Great Lakes Energy Cooperative v. International Brotherhood of Electrical Workers
OPINION ; signed by Chief Judge Robert Holmes Bell (Chief Judge Robert Holmes Bell, kcb)
G r e a t Lakes Energy Cooperative v. International Brotherhood of Electrical Workers
D o c . 20
U N IT E D STATES DISTRICT COURT F O R THE WESTERN DISTRICT OF MICHIGAN S O U T H E R N DIVISION
G R E A T LAKES ENERGY COOPERATIVE, P lain tiff / Counter-Defendant, F ile No. 1:07-CV-347 v. H O N . ROBERT HOLMES BELL L O C A L 876 INTERNATIONAL BROTHERHOOD OF ELECTRICAL W O R KE R S, D e f e n d a n t / Counter-Claimant. / OPINION T h is matter is before the Court on the parties' cross-motions for dismissal or s u m m a ry judgment.1 This matter arises from a disagreement between the parties about an a rb itra tio n award. The underlying dispute that was submitted to arbitration centers on the h o u rly rate Plaintiff Great Lakes Energy Cooperative pays to linemen who are "called-out" o u ts id e of their regular shifts. On December 6, 2007, the Court heard oral argument on th e s e motions. For the reasons that follow the arbitration award will be vacated. I. P la in tif f Great Lakes Energy Cooperative is a Michigan nonprofit consumer
Defendant Local 876 International Brotherhood of Electrical Workers moved to s tr ik e Plaintiff's response to Defendant's motion to dismiss and for summary judgment b e c a u s e Plaintiff filed its response two days late. (Dkt. No. 16.) On the record at the D e c em b e r 6, 2007, hearing the Court denied Defendant's motion to strike.
c o o pe ra tive corporation. Defendant Local 876 International Brotherhood of Electrical W o rk e rs is a labor organization under the National Labor Relations Act, 29 U.S.C. §§ 1511 69 . Defendant represents Plaintiff's linemen, who construct, maintain, and repair power lin e s . Plaintiff and Defendant are parties to a collective bargaining agreement ("CBA") that is effective from January 30, 2006, through January 25, 2009. T h e regular shift for linemen is Monday through Friday from 7:30 a.m. to 4:00 p.m. O n a rotating basis linemen are on-call weekdays from 4:00 p.m. to 7:30 a.m. and from 4:00 p .m . Friday to 7:30 a.m. Monday. The linemen are paid for four hours as compensation for b e in g on-call. If an on-call lineman is actually called-out outside of his regular shift he is p a id double-time for the time he is on the call and he is paid for a minimum of two hours, e ve n if the call is completed in less than two hours. The dispute centers on the hourly rate p a id to linemen when a call-out continues into a lineman's regular shift. For example, a lin e m a n might receive a call-out at 5:00 a.m. that is not completed until 9:30 a.m. Assuming th e lineman's regular shift begins at 7:30 a.m., Plaintiff and Defendant agree that from 5:00 a .m . to 7:30 a.m. the lineman is to be paid double-time. The parties disagree as to the rate to be paid from 7:30 a.m. to 9:30 a.m. Plaintiff contends that in such a situation a lineman s h o u ld be paid his regular hourly rate from 7:30 a.m. to 9:30 a.m., while Defendant contends th a t in such a situation a lineman should be paid double-time from 7:30 a.m. to 9:30 a.m., w h e n the call-out was completed.
D e fe n d a n t filed a grievance on behalf of Gregg Capelin, and other similarly situated lin e m e n , who had been paid their regularly hour rate for the portion of call-outs that c o n t in u e d into their regular shifts after January 30, 2006. (Dkt. No. 1, Compl., Ex. 2, A rb itra tion Award 3.) The grievance process did not resolve the issue to Defendant's s a tis f a c tio n , so Defendant sought to arbitrate the issue pursuant to article XIX of the CBA, w h ic h provides for the arbitration of disputes under the CBA. A hearing was held before the arbitrator, Deborah M. Brodsky, on November 7, 2 00 6. On January 31, 2007, the arbitrator issued her decision. The arbitrator determined th a t: Based on the above analysis and a careful examination of the record as a w h o l e , she determines that the parties never reached a meeting of the minds re ga rd in g the subject pre-shift call out situation that extends into a regularly s c h e d u le d shift. However, the Union has sufficiently shown that it understood th e negotiations and the Company's actions (prior to the Company's pay trea tm e n t of the employees who had the grievance filed on their behalf) to in d ic a te that the Company had agreed to the Union's interpretation. On the o th e r hand, the Company asserted that it had not agreed with the IBEW's in te rp re ta tio n and conducted itself as though it believed that the Union was s o m e h o w aware of that fact (prior to the subject grievances having been filed). T h ere was no true meeting of the minds regarding this issue. T h e Company, however, is somewhat culpable in this Arbitrator's view , because it led the Union down the "primrose path" when it could have e a s ily clarified this situation in the contract language or not walked away from th e bargaining table until it knew that the Union "was on the same page" as th e Company. . . . The Arbitrator therefore hereby directs the Company to pay a ll affected linemen from the January 30, 2006 pay period until the pay period o f the issuance of this decision, the double time pay for call out work that b e ga n pre-shift and continued into such linemen's regular shift. The Union a n d the Company are hereby directed to again negotiate the subject call out la n gu a ge and reach a true meeting of the minds regarding the subject issue.
