Salem Hospital v. Massachusetts Nurses Ass'n

United States Court of Appeals
For the First Circuit

No. 05-2614

SALEM HOSPITAL,

Plaintiff, Appellee,

v.

MASSACHUSETTS NURSES ASSOCIATION,

Defendant, Appellant.

APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Richard Stearns, U.S. District Judge]

Before

Lipez, Circuit Judge,
Cyr and Stahl, Senior Circuit Judges.

James F. Lamond for appellant.
Richard P. Ward for appellee.

June 2, 2006
 STAHL, Senior Circuit Judge. This is an appeal by the

Massachusetts Nurses Association ("MNA" or "the Union") of the

district court's order vacating an arbitration award. The award

was rendered pursuant to the binding arbitration process for

dispute resolution provided for in the collective bargaining

agreement between the Union and Salem Hospital. We affirm the

decision of the district court, although for different reasons from

those offered by that court.

I. Background

A. The Dispute

The Union represents most of the nurses who work at Salem

Hospital in Salem, Massachusetts.1 Among the represented group of

nurses is the nursing staff of the Hospital's Post-Anesthesia Care

Unit ("PACU"). Up until 1993, the PACU unit had a fully staffed

night shift of nurses during the week and used an on-call system

for night shifts on the weekends.2 In 1993, the Hospital

eliminated the weekday full night shift of nurses and switched to

the on-call system during the week as well.3 The collective

1
The employee bargaining unit encompasses "all full-time and
regular part-time registered nurses employed by the Hospital,"
excluding certain managers and supervisors.
2
On-call requires the nurses who are on call for any given
night to carry a pager and be ready to come to work if needed.
3
As used in this case, "the week" means 7:00 AM Monday through
7:00 AM Saturday, with "the weekend" running from Saturday morning
to Monday morning. Thus, the two "weekend overnights" at issue in
this case comprise the early morning hours (12:30 AM to 6:30 AM) of

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bargaining agreement ("the Agreement") between the Hospital and the

union then representing the nurses4 was amended in November 1992 in

anticipation of this change and contains a section specifically

dealing with on-call. This section is at the root of the dispute

underlying this case. In relevant part, the section states:

§ 8.12, On-Call Pay. The Hospital reserves
the right to establish and disestablish on-
call in particular units when it determines
such is necessary. The Hospital will
determine, in its judgment, the number of
nurses needed to have a reasonable allocation
of on-call assignments. It will look first at
qualified volunteers and then assign the least
senior qualified nurses in the unit to fill
the number of on-call positions. Nurses who
are assigned to be on-call will be provided
with long-range beepers. All Post Anesthesia
Care Unit nurses (PACU), on a rotating basis,
will share on-call from 12:30 a.m. to 6:30
a.m., Tuesday through Saturday.

Similar language has remained in subsequent iterations of the

Agreement.

For approximately ten years after the switch from fully

staffed weeknight shifts to weeknight on-call, the Hospital used

the on-call system to staff the PACU unit with night nurses seven

nights a week. This practice continued without incident until

Sunday and Monday.
4
The Massachusetts Nurses Association moved to be substituted
for the original defendant, a local unit of the American Federation
of State, County, and Municipal Employees (AFSCME), after the
nurses voted to have the MNA replace the AFSCME as their collective
bargaining representative. References to "the Union" predating
2005 are to the AFSCME.

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2003, when a PACU nurse who was assigned to be on call on a weekend

night filed a grievance challenging the Hospital's authority to

assign nurses to on-call during weekend nights. She argued that

the last above-quoted sentence in § 8.12 of the Agreement, which

states that weeknight on-call duty is to be shared equally among

all PACU nurses, set forth the exclusive time and manner in which

PACU nurses could serve on call. In other words, she contended

that the sentence placed a limitation on the Hospital's authority

to "establish . . . on-call" as it sees fit.

