Not for Publication in West's Federal Reporter
United States Court of Appeals
For the First Circuit
Nos. 13-1468, 13-1547
RICHARD P. GAMBINO, as he is Administrator, LOCAL 103, I.B.E.W.
HEALTH BENEFIT PLAN; ELECTRICAL WORKERS' PENSION FUND, LOCAL 103,
I.B.E.W.; ELECRICAL WORKERS' DEFERRED INCOME FUND, LOCAL 103,
I.B.E.W.; JOINT APPRENTICESHIP AND TRAINING FUND; INTERNATIONAL
BROTHERHOOD OF ELECTRICAL WORKERS LOCAL 103 OF BOSTON,
MASSACHUSETTS; LAWRENCE J. BRADLEY, as he is Executive
Secretary-Treasurer, NATIONAL ELECTRICAL BENEFIT FUND,
Plaintiffs, Appellees/Cross-Appellants,
v.
ADA ALFONSO d/b/a ALFONSO ELECTRICAL SERVICES and ALFONSO
ELECTRICAL CO.; OLD GOAT ENTERPRISES, INC.,
Defendants, Appellants/Cross-Appellees.
APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Patti B. Saris, U.S. District Judge]
Before
Thompson, Circuit Judge,
Souter,* Associate Justice,
and Stahl, Circuit Judge.
Stephen P. Kolberg, with whom Kolberg & Schneider, P.C.
was on brief, for appellants/cross-appellees.
Indira Talwani, with whom Ira Sills, Alexander
Sugerman-Brozan, Kathryn S. Shea, and Segal Roitman LLP were on
brief, for appellees/cross-appellants.
*
Hon. David H. Souter, Associate Justice (Ret.) of the
Supreme Court of the United States, sitting by designation.
June 20, 2014
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SOUTER, Associate Justice. This appeal is from a district
court order confirming an arbitration award against an employer who
failed to make contributions to benefit funds as required by the
governing collective bargaining agreement with a labor union. We
affirm.
I.
International Brotherhood of Electrical Workers Local 103
("Union") is a union of electrical and construction laborers in
eastern Massachusetts. Employers who are party to a Collective
Bargaining Agreement ("CBA") with the Union must contribute to
funds ("Funds") that provide benefits to union members. Ada Alfonso
is one of those employers.
The Funds sued Alfonso1 in federal court, alleging
delinquency in making contributions. While that action was pending,
the Union invoked the CBA to resolve the same dispute before a
joint labor-management arbitration committee ("Committee"). The
Committee ordered an award in the Union's favor.
Alfonso filed a motion in court to vacate the arbitration
award, to which the Union responded by bringing its own judicial
1
The action was brought against Ada Alfonso, doing business
as Alfonso Electrical Services and Alfonso Electrical Company, and
against Old Goat Enterprises, Inc., of which Alfonso is the
majority owner and president. Alfonso is a signatory to the CBA and
Old Goat, while not a signatory, agrees that it is bound by it. The
parties agree that the resolution of this case will have identical
effect on each defendant. For ease, we refer to the defendants
collectively as "Alfonso."
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action to confirm it. Thereafter, the actions by the Funds and the
Union were consolidated.
The district court initially granted Alfonso's motion to
vacate the award, ruling that the Committee was biased because it
included several individuals who were also trustees of the Funds.
The court's decision rested in part on the fact that the Union had
presented no evidence that Alfonso knew in advance about the
Committee's membership. Later, however, the district court granted
the Union's motion for reconsideration, finding that new evidence
demonstrated that, when Alfonso agreed to the CBA arbitration
procedure, she had indeed known of the Committee's potential
composition. The court thus confirmed the arbitration award in a
judgment against Alfonso, who appealed. The Union cross-appealed on
an issue we find it unnecessary to reach, as explained in footnote
6, below.
II.
We review de novo the district court's decision to
confirm the arbitration award. Doral Fin. Corp. v. Garcia-Velez,
725 F.3d 27, 31 (1st Cir. 2013). Against that decision, Alfonso
argues that (i) the CBA does not permit arbitration of the type of
dispute present here; (ii) the Committee's decision was not final
and binding; (iii) the Union waived its right to arbitration; and
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(iv) she did not consent to a proceeding with biased arbitrators.
None of these challenges has merit.2
A.
Alfonso contends that the following arbitration
provisions of the CBA are too narrow to embrace the dispute in this
case.
1.4 During the term of this Agreement, there
shall be no stoppage of work either by strike
or lockout because of any proposed change(s)
in this Agreement or dispute over matters
relating to this Agreement. All such matters
must be handled as stated herein.
1.5 There shall be a Labor-Management
Committee3 of three (3) representing the Union
and three (3) representing the Employers. It
shall meet regularly at such stated times as
it may decide. However, it shall also meet
within forty-eight (48) hours when notice is
given by either party. It shall select its own
Chairman and Secretary. The Local Union shall
select the Union representatives and the
Chapter4 shall select the management
representatives.
1.6 All grievances or questions in dispute
shall be adjusted by the duly authorized
2
If we were to vacate the arbitration award, Alfonso argues
that she should not have to resubmit her dispute to what in her
view would be another biased Committee. Because we affirm the
confirmation of the award, we do not reach this argument.
3
Elsewhere the CBA refers to a "Joint Conference Committee."
The parties' use of the terms implies that the Labor-Management
Committee and the Joint Conference Committee are one and the same.
4
"The Chapter" refers to Electrical Contractors Association
of Greater Boston, Inc., Boston Chapter, National Electrical
Contractors Association ("NECA"). We refer to the Chapter as
"NECA."
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representatives of each of the parties to this
Agreement. In the event that these two are
unable to adjust any matter within forty-eight
(48) hours, they shall refer the same to the
Labor-Management Committee.
1.7 All matters coming before the Labor-
Management Committee shall be decided by
majority vote. Four (4) members of the
Committee, two (2) from each of the parties
hereto, shall be a quorum for the transaction
of business but each party shall have the
right to cast the full vote of its membership
and shall be counted as though all were
present and voting.
1.8 Should the Labor-Management Committee fail
to agree or to adjust any matter, such shall
then be referred to the Council on Industrial
Relations for the Electrical Contracting
Industry for adjudication. The Council's
decisions shall be final and binding.
According to Alfonso, the reference in section 1.4 to disputes over
"matters relating to this Agreement" covers only interpretive
disagreements about the very terms of the CBA, and does not extend
to a collection dispute like this one. She points to a section of
the document that imposes the CBA's terms on non-signatories whom
employers might oversee, such as subcontractors: "As a remedy for
violations of this section, the Labor-Management Committee . . .
[is] empowered . . . to require an Employer to . . . pay into the
affected . . . funds . . . any delinquent contributions to such
funds which have resulted from the violations." Alfonso says that
if the CBA's general arbitration provisions were sufficiently broad
to embrace all collection disputes there would have been no need to
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empower the Committee explicitly to award delinquent contributions
to remedy violations "of this section."
Alfonso's argument against imputing redundancy to the CBA
is not, however, the only interpretive guide at hand. This case
arises under section 301 of the Labor Management Relations Act
("LMRA"), 29 U.S.C. § 185, and in section 301 cases the Supreme
Court has directed that, if there is any doubt, an arbitration
clause should be interpreted to embrace a particular dispute. See
United Steelworkers of Am. v. Warrior & Gulf Nav. Co., 363 U.S.
574, 582-83 (1960); see also AT & T Techs., Inc. v. Commc'ns
Workers of Am., 475 U.S. 643, 650 (1986) ("[T]here is a presumption
of arbitrability . . . ."). Here, we can hardly say that the text
of the CBA commands Alfonso's interpretation beyond all doubt. On
its face, the phrase "matters relating to this agreement" in
section 1.4 can cover disagreements stemming from the contractual
relationship of parties to the CBA. And because the CBA is the
source of employers' obligations to contribute to the Funds, such
disagreements would seem to include contribution disputes.
