UPS v. Int'l Brotherhood Tmstr.

Opinions of the United
1995 Decisions States Court of Appeals
for the Third Circuit

5-24-1995

UPS v Int'l Brotherhood Tmstr.
Precedential or Non-Precedential:

Docket 94-7224

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 UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT

No. 94-7224

UNITED PARCEL SERVICE, INC.,

Appellant

v.

INTERNATIONAL BROTHERHOOD OF TEAMSTERS,
CHAUFFEURS, WAREHOUSEMEN AND HELPERS
OF AMERICA, LOCAL UNION NO. 430

On Appeal from the United States District Court
for the Middle District of Pennsylvania
(D.C. Civ. Action No. 93-cv-00807)

Argued: September 19, 1994

Before: GREENBERG, ROTH and ROSENN, Circuit Judges

(Opinion Filed May 24, 1995)

Martin Wald, Esquire (Argued)
Nicholas N. Price, Esquire
Axel J. Johnson, Esquire
Schnader, Harrison, Segal & Lewis
1600 Market Street, Suite 3600
Philadelphia, PA 19103
Attorneys for Appellant

Ira H. Weinstock, Esquire
Jason N. Weinstock, Esquire (Argued)
Ira H. Weinstock, P.C.
800 North Second Street, Suite 100
Harrisburg, PA 17102
 Attorneys for Appellee

OPINION OF THE COURT

ROTH, Circuit Judge:

This appeal requires us to determine whether a portion

of an arbitration award should be struck down on the ground that

the arbitrator exceeded the scope of his authority. Because we

find that the arbitrator's response did not exceed the scope of

the question presented, we will affirm the district court's

decision upholding the arbitration award.

I.

The facts of the case are undisputed. On or about

February 7, 1992, United Parcel Service ("UPS") discharged Thomas

Varish for poor work performance. Thereafter, the International

Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers,

Local Union No. 430 (the "Union") filed a grievance on behalf of

Varish under the procedures set forth in the parties' collective

bargaining agreement (the "Agreement"). After UPS and the Union

were unable to reach an accord with respect to Varish's

discharge, the parties submitted the dispute to the Central
Pennsylvania Area Parcel Grievance Committee (the "Joint Panel"

or "Panel")1, as required by the Agreement.

At the hearing before the Joint Panel, the Union

representative presenting Varish's case raised a Point of Order

challenging UPS's attempt to introduce into evidence notations of

informal disciplinary actions previously taken against Varish.

These informal actions are typically referred to as "talk-with's"

and "talk-to's," which are verbal reprimands or comments, or

"write-up's," which are written records of reprimands or

comments.2 The Panel considered the Point of Order, but could

not resolve the issue. Accordingly, the Panel issued the

following decision:

A Point of Order was raised and Executive Session was
called. The Panel deadlocked on the Point of Order.
The question is whether [UPS] may enter into the
record, "talk-with's," "talk-to's" or "write-up's"
which [sic] the Union had no prior knowledge.

As required by the parties' Agreement, the parties

submitted the Point of Order to an arbitrator. After hearing two

days of testimony and reviewing post-arbitration briefs,

1The Joint Panel is composed of equal numbers of UPS and
Union representatives. The Union representatives cannot be from
the local Union involved in the dispute, and the UPS
representatives cannot be from the UPS district involved in the
dispute. Thus, the local Union and UPS district present their
cases to a disinterested panel. Appendix ("App.") at 77.
2
For the purposes of this opinion, we will refer to all three
categories of informal actions as "talk-to's."
Arbitrator Eli Rock rendered an award and opinion in this matter.

The two paragraph award reads as follows:

1. On the general question of the admissibility of
talk-to's and the like before the Joint Panel where the
Union members object, the ruling is that such material
may not be admitted over the objection of the Union
members.

2. In the present particular case involving employee
Varish, and limited to the present submission to
arbitration, the disputed material may be admitted.