The Hospital responded that the sentence in question was

not a limitation on when PACU nurses could be assigned on-call but

rather a modification of how nurses would be chosen for on-call

duty on weekday nights under the new arrangement. Since the first

part of § 8.12 specifies that, generally speaking, nurses will be

selected for on-call by volunteers and then in reverse order of

seniority, the second part, the Hospital contended, simply laid out

a different method for selecting nurses to serve on call during

weekday nights. The Hospital's proffered reason for the different

method was that weeknight on-call was a replacement for the fully

staffed weeknight shifts that had been in place until 1993, and

that the Hospital and the Union had agreed to distribute those

shifts equally among all PACU nurses rather than assign them solely

to volunteers and to the most junior nurses.

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 The aggrieved nurse followed the grievance procedure laid

out in the Agreement and the Union and the Hospital eventually

proceeded to arbitration.

B. The Arbitration

The parties' collective bargaining agreement includes a

comprehensive dispute resolution procedure. One provision spells

out the function and authority — including limits thereon — of the

arbitrator selected to resolve a dispute. The provision makes

clear that the Agreement grants an arbitrator the authority to

interfere with a decision made by the Hospital only in very limited

circumstances.

§ 6.4, Arbitrator's Function and Authority.
The function of the arbitrator is to determine
the interpretation and application of the
specific provisions of this Agreement to the
grievance. . . . No arbitrator shall have any
authority or power to reverse, set aside or
modify any determination made by the Hospital
pursuant to the provisions of this Agreement
unless he or she finds that such determination
was arbitrary or capricious, without any
reasonable basis or in contravention of
express language of this Agreement which is
not subject to interpretation.

In accordance with these restrictions, the arbitrator in this case

recognized that she had the authority to put a stop to the

Hospital's practice of assigning weekend on-call only if that

practice either (a) was arbitrary and capricious or (b) contravened

express language in the Agreement that was not subject to

interpretation; that is, unambiguous language. Accordingly, she

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made explicit findings about whether the two prongs were met. She

first concluded that the Hospital's decision to assign nurses to

weekend on-call was not arbitrary or capricious; to the contrary,

she found the decision very reasonably grounded in patient safety

concerns. She went on to find, however, that the practice of

giving on-call assignments for weekend nights contravened express,

unambiguous language in the Agreement. She concluded that she

therefore had the authority under § 6.4 to set the Hospital's

decision aside.

The arbitrator's decision rested on her determination

that the fifth sentence in § 8.12 had only one possible meaning.

She stated,

The fifth sentence of [§ 8.12] plainly defines
a limited time period during which PACU nurses
can be assigned on-call. It specifically
states that the only time PACU nurses can be
assigned to on-call is weekday nights. This
provision is not subject to interpretation,
because any proffered interpretation that
would expand the instances in which PACU
[nurses] can be required to go on-call would
render the provision meaningless and
unnecessary.

The arbitrator accordingly concluded that the Hospital had violated

the Agreement by requiring PACU nurses to serve on call at times

other than weekday nights. As a remedy, she ordered the Hospital

to cease assigning any PACU nurses to on-call duty on weekend

nights.

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C. The District Court Decision

The Hospital brought an action under § 301 of the Labor

Management Relations Act, 29 U.S.C. § 185, to vacate the

arbitration award. It argued that the arbitrator had exceeded her

authority by ignoring the plain language of the Agreement and

resting her award on palpably faulty reasoning. The Hospital

contended that it was simply irrational for the arbitrator to

conclude that the fifth sentence of § 8.12 would be meaningless

unless interpreted to prohibit weekend night on-call. Rather, the

Hospital argued, that sentence makes perfect sense as a way of

changing the method by which nurses would be selected for on-call

duty on weekday nights.

The district court found that the arbitrator had

construed the Agreement in a way that completely transformed the

meaning of § 8.12 and created a work rule never contemplated or

bargained for by the parties. It further held that the arbitrator

had exceeded the limited authority given her by § 6.4 by

interfering with a Hospital decision without first finding that the

decision was arbitrary or capricious. Accordingly, the court

granted the Hospital's motion for summary judgment and vacated the

arbitral award. The Union now appeals.