Thus, both the statutory presumption and the
comprehensive language of the arbitration clause itself point to
arbitrability in this instance, a conclusion buttressed by the CBA
article devoted to the Funds themselves, which warns that
consequences will result "[t]o the extent an individual Employer
becomes delinquent, as determined by the Joint Conference
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Committee." Accordingly, the specific language Alfonso points to is
most harmoniously read, not as defeating arbitrability here but as
guaranteeing it elsewhere as a belt-and-suspenders provision,
making it clear that even if an employer tries to circumvent its
obligations under the CBA through, for example, subcontracting,
resultant losses to the Funds are remediable through arbitration.
Hence, we think the dispute in this case was arbitrable under the
CBA.
B.
Alfonso argues that the Committee's award was not fit for
enforcement because it was not final and binding, a conclusion she
rests on the fact that in referring to Committee decisions, the CBA
does not use the phrase "final and binding." Against this silence,
she contrasts language from the CBA elsewhere, providing that
"[s]hould the Labor-Management Committee fail to agree or to adjust
any matter, such shall then be referred to the Council on
Industrial Relations for the Electrical Contracting Industry for
adjudication. The Council's decisions shall be final and binding."
And she claims support for her reading in what she sees as the
character of the Committee's procedures, being so cursory that they
must not have been meant to produce final, binding decisions.
But whether the Committee's award is final and binding
turns on whether Committee arbitration "is the parties' chosen
instrument for the definitive settlement of grievances under the
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[CBA]." Elec. Contractors Ass'n of Greater Bos., Inc. v. Local
Union 103, Int'l Bhd. of Elec. Workers, 458 F.2d 590, 592 (1st Cir.
1972) (emphasis omitted) (quoting Gen. Drivers, Warehousemen &
Helpers, Local Union No. 89 v. Riss & Co., 372 U.S. 517, 519 (1963)
(per curiam)). And that choice need not be the product of any magic
words. See Riss & Co., 372 U.S. at 519 ("It is not enough that the
word 'arbitration' does not appear in the collective bargaining
agreement . . . .").
We think that the CBA reveals the parties' intent to use
Committee arbitration for the definitive settlement of grievances
such as the one here, by words pointing adequately to the finality
of a Committee decision. As quoted before, section 1.4, which
appears under the heading "Grievances - Disputes," provides that
"[a]ll . . . matters [relating to the CBA] must be handled as
stated herein." The subsequent sections, also reproduced above,
proceed to spell out the grievance hierarchy: disputes are to be
resolved in the first instance by representatives of each party,
failing which the Committee is to try its hand, followed by the
Council if necessary. If we were to accept Alfonso's position,
binding arbitration awards could result only when the Committee
fails to resolve a matter, necessitating review by the Council;
matters that the Committee succeeded in resolving would never reach
finality. That would be so absurd that the more likely reading of
the "final and binding" language describing the Council's decisions
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does not imply that decisions reached by the other grievance bodies
are tentative, but instead stresses the administration hierarchy:
the Council is the end of the road. Thus the mere availability of
a higher order procedure was not meant to render the process one
step down impotent when it produces a decision.
We see nothing to disturb this conclusion in what Alfonso
calls the cursory treatment of her case by the Committee. She
directs us to no authority, and we have found none, to support her
apparent position that grievance procedures must approximate those
of the courtroom for them to produce binding results. Again, the
touchstone is the parties' intent to use certain processes to
resolve disputes, Elec. Contractors Ass'n, 458 F.2d at 592, and
Alfonso has provided no indication that she did misunderstand or
could have misunderstood the character of the Committee's
proceedings when she became party to the CBA.
C.
Alfonso says that the Union waived its right to arbitrate
by first having the dispute litigated in court. Of course, she
recognizes that it was the Funds, not the Union, that brought the
initial judicial action, so she claims an identity of interest
between the two, and argues that individuals who drove the Funds'
litigation were also instrumental in the Union's decision to call
for arbitration.
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It is true that by engaging in litigation, a party may
waive its right to arbitrate. See Creative Solutions Grp., Inc. v.
Pentzer Corp., 252 F.3d 28, 32 (1st Cir. 2001). To determine
whether waiver has occurred, we consider, among other things,
whether a party has actually participated in any preexisting
litigation and whether the opposing party has been prejudiced. See
id. Doubts are to be resolved against a finding of waiver. See id.
Here, there is a basis for doubt, at the least. The right
to arbitrate springs from the CBA, and because the CBA is an
agreement between employers and the Union, not the Funds, the Funds
lacked any right to call for arbitration. And Alfonso has directed
us to no authority, nor have we found any, to support her argument
that the Funds' decision to litigate waived the Union's ability to
arbitrate.5 In any event, there is no need for us to explore when,
if ever, one party's litigation efforts will waive another party's
arbitration rights, since the record before us fails to show any
prejudice to Alfonso from the sequential character of the
proceedings. Indeed, the Funds seem to have protected Alfonso from
the potential prejudice of inconsistent or duplicative obligations
by agreeing to be bound by the results of the Union's arbitration
proceedings.
5
The sole case she cites, Taylor v. Sturgell, does not
address waiver of arbitration rights; instead, it holds that there
is no "virtual representation" exception to the general rule
against nonparty claim preclusion. 553 U.S. 880, 904 (2008).
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D.
Alfonso claims that the award should be vacated because
she did not consent to arbitrators of a sort she characterizes as
biased. Under the CBA, the Union and NECA (which represents the
employers) each has authority to select three arbitrators for the
Committee. In Alfonso's case, two of those selected by the Union
and one of the arbitrators selected by NECA were also trustees of
the Funds. According to Alfonso, these three arbitrators were
biased, as being subject to a statutorily imposed fiduciary duty to
act solely in the interest of the Funds' participants and
beneficiaries. See Employee Retirement Income Security Act of 1974
("ERISA"), 29 U.S.C. § 1104(a)(1).
The parties agree that, although this action arises under
the LMRA, the Federal Arbitration Act ("FAA"), 9 U.S.C. § 1 et
seq., provides guidance on the issue of arbitrator neutrality.
Under the FAA, an arbitration award may be vacated on the ground of
"evident partiality . . . in the arbitrators," 9 U.S.C. § 10(a)(2),
understood as requiring "more than just the appearance of possible
bias," but less than bias in fact, JCI Commc'ns, Inc. v. Int'l Bhd.
of Elec. Workers, Local 103, 324 F.3d 42, 51 (1st Cir. 2003). It
arises where "a reasonable person would have to conclude that an
arbitrator was partial to one party to an arbitration." Id.
(quoting Nationwide Mut. Ins. Co. v. Home Ins. Co., 278 F.3d 621,
626 (6th Cir. 2002)(internal quotation marks omitted)).
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But parties can agree to have partisan arbitrators. See,
e.g., Delta Mine Holding Co. v. AFC Coal Props., Inc., 280 F.3d
815, 821 (8th Cir. 2001) (cited by JCI Commc'ns, 324 F.3d at 51).
And once parties have agreed to a method of arbitration, they can
demand no more impartiality than the degree inherent in that
method. See, e.g., Sheet Metal Workers Int'l Ass'n, Local No. 162
v. Jason Mfg., Inc., 900 F.2d 1392, 1398 (9th Cir. 1990); Merit
Ins. Co. v. Leatherby Ins. Co., 714 F.2d 673, 679 (7th Cir. 1983);
Nationwide Mut. Ins. Co. v. First State Ins. Co., 213 F. Supp. 2d
10, 17 (D. Mass. 2002) (all cited by JCI Commc'ns, 324 F.3d at 51).
This law is key. Assuming, without deciding, that the
trustees of the Funds on the Committee were subject to evident
partiality,6 the short answer is that Alfonso consented to a
process subject to this level of bias. It is true, as Alfonso
notes, that the CBA is silent as to the composition of the
Committee aside from providing that both the Union and NECA "shall
select . . . representatives." Contrary to Alfonso's protest,
6
The Union would prefer that we not make this assumption. In
fact, in what it characterized as "an abundance of caution," the
Union cross appealed precisely because it wanted us to vacate the
district court's finding of evident partiality, presumably worried
about the impact this finding may have on future cases. We decline
to take up the issue, however, for its resolution could not alter
our disposition of this case, and the district court's finding of
evident partiality has no binding precedential effect outside of
this litigation. See Am. Elec. Power Co. v. Connecticut, 131 S. Ct.
2527, 2540 (2011) ("[F]ederal district judges, sitting as sole
adjudicators, lack authority to render precedential decisions
binding other judges, even members of the same court.").
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however, the word "select" does not, standing alone, imply that the
representatives selected will be impartial, and although the CBA
itself did not give Alfonso notice of the Committee's composition,
other things did. The Union's constitution calls for the Union's
business manager both to serve as a trustee of the Funds and to
perform all duties specified in the Union's bylaws, including
sitting as a member on all employer-Union committees. These
documents, in other words, guarantee that one of the Union's
representatives on the Committee will also be a trustee of the
Funds. Alfonso has been a member of the Union since 2000,7 six
years before she became party to the CBA as an employer, and
although she contends that she never received copies of the Union's
constitution or bylaws, she does not dispute that these documents
were available to her.8
Similarly, on the management side, since 2006, the year
Alfonso became an employer party to the CBA, NECA has appointed the
same individual to serve both as a trustee of the Funds and as a
representative to the Committee. There is nothing in the record to
rebut an affidavit of NECA's executive director saying that Alfonso
7
As the district court noted, it may seem strange that
Alfonso is both a member of the Union and an employer, but the
parties do not appear to dispute this point.
8
The Union's constitution also calls for the Union's
president to act as an ex-officio member of all committees, which
would include the Labor-Management Committee. And, while no
document calls for the Union's president to serve as a trustee of
the Funds, he has done so since 1996.
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would have had knowledge of these appointments: she was part of
NECA's membership committee and, through Old Goat, was a voting
NECA member until 2010.
In sum, the record before us reflects that when Alfonso
became an employer signatory to the CBA, and so agreed to resolve
disputes through Committee arbitration, she had notice that the
Committee could, and indeed would, contain some trustees of the
Funds. Having agreed to that method for resolving disputes, she can
demand no more impartiality than naturally comes with it.9
9
At times, Alfonso's bias argument slides into one sounding
in a kind of administrative due process. She complains that the
arbitration proceeding lasted less than an hour and consisted
almost entirely of party argumentation and document submission, as
opposed to witness testimony with its accompanying opportunity for
cross examination. Similarly, according to Alfonso, the Committee
refused to require the Union to produce documents she had
subpoenaed and witnesses she had summonsed.
It is true that "[a]rbitration proceedings must meet the
minimal requirements of fairness," which include "a hearing on the
evidence." Ramirez-De-Arellano v. Am. Airlines, Inc., 133 F.3d 89,
91 (1st Cir. 1997) (internal quotation marks omitted). And, under
the FAA, an arbitration award may be vacated if the arbitrators
"refus[ed] to hear evidence pertinent and material to the
controversy." 9 U.S.C. § 10(a)(3). But "[w]e cannot vacate an
arbitral award based on sheer speculation alone." Garcia-Velez, 725
F.3d at 33.
Alfonso leaves us to speculate. She does not explain what
further information could have come to light during the proceedings
that would have altered the Committee's award, and she points to
nothing in the record that causes us to doubt the adequacy of her
hearing.
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III.
The district court's order confirming the arbitration
award and the corresponding judgment against Alfonso are AFFIRMED.
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