PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
PPG INDUSTRIES, INCORPORATED,
Plaintiff-Appellee,
v.
INTERNATIONAL CHEMICAL WORKERS
UNION COUNCIL OF THE UNITED
FOOD AND COMMERCIAL WORKERS; No. 08-2180
INTERNATIONAL CHEMICAL WORKERS
UNION COUNCIL OF THE UNITED
FOOD AND COMMERCIAL WORKERS,
LOCAL UNION NO. 45C,
Defendants-Appellants.
Appeal from the United States District Court
for the Northern District of West Virginia, at Wheeling.
Frederick P. Stamp, Jr., Senior District Judge.
(5:07-cv-00085-FPS)
Argued: September 30, 2009
Decided: November 20, 2009
Before MOTZ and DUNCAN, Circuit Judges, and
Cameron McGowan CURRIE, United States District Judge
for the District of South Carolina, sitting by designation.
Reversed and remanded by published opinion. Judge Motz
wrote the opinion, in which Judge Duncan and Judge Currie
joined.
2 PPG INDUSTRIES v. INTERNATIONAL CHEMICAL WORKERS
COUNSEL
ARGUED: August Randall Vehar, ICWUC/UFCW LEGAL
DEPARTMENT, Akron, Ohio, for Appellants. C. David Mor-
rison, STEPTOE & JOHNSON, LLP, Clarksburg, West Vir-
ginia, for Appellee. ON BRIEF: Robert W. Lowrey, UFCW
Assistant General Counsel, ICWUC/UFCW LEGAL
DEPARTMENT, Akron, Ohio; Tim Cogan, CASSIDY,
MYERS, COGAN & VOEGELIN, LC, Wheeling, West Vir-
ginia, for Appellants. Carolyn A. Wade, Jill Oliverio Florio,
STEPTOE & JOHNSON, LLP, Clarksburg, West Virginia,
for Appellee.
OPINION
DIANA GRIBBON MOTZ, Circuit Judge:
A reviewing court must defer to an arbitrator’s construction
of a contract even when the court believes that the arbitrator
construed the contract incorrectly. In this case, the district
court vacated the arbitration award, concluding that the arbi-
trator exceeded his authority by adding a term to the underly-
ing contract. We conclude, however, that even if the arbitrator
erred, he acted within the scope of his authority under the
contract. Accordingly, we must reverse the judgment of the
district court and remand with instructions to enforce the arbi-
tration award.
I.
The contract at issue, a collective bargaining agreement
("CBA"), governed labor relations between PPG Industries
("Company") and certain union employees at the Company’s
Natrium, West Virginia plant during 2005. These employees
belonged to the International Chemical Workers Union Coun-
cil of the United Food and Commercial Workers and the
PPG INDUSTRIES v. INTERNATIONAL CHEMICAL WORKERS 3
International Chemical Workers Union Council of the United
Food and Commercial Workers, Local Union No. 45C
("Union").
The CBA expressly provides that "grievances involving
alleged violations with respect to the application or interpreta-
tion of the terms of this agreement may be submitted by either
party to arbitration." It further provides that "[t]he Arbitrator
shall have no authority to add to, take from, change or modify
any of the terms of this Agreement nor shall he have any
authority in the making of a new agreement."
The CBA incorporates the terms of a company-wide bonus
plan, the Chlor-Alkali & Derivatives Variable Pay Plan
("Bonus Plan"). The parties agree that the CBA mandatory
arbitration provision quoted above governs disputes arising
under the Bonus Plan.
The Bonus Plan states that an employee becomes eligible
to receive a bonus if the employee:
(1) has been Actively Employed for 1,040 or more
hours during the Plan Year; and
(2)(a) is Actively Employed on the last workday of
the Plan Year; or on approved leave of absence or
layoff; or
(b) whose termination during the Plan Year was an
Eligible Termination.
The CBA defines "Actively Employed" in two sentences:
"Actively Employed" means actively at work; on
vacation; or on FMLA or Military leave of absence.
"Actively Employed" does not include overtime
hours, leaves of absence, other than FMLA and/or
Military, or layoffs.
4 PPG INDUSTRIES v. INTERNATIONAL CHEMICAL WORKERS
Union members at the Natrium plant went on strike from
September 2005 until February 2006. After resolution of the
strike and agreement on a new CBA, the Company refused to
pay the bonuses set forth in the Bonus Plan to striking
employees—even those actively employed for more than
1040 hours during 2005. Seeking payment of these bonuses,
the Union filed a grievance under the CBA. The matter pro-
ceeded to arbitration.