T h is new understanding shall be signed off and appended to the current c o n tra c t to govern such situations for the remainder of the current contract te rm . (A rb itra tio n Award 12-13 (footnotes omitted).) Based on her findings, the arbitrator made th e following award: P u rs u a n t to the above findings, the subject dispute is remanded to the p a rtie s to reach a full meeting of the minds regarding the situation as to how line m e n are to be paid for the period of time that pre-shift call out work e x te n d s into their regularly scheduled shift. Based on the determination re a c h e d in the "Discussion and Findings" section of this opinion, the A rb itra to r has ruled that that [sic] the Employer is responsible to pay affected line m e n for such disputed hours at the double time rate for all disputed work b e tw e e n the January 30, 2006 pay period and the pay period that this opinion a n d award is issued. Payment for this partial remedy shall be made as soon a s possible, but within 6 weeks of the issuance of this award. This stop-gap re m e d y is based on the unique facts and circumstances of this case. S ub se q u e n t disputed work will be governed by the parties' clarified a gre e m e n t. S in c e neither party totally prevailed from this award, and conversely, th e re is no one loser on the merits of this arbitration, the arbitrator's fees and e x p e n s e s shall be shared equally between the parties. (Id . at 13 (footnotes omitted).) P la in tif f filed this lawsuit on April 5, 2007, asking the Court to vacate the arbitration a w a rd . On April 12, 2007, Defendant filed a counter-complaint asking the Court to modify th e arbitration award; vacate the arbitration award and remand for a new hearing; or remand th is matter back to the same arbitrator, to permit the arbitrator to issue a remedy consistent w ith her factual findings. Both parties bring their respective actions pursuant to § 301 of the La b o r Management Relations Act, 29 U.S.C. § 185. (Compl. ¶¶ 4-5; Dkt. No. 3, CounterC o m p l. ¶ 3.)
II. B o th parties move to dismiss for failure to state a claim under Federal Rule of Civil P ro c e d u re 12(b)(6) and for summary judgment under Rule 56. Each party asks the Court to dismiss the opposing party's claim for failing to state a claim upon which relief can be gra n te d under Rule 12(b)(6). A. R u le 12(b)(6) Standard R u le 12(b)(6) enables the court to dismiss a complaint for "failure to state a claim u po n which relief can be granted . . . ." Fed. R. Civ. P. 12(b)(6). Rule 8(a)(2) "requires o n ly `a short and plain statement of the claim showing that the pleader is entitled to relief,' in order to `give the defendant fair notice of what the . . . claim is and the grounds upon w h ic h it rests,' Conley v. Gibson, 355 U.S. 41, 47 (1957)." Bell Atl. Corp. v. Twombly, 550 U .S .--, 127 S. Ct. 1955, 1964 (2007) (alteration in Twombly). "`[A] Rule 12(b)(6) motion s h o u ld not be granted unless it appears beyond doubt that the plaintiff can prove no set of f ac ts in support of his claim which would entitle him to relief.'" Directv, Inc. v. Treesh, 487 F .3d 471, 476 (6th Cir. 2007) (quoting Ricco v. Potter, 377 F.3d 599, 602 (6th Cir. 2004)). T h e court must construe the complaint in the light most favorable to the non-moving party, a c c e p t all well-pleaded allegations as true, and draw all reasonable inferences in favor of the n o n -m o vin g party. Id.; Amini v. Oberlin Coll., 259 F.3d 493, 497 (6th Cir. 2001). In
c o n s id e rin g a Rule 12(b)(6) motion the Court is generally limited to the complaint and the e x h ib its attached to the complaint. Amini, 259 F.3d at 502.
A u th o r ity of the Court to Grant the Relief Sought by Plaintiff and Defendant B o th parties contend that the opposing party's complaint fails to state a claim upon
w h ic h relief could be granted because the opposing party's complaint seeks relief that the C o u rt does not have authority to grant. Plaintiff seeks the following relief in its complaint: [ v] a c a te the portion of the Arbitrator's Opinion and Award Ordering the p a rtie s to bargain and awarding double time pay for all call out hours worked .... (C o m p l. 6.) Defendant contends Plaintiff's complaint should be dismissed under Rule 1 2 (b )(6 ) because, in Defendant's view, the Court lacks authority to vacate a labor arbitration a w a rd without remanding the dispute to the arbitrator. Defendant seeks the following relief in its counter-complaint: va c ate the arbitration award and remand for a new hearing. In the alternative, th e Union requests that this Honorable Court enter an order vacating the a rb itra tion award and remanding the matter back to Arbitrator Brodsky to is s u e a remedy for the Union consistent with her stated factual findings and/or th is Honorable Court vacate the award and grant the relief requested by the U n io n in light of the factual findings as set forth in Arbitrator Brodsky's D is c u s sio n and Findings. (C o un te r-C o m p l. 6.) Plaintiff contends Defendant's counter-complaint should be dismissed u nd e r Rule 12(b)(6) because, in Plaintiff's view, the Court lacks authority to grant any relief b e yo n d vacating the labor arbitration award. T h e relief sought by Plaintiff and Defendant can be distilled into three categories. F irs t, Plaintiff asks the Court to vacate the labor arbitration award and take no further action. S e c o n d , Defendant asks the Court to vacate the labor arbitration award and remand the
d is p u te to enable the arbitrator to conduct a new hearing or to modify the remedy. Third, D e fe n d a n t asks the Court to vacate the labor arbitration award and to modify the remedy set f o rth in the award based on the arbitrator's factual findings. 1. V a c a tu r Without Further Action
D e f e n d a n t contends that if the Court vacates the labor arbitration award then the C o u rt must remand the case for further arbitration proceedings. Defendant bases this c o n te n tio n on the following sentence from Major League Baseball Players Ass'n v. Garvey, 5 3 2 U.S. 504 (2001) (per curiam): "Even when the arbitrator's award may properly be va c a te d , the appropriate remedy is to remand the case for further arbitration proceedings." 5 3 2 U.S. at 511 (citing United Paperworkers Int'l Union v. Misco, Inc., 484 U.S. 29, 40 n .1 0 (1987)). Neither the Supreme Court nor the Sixth Circuit have expounded upon the im po rt of the foregoing sentence from Garvey. In Garvey the Supreme Court reversed a Ninth Circuit decision that had vacated an a rb itra tio n award and that then went on to resolve the merits of the parties' dispute based on th e Ninth Circuit's assessment of the record that had been before the arbitrator. Id. at 5070 8 . In this context the Court does not read the Supreme Court's use of "appropriate" in the a b o ve quoted sentence to mean "only." This is further supported by the sentence that p re c e d e s the above quoted sentence from Garvey: "But again, established law ordinarily p re c lu d e s a court from resolving the merits of the parties' dispute on the basis of its own f ac tu a l determinations, no matter how erroneous the arbitrator's decision." Id. at 511 (citing
M is c o , 484 U.S. at 40 n.10, and United Steelworkers of Am. v. Am. Mfg. Co., 363 U.S. 564, 5 6 8 (1960)). This sentence indicates that the Supreme Court's use of "appropriate" was to e m p h a s ize the impropriety of the Ninth Circuit having made its own factual determinations a n d then having resolved the merits based on those factual determinations, rather than to in d ic a te that vacatur followed by remand was the only permissible resolution. Moreover, e a rlie r in the Garvey opinion the Supreme Court stated that in the rare instance where va c a tu r is appropriate, "the court should `simply vacate the award, thus leaving open the p o s s ib ility of further proceedings if they are permitted under the terms of the agreement.'" G a rv e y, 532 U.S. at 510 (quoting Misco, 484 U.S. at 40 n.10)). In Garvey the Supreme C o u rt in describing the appropriate action for a court to take after vacating an arbitration a w a r d repeatedly referenced footnote ten in the Misco decision. Garvey, 532 U.S. at 5101 1 . In footnote ten of Misco the Supreme Court stated: E v e n in the very rare instances when an arbitrator's procedural aberrations rise to the level of affirmative misconduct, as a rule the court must not foreclose f u rth e r proceedings by settling the merits according to its own judgment of the a p p ro p ria te result, since this step would improperly substitute a judicial d e te rm in a tio n for the arbitrator's decision that the parties bargained for in the c o lle c tive -b a rga in in g agreement. Instead, the court should simply vacate the a w a rd , thus leaving open the possibility of further proceedings if they are p e rm itte d under the terms of the agreement. The court also has the authority to remand for further proceedings when this step seems appropriate. See, e. g ., Amalgamated Food & Allied Workers Union, Local 56 v. Great A&P Tea C o ., 415 F. 2d 185 (CA3 1969) (vacating and remanding to the arbitrators for d e c is io n after finding that the arbitrators declined to arbitrate the issues s u b m itte d ). See also 9 U. S. C. § 10(e) ("Where an award is vacated and the tim e within which the agreement required the award to be made has not e x p ire d the court may, in its discretion, direct a rehearing by the arbitrators").