In his memorandum detailing his decision, Arbitrator

Rock explained his analytical process as follows:
Addressing myself to [the Point of Order], it
appears to me that I have no choice, in this case but
to break down the issue into the broader and general
question of [UPS]'s right to introduce "talk-with's"
and the like over the Union's objections, and secondly
[UPS]'s right to do so in the present specific case,
involving grievant Tom Varish.

App. at 59. In the context of the question presented, i.e., the

admissibility of talk-to's of which the Union had no prior

knowledge, the arbitrator, in making his first "general" ruling,

gave "significant weight" to the past practice of the parties.
He found it to be "completely clear . . . that where the Union

members have opposed the admission of `talk-to's,' and have stuck

to that position, such items have not been entered in the

record." (Id. at 60).3 In regard to this particular case,
3
Some confusion exists in the record concerning the scope of
Arbitrator Rock's award. This confusion arises because, in the
decision accompanying the arbitrator's award, Arbitrator Rock
references objections raised by "Union panel members." See App.
60-61. However, the question presented to the Arbitrator
involved objections raised by Union members, not Union panel
however, the arbitrator determined that both Varish and the Union

had had prior knowledge of the talk-to's. Id. at 61. The

arbitrator found therefore in his second paragraph that the talk-

to's here should have been admitted.

UPS sought to vacate paragraph one of the arbitrator's

award, arguing that the arbitrator exceeded the contractual

limitations on his authority by ruling on an issue not submitted

for arbitration and by altering the parties' underlying

Agreement.4 The parties filed cross-motions for summary

judgment, and the district court entered an order granting the

Union's motion and denying UPS's. This appeal followed.5

members. Because the arbitrator's decision and award must be
considered in light of the question presented, and because the
award itself is free from any ambiguity in language, we find that
the arbitrator's award properly addressed objections raised by
Union members.
4
It should be noted that the parties have not appealed the
arbitrator's second finding, namely that, in Varish's specific
case, the disputed material was admissible.
5
On appeal, UPS also raises, for the first time, a public
policy challenge to paragraph one of the arbitrator's award. It
is the general rule that issues raised for the first time at the
appellate level will not be reviewed. See, e.g., Singleton v.
Wulff, 428 U.S. 106, 120 (1976); Hormel v. Helvering, 312 U.S.
552, 556 (1941). Even were this Court to exercise its discretion
and reach the issue, however, UPS's public policy challenge to
paragraph one would clearly fail.
Although a court may refuse to enforce an arbitrator's
interpretation of a collective bargaining agreement if the
interpretation "explicitly conflict[s] with well-defined,
dominant public policy," Stroehmann Bakeries, Inc. v. Local 776,
International Brotherhood of Teamsters, 969 F.2d 1436, 1441 (3d
Cir.), cert. denied, 113 S.Ct. 660 (1992), UPS fails to
articulate a well-defined public policy violated by paragraph one
of the award, particularly when the award is interpreted, as we
 II.

We exercise plenary review of the district court's

decision resolving cross-motions for summary judgment. See

Stroehmann Bakeries, Inc. v. Local 776, International Brotherhood

of Teamsters, 969 F.2d 1436, 1440 (3d Cir. 1992), cert. denied,

113 S.Ct. 660 (1992).

III.

It is well settled that courts have limited power to

review a labor arbitrator's award. Where, as here, the parties'

collective bargaining agreement provides for binding arbitration

in grievance proceedings, courts are not authorized to reconsider

the merits of an arbitrator's award. A contrary rule would

undermine the federal policy which favors settling labor disputes

through arbitration. See United Paperworkers International Union

v. Misco, Inc., 484 U.S. 29, 36 (1987); United Steelworkers of

America v. Enterprise Wheel & Car Corp., 363 U.S. 593, 596

(1960). Therefore, an arbitrator's award will be upheld so long

as it "draws its essence from the collective bargaining

agreement," Misco, 484 U.S. at 36; Enterprise Wheel, 363 U.S. at

597, unless the award is tainted by fraud or bias or addresses

matters outside the arbitrator's authority. High Concrete
Structures, Inc. v. United Electrical, Radio & Machine Workers,

Local 166, 879 F.2d 1215, 1218 (3d Cir. 1989); see also Mobil Oil

do here, to exclude only talk-to's about which the Union had no
prior knowledge.
Corp. v. Independent Oil Workers Union, 679 F.2d 299, 302 (3d

Cir. 1982) ("[A]n arbitrator must not exceed his authority and

dispense his own brand of industrial justice.").

