Teamsters Local Union No. 100 v. First Student, Inc.

Filing 11

ORDER denying 4 Amended Motion to Vacate the arbitrator's award. Plaintiff's complaint for review of the arbitrator's decision is dismissed with prejudice. Signed by Judge Sandra S Beckwith on 5/26/15. (mb)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION

Teamsters Local Union No. 100,
Plaintiff,
vs.
First Student, Inc.,
Defendant.

)
)
) Case No. 1:15-CV-199
)
)
)
)
)
)
ORDER

This matter is before the Court on Plaintiff Teamsters Local Union No. 100’s
amended motion to vacate arbitrator’s award (Doc. No. 4). For the reasons that follow,
Plaintiff’s motion is not well-taken and is DENIED.
I. Background
Teamsters Local Union No. 100 (“the Teamsters”) is the collective bargaining
representative for the school bus drivers, monitors, lot-men and dispatchers who are
employed by Defendant First Student, Inc. (“First Student”). In this case, the Teamsters
ask the Court to vacate an arbitrator’s interpretation of the collective bargaining agreement
in effect for the period July 1, 2013 to June 30, 2016 (“the 2013 CBA”). Specifically, the
Teamsters object to the arbitrator’s interpretation of Section 47 of the 2013 Agreement,
which sets forth the applicable wage rates.
As explained by the arbitrator, Article 47 establishes sixteen annual wage steps. It
also provides a specific rate for a New Hire. Under the 2013 CBA, an employee who works
at least one day during the regular school year at the New Hire rate receives a year of

service for purposes of the wage scale and is eligible to advance to the next wage step.
In other words, there are actually seventeen pay levels, but, somewhat counter-intuitively,
an employee in his second year of service will be paid at the Year 1 Rate (because the first
year of employment was compensated at the New Hire rate). An employee in his third year
of service will be paid at the Year 2 rate, and so forth. Doc. No. 2-3, at 25.
The prior CBA (“the 2009 CBA) had only three wage rates. New hires under the
2009 CBA were also paid at the New Hire Rate. Also like the 2013 CBA, new employees
with at least one day of service during the school year were eligible to advance to the next
wage rate. Under this agreement, employees in their second year of service were paid at
the Second Year Rate. Employees remained at the Second Year Rate until they completed
seven years of service, at which time they advanced to the Eighth Year Rate. Employees
then remained at the Eighth Year Rate for the remainder of their service. Doc. No. 2-3, at
78.
The dispute between the Teamsters and First Student centered on First Student’s
treatment of existing employees when the 2013 CBA went into effect. First Student
decided that the year after the New Hire Year would be Year 1 on the wage scale. Thus,
for example, according to First Student’s determination, under the new agreement, an
employee in his fifth year of service, including the hire year, would be paid at the Year 4
rate. The union members, however, thought that this interpretation cheated them out of a
year of service on the wage scale. They contended that under the new CBA, an employee
in his fifth year of service should be compensated at the Year 5 rate.
The parties’ dispute over the new wage rates proceeded to arbitration. In support
of its interpretation of the new CBA before the arbitrator, the Teamsters focused on the fact
2

that during negotiations, First Student agreed to delete the word “after” from a proposed
draft of the new wage scale. In the draft proposal, the first year was paid at the New Hire
rate, the second year rate was denominated “After 1 year,” the third year rate was
denominated “After 2 years,” and so on. Doc. No. 2-4, at 51. The union membership,
refused to ratify the proposed wage scale because of the word “after.” The members
thought that the word “after” created confusion and would result in delaying progression to
the next wage step by one year. After further negotiations, First Student agreed to delete
“after” from the wage scale and the membership ultimately ratified the amended wage
scale. The Teamsters argued that First Student was improperly trying to use arbitration to
put back into the CBA a term it had surrendered during negotiations. First Student’s
position was that it agreed to eliminate the word “after” from the wage scale only in order
to eliminate confusion but that this amendment did not otherwise result in a substantive
change in the manner in which the new wage scale would be applied.
The arbitrator agreed with First Student in his award. He agreed that there was
some merit to the Teamsters’ argument that an employee in his fifth year of service should
be compensated at the Year 5 rate. He noted further, however, that the Union could have
drafted the wage scale so that the year after the New Hire year was Year 2. The arbitrator
also noted that accepting the Teamsters’ position would permit employees who worked one
day in the New Hire Year to completely bypass the Year 1 wage rate and advance to the
Year 2 wage rate. The arbitrator rejected this position, however, because there is no
provision in the CBA to treat existing employees differently from newly hired employees.
The arbitrator determined, rather, that the wage rate chart provided the best
expression of the parties’ intent concerning application of the wage rates. The arbitrator
3