Misco, 484 U.S. at 40 n.10. When the entire discussion of remedies in Garvey is read in c o n j u n c tio n with Misco, it is clear that a federal court may vacate a labor arbitration award w itho u t taking further action, such as remanding the dispute to the arbitrator. D e f e n d a n t's Rule 12(b)(6) motion is premised on the Court lacking authority to grant the relief sought by Plaintiff, i.e., vacatur of the arbitration award without further action. As th e foregoing analysis of Garvey and Misco makes clear, a federal court may vacate an a rb itra tion award without taking further action. When Plaintiff's complaint is construed in th e light most favorable to Plaintiff, Plaintiff's allegations would support vacatur of the a rb itra tio n award without further action. As Plaintiff's complaint states a claim upon which re lie f could be granted, Defendant's Rule 12(b)(6) motion is denied. 2. V a c a tu r with Remand to the Arbitrator
D e f e n d a n t's counter-complaint asks the Court to either remand for a new hearing or to remand for the arbitrator to issue a remedy consistent with the factual findings in the a rb i tr a t i o n award. "A remand is proper . . . under the federal law of labor arbitration c o n t ra c t s , to clarify an ambiguous award or to require the arbitrator to address an issue s u bm itte d to him but not resolved by the award." Indus. Mut. Ass'n. v. Amalgamated W o r k e r s, Local Union No. 383, 725 F.2d 406, 413 n.3 (6th Cir. 1984) (citing La Vale Plaza, In c ., v. R.S. Noonan, Inc., 378 F.2d 569 (3d Cir. 1967), and Grand Rapids Die Casting C o rp . v. Local Union No. 159, UAW, 684 F.2d 413, 416 (6th Cir. 1982)). Defendant c o n te n d s that the arbitration award is ambiguous because the arbitrator found a breach of
th e CBA but only awarded damages for one year and then ordered the parties to negotiate. D e fe n d a n t's counter-complaint does not explicitly describe the arbitration award as a m b igu ou s ; however, when read in the light most favorable to Defendant, the counterc o m p la in t does allege ambiguity based on purported inconsistencies between the arbitrator's f in d in gs of fact and remedy. (Counter-Compl. ¶¶ 15, 17.) As Defendant's counterc o m p la in t alleges that the arbitration award is ambiguous, to the extent that Defendant seeks re m a n d to the arbitrator the counter-complaint states a claim upon which relief could be g ra n te d . 3. M o dif ic a tio n of the Arbitration Award
D e f e n d a n t's counter-complaint, in the alternative, asks the Court to modify the re m e d y set forth in the award based on the arbitrator's factual findings. Section 301 of the L a b o r Management Relations Act, 29 U.S.C. § 185, "empowers the federal courts to fashion ru le s of federal common law to govern `[s]uits for violation of contracts between an e m p lo y e r and a labor organization' under the federal labor laws." Misco, 484 U.S. at 41 (q u o tin g Textile Workers Union of Am. v. Lincoln Mills of Ala., 353 U.S. 448 (1957)). A lth o u gh the Federal Arbitration Act ("FAA") does not "apply to contracts of employment o f . . . workers engaged in foreign or interstate commerce," 9 U. S. C. § 1, federal courts h a ve often looked to the FAA for guidance in fashioning the federal common law that go ve rn s the modification of labor arbitration awards. Misco, 484 U.S. at 41 & n.9; Int'l B h d . of Teamsters, Local 519 v. United Parcel Serv., Inc., 335 F.3d 497, 503 n.2 (6th Cir.