UPS raises two intertwined issues in its appeal: that

paragraph one of the arbitrator's award exceeds the scope of his

authority and that it does not draw its essence from the parties'

collective bargaining agreement.6 UPS argues that we should not

uphold paragraph one of the award because the arbitrator failed

to confine his inquiry to the "grievance coming before him,"

namely the admissibility of talk-to's about which the Union had

no prior knowledge. In UPS's view, paragraph one of the award

holds that all talk-to's, regardless of whether the Union had

prior knowledge, may not be admitted over the objection of the

Union members.

In support of this interpretation, UPS cites two

passages contained in Arbitrator Rock's memorandum accompanying

the arbitration award. First, UPS points to a passage in which

Arbitrator Rock states that "[t]he Union panel members could in a

specific future case simply object to the introduction of `talk-
6
Under Article 48, Section 2 of the parties' Agreement:

The arbitrator shall have the authority to apply the
provisions of this Agreement, and to render a decision
on any grievance coming before him, but shall not have
the authority to amend or modify this Agreement or
establish new terms and conditions under this
Agreement.

(emphasis added).
to's' as such, without regard to the prior processing or handling

of such material, and given the above past practice [of the Joint

Panel] and the weight that I have given to it, this would be

sufficient to bar the introduction of such material." App. at

61. UPS argues that, in using this language, the arbitrator

ruled on the admissibility of all talk-to's, whether or not the

Union had had prior knowledge of them, and therefore the

arbitrator exceeded the scope of his authority.

UPS also points to references in Arbitrator Rock's

memorandum to objections raised by "Union panel members" (App. at

60-61) as evidence that the arbitrator exceeded his authority.

UPS properly contends that the question presented to Arbitrator

Rock did not involve objections raised by union panel members,

but rather by union members appearing before the panel.7

A review of Arbitrator Rock's award, however, persuades

us that the award did not exceed the scope of his authority and

that thereby, pursuant to Article 48, Section 2 of the parties'

agreement, the award drew its essence from the agreement. To

begin with, it is crucial to consider the arbitrator's award in

light of the question presented. Accordingly the arbitrator's

award should be read to address only those talk-to's of which the

Union did not have prior knowledge and only those objections

raised by Union members.

7
See footnote 3, supra.
 Additionally, UPS's interpretation of paragraph one of

the award is not suggested by the language of the award itself.

In drawing the inference that paragraph one exceeds the scope of

the question presented, UPS relies solely upon the language

contained in the arbitrator's accompanying opinion. The Supreme

Court, however, has clearly held that ambiguity in an opinion

accompanying an award is not a reason for determining that an

award is unenforceable as beyond the scope of the arbitrator's

authority. United Steelworkers of America v. Enterprise Wheel &

Car Corp., 363 U.S. 593, 598 (1960). Instead, when an award does

not apparently exceed the scope of the parties' submission, it

will be affirmed, regardless of inferences that may be drawn from

the accompanying opinion. Id. Such an award will, of course, be

enforceable only to the extent it does not exceed the scope of

the parties' submission. Thus, given two reasonable

interpretations of the award, only that which is within the

authority of the arbitrator will be enforceable.

In the instant case, the arbitrator's award, on its

face, does not contain any language indicating that it extends

beyond the scope of the question presented. Rather, paragraph

one is logically read as a direct response to the parties'

submission, pertaining only to talk-to's about which the Union

had no prior knowledge.8 Accordingly, the award is not beyond

8
Not only is this a logical reading of the award, but it is
also a preferable reading insofar as it eliminates the inherent
contradiction found in the parties' suggested reading of the
award. Specifically, if paragraph one of the award were read to
the scope of the arbitrator's authority under the parties'

Agreement.

The judgment of March 24, 1994, will be affirmed.

RE: UNITED PARCEL SERVICE, INC. APPELLANT v. INTERNATIONAL
BROTHERHOOD OF TEAMSTERS, CHAUFFEURS, WAREHOUSEMEN AND HELPERS,
LOCAL UNION NO. 430, APPELLEE, No. 94-7224

ROSENN, Circuit Judge, Dissenting.

This appeal stems from an arbitration proceeding held

in response to a specific submission by the parties. The

submission simply asked the arbitrator to decide a procedural

question relating to the admissibility of notations of prior

informal disciplinary actions ("talk to's") taken against a

discharged employee at a hearing before a joint mediation panel

considering the discharge of that employee. The submission by

the Joint Panel asked "whether the Company may enter into the

record [before the Panel] 'talk-withs,' 'talk-to's' or 'write-

ups' which [sic] the Union had no prior knowledge." (Emphasis

added).

The arbitrator decided that "[i]n the present

particular case . . . and limited to the present submission to

mean that all talk-to's are inadmissible upon the Union's
objection, paragraph two's holding that the talk-to's in the
present case are admissible would be rendered illogical and
inconsistent.
arbitration, the disputed material may be admitted." The

arbitrator concluded that the Union had had prior knowledge of

the talk-to's and that therefore, they were admissible. The

Union's prior knowledge was critical to the arbitrator's decision

because it was an integral part of the issue submitted for

arbitration. The parties do not dispute the disposition of the

specific submission.

The arbitrator, however, captiously decided another

question that was neither submitted nor authorized, paragraph one

of his award. That paragraph provided:

1. On the general question of admissibility
of talk-to's and the like before the Joint
Panel where the Union members object, the
ruling is that such material may not be
admitted over the objection of the Union
members.

This conflicts with paragraph two,9 exceeds the scope

of the submission and does not draw its essence from the parties

collective bargaining agreement. Thus, I believe that paragraph

one of the arbitrator's award must be vacated, the judgment of
the district court reversed, and the case remanded to the

9
Paragraph two's finding that the talk-to's are admissible
makes no sense in light of paragraph one's conclusion that talk-
to's are never admissible if the Union objects. Judge Roth cites
this inconsistency as support for her conclusion that paragraph
one refers only to talk-to's which the Union does not know about
prior to the hearing.
I believe that the plain language of these two paragraphs
reveals an inherent inconsistency and that the only way to
eliminate that inconsistency is to vacate paragraph one.
district court with directions to enter summary judgment on

behalf of the appellant. I therefore respectfully dissent.

I.

In paragraph one, the arbitrator plainly states that

talk-to's are never admissible over the Union member's objection.

The district court,10 UPS and the Union all read paragraph one to

apply to all talk-to's, regardless of Union knowledge, and so do

I. The majority states that a broad "interpretation of paragraph

one of the award is not suggested by the language of the award

itself." (Maj. Op. at 8). However, paragraph one's clear

statement that "[talk-to's] may not be admitted over the

objection of the Union members" supports this interpretation.

Paragraph one makes no reference to Union knowledge or lack

thereof; it directs a broad prohibition.

The arbitrator's opinion eliminates any doubt that

paragraph one may be limited to cases of Union ignorance when it

states: "The Union panel members could in a specific future case

simply object to the introduction of `talk-to's' as such, without

regard to the prior processing or handling of such material, and

. . . this would be sufficient to bar the introduction of such

material." App. at 61. The majority quotes this language, states

that it is ambiguous and concludes that "when an award does not

apparently exceed the scope of the parties' submission, it will

10
Specifically, the district court characterized paragraph
one as saying, "that `talk-to's' are never admissible if the
Union objects."Opn. at 8.
be affirmed, regardless of inferences that may be drawn from the

accompