JNESO, DISTRICT COUNCIL 1, IUOE v. PRIME HEALTHCARE, ST. MARY'S HOSPITAL
OPINION. Signed by Judge Kevin McNulty on 6/3/2021. (ld, )
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
JNESO, DISTRICT COUNCIL 1, IUOE,
Civ. No. 20-18068 (KM) (JBC)
PRIME HEALTHCARE, ST. MARY’S
KEVIN MCNULTY, U.S.D.J.:
JNESO, District Council 1, IUOE (the “Union”) is a labor organization
representing employees at St. Mary’s General Hospital, owned by Prime
Healthcare. Pursuant to a collective bargaining agreement (“CBA”), the parties
arbitrated a dispute involving the Hospital’s refusal to hire a laid-off employee.
The arbitrator entered an award in favor of the Union, which petitions to
confirm that award. (DE 2.)1 The Hospital cross-petitions to vacate the award.
(DE 11.) For the following reasons, the Union’s petition to confirm is
GRANTED, and the Hospital’s cross-petition to vacate is DENIED.
The Hospital employed a Union member, John Varghese, as a radiation
therapist technician. (Award at 2.) He received a temporary layoff notice
because the radiation department needed to install a TrueBeam radiation
imaging system. (Id.) In the meantime, he filled another vacant position. (CrossPet. ¶ 45.)
Certain citations to the record are abbreviated as follows:
DE = docket entry
Award = Arbitration Award (DE 1, Ex. B)
CBA = Collective Bargaining Agreement (DE 1, Ex. A)
Cross-Pet. = Hospital’s Cross Petition (DE 11-1)
A few months later, the Hospital posted a position for a radiation
technician with two to three years’ experience with the TrueBeam system.
(Award at 3.) The Hospital did not offer Varghese the role because, in the
Hospital’s view, he lacked the requisite experience. (Id.) Nonetheless, Varghese
had a radiation therapy license and was authorized to operate any radiation
machines after training on them for two days. (Id. at 4.)
In response, the Union filed grievances with the Hospital and then
initiated an arbitration, contending that the CBA required the Hospital to hire
Varghese and train him on the TrueBeam equipment. (Id. at 7–8.) The
arbitrator agreed, relying on two provisions of the CBA. The first provided that
“[a]n employee subject to layoff may elect to fill any vacant position, provided
s/he possesses the necessary qualifications of the position or be provided the
opportunity to obtain those qualifications on the same basis as would be
afforded a new hire for the position.” (CBA, Art. 16, § 5g.) The second provided
that “[p]resently employed bargaining unit members will be given first
preference for all bargaining unit jobs.” (CBA, Art. 26, § 2.)
The arbitrator, relying on testimony from Varghese and management,
reasoned that (1) Varghese could operate the TrueBeam system with two days
of training, (2) the manufacturer provides four to five days of training at no
cost, (3) the Hospital provides training on equipment, and (4) other hospitals
owned by Prime Healthcare provide training on similar equipment. (Award at 9–
10.) As a result, “the Hospital failed to adhere to the CBA provision to give first
preference to a current bargaining member who is qualified and can perform
the job with the training the Hospital could have provided.” (Id. at 10.) The
arbitrator ordered the Hospital to assign Varghese to the radiation therapist
technician position with backpay and provide him training. (Id. at 11.)
STANDARD OF REVIEW
Section 301 of the Labor Management Relations Act gives federal courts
jurisdiction over “[s]uits for violation of contracts between an employer and a
labor organization.” 29 U.S.C. § 185(a). In addition, the Federal Arbitration Act
empowers federal courts to confirm, vacate, or modify arbitration awards. 9
U.S.C. §§ 9–11. Accordingly, federal courts may confirm, vacate, or modify
arbitration awards arising from a CBA. Hamilton Park Healthcare Ctr. v. 1199
SEIU United Healthcare Workers E., 817 F.3d 857, 861–62 (3d Cir. 2016). In
such cases, “courts are restricted in reviewing the decision of an arbitrator”
with “a heavy degree of deference.” Monongahela Valley Hosp. Inc. v. United
Steel Paper & Forestry Rubber Mfg. Allied Indus. & Serv. Workers Int’l Union
AFL-CIO CLC, 946 F.3d 195, 199 (3d Cir. 2019) (citations omitted). Still, courts
“will vacate an award ‘if it is entirely unsupported by the record or if it reflects
a manifest disregard of the agreement.’” Id. (quoting Citgo Asphalt Ref. Co. v.
Paper, Allied-Indus., Chem. & Energy Workers Int’l Union Local No. 2-991, 385
F.3d 809, 816 (3d Cir. 2004)).
The Hospital offers four reasons to vacate the award: (A) the arbitrator
applied the wrong section of the CBA; (B) regardless, the arbitrator
misinterpreted the section she did apply; (C) the arbitrator made erroneous
factual findings; and (D) the award violates public policy. None is persuasive.