2 0 0 3 ). Section 11 of the FAA sets forth the following framework for the modification of a rb itra tio n awards: In either of the following cases the United States court in and for the district w h e re in the award was made may make an order modifying or correcting the a w a rd upon the application of any party to the arbitration-(a ) Where there was an evident material miscalculation of figures or an e vid e n t material mistake in the description of any person, thing, or p ro p e rty referred to in the award. (b ) Where the arbitrators have awarded upon a matter not submitted to th e m , unless it is a matter not affecting the merits of the decision upon th e matter submitted. (c ) Where the award is imperfect in matter of form not affecting the m e rits of the controversy. T h e order may modify and correct the award, so as to effect the intent thereof a n d promote justice between the parties. 9 U.S.C. § 11. D e f e n d a n t's counter-complaint does not explicitly identify the modification sought. D e f e n d a n t's brief in support of its motion for summary judgment indicates that Defendant s e e k s to have the Court delete the negotiation language from the arbitration award and r e q u ire Plaintiff to pay double-time for call-outs that extend into regular shifts for the e n tire ty of the current CBA. (Dkt. No. 10, Def.'s Br. in Supp. 9.) Defendant never e x p licitly specifies the subsection of § 11 of the FAA under which it is seeking this m o d ific a tion ; however, Defendant uses language consistent with § 11(c). (Id.) Defendant c o n te n d s that the arbitrator found that Plaintiff had breached the CBA and that the remedy a w a rd e d by the arbitrator is inconsistent with this finding to the extent it requires the parties to negotiate. If the arbitrator found a breach of the CBA, but provided a remedy that only
c o ve re d part of the duration of the CBA, then a modification could be permissible under § 1 1 (c ). When Defendant's counter-complaint is read in the light most favorable to
D e fe n d a n t, a modification of the arbitration award under § 11(c) would be permissible. A s Defendant's counter-complaint alleges inconsistencies between the arbitrator's f in d in gs of fact and remedy, to the extent that the counter-complaint seeks a modification o f the arbitration award the counter-complaint states a claim upon which relief could be gra n te d . As Defendant's counter-complaint states claims upon which relief could be granted a s to either modification or vacatur with remand, Plaintiff's Rule 12(b)(6) motion is denied. I I I. A. S um m a r y Judgment Standard U n d e r Rule 56(c) of the Federal Rules of Civil Procedure, summary judgment is p ro p e r if there is no genuine issue as to any material fact and the moving party is entitled to j u d gm e n t as a matter of law. In evaluating a motion for summary judgment the court must lo ok beyond the pleadings and assess the proof to determine whether there is a genuine need f o r trial. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). If th e defendant carries its burden of showing there is an absence of evidence to support a c la im , then the plaintiff must demonstrate by affidavits, depositions, answers to in te rroga to rie s , and admissions on file, that there is a genuine issue of material fact for trial. C e lo te x Corp. v. Catrett, 477 U.S. 317, 324-25 (1986).
In considering a motion for summary judgment, the court must construe the evidence a n d draw all reasonable inferences in favor of the nonmoving party. Minges Creek, L.L.C. v . Royal Ins. Co. of Am., 442 F.3d 953, 955-56 (6th Cir. 2006) (citing Matsushita, 475 U.S. a t 587). Nevertheless, the mere existence of a scintilla of evidence in support of the p la in tiff 's position is not sufficient to create a genuine issue of material fact. Anderson v. L ib e r ty Lobby, Inc., 477 U.S. 242, 252 (1986). The proper inquiry is whether the evidence is such that a reasonable jury could return a verdict for the plaintiff. Id.; see generally, S tr e e t v. J.C. Bradford & Co., 886 F.2d 1472, 1476-80 (6th Cir. 1989). B. " A r g u a b ly construing or applying" J u d ic ia l review of a labor arbitration award pursuant to a collective bargaining a g r e e m e n t "is very limited." Garvey, 532 U.S. at 509. A federal court reviewing a labor a rb itra tio n award is not "authorized to reconsider the merits of an award even though the p a rtie s may allege that the award rests on errors of fact or on misinterpretation of the c o n tra c t." Misco, 484 U.S. at 36. "Because the parties have contracted to have disputes s e ttle d by an arbitrator chosen by them rather than by a judge, it is the arbitrator's view of th e facts and of the meaning of the contract that they have agreed to accept." Id. at 37-38. " `[ O ] n ly when the arbitrator strays from interpretation and application,' . . . does he enter th e forbidden world of `effectively dispens[ing] his own brand of industrial justice,' making th e arbitrator's decision `unenforceable.'" Mich. Family Res., Inc. v. SEIU Local 517M, 475 F . 3 d 746, 752 (6th Cir. 2007) (en banc) (quoting Garvey, 532 U.S. at 509). In Michigan
F a m ily Resources the Sixth Circuit "refined the scope of judicial review over la b o r-a rb itra tio n awards," and limited the scope of judicial review to "the questions of `p ro c e d u ra l aberration' outlined by the Supreme Court in" Misco and Garvey. Truck D r iv e r s Local No. 164, Int'l Bhd. of Teamsters v. Allied Waste Sys., -- F.3d --, 2008 WL 5 0 0 9 0 , at *4, 2008 U.S. App. LEXIS 87, at *12, (6th Cir. 2008) (citing Mich. Family Res., 4 7 5 F.3d at 753). The three questions of procedural aberration ask: D i d the arbitrator act "outside his authority" by resolving a dispute not c o m m itte d to arbitration? Did the arbitrator commit fraud, have a conflict of in te re s t or otherwise act dishonestly in issuing the award? And in resolving a n y legal or factual disputes in the case, was the arbitrator "arguably c o n s tru in g or applying the contract"? So long as the arbitrator does not offend a n y of these requirements, the request for judicial intervention should be re s is te d even though the arbitrator made "serious," "improvident" or "silly" e rro rs in resolving the merits of the dispute. M ic h . Family Res., 475 F.3d at 753. The parties' contentions focus on the third inquiry, w h e th e r the arbitrator was "arguably construing or applying the contract." A r tic le V section 5 of the CBA sets forth how the call-out system will be a d m in is te re d , how linemen will be compensated for being on-call, and how linemen will be c o m p e n s a te d for call-outs. After identifying the question before her, the arbitrator
e x te n s ive ly reviewed the bargaining history of article V section 5 from the negotiations d u ring December 2005 and January 2006 that lead to the current CBA. (Arbitration Award 1 -4 .) Two primary changes were made to the call-out system during those negotiations. F irs t, the compensation for being on-call was reduced from eight to four hours of regular p a y . (Id. at 7; see also Dkt. No. 1, Compl., Ex. 1, CBA, art. V, § 5.) Second, the prior
C B A did not expressly address the compensation for a call-out, though Plaintiff's practice h a d been to pay linemen time and one-half for time worked during a call-out. (Arbitration A w a rd 7.) The current CBA expressly set the pay rate for call-outs at double-time. (Id. at 2 -3 , 7; see also CBA, art. V, § 5.) As to the compensation for call-outs that continued into a regular shift under the prior CBA the arbitrator noted that the practice was that "[i]f the c a ll out began before their regular shift and continued into their regular shift, the linemen o n ly received straight time pay for those hours that overlapped into their regular shift." (A rb itra tion Award 1.) T h e arbitrator found the following language from the article V section 5 central to the d is p u t e : E f f e c tive with the pay period beginning January 30, 2006, in the event a line d e p a r tm e n t employee is called out, he will be paid double his regular h o u r ly rate with a minimum of two hours of double time pay in addition to th e applicable on call pay . . . [sic] (Id . at 7 (quoting CBA, art. V, § 5) (emphasis in the arbitration award).) The arbitrator n o te d that the dispute as to whether the foregoing language requires double-time pay for the p o rtio n of a call-out that continues into a regular shift stems from the absence of a definition o f "call-out" in the CBA. (Id.) The arbitrator then discussed the competing testimony of t h e representatives of Plaintiff and Defendant who had participated in the negotiations. B a s e d on the arbitrator's assessment of this testimony the arbitrator concluded that a re p re s e n ta tive of Defendant had inquired about the pay rate for a call-out that continued into a regular shift and that Defendant understood the answer given by the representative of
P la in tiff to be that double-time would be paid for the portion of a call-out that extended into a lineman's regular shift. (Id. at 9-10.) The arbitrator then considered whether the question b e f o re her could be analogized to the scenarios described in the February 2, 2006, m e m o ra n d u m drafted by Jennifer Wilson, Plaintiff's Human Resources Director. (A rb itra tio n Award, 10-11; Arbitration Award, App. A, Feb. 2 Memo. from Jennifer W ilso n .) The February 2 memorandum describes how the new call-out provision will apply in three scenarios, but does not address the question of a call-out that continues into a line m a n 's regular shift. The arbitrator then rejected Plaintiff's contention that it had told D e f e n d a n t in the course of the negotiations for the current CBA that all pay practices from th e prior CBA would continue. (Arbitration Award 11-12.) Lastly, the arbitrator reasoned th a t Plaintiff was the drafter of the CBA and that because article V section 5 was ambiguous it should be construed against the drafter. (Id. at 12.) The arbitrator then concluded "that th e parties never reached a meeting of the minds regarding the subject pre-shift call out s itu a tio n that extends into a regularly scheduled shift." (Id.) A f te r finding that there had not been a "meeting of the minds," the arbitrator went on to find that Plaintiff was "somewhat culpable" because in the arbitrator's view Plaintiff " c ou ld have easily clarified" the situation regarding the pay rate for call-outs that continued in to a lineman's regular shift. (Id.) Based on that finding, the arbitrator directed the parties to pay double-time for call-outs that continued into a regular shift for the first year of the c u rre n t CBA, but then directed the parties to negotiate regarding how the issue would be a d d re s s e d for the remainder of the current CBA. (Id. at 12-13.)