Following a hearing at which both sides presented evidence
and arguments, the arbitrator issued his order and opinion
awarding relief to the Union. After setting forth the parties’
respective arguments, the arbitrator noted that the "strike
extending through the last day of the year" presented a situa-
tion "never discussed, or in all probability contemplated, by
the parties during meetings regarding [the Bonus Plan]." The
arbitrator rejected the Union’s claim that the Company unlaw-
fully retaliated in denying the strikers benefits under the
Bonus Plan. The arbitrator explained that although he could
"understand the Union’s view of [the Company’s] motiva-
tion," the Company had "made a plausible argument" for its
decision and, if he viewed the matter "without full consider-
ation of all the surrounding circumstances[,] [he] would be
inclined to accept the Company’s claim of ineligibility."1
The arbitrator did not explain precisely what he meant by
"all the surrounding circumstances," but he did immediately
follow this observation with the statement that he was "fully
aware of the limitations" that the CBA arbitration provision
imposed on him and the Supreme Court’s requirement that
any arbitration award "draw[ ] its essence from the collective
bargaining agreement." United Steelworkers of Am. v. Enter.
Wheel & Car Corp., 363 U.S. 593, 597 (1960). The arbitrator
then quoted several arbitration decisions that set forth various
1
The Union continues to pursue this claim, but only as a rationale for
reinstating the arbitration award. Because we order reinstatement of the
award on other grounds, we do not reach the retaliation argument.
PPG INDUSTRIES v. INTERNATIONAL CHEMICAL WORKERS 5
rules of contract construction. These include the rule that "if
the terms of an agreement ‘unambiguously resolve the point
at issue, the arbitrator has no choice but to apply them as writ-
ten,’" and the rule that arbitrators should attempt to determine,
"from the instrument as a whole, the true intent of the par-
ties."
The arbitrator considered evidence submitted by both par-
ties that during a series of meetings held in 1995, employees
asked questions about the Bonus Plan. In response to ques-
tions about the definition of "active employment," a Company
official had stated that employees were either "employed" or
"terminated," suggesting that an employee not "terminated"
was "actively employed" for purposes of the Bonus Plan. The
arbitrator noted that the Company had drafted the language of
the Bonus Plan, and that any ambiguity in the term "actively
employed" should be "construed against the drafter" (internal
quotation marks omitted) (quoting another arbitration deci-
sion).
The arbitrator next addressed the argument of the Company
based on the axiom that the expression of one thing implies
the exclusion of others. Specifically, the Company contended
that because the Bonus Plan enumerates four groups of active
employees, but does not name strikers, it thereby excludes
strikers from the ranks of the "actively employed" and so
from eligibility for bonuses. The arbitrator found that "[w]hile
the principle of exclusion is a solid one . . . there is a dilemma
here with the wording" of the Bonus Plan. That is, the arbitra-
tor noted, the Bonus Plan also contains another list of groups
of employees—those expressly not within the category "ac-
tively employed"—and this list too does not name strikers.
The arbitrator observed that the presence of the two lists
"gives rise to the question to which list does the exclusion rule
apply? If it is the latter list then the grievants are not ineligible
[for bonuses]."
To resolve the "dilemma" created by the two contractual
lists addressing active employment, the arbitrator referred
6 PPG INDUSTRIES v. INTERNATIONAL CHEMICAL WORKERS
again to the Company’s comments at its 1995 meetings with
the Union. The arbitrator concluded that "the explanations
given to the Union in the 1995 discussions were, if not mis-
leading, lacking in a satisfactory or clear definition of" the
term "actively employed" and therefore unclear as to eligibil-
ity for benefits under the Bonus Plan. Accordingly, the arbi-
trator found that the strikers, who were otherwise entitled to
bonuses "[u]nder the language of the [CBA] and the [Bonus]
Plan . . . did not forfeit that entitlement by going on strike at
the termination of their Labor Agreement and continuing on
strike through 12/31/2005."
The Company contested the arbitration award in the district
court. On cross-motions for summary judgment, the court
vacated the award, finding that the arbitrator had exceeded his
authority. The court reasoned that "nothing in the [Bonus
Plan], the CBA, or the parties’ 1995 discussions concerning
the [Bonus Plan] indicates that the parties intended to include
or exclude, or even considered including or excluding, strik-
ing employees as falling within the meaning of ‘Actively
Employed.’" For this reason, the court believed that the arbi-
trator had "effectively changed the term ‘Actively Employed’
by adding ‘on strike’ to its list of inclusions, in violation of
the restrictions imposed upon his authority by the CBA."
The Union timely filed this appeal.
II.
Whether an arbitrator acts within the scope of his authority
presents a question of law, and so we review the judgment of
the district court de novo. Island Creek Coal Co. v. Dist. 28,
United Mine Workers of Am., 29 F.3d 126, 129 (4th Cir.
1994).
"[J]udicial review of arbitration awards is . . . ‘among the
narrowest known to the law.’" U.S. Postal Serv. v. Am. Postal
Workers Union, 204 F.3d 523, 527 (4th Cir. 2000) (quoting
PPG INDUSTRIES v. INTERNATIONAL CHEMICAL WORKERS 7
Union Pac. R.R. v. Sheehan, 439 U.S. 89, 91 (1978)). Indeed,
the Supreme Court has recently explained that "[j]udicial
review of a labor-arbitration decision" is not merely limited
but "very limited." Major League Baseball Players Ass’n v.
Garvey, 532 U.S. 504, 509 (2001) (per curiam). A court must
"determine only whether the arbitrator did his job—not
whether he did it well, correctly, or reasonably, but simply
whether he did it." Mountaineer Gas Co. v. Oil, Chem. &
Atomic Workers Int’l Union, 76 F.3d 606, 608 (4th Cir. 1996).
Of course, the arbitrator cannot "ignore the plain language
of the contract" to impose his "own notions of industrial jus-
tice." United Paperworkers Int’l Union v. Misco, Inc., 484
U.S. 29, 38 (1987). However, "mere ambiguity in the opinion
accompanying an award, which permits the inference that the
arbitrator may have exceeded his authority, is not a reason for
refusing to enforce the award." Enter. Wheel, 363 U.S. at 598.
The Court has explained that since arbitrators need not give
any rationale for an arbitration award, requiring their opinions
to be "free of ambiguity may lead arbitrators to play it safe by
writing no supporting opinions." Id. Therefore, "as long as the
arbitrator is even arguably construing or applying the contract
and acting within the scope of his authority, that a court is
convinced he committed serious error does not suffice to
overturn his decision." Misco, 484 U.S. at 38.2
2
The Company acknowledges most of these well-established principles.
A notable exception is the Company’s heavy reliance on Wyandot, Inc. v.
Local 227, United Food & Commercial Workers Union, 205 F.3d 922,
929 (6th Cir. 2000), to establish some limitations on the arbitrator’s role.
The Company fails to recognize that the Sixth Circuit itself has recently
held that the Supreme Court’s holdings in Misco and Garvey do not permit
these limitations and so overruled the approach followed in Wyandot. See
Mich. Family Res. v. Serv. Employees Int’l Union Local 517M, 475 F.3d
746, 751-53 (6th Cir. 2007) (en banc).
8 PPG INDUSTRIES v. INTERNATIONAL CHEMICAL WORKERS
III.
To circumvent the mountain of authority holding that
courts cannot second-guess an arbitrator’s construction of a
CBA, the Company principally contends that the "arbitrator
ignored plain contract language," added "a new term to the
agreement," and so "strayed from his proper role." Brief of
Appellee at 12, 23, 36.
Given the two-sentence CBA definition of "actively
employed" and the failure of the CBA to address strikers in
either sentence, we cannot conclude that the arbitrator ignored
the plain language of the CBA. Yuasa, Inc. v. Int’l Union of
Electronic, Electrical, Salaried, Mach. & Furniture Workers,
Local 175, 224 F.3d 316 (4th Cir. 2000), is instructive here.
There, as here, the the CBA did not address certain issues,
which therefore "had to be addressed through interpretation"
by the arbitrator. Id. at 323. Also as in Yuasa, the arbitrator’s
decision was consistent with the parties’ general intent as
manifested in the agreement itself and, in any event, not
inconsistent with any clearly expressed limitation. Id.
The Company’s arguments simply constitute an attack on
the correctness of the arbitrator’s decision. A court has no
warrant to determine the correctness of the arbitrator’s award.
If an arbitrator "even arguably" construes a CBA, a court
must uphold the resulting award. Misco, 484 U.S. at 38.
Certainly, in the case at hand, the arbitrator construed the
CBA. At the outset of his opinion, the arbitrator explicitly
acknowledged his limited mandate under the CBA and the
Supreme Court’s admonition in Enterprise Wheel that he
draw the essence of his award from the CBA. The arbitrator
then dedicated virtually his entire opinion to interpreting the
phrase "actively employed" in the CBA. In doing so, he
repeatedly relied on precedents interpreting the very same
phrase and on the rules of contract construction.
PPG INDUSTRIES v. INTERNATIONAL CHEMICAL WORKERS 9
Accordingly, the arbitration award at issue here stands in
stark contrast to the few modern instances in which we have
held that an arbitrator crossed the line from construing a con-
tract to imposing his own notions of fairness. Cf. Postal Serv.,
204 F.3d at 528 (rejecting an arbitrator’s award that "contra-
vene[d] the unambiguous language of" the contract); Cham-
pion Int’l Corp. v. United Paperworkers Int’l Union, 168 F.3d
725, 731 (4th Cir. 1999) (rejecting an arbitrator’s award
because it was based on the wrong contract); Mountaineer
Gas, 76 F.3d at 610 (rejecting an arbitrator’s award that "bla-
tantly ignored the unambiguous language" of the company’s
policy and instead "fashion[ed] an entire new remedy and
infuse[ed] his personal feelings and sense of fairness into the
award"); Island Creek Coal Co., 29 F.3d at 130–31 (rejecting
an arbitrator’s award for punitive damages when the underly-
ing agreement did not authorize punitive damages).
For these reasons, the Company’s contention that the "arbi-
trator ignored plain contract language" and added "a term to
the CBA" must fail.
IV.
The Company’s only remaining argument—that the arbitra-
tor erred in using extrinsic evidence (i.e. evidence as to the
1995 meetings) to construe "unambiguous language" in the
CBA—also fails.3 This is so because the arbitrator found the
terms of the CBA ambiguous, and this court cannot second-
guess that judgment.
3
Tellingly, the Company itself has recognized facial ambiguity in the
CBA and Bonus Plan. Thus, the Company argues that the plain language
of these documents requires an employee to be "Actively Employed" "on
the last work day" of a year to earn the bonus, but contends that it has
"never taken" the "ridiculous position" of denying benefits under the
Bonus Plan "to an employee who happened to be scheduled off of work"
when December 31 falls on a Saturday. Brief of Appellee at 16 n.8. More-
over, in making this argument, the Company relies on "the 1995 discus-
sions between the Company and the Union," which it contends the
arbitrator improperly considered. Id.
10 PPG INDUSTRIES v. INTERNATIONAL CHEMICAL WORKERS
The "basic objective" of a reviewing court in the arbitration
context is "to ensure that commercial arbitration agreements,
like other contracts, are enforced according to their terms, and
according to the intentions of the parties." First Options of
Chi., Inc. v. Kaplan, 514 U.S. 938, 947 (1995) (citations and
internal quotation marks omitted). Here, the parties expressly
agreed in the CBA that the arbitrator could adjudicate "griev-
ances involving alleged violations with respect to the applica-
tion or interpretation of the terms of [the CBA]" (emphasis
added). Because determining whether the terms of a contract
are ambiguous is an exercise in "interpretation," the parties
agreed in the CBA that the arbitrator would determine the
ambiguity vel non of its terms. See Green Tree Fin. Corp. v.
Bazzle, 539 U.S. 444, 453 (2003) (noting that when a contract
contains such "sweeping language concerning the scope of the
questions committed to arbitration, . . . matter[s] of contract
interpretation should be for the arbitrator, not the courts, to
decide"). Pursuant to this authority (and consistent with the
record before him), the arbitrator found the terms of the CBA
ambiguous.
In light of that finding, the arbitrator could properly con-
sider the 1995 meetings in order to resolve the ambiguity. See
CSX Transp., Inc. v. United Transp. Union, 29 F.3d 931, 936
(4th Cir. 1994) ("If the parties’ written agreement is ambigu-
ous or silent regarding the parties’ intent, the arbitrator may
use past practices and bargaining history to ‘fill a gap’ in the
written contract.").
V.
Accordingly, we reverse the judgment of the district court
and remand the case for entry of a judgment enforcing the
arbitration award.
REVERSED AND REMANDED