A. Correct Section of the CBA
The Hospital argues that the arbitrator applied the wrong section of the
CBA. (Hosp. Mot. at 4–6.) The arbitrator relied on Article 16, § 5g, which states
that “[a]n employee subject to layoff may elect to fill any vacant position,
provided s/he possesses the necessary qualifications of the position or be
provided the opportunity to obtain those qualifications on the same basis as
would be afforded a new hire for the position.” (CBA, Art. 16, § 5g.) Instead, the
Hospital contends, the arbitrator should have applied § 6, which provides that
“[w]henever a vacancy or newly created position occurs in a bargaining unit job
classification, bargaining unit employees shall be recalled in accordance with
seniority in the reverse order in which they were laid off, provided they possess
the necessary skill and ability to perform the job.” (CBA, Art. 16, § 6.) The
difference between the two provisions is that, under § 5g, an employee need not
already possess the qualifications but can be given an opportunity to obtain
them (i.e., training), while under § 6, no such option is available. If § 6 applies,
the Hospital reasons, then the award cannot stand because Varghese did not
have two to three years’ TrueBeam experience and the arbitrator could not
compensate for that lack by ordering the Hospital to provide training.
This argument comes down to a question of contract interpretation: Did
the arbitrator correctly conclude that Varghese was “subject to a layoff” within
the meaning of § 5g? An alleged “misinterpretation of the contract,” however,
does not ordinarily provide a basis to vacate an arbitration award. Citgo, 385
F.3d at 815 (citation omitted). In rare circumstances, courts may vacate an
award “where there is a manifest disregard of the agreement, totally
unsupported by the principles of contract construction and the law of the
shop.” Id. at 816 (citation omitted). But this only occurs when an arbitrator so
departs from the plain language of the agreement that the arbitrator essentially
“dispense[s] his own brand of industrial justice.” Monongahela Valley, 946 F.3d
at 199 (citation omitted).
I cannot say that happened here. The application of the phrase “subject
to a layoff” to these facts is open to interpretation. The Hospital says that § 5g
“is limited to the circumstance when an employee is initially identified for
layoff” and allows him to “move into a vacant position to avoid layoff.” (Hosp.
Mot. at 8.) That is a reasonable interpretation, but not the only one.
There are no strong indicia in the CBA as to the temporal limits of
“subject to a layoff.” Generally, “subject to” means “affected by or possibly
affected by (something).” Subject to, Merriam-Webster, https://www.merriamwebster.com/dictionary/subject%20to (last visited May 26, 2021). The
arbitrator could rationally conclude that Varghese was “affected by” the layoff
when the new position opened up because he was currently occupying a
position by virtue of the fact that he had been laid off. Moreover, this was not
some open-ended or permanent change of status; this was a temporary layoff
pending completion of the TrueBeam system. One could reasonably conclude,
then, that Varghese remained in laid-off status. Whether or not this is the best
reading of the CBA is not the issue; the arbitrator’s interpretation is a
reasonable one, which draws its essence from the CBA and does not bespeak a
personal brand of industrial justice. When there are multiple reasonable
interpretations, the arbitrator’s pick among them cannot be erroneous and
must stand. Monongahela Valley, 946 F.3d at 199–200.
B. Misapplication of the CBA
As a backup, the Hospital contends that, even if § 5g applies, the
arbitrator misapplied that section. Here, the Hospital focuses on the award’s
provision that Varghese could readily be trained to operate the TrueBeam
system. Because new hires for the position would presumably already be
qualified without further training, the Hospital reasons, Varghese would not be
taking the position “on the same basis” as a “new hire.” (CBA, Art. 16, § 5g.)
Again, the Hospital’s argument is not unreasonable, but it cannot
outweigh the “heavy degree of deference” I give to the arbitrator. Monongahela
Valley, 946 F.3d at 199. The arbitrator reasoned that, as a general matter, the
Hospital could rapidly provide the supplemental training that would qualify
Varghese to operate the TrueBeam system. (Award at 9–10.) The language of
§ 5g is somewhat general, stating that the Hospital must provide the same
opportunities as “a new hire for the position.” (CBA, Art. 16, § 5g.) See United
States v. Hendrickson, 949 F.3d 95, 98 (3d Cir. 2020) (explaining that the
indefinite article “a” “has a generalizing force on the noun that follows it”
(citations omitted)). Given the evidence the arbitrator heard, the arbitrator
could reasonably conclude that the manufacturer’s training or Prime
Healthcare’s training at other hospitals was of the same kind generally
available to any new hire.