concluded that the chart provided a graphical representation of an employee’s progression
through the wage scales, i.e., the employee is paid at the New Hire rate in the year of hire
and advances one step on the chart at the beginning of the new school year until he
reaches the maximum wage. The arbitrator also concluded that nothing in the CBA
requires the employer to deviate from those steps when assigning wage rates. Finally, the
arbitrator concluded that First Student properly advanced existing employees to the new
wage step for the new school year in 2013 and that no employee lost a year of service
under the wage chart when the new CBA went into effect. Therefore, the arbitrator
concluded, First Student did not violate the CBA. Doc. No. 4-1, at 11-15.
The Teamsters now move the Court to vacate the arbitrator’s award.

The

Teamsters contend that the arbitrator acted outside the scope of his authority by inserting
provisions into the CBA which do not otherwise appear and that he ignored the clear and
unambiguous language of the contract.

First Student, however, contends that the

Teamsters’ motion is frivolous because the arbitrator clearly engaged in interpreting the
CBA when he issued his award and, hence, the Teamsters have not presented any
reasonable for basis for vacating his award.
The Teamsters’ motion to vacate the arbitrator’s award is now ready for disposition
by the Court.
II. Standard of Review
A federal court’s review of an arbitrator’s award is significantly circumscribed. The
court’s task is to determine whether the arbitrator’s decision “draws its essence from the
contract.” Michigan Family Res., Inc. v. Service Emp. Int’l Union Local 517M, 475 F.3d
746, 752 (6th Cir. 2007). If the arbitrator was “even arguably construing or applying the
4

contract,” the award must be confirmed. Id. “Only when the arbitrator strays from
interpretation and application . . . does he enter the forbidden world of effectively
dispensing his own brand of industrial justice, making the arbitrator’s decision
unenforceable.” Id. (quoting in part Major League Baseball Players Ass’n v. Garvey, 532
U.S. 504, 509 (2001)) (internal brackets and quotation marks omitted). The Sixth Circuit
explained further that:
The [Supreme] Court’s repeated insistence that the federal courts must tolerate
“serious” arbitral errors suggests that judicial consideration of the merits of a dispute
is the rare exception, not the rule. At the same time, we cannot ignore the specter
that an arbitration decision could be so ignorant of the contract’s plain language as
to make implausible any contention that the arbitrator was construing the contract.
An interpretation of a contract thus could be so untethered to the terms of the
agreement . . . that it would cast doubt on whether the arbitrator indeed was
engaged in interpretation. Such an exception of course is reserved for the rare
case. For 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 that.
...
This view of the “arguably construing” inquiry no doubt will permit only the most
egregious awards to be vacated. But it is a view that respects the parties’ decision
to hire their own judge to resolve their disputes, a view that respects the finality
clause in most arbitration agreements . . . and a view whose imperfections can be
remedied by selecting better arbitrators.
Id. at 753-54 (internal citations, brackets and quotation marks omitted).

Thus, the

reviewing court cannot vacate the arbitrator’s award even if he made “serious, improvident,
or silly errors in resolving the merits of the dispute.” Id. at 753 (internal quotation marks
omitted). Similarly, the reviewing court cannot reverse the arbitrator’s decision based on
mistakes of fact or law, Beacon Journal Pub. Co. v. Akron Newspaper Guild Local No. 7,
114 F.3d 596, 599 (6th Cir. 1997), or because the arbitrator misinterpreted federal law.

5

Anaconda Co. v. District Lodge No. 27 of the Int’l Ass’n of Machinists, 693 F.2d 35, 37-38
(6th Cir. 1982).
A federal court, rather, will only review an arbitrator’s award for “procedural
aberrations.” That review is limited to considering: 1) whether the arbitrator acted outside
the scope of his authority by not resolving a dispute committed to arbitration; 2) whether
the arbitrator committed fraud, had a conflict of interest, or otherwise acted dishonestly in
issuing the award; and 3) whether the arbitrator arguably construed and applied the
contract in resolving disputed factual and legal questions. Truck Drivers Local No. 164 v.
Allied Waste Sys., Inc., 512 F.3d 211, 216 (6th Cir. 2008). If the arbitrator did not violate
any of these requirements, his award must be affirmed even if the court believes the
arbitrator was seriously mistaken in resolving the merits of the dispute. Id.
III. Analysis
In this case, it is clear that the Court cannot vacate the arbitrator’s award.
First, the Teamsters wrongly contend that the arbitrator acted outside the scope of
his authority in issuing his award. An arbitrator acts outside the scope of his authority only
when he decides an issue that the collective bargaining agreement does not commit to
arbitration. Truck Drivers, 512 F.3d at 217. Here, however, the Teamsters do not contend
that the CBA did not permit the arbitrator to decide disputes concerning the application of
the wage scale. The Teamsters do argue that the arbitrator added the term “after” back
into the wage scale in violation of the 2013 CBA. See CBA Art. 12 (Doc. No. 2-3, at 30)
(“The power of the arbitrator shall be limited to the interpretation of the Agreement. He
shall have no power to add or subtract from or modify any of this Agreement, nor shall he
have power to establish or change any wage scale or classification.”). The arbitrator plainly
6

did not add the word “after” back into the 2013 CBA. Instead, he concluded that the
removal of the word “after” from the final draft of the 2013 CBA was a non-substantive
change to the agreement. In support of that conclusion, the arbitrator observed that the
wage rates did not change and that the new wage chart contained seventeen wage steps
both before and after the removal of the word “after.” Doc. No. 4-1, at 15. The arbitrator’s
award, therefore, shows that he was engaged in contract interpretation and did not act
outside the scope of his authority in rendering his award.
Second, and finally, the arbitrator’s decision clearly draws its essence from the CBA.
The arbitrator’s award shows that he cited the applicable article of the CBA, that he
reviewed the wage scale provisions, and that he reached logical conclusions concerning
the correct application of the wage scale. For instance, the arbitrator noted that the wage
chart graphically demonstrates an employee’s progression throughout each wage step and
concluded that, because of the New Hire rate, an employee in his second year of
employment is paid at the Year 1 rate, that an employee in his third year of employment
is paid at the Year 2 rate, and so forth. Applying that logic, the arbitrator then concluded
that First Student did not deny any existing employee of a year of service under the wage
chart. Not only is the arbitrator’s decision not “untethered from the agreement,” it is
arguably the only reasonable and correct interpretation of the CBA. Doc. No. 4-1, at 16-17.
Compare with Michigan Family Res., 475 F.3d at 754 (“The arbitrator’s ten-page opinion
has all the hallmarks of interpretation. He refers to, quotes from and analyzes the pertinent
provisions of the agreement, and at no point does he say anything indicating that he was
doing anything other than trying to reach a good-faith interpretation of the contract.”).

7

Accordingly, the Teamsters’ amended motion to vacate the arbitrator’s award is not
well-taken and is DENIED. The Teamsters’ complaint for review of the arbitrator’s decision
is DISMISSED WITH PREJUDICE.

IT IS SO ORDERED

Date May 26, 2015

s/Sandra S. Beckwith
Sandra S. Beckwith
Senior United States District Judge

8