issued an award on March 4, 2014. The
arbitrator found that Unique had violated the CBA by refusing the Union’s appointed steward.
The arbitrator awarded the Union backpay for the steward, the fringe benefit contributions owed
under the CBA for the steward, and attorneys’ fees and costs. Unique was also ordered to place
a Union steward at the Northwestern jobsite if the job was still in progress. But because Unique
was no longer working at the Northwestern jobsite, no Union steward was ever placed there.
Because the amounts awarded had not been quantified, the arbitrator noted that, “[w]ith consent
of the parties, jurisdiction is retained to resolve any disputes over amounts owed by the
Employer under this award.” Doc. 47-1 at 10 n.22. Accordingly, on August 9, 2014, the
arbitrator issued a supplementary award, awarding the Union $41,436.59. That amount
represented $19,856.84 in backpay, $12,856.84 in fringe benefits, and $9,031.46 in attorneys’
fees and costs.

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At the same time as the award was issued, the arbitrator issued an invoice for his services,
indicating that the Union and Unique each owed him $1,750. The CBA provides that “[t]he
expense of the Arbitrator shall be shared by the parties in equal proportions.” Doc. 47-4, § 18.4.
The Union paid the arbitrator $1,750 by check dated April 24, 2014. Unique has not paid the
arbitrator its portion of the arbitration costs despite the arbitrator’s numerous requests. On
February 6, 2015, the arbitrator contacted counsel for the Union, requesting that the Union make
arrangements to pay Unique’s share of the invoice based on the arbitrator’s interpretation that the
liability for expenses was joint and several. The Union refused, leading the arbitrator to remove
himself from the arbitration panel on February 17 and to threaten collection proceedings if the
Union failed to pay Unique’s portion of the invoice. On March 13, the arbitrator further
threatened that if the outstanding balance was not paid by the Union, he would issue a second
supplementary opinion and award vacating the two prior awards in the matter. That second
supplementary award was issued on March 15. The arbitrator indicated he had “continuing
jurisdiction” pursuant to Article XVIII of the CBA, that the Union was subject to joint and
several liability for the arbitration expenses, and that a final and binding award was conditional
on full payment of the arbitration expenses. Doc. 47-5 at 6–7. Because the arbitrator had not
been fully paid, he vacated the previously issued March 4, 2014 award and August 9, 2014
supplementary award.
ANALYSIS
The Union asks the Court to vacate the arbitrator’s March 15, 2015 second
supplementary award, which would have the effect of reinstating the March 4, 2014 award and
August 9, 2014 supplementary award. The Union again cites to the Federal Arbitration Act (the
“FAA”) despite the fact that this action is governed by Section 301 of the Labor Management

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Relations Act (the “LMRA”), 29 U.S.C. § 185, and not the FAA. But as the Court has already
explained, see Doc. 28 at 4–5, this makes little difference, for the standard of review is
essentially the same under the LMRA and the FAA, with district courts looking to the FAA as
guidance to fill in procedural gaps in LMRA actions involving petitions to confirm or vacate
arbitration awards. Smart v. Int’l Bhd. of Elec. Workers, Local 702, 315 F.3d 721, 724–25 (7th
Cir. 2002); Int’l Union of Operating Eng’rs, Local No. 841 v. Murphy Co., 82 F.3d 185, 188–89
(7th Cir. 1996) (reviewing award under FAA, but finding same result would obtain under the
LMRA); Nat’l Wrecking Co. v. Int’l Bhd. of Teamsters, Local 731, 990 F.2d 957, 960 (7th Cir.
1993) (standard of review is the same whether the case arises under the LMRA or the FAA).
The Court’s review of a labor arbitration award is limited. Prate Installations, Inc. v.
Chicago Reg’l Council of Carpenters, 607 F.3d 467, 470 (7th Cir. 2010). The Court is to
enforce an award as long as the decision “draws its essence from the collective bargaining
agreement.” United Paperworks Int’l Union, AFL-CIO v. Misco, Inc., 484 U.S. 29, 36, 108 S.
Ct. 364, 98 L. Ed. 2d 286 (1987) (quoting Steelworkers v. Enterprise Wheel & Car Corp., 363
U.S. 593, 597, 80 S. Ct. 1358, 4 L. Ed. 2d 1424 (1960)). The Court’s review is “limited to
determining whether the arbitrator exceeded the powers delegated to him by the parties, i.e.,
whether he failed to arbitrate the dispute in accord with the agreement.” Clear Channel
Outdoor, Inc. v. Int’l Unions of Painters & Allied Trades, Local 770, 558 F.3d 670, 675 (7th Cir.
2009) (citation omitted) (internal quotation marks omitted); see also United Steel, Paper &
Forestry, Rubber, Mfg., Energy, Allied Indus. & Serv. Workers Int’l Union, AFL-CIO, CLC v.
PPG Indus., Inc., 751 F.3d 580, 584 (7th Cir. 2014) (“A court will not overturn an arbitrator’s
award, even if the arbitrator’s decision is wrong on the law or the facts; an arbitrator’s award is
unenforceable only if he ‘strays from interpretation and application of the agreement and

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effectively dispenses his own brand of industrial justice.’” (quoting Major League Baseball
Players Ass’n v. Garvey, 532 U.S. 504, 509, 121 S. Ct. 1724, 149 L. Ed. 2d 740 (2001))). An
award “procured by the parties through fraud or through the arbitrator’s dishonesty need not be
enforced.” Misco, Inc., 484 U.S. at 38; see also 9 U.S.C. § 10 (under the FAA, court may vacate
arbitration award where, among other things, the award was procured by fraud; the arbitrator was
partial, corrupt, or guilty of misconduct that prejudiced the party; or the arbitrator exceeded his
powers).
The Union argues that the arbitrator exceeded his authority in issuing the March 15, 2015
second supplementary award because his jurisdiction over the case ended when the
supplementary award was issued, meaning that the March 15, 2015 second supplementary award
has no effect. The Court has already determined that the March 4, 2014 award was a final
award. See Doc. 28 at 5–6. In his March 4, 2014 award, the arbitrator indicated that he was
retaining jurisdiction “to resolve any disputes over amounts owed by [Unique] under this award.”
Doc. 47-1 at 10 n.22. Any disputes over those amounts appear to have been resolved with the
entry of the August 9, 2014 supplementary award setting forth the amounts owed by Unique.
The arbitrator did not retain the authority to modify or vacate the awards on any other basis,
including for the non-payment of his invoice by one of the parties. See CUNA Mut. Ins. Soc’y v.
Office & Prof’l Emps. Int’l Union, Local 39, 443 F.3d 556, 564–65 (7th Cir. 2006) (“[A]fter a
final decision by an arbitrator, the arbitrator becomes functus officio and lacks the power to
reconsider or amend the decision.” (quoting Anderson v. Norfolk & W. Ry. Co., 773 F.2d 880,
883 (7th Cir. 1985))); Dreis & Krump Mfg. Co. v. Int’l Ass’n of Machinists & Aerospace
Workers, Dist. No. 8, 802 F.2d 247, 250 (7th Cir. 1986) (rejecting “the idea that an arbitrator
might have an inherent power to modify his award” unless the arbitrator specifically retains

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jurisdiction over the remedy portion of his award). 1 Because the reservation of jurisdiction
contained in the March 4, 2014 award did not extend to disputes over payment of the arbitrator’s
expenses, 2 the March 15, 2015 award must be vacated. 3 This results in the reinstatement of the
March 4, 2014 and August 9, 2014 awards. Although the Court agrees that the arbitrator is
entitled to payment of his expenses under the CBA, he should have pursued a different course of
action to obtain that payment or make a statement about the importance of paying arbitrators, as
vacating a long-final award exceeded his authority. 4

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The Seventh Circuit has questioned the validity of the functus officio doctrine, noting that there are
“loophole[s] . . . for clarification or completion, as distinct from alteration, of the arbitral award.” Glass,
Molders, Pottery, Plastics & Allied Workers Int’l Union, AFL-CIO, CLC, Local 182B v. Excelsior
Foundry Co., 56 F.3d 844, 847 (7th Cir. 1995). But the doctrine is still viable and relevant, particularly
here where the arbitrator was not called on to clarify or complete his decision but rather sua sponte
vacated it based on the losing party’s refusal to pay its share of the arbitration expenses.

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The Court has found cases discussing arbitrations that were terminated prior to the issuance of an award
as a result of a party’s failure to pay arbitration fees. See, e.g., Day v. Clymo, No. 6:13-cv-871-Orl40KRS, 2015 WL 3830346, at *2 (M.D. Fla. June 18, 2015) (finding that defendant waived right to
arbitration by failing to pay arbitration fee); Union Cent. Life Ins. Co. v. Andraos, No. 1:09-cv-00758,
2011 WL 4102335, at *6 (S.D. Ohio Aug. 5, 2011) (noting that arbitration was terminated because of
parties’ failure to deposit the required arbitration fees before a final decision was rendered by the
arbitrators on the merits of the parties’ claims). But here, the arbitrator did not seek to collect his fee until
after the decision was rendered, making those cases inapposite. The result may have been different had
this issue arisen prior to the arbitrator’s rendering of his final award, but because it arose after the
arbitrator lost the authority to amend his award, the Court must vacate the award, leaving the arbitrator to
pursue payment of his fees through other channels. See Pre-Paid Legal Servs., Inc. v. Cahill, 786 F.3d
1287, 1295–98 (10th Cir. 2015) (reviewing cases involving non-payment of arbitration fees before
decision had been rendered).
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The Court also notes that at the time the arbitrator issued the March 15, 2015 second supplementary
award, he had resigned from the panel of arbitrators authorized to hear disputes under the CBA. This also
suggests that he exceeded his authority when he rendered the March 15, 2015 award.

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Because the Court finds that the arbitrator exceeded his authority, it need not address the Union’s
arguments that the arbitrator was biased and engaged in misconduct or that the March 15, 2015 second
supplementary award should be vacated to prevent Unique from benefitting from its failure to pay the
arbitrator.

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CONCLUSION
For the foregoing reasons, the Union’s motion to vacate the March 15, 2015 second
supplementary award and order [44] is granted.

Dated: October 5, 2015

______________________
SARA L. ELLIS
United States District Judge

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