A "meeting of the minds" in the context of a contract means that the parties "agree o n the same terms, conditions, and subject matter." Black's Law Dictionary 1004 (8th ed. 2 0 0 4 ). See also Detroit Radiant Prods. Co. v. BSH Home Appliances Corp., 473 F.3d 623, 6 30 (6th Cir. 2007) ("[T]he key inquiry is whether the draft Supplier Agreement was u n d e rs to o d by the parties to memorialize the terms of their contract. Yet [the party seeking to enforce the draft Supplier Agreement] presents no evidence that such a meeting of the m in d s took place."). If there was not a "meeting of the minds" as to how the contract would a p p ly to a particular issue, then the contract does not reach that particular issue. E.g., Gage P r o d s . Co. v. Henkel Corp., 393 F.3d 629, 637-39 (6th Cir. 2004). The arbitrator's c o n c lu s io n that there had not been a "meeting of the minds" as to the pay rate for call-outs th a t continued into a lineman's regular shift necessarily meant that the current CBA does not s p e c if y the pay rate in such situations. A f te r having found that the current CBA does not reach the question of the pay rate f or call-outs that continued into a lineman's regular shift, the arbitrator could not have been " a rgu a b ly construing or applying" the current CBA in making the award of back pay for the p rio r year and then directing the parties to "again negotiate." If the current CBA did not rea c h a particular question, then there was nothing for the arbitrator to construe or apply. A d d itio n a lly, the arbitrator's remedy implicitly acknowledges that the current CBA did not re a c h the question of the pay rate for call-outs that continued into a lineman's regular shift. If the CBA resolved that issue then that resolution, whatever it might be, would apply for
th e entire term of the CBA, January 30, 2006, through January 25, 2009; however, the a rb itra to r only awarded back pay for the period of January 30, 2006, through January 31, 2 0 0 7 . (Arbitration Award 13.) Moreover, the arbitrator directed the parties to "again n e go tia te ," but it is conceptually inconsistent to conclude that a binding agreement between th e parties resolves an issue and to order the parties to negotiate the issue. To do so voids th e prior agreement reached by the parties. W h ile the Court must enforce an arbitration award if the arbitrator made "`serious,' `im p ro vid e n t' or `silly' errors in resolving the merits of the dispute[,]" Mich. Family Res., 4 7 5 F.3d at 753, in this case the arbitrator's error cannot be placed in one of those c a te go rie s . As the arbitrator made an award on an issue that the arbitrator had concluded the C B A does not reach, the arbitrator strayed "from interpretation and application" and entered " th e forbidden world of `effectively dispens[ing] [her] own brand of industrial justice . . . .'" Id. at 752 (quoting Garvey, 532 U.S. at 509) (first alteration in Michigan Family R e s o u r c es ). In so doing the arbitrator made her decision "`unenforceable.'" Id. (quoting G a rv e y, 532 U.S. at 509). If the arbitrator merely "chose the wrong path in justifying the award," then this C o u rt would be without a warrant to vacate the arbitration award. Id. at 755. For example, if the arbitrator had provided the same written decision but then ordered Plaintiff to pay d o u b le -tim e for call-outs that continue into a lineman's regular shift for the entire term of th e current CBA, the Court could conclude that the arbitrator did not intend "meeting of the
m in d s " to have its traditional legal meaning.
In contrast to that counterfactual, the
a rb itra to r's award makes clear that she intended "meeting of the minds" to have its tra d itio n a l legal meaning because by only awarding double-time pay for one year and by d ire c tin g the parties to again negotiate she acknowledged that the CBA does not address w h e th e r linemen are to be paid double-time for call-outs that continue into their regular s h if ts . L a stly, the Court must consider the admonition in Michigan Family Resources that: " in most cases, it will suffice to enforce the award that the arbitrator appeared to be engaged in interpretation, and if there is doubt we will presume that the arbitrator was doing just th at." Mich. Family Res., 475 F.3d at 753. Accord Truck Drivers Local No. 164, 2008 WL 5 0 0 9 0 , at *6, 2008 U.S. App. LEXIS 87, at *16. The arbitrator appeared to be engaged in in te rp re ta tio n in the first eleven pages of her decision, but after finding on page twelve that " th e parties never reached a meeting of the minds regarding the subject pre-shift call out s it u a t io n that extends into a regularly scheduled shift[,]" (Arbitration Award 12), the a rb itra tio n does not appear to be engaged in interpretation, and neither party makes a c o n te n tio n to the contrary. Plaintiff acknowledged that the arbitration award should be va c a te d as follows: T h is is the rare case in which the parties agree on the fundamental is s u e . In its Complaint, [Plaintiff] alleged that the arbitrator who issued the la b o r arbitration award in a dispute between [Plaintiff] and [Defendant] e x c e e d e d her authority under the arbitration provision in the parties' [CBA]; th e re f o re , [Plaintiff] asks that the award be vacated. [Defendant] filed a C o u n ter-C o m p laint, also alleging that the arbitrator exceeded her authority,
a n d also asking this Court to vacate the arbitration award. Thus, at the very le a st, this litigation should result in vacatur of the arbitration award at issue. (D k t. No. 7, Pl.'s Br. in Supp. 1-2. See also Dkt. No. 14, Pl.'s Reply in Supp. 2.) Defendant a c k n o w le d ge d that the arbitration award should be vacated as follows: B o th parties contend that the arbitrator exceeded her authority in issuing an a w a rd that fails to derive its essence from the collective bargaining agreement. H o w e ve r, any agreement between the parties ends at this point. The parties d is a gre e on the underlying justifications for vacating the arbitration award. (D e f . ' s Br. in Supp. 1. See also Dkt. No. 8, Def.'s Resp. in Opp'n 1-2.) These
a c k n o w le d gm e n ts do not give the Court authority to vacate the arbitration award as vacatur m u s t still be premised on the arbitrator having failed to "arguably construe or apply the c o n tra c t." However, given that the Court's analysis of the arbitration award yielded the c o n c lu sio n that the arbitrator was dispensing her own brand of industrial justice and that n e ith e r party to the arbitration now contends that the arbitrator was "arguably construing o r applying the contract," the presumption that the arbitrator was engaged in interpretation is inapplicable. A s the Court has determined that this arbitration award is the rare instance in which a n arbitration award must be vacated, the Court must determine what additional action is a p p ro p ria te . Defendant asks the Court to remand this case to the arbitrator to permit the a rb itra to r to clarify the award. A remand to the arbitrator would be proper if on remand the a rb itra to r could clarify an ambiguous award. Indus. Mut. Ass'n, 725 F.2d at 413 n.3. The
a rb itra tio n award is not ambiguous; rather, as the Court's foregoing analysis explained, the a rb itra to r dispensed her own brand of industrial justice. Therefore, remand to the arbitrator w o u ld be improper. In the alternative, Defendant asks the Court to modify the arbitration a w a rd . Defendant seeks this modification under § 11(c) of the FAA, 9 U.S.C. § 11(c). See s u p r a Part II.B.3. Section 11(c) permits the Court to modify an arbitration award when the a w a rd is "imperfect in matter of form not affecting the merits of the controversy." 9 U.S.C. § 11(c). Modifying the arbitration award to specify whether for the entirety of the current C B A linemen are to be paid double-time for the portion of a call-out that continues into their re gu la r shift would affect the merits of the controversy as the dispute between the parties is th a t very question. See NCR Corp. v. Sac-Co., Inc., 43 F.3d 1076, 1080-81 (6th Cir. 1995). T h u s , modifying the arbitration award would be improper. The remaining option is for the C o urt to vacate the arbitration award without taking further action. As the Court's earlier a n a lys is made clear vacatur without further action is clearly permissible. Misco, 484 U.S. a t 40 n.10; see supra Part II.B.1. IV . A lth o u gh Michigan Family Resources set forth a highly deferential standard of re vie w , the Court cannot say that the arbitrator was "arguably construing or applying" the C B A when she issued the January 31, 2007, arbitration award. Rather, a review of the J a n u a r y 31, 2007, arbitration award in consideration of the standard set forth in Michigan F a m ily Resources permits only the conclusion that the arbitrator was dispensing her own
b ra n d of industrial justice, and so her decision must be vacated. An order will be entered c o n s is te n t with this opinion.
D a te :
February 1, 2008
/s/ Robert Holmes Bell ROBERT HOLMES BELL C H IE F UNITED STATES DISTRICT JUDGE
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