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 II. Analysis

A. Standard of Review

We review the district court's grant of summary judgment

de novo, Cytyc Corp. v. Deka Prods. Ltd. P'ship, 439 F.3d 27, 32

(1st Cir. 2006), applying the same standard as did the district

court. The hallmark of federal court review of an arbitrator's

decision is extreme deference to the opinion of the arbitrator,

whose interpretation of the contract has been bargained for by the

parties to the arbitration agreement. See United Paperworkers

Int'l Union v. Misco, Inc., 484 U.S. 29, 37-38 (1987); Cytyc, 439

F.3d at 32-33. "[J]udicial review of an arbitration decision is

extremely narrow and extraordinarily deferential [and] 'is among

the narrowest known in the law.'" Providence Journal Co. v.

Providence Newspaper Guild, 271 F.3d 16, 20 (1st Cir. 2001)

(quoting Maine Centr. R.R. Co. v. Bhd. of Maintenance of Way

Employees, 873 F.2d 425, 428 (1st Cir. 1989)). If an arbitration

award rests on a plausible interpretation of the underlying

contract, we must uphold it. See id. at 21 (upholding arbitrator's

decision because it was "a plausible, if not reasonable,

interpretation of the collective bargaining agreement"); Labor

Relations Div. of Constr. Indus. of Mass. v. Int'l Bhd. of

Teamsters, 29 F.3d 742, 746-47 (1st Cir. 1994) (same).

Nonetheless, an arbitrator's decision is not entirely

impervious to judicial oversight. In very limited circumstances,

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a party may succeed in challenging an arbitrator's interpretation

of an agreement. "[T]he paramount point to be remembered in labor

arbitration is that the power and authority of an arbitrator is

totally derived from the collective bargaining agreement and that

he violates his obligation to the parties if he substitutes 'his

own brand of industrial justice' for what has been agreed to by the

parties in that contract." Georgia-Pac. Corp. v. Local 27, United

Paperworkers Int'l Union, 864 F.2d 940, 944 (1st Cir. 1988)

(quoting United Steelworkers of Am. v. Enter. Wheel & Car Corp.,

363 U.S. 593, 597 (1960)). "Our task is to determine whether the

arbitrator exceeded his authority by failing to apply the contract

in a plausible manner." Labor Relations Div., 29 F.3d at 746.

B. Scope of the Arbitrator's Authority

The Agreement in this case grants arbitrators only narrow

authority to overrule determinations made by the Hospital, allowing

an arbitrator to interfere only if "he or she finds that [a]

determination was arbitrary or capricious, without any reasonable

basis or in contravention of express language of this Agreement

which is not subject to interpretation." The arbitrator here

determined that the language in § 8.12 was not subject to

interpretation and consequently found she had the authority to set

aside a Hospital policy that contravened that language.5 It is

5
The district court appeared to believe that § 6.4 sets out a
conjunctive requirement, i.e., that the Hospital's decision be both
arbitrary or capricious and in contravention of unambiguous

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this threshold determination, rather than the arbitrator's later

decision on the merits that the Agreement prohibited assigning PACU

nurses to weekend night on-call duty, that we review. We do so by

asking whether the arbitrator had a plausible basis for her

determination. In making this assessment, we keep in mind the

Supreme Court's repeated admonitions that courts may never

substitute their own views of the merits of a particular case for

the views of the arbitrator. See, e.g., Major League Baseball

Players Ass'n v. Garvey, 532 U.S. 504, 511 (2001); Misco, 484 U.S.

at 36. We also take into account, in this particular case, the

very narrow scope of authority granted to the arbitrator by the

Agreement in the first place. Cf. Nat'l Cas. Co. v. First State

Ins. Group, 430 F.3d 492, 497-98 (1st Cir. 2005) (noting that the

dissatisfied party "will have great difficulty" showing prejudice

from arbitral process where contract contained "broad" clause that

"fully sign[ed] over to the arbitrators the power to run the

dispute resolution process unrestrained by the strict bounds of law

or of judicial process").

contractual language before the arbitrator can intervene. The
arbitrator, in contrast, evidently found the word "or" to create a
disjunctive requirement; i.e., an arbitrator is not empowered to
modify a Hospital decision unless the decision (a) is arbitrary or
capricious or without any reasonable basis, or (b) contravenes
express, unambiguous language in the Agreement. The arbitrator's
view is a plausible interpretation of contractual language that
would admittedly have benefitted from more careful placement of
commas. In any event, the arbitrator herself found that the first
prong was not met, and we conclude the second prong was not met
either.

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 In her decision, the arbitrator reasoned that the

relevant language in § 8.12, the fifth sentence, is "express"

because it "plainly defines a limited time period during which PACU

nurses can be assigned on-call" and "specifically states that the

only time PACU nurses can be assigned to on-call is weekday

nights." She went on to conclude that the language was "not

subject to interpretation" because any other interpretation besides

the one just stated "would render the provision meaningless and

unnecessary." However, the Hospital has put forth an entirely

logical and rational interpretation that belies the arbitrator's

insistence that only her interpretation makes sense. The

Hospital's explanation is that the fifth sentence of § 8.12

describes an alternative method for assigning PACU nurses to on-

call duty on weekday nights: on weekend nights, PACU nurses will

continue to be chosen for on-call using the general, Hospital-wide

method of first taking volunteers and then selecting the most

junior nurses; but on weekday nights in the PACU unit, all PACU

nurses will share on-call duty equally, since weeknight on-call is

a replacement for the old, fully staffed PACU weeknight shifts.

That the Hospital's explanation seems eminently

reasonable to us would be irrelevant if we were reviewing the

arbitrator's decision that her interpretation of § 8.12 was the

best possible interpretation. "[I]nterpretation of the collective

bargaining agreement is a question for the arbitrator. It is the

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arbitrator's construction which was bargained for; and so far as

the arbitrator's decision concerns construction of the contract,

the courts have no business overruling him because their

interpretation of the contract is different from his." Enter.

Wheel & Car, 363 U.S. at 599. The question before us, however, is

not the plausibility of the arbitrator's view as to the meaning of

§ 8.12, but rather the plausibility of her assertion that § 8.12 is

not subject to interpretation at all. In this context, the

presence of a logical, rational alternative explanation of the

meaning of § 8.12 is highly relevant, because it indicates that

there is more than one reasonable way of looking at § 8.12 and,

therefore, that the provision is subject to interpretation. The

reasonableness of the Hospital's interpretation is bolstered by the

fact that PACU nurses served on call on weekend nights as a matter

of course for at least ten years preceding this dispute. Cf.

Providence Journal Co., 271 F.3d at 21 (arbitrators are allowed to

use the parties' past practice "as an interpretive device or as

relevant evidence").

We conclude it was not plausible for the arbitrator to

find the fifth sentence of § 8.12 not subject to interpretation.

She therefore had no authority under the collective bargaining

agreement to overturn the Hospital's weekend on-call assignment

policy on the ground that it contravened that language in § 8.12.

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Accordingly, her decision cannot stand and her award must be

vacated.

III. Conclusion

It is rare for a court to disturb the result of a dispute

resolution process that has been duly bargained for by the parties.

"Nevertheless, acknowledging that our role is a limited one is not

the equivalent of granting limitless power to the arbitrator."

Poland Spring Corp. v. United Food and Commercial Workers Int'l

Union, 314 F.3d 29, 33 (1st Cir. 2002) (citing Georgia-Pac., 864

F.2d at 944). It is well established that arbitrators cannot

exceed the authority given to them by the underlying contractual

agreement, and that is what the arbitrator did here.

The opinion of the district court vacating the

arbitrator's award is affirmed.

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