I reiterate that courts do not vacate awards unless they violate the spirit
of the CBA. See Monongahela Valley, 946 F.3d at 199 (“[A]n award must still
draw its essence from the words of the [CBA] . . . .” (cleaned up)). The purpose
of the CBA provisions ostensibly is to use Union members for positions
whenever feasible. The Hospital could very easily do so in this case, according
to the arbitrator’s view of the evidence. To adopt the Hospital’s proffered
interpretation would allow a runaround of that purpose by incentivizing the
Hospital to affirmatively seek out hirees whose qualifications exceed those of
the Union workers, even if the Union workers could easily obtain those
qualifications. The arbitration award here draws its essence from that
obligation to hire Union members when possible.
In sum, the Hospital cannot show that the arbitrator’s award so departs
from the CBA as to warrant vacatur.
C. Factual Errors
The Hospital argues that the arbitrator made three erroneous findings of
fact: (1) the arbitrator relied on Varghese’s testimony to establish training
requirements, (2) the arbitrator relied on a document to establish the job
description that wrongly listed the necessary experience to be one year, and
(3) testimony about available training on similar equipment was too vague to
permit a conclusion that it was relevant to the TrueBeam system. (Hosp. Mot.
at 13–18.) But “a reviewing court must defer to the arbitrator’s factual findings”
as “the exclusive province of the arbitrator.” Citgo, 385 F.3d at 816; see also
Major League Baseball Players Ass’n v. Garvey, 532 U.S. 504, 508 (2001)
(“[I]mprovident, even silly, factfinding does not provide a basis for a reviewing
court to refuse to enforce the award.” (quotation marks and citation omitted)).
This is so because the parties agreed to have facts resolved by the arbitrator.
Garvey, 532 U.S. at 509–10. Accordingly, I cannot vacate the award based on
alleged factual errors.2
Nor can I say that this award was “entirely unsupported by the record.”
Monongahela Valley, 946 F.3d at 199. The Hospital’s first and third alleged errors are
based on allegations that findings were not supported by the correct or adequate
testimony. They were, however, based on some testimony; the question is one of
interpretation. As to the second alleged error, the arbitrator explained that the position
originally called for one year of experience but was amended to require two to three.
(Award at 3.)
D. Public Policy
Finally, the Hospital argues that the award runs contrary to public
policy. (Hosp. Mot. at 18–20.) There is an exception to general rule of deference
to arbitrators when the award “violates a well defined and dominant public
policy.” Exxon Shipping Co. v. Exxon Seamen’s Union, 73 F.3d 1287, 1291 (3d
Cir. 1996) (quotation marks and citation omitted). “[A]ny such public policy
must be explicit, well defined, and dominant. It must be ascertained by
reference to the laws and legal precedents and not from general considerations
of supposed public interests.” E. Associated Coal Corp. v. United Mine Workers,
531 U.S. 57, 62 (2000) (quotation marks and citation omitted).
As a qualifying public policy, the Hospital points to propositions in
Belmar v. Cipolla, 475 A.2d 533 (N.J. 1984). There, the New Jersey Supreme
Court addressed whether a hospital’s exclusive contract with a group of
anesthesiologists for the provision of all anesthesiologic services at the hospital
violated public policy. Id. at 534. The court explained that it “normally do[es]
not interfere with a reasonable management decision concerning staff privileges
as long as that decision furthers the health care mission of the hospital.” Id. at
538. Nonetheless, hospitals must “balanc[e] the interests of the hospital
management with those of a doctor who desires to practice at the hospital,”
always with an eye towards public health. Id.
The Hospital argues that the arbitrator violated the principles stated in
Belmar by overruling the Hospital’s view of the necessary qualifications to serve
patients. (Hosp. Mot. at 20.) Assuming that the Belmar principles are a welldefined public policy,3 the Hospital’s argument fails because the award is not
contrary to those principles. It might be the case that permitting an unqualified
person to operate the TrueBeam system has public policy implications. But I
cannot disturb the arbitrator’s factual findings that Varghese could readily
become qualified for the position with training available to the Hospital. Thus, I
One can doubt, however, that the public policy concerns of Belmar have the
same force here. Belmar deals with privileges for doctors, not technicians.
cannot reason, as the Hospital would like, that the award risks public health
by forcing the Hospital to employ an unqualified employee. See Rohm & Haas
Co. v. United Steel, Paper & Forestry, Rubber, Mfg., Eng., Allied Indus. & Serv.
Workers Int’l Union, AFL-CIO-CLC, 781 F. Supp. 2d 251, 256 (E.D. Pa. 2011)
(argument that award violated public policy against workplace violence failed
because arbitrator found that worker was not dangerous).
For the reasons set forth above, the Union’s petition to confirm the
arbitration award is granted, and the Hospital’s cross-petition to vacate the
arbitration award is denied.
A separate order will issue.
Dated: June 3, 2021
/s/ Kevin McNulty
Hon. Kevin McNulty
United States District Judge
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