PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
INTERNATIONAL UNION, UNITED MINE
WORKERS OF AMERICA; UNITED MINE
WORKERS OF AMERICA, DISTRICT 17;
LOCAL UNION 93, UNITED MINE
WORKERS OF AMERICA,
Plaintiffs-Appellees, No. 00-1262
v.
MARROWBONE DEVELOPMENT
COMPANY,
Defendant-Appellant.
Appeal from the United States District Court
for the Southern District of West Virginia, at Huntington.
Robert C. Chambers, District Judge.
(CA-99-306-3)
Argued: September 27, 2000
Decided: November 14, 2000
Before MOTZ and TRAXLER, Circuit Judges, and
Frederick P. STAMP, Jr., Chief United States District Judge for the
Northern District of West Virginia, sitting by designation.
Affirmed by published opinion. Judge Motz wrote the opinion, in
which Judge Traxler and Chief Judge Stamp joined.
COUNSEL
ARGUED: Ronald E. Meisburg, HEENAN, ALTHEN & ROLES,
Washington, D.C., for Appellant. Deborah Stern, INTERNATIONAL
2 INTERNATIONAL UNION v. MARROWBONE DEVELOPMENT CO.
UNION, UNITED MINE WORKERS OF AMERICA, Fairfax, Vir-
ginia, for Appellees. ON BRIEF: Anna M. Dailey, HEENAN,
ALTHEN & ROLES, Charleston, West Virginia, for Appellant.
James M. Haviland, CRANDALL, PYLES & HAVILAND, Charles-
ton, West Virginia, for Appellees.
OPINION
DIANA GRIBBON MOTZ, Circuit Judge:
In 1998, a member of the United Mine Workers of America, Local
93 filed a grievance with the Marrowbone Development Company
asserting that Marrowbone assigned to non-union members certain
work that rightfully belonged to Union employees under the govern-
ing collective bargaining agreement. The Company prevailed in arbi-
tration, but the district court vacated the arbitration award finding that
the Union did not receive a full and fair hearing. Because the arbitra-
tor exceeded his authority under the governing agreement and failed
to provide a fundamentally fair hearing, we affirm.
I.
Prior to 1993, Marrowbone operated a non-union coal mining com-
plex in Mingo County, West Virginia. In May 1993, the parties to this
litigation signed an interim collective bargaining agreement, and the
National Labor Relations Board certified Local 93 as the exclusive
collective bargaining agent for Marrowbone’s Union employees. The
National Bituminous Coal Wage Agreement of 1993 ("1993 Agree-
ment") superseded the interim agreement in December 1993 and con-
trolled work assignments and dispute resolution.
In 1994, members of the Union filed six grievances against the
Company pursuant to the 1993 Agreement. Five of the six grievances
asserted that Marrowbone used salaried employees — such as Com-
pany supervisors — to perform various delivery tasks that the 1993
Agreement assigned to Union employees. The sixth grievance alleged
that Marrowbone used an outside contractor to deliver parts to one of
its mines — work that the Union claimed belonged to Union employ-
ees exclusively.
INTERNATIONAL UNION v. MARROWBONE DEVELOPMENT CO. 3
All six grievances were submitted to an arbitrator, who ordered
Marrowbone to cease using non-union employees or subcontractors to
perform the disputed work. Marrowbone appealed to the district
court, but sought vacatur of only a portion of the arbitration award —
the arbitrator’s decision as to the sixth grievance. The Company
asserted that this decision violated § 8(e) of the National Labor Rela-
tions Act, 29 U.S.C. § 158(e) (1994), because it required Marrowbone
to cease doing business with third-party contractors.1 The parties
entered into a Joint Stipulation of Undisputed Material Facts to serve
as the findings of fact for the ensuing summary judgment motions.
The relevant portion of the Joint Stipulation provided:
In April and August, 1994, disputes developed regarding
whether classified employees in the bargaining unit were
entitled to perform the work of delivering parts and supplies
at the Marrowbone Complex. Prior to that time, all parts and
supplies had been delivered by contractors, supervisors, or
other non-bargaining unit personnel.
That dispute was ultimately decided by this Court in Marrowbone
Development Co. v. District 17, 147 F.3d 296 (4th Cir. 1998)
("Marrowbone I"). We held that preventing Marrowbone from
employing outside contractors to do transportation and delivery work
not previously performed by Union employees violated § 8(e)’s pro-
hibition against "work-acquisitive" union agreements. Id. at 304. In
other words, to permit this would allow the Union to use its bargain-
ing position with Marrowbone to acquire new work that was previ-
ously done by third-party contractors, thus producing an illegal
1
Section 8(e) reads in pertinent part:
It shall be an unfair labor practice for any labor organization and
any employer to enter into any contract or agreement, express or
implied, whereby such employer ceases or refrains or agrees to
cease or refrain from handling, using, selling, transporting or
otherwise dealing in any of the products of any other employer,
or to cease doing business with any other person, and any con-
tract or agreement entered into heretofore or hereafter containing
such an agreement shall be to such extent unenforcible and void.
29 U.S.C. § 158(e) (footnote omitted).
4 INTERNATIONAL UNION v. MARROWBONE DEVELOPMENT CO.
"secondary effect." Id. Because Marrowbone never challenged the
arbitrator’s decision regarding the first five grievances, we did not
address the question of whether forcing Marrowbone to cease using
its own non-union employees, as opposed to outside contractors, for
transportation and delivery work similarly violated § 8(e). Id.
Three months after the Marrowbone I decision, a Union employee
filed the instant grievance, asserting that:
The Company has violated the collective bargaining agree-
ment by assigning to supervisors and to vendors the type of
work traditionally performed by bargaining unit employees,
in connection with the delivery of parts through the mining
complex. The work wrongfully assigned outside of the unit
includes that traditionally performed by surface utility and
supply motormen utility employees, and electricians, among
others.
This grievance is governed by the National Bituminous Coal Wage
Agreement of 1998 ("1998 Agreement"), which superseded the 1993
Agreement but is identical in all relevant respects. Article XXIII of
the 1998 Agreement controls the "Settlement of Disputes" and out-
lines the "Grievance Procedure." It provides that if the parties fail to
resolve a dispute under the first two "steps" of the procedure, the
grievance is referred to Step 3, where Company and Union represen-
tatives "meet and review the facts and pertinent contract provisions in
an effort to reach agreement." If the parties "fail to reach agreement"
at Step 3, the matter is referred to Step 4, where an arbitrator "shall
conduct a hearing in order to hear testimony, receive evidence and
consider arguments" and ultimately decide the case.
In accordance with the 1998 Agreement, the grievance at issue here
eventually proceeded to a Step 3 meeting that failed to resolve the
complaint. The grievance was then referred to a new arbitrator, who
initiated a hearing on February 16, 1999. At the outset of the hearing,
the arbitrator accepted a handful of joint exhibits, listened to Marrow-
bone’s summary judgment argument, and heard the Union’s opening
statement.
In that statement, the Union representative noted that the facts the
Union sought to prove were "very different from those presented in"
INTERNATIONAL UNION v. MARROWBONE DEVELOPMENT CO. 5
Marrowbone I, and promised that the Union would "present evidence
. . . that the disputed work . . . is the same type of work that the com-
pany assigned simultaneously to bargaining unit employees and . . .
is indisputably covered by the contract." The Union attempted to offer
testimony, submit evidence, and present arguments in support of its
position, and also requested permission to brief issues upon which
there was "some confusion from [the Union] as well as the company."
The Union concluded that "[t]he grievance before you seeks only to
preserve the right of bargaining unit employees to be assigned the
type of bargaining unit work which they have traditionally performed.
No more, and no less."
Upon hearing this, the Company asked for a recess. Then the Com-
pany requested that the arbitrator "remand this case back to Step 3."
The Company representative explained that "[b]ased on the represen-
tations made by the union in their opening statement of the evidence
and arguments that they intend to present throughout the course of
this hearing," a remand was necessary for a "full open, frank . . .
negotiation of the issues of fact" that were disputed by the parties.
Without hearing testimony or considering the evidence the Union
sought to introduce or the arguments it sought to make, the arbitrator
decided to remand the case for another Step 3 meeting. Although ini-
tially resistant to the delay that a new Step 3 meeting would create,
the Union ultimately consented to the remand after the arbitrator
agreed to schedule a specific date (March 26) for a full arbitration
hearing in the event that the Step 3 meeting failed to resolve the
grievance. Before the aborted February hearing adjourned, the Union
asked whether the parties should file briefs. The arbitrator responded
by stating that they should not, because "[i]f we’re going back to Step
3, we’re starting over." (Emphasis added).
However, prior to the scheduled date of the full arbitration hearing,
the arbitrator reviewed Marrowbone I and decided that it controlled
the outcome of the new grievance. On March 22, 1999, the arbitrator
issued his opinion and award dismissing the grievance. The award
quoted extensively from Marrowbone I, which held that:
The bargaining unit employees never engaged in delivery
and transportation work before the enforcement date of the
6 INTERNATIONAL UNION v. MARROWBONE DEVELOPMENT CO.
national agreement. . . . [I]n turning over such work to
employees, Marrowbone was required to cease its business
relations with other parties, [thus] the [agreement is] sec-
ondary in nature . . . [and] therefore contrary to the dictates
of § 8(e).
Marrowbone I, 147 F.3d at 304. The arbitrator determined that "the
grievance filed in this case also pertains to . . . the subject of the
grievances filed in 1994," and therefore concluded "that he [wa]s
bound by [Marrowbone I]."
The Union brought this action seeking to have the district court
vacate the arbitration award. Both parties then moved for summary
judgment. Finding that the arbitrator denied the Union a full and fair
hearing, the district court granted the Union’s motion, and remanded
the case for an evidentiary arbitration hearing. Marrowbone timely
appealed to this court.
II.
It is well-settled that an arbitrator acting within the scope of a col-
lective bargaining agreement receives great deference as to procedural
matters and legal interpretation. See, e.g., United Paperworkers Int’l
Union v. Misco, Inc., 484 U.S. 29, 40 (1987). If, however, an award
fails to "draw[ ] its essence from the collective bargaining agree-
ment," deference is not appropriate. Id. at 36 (citation omitted). See
also Island Creek Coal Co. v. District 28, 29 F.3d 126, 129 (4th Cir.
1994) (citing Misco, 484 U.S. at 38). Similarly, courts owe no defer-
ence to an arbitrator who has failed to provide the parties with a full
and fair hearing. See Hoteles Condado Beach v. Union de Tron-
quistas, 763 F.2d 34, 38 (1st Cir. 1985). Because "the question of
whether a labor arbitrator exceeded the scope of his authority is a
question of law, this court reviews the district court’s ruling de novo."
Mountaineer Gas Co. v. Oil, Chem., & Atomic Workers Int’l Union,
76 F.3d 606, 608 (4th Cir. 1996).
When these principles are applied to the case at hand, we can only
conclude that the arbitrator exceeded his authority under the govern-
ing 1998 Agreement and failed to provide the Union with a full and
fair hearing.
INTERNATIONAL UNION v. MARROWBONE DEVELOPMENT CO. 7
A.
By signing the 1998 Agreement, Marrowbone and the Union con-
tracted to settle labor disputes according to a specified procedure. The
final step in that agreed-upon process is arbitration. As such, we are
wary of invalidating a decision reached through arbitration. At the
same time, however, we must also protect the parties by "insur[ing]
that the arbitrator . . . act[s] within the contractually-drawn bounda-
ries" outlined in the 1998 Agreement. Champion Int’l Corp. v. United
Paperworkers Int’l Union, 168 F.3d 725, 728 (4th Cir. 1999). And we
must remember that an arbitration award is "legitimate only so long
as it draws its essence from the collective bargaining agreement."
United Steelworkers v. Enterprise Wheel & Car Corp., 363 U.S. 593,
597 (1960).
In determining whether an arbitration award draws its essence from
the collective bargaining agreement, and whether the arbitrator acted
within the scope of his authority under that agreement, we examine:
(1) the arbitrator’s role as defined by the [agreement]; (2)
whether the award ignored the plain language of the [agree-
ment]; and (3) whether the arbitrator’s discretion in formu-
lating the award comported with the essence of the
[agreement’s] proscribed limits.
Mountaineer, 76 F.3d at 608.
Thus, we must first determine the arbitrator’s proper role under the
agreement. The principal role of the arbitrator under the 1998 Agree-
ment is to "conduct a hearing in order to hear testimony, receive evi-
dence and consider arguments" and eventually render a decision. In
this case, at the abbreviated February arbitration hearing, the Union
representative sought to introduce "facts very different from those
presented in [Marrowbone I]," and present evidence demonstrating
that the Company had previously assigned the disputed work to Union
members. The Union was "willing to go forward" with its testimony
and evidence. The arbitrator refused to permit the Union to do so. He
also refused to accept briefs containing written arguments, concluding
that they were rendered "unnecessary" because the grievance process
would be "starting over." Bowing to the Company’s contentions that
8 INTERNATIONAL UNION v. MARROWBONE DEVELOPMENT CO.
factual disputes should be discussed, and if possible resolved, at a
Step 3 meeting, the arbitrator adjourned the initial hearing before the
Union could present its evidence. Although the arbitrator scheduled
a subsequent arbitration hearing to satisfy the requirements of the
1998 Agreement — hear testimony, receive evidence, and consider
arguments — he never convened that hearing. Thus, the arbitrator
clearly failed to comport with his "role as defined by" the 1998
Agreement. Mountaineer, 76 F.3d at 608.
Not only did the arbitrator fail to comply with the role assigned to
him under the 1998 Agreement, his award also contravened the
Agreement’s "plain language," and in fashioning it, he acted well
beyond the "proscribed limits" of the Agreement. Id. In pertinent part
the 1998 Agreement provides:
At the earliest possible time, but no later than 15 days after
referral to him, the arbitrator shall conduct a hearing in
order to hear testimony, receive evidence and consider
arguments.
In cases in which the parties have agreed that there is no
question of fact involved in the grievance, the arbitrator may
decide the case upon the basis of a joint statement of the
parties and such exhibits as they shall submit.
1998 NBCWA, art. XXIII, § (c)(4) (emphasis added).
Here the parties clearly did not agree that "there is no question of
fact involved in the grievance." Rather, they affirmatively acknowl-
edged the existence of factual disputes. Indeed, the Company pre-
vailed upon the arbitrator to remand the case to Step 3 of the
grievance procedure in an attempt to resolve those disputes. Despite
the parties’ acknowledgment of disputed facts, the arbitrator did not
abide by the Agreement’s command that he "conduct a hearing in
order to . . . receive evidence." Instead, he issued an award without
holding an evidentiary hearing. This action squarely conflicts with the
plain language of the Agreement.2
2
Moreover, the 1998 Agreement limits arbitration to those "cases
where the [parties] fail to reach agreement." By "starting over" at Step
INTERNATIONAL UNION v. MARROWBONE DEVELOPMENT CO. 9
Arbitrators receive their authority from the governing collective
bargaining agreement. Their awards are "legitimate only so long as
[they] draw [their] essence from" that agreement. United Steelwork-
ers, 363 U.S. at 597. When, as here, the award does not draw its
essence from the governing agreement, and the arbitrator has
exceeded his authority under the agreement, "courts have no choice
but to refuse enforcement of the award." Id.
B.
For many of the same reasons, we believe that the arbitrator also
denied the Union a full and fair hearing.
An arbitrator typically retains broad discretion over procedural
matters and does not have to hear every piece of evidence that the
parties wish to present. Hoteles, 763 F.2d at 39-40. Indeed, an arbitra-
tor’s procedural ruling may not be overturned unless it was "in bad
faith or so gross as to amount to affirmative misconduct." Misco, 484
U.S. at 40. Thus, a court will not set aside an arbitration award
because the arbitrator refused to hear evidence that was immaterial,
id. cumulative, National Post Office Mailhandlers v. United States
Postal Service, 751 F.2d 834, 841 (6th Cir. 1985), or irrelevant, Gra-
hams Serv. Inc. v. Teamsters Local 975, 700 F.2d 420, 422-23 (8th
Cir. 1982).
Nonetheless, "[v]acatur is appropriate . . . when the exclusion of
relevant evidence ‘so affects the rights of a party that it may be said
that he was deprived of a fair hearing.’" Hoteles, 763 F.2d at 40
(quoting Newark Stereotypers’ Union No. 18 v. Newark Morning Led-
ger Co., 397 F.2d 594, 599 (3d Cir. 1968)). See also Burchell v.
Marsh, 58 U.S. (17 Haw.) 344, 349 (1854) ("If the award is within
the submission, and contains the honest decision of the arbitrators,
after a full and fair hearing of the parties, a court of equity will not
3, the parties agreed to "meet and review the facts and the pertinent con-
tract provisions in an effort to reach agreement." (Emphasis added). The
record makes no mention of the new Step 3 meeting; the arbitrator may
have decided the case even before the Step 3 meeting occurred, thereby
violating the "proscribed limits" of the Agreement in yet another respect.
Mountaineer, 76 F.3d at 608.
10 INTERNATIONAL UNION v. MARROWBONE DEVELOPMENT CO.
set it aside for error.") (emphasis added); Forsythe Int’l, S.A. v. Gibbs
Oil Co., 915 F.2d 1017, 1020 (5th Cir. 1990) ("In reviewing the dis-
trict court’s vacatur, we [ask] whether the arbitration proceedings
were fundamentally unfair."); National Post Office Mailhandlers, 751
F.2d at 841 ("[T]he standard for judicial review of arbitration proce-
dures is merely whether a party to arbitration has been denied a fun-
damentally fair hearing.").
In Hoteles, for example, the First Circuit held that an arbitrator’s
refusal to consider a trial transcript submitted by one of the parties
denied them "adequate opportunity to present its evidence and argu-
ments." 763 F.2d at 39. See also Prudential Securities, Inc. v. Dalton,
929 F. Supp. 1411, 1417 (N.D. Okla. 1996) (finding arbitrator guilty
of misconduct in making a final decision without hearing "evidence
pertinent and material to the controversy").
Here, the arbitrator told the Union to meet with Marrowbone,
gather information, negotiate further, and, if the dispute was still not
resolved, present evidence and argument at a March 26 arbitration
hearing. Yet the arbitrator issued his award without ever holding that
hearing or affording the Union the opportunity to present the evidence
it had been prepared to offer at the abbreviated February hearing.
Notably, the arbitrator did not cancel the scheduled hearing because
he found the Union’s evidence "cumulative," "irrelevant," or "imma-
terial"; nor does the record suggest that this evidence was, in fact,
cumulative or anything less than highly material and relevant. After
all, the Union claimed that this evidence would demonstrate that facts
involved in the present grievance were "very different from those
presented in" Marrowbone I and that the contested work was "indis-
putably covered by the contract." Therefore, despite our usual defer-
ence, we cannot sanction the decision of an arbitrator who failed to
provide a signatory to the arbitration agreement a full and fair hear-
ing.
III.
Finally, we note that Marrowbone’s reliance on the doctrine of
judicial estoppel is misplaced. Marrowbone contends that the Union
is judicially estopped from bringing its grievance because that griev-
INTERNATIONAL UNION v. MARROWBONE DEVELOPMENT CO. 11
ance contradicts the Joint Stipulation entered in the Marrowbone I
proceeding. The elements of judicial estoppel are:
First, the party sought to be estopped must be seeking to
adopt a position that is inconsistent with a stance taken in
prior litigation. And the position sought to be estopped must
be one of fact rather than law or legal theory. Second, the
prior inconsistent position must have been accepted by the
court. . . . Finally, the party sought to be estopped must have
"intentionally misled the court to gain unfair advantage."
Indeed, we have stated that this factor is the "determinative
factor" in the application of judicial estoppel to a particular
case.
Lowery v. Stovall, 92 F.3d 219, 224 (4th Cir. 1996) (internal citations
omitted), cert. denied, 519 U.S. 1113 (1997). In this case, it is not at
all clear that the "party sought to be estopped," i.e., the Union, has
taken inconsistent factual positions or that it has intentionally mislead
the court.
The Union’s current grievance is not, on its face, contrary to the
Joint Stipulation that the parties entered for purposes of the Marrow-
bone I litigation. That Stipulation stated that prior to 1994, "all parts
and supplies had been delivered by contractors, supervisors, or other
non-bargaining unit personnel." In contrast, the grievance before us
addresses work "traditionally performed by bargaining unit employ-
ees, in connection with the delivery of parts." (Emphasis added). The
Joint Stipulation and the grievance do not, on their face, explicitly
refer to identical delivery work. Nor does the record indicate that the
work described in the Joint Stipulation — "work of delivering parts
and supplies at the Marrowbone complex" that was performed prior
to 1994 by "non-bargaining unit personnel" — is the same work at
issue in the instant grievance — work "in connection with the deliv-
ery of parts through the mining complex" that was "traditionally per-
formed by bargaining unit employees." Without evidence
demonstrating otherwise, we cannot find the claims inconsistent.
In addition, nothing indicates that the Union intentionally mislead
the court in either the current grievance or the Joint Stipulation.
"[J]udicial estoppel raises the cost of lying," and "prevent[s] situations
12 INTERNATIONAL UNION v. MARROWBONE DEVELOPMENT CO.
from arising in which one of two related decisions has to be wrong
because a party took opposite positions and won both times."
Chaveriat v. Williams Pipe Line Co., 11 F.3d 1420, 1427-28 (7th Cir.
1993). Neither of those situations is present here. There is no evi-
dence that the Union was lying in the Joint Stipulation or is lying in
the current proceeding. Of course, if on remand the Company proves
that the work at issue here is identical to that covered by the Joint
Stipulation and that the Union intentionally mislead the court, then it
may reassert its judicial estoppel argument.3 On the record before us,
however, we find no basis for holding that judicial estoppel prevents
the Union from bringing its claim.
IV.
In sum, the arbitrator exceeded his authority under the 1998 Agree-
ment and denied the Union a full and fair hearing. Therefore, we
affirm the district court’s judgment vacating the arbitration award and
remanding the case to the arbitrator for the evidentiary hearing
required under the governing collective bargaining agreement.
AFFIRMED
3
We note, however, that if the Company was convinced that the work
involved was the same in both cases, there would have been no need for
a return to Step 3 to resolve factual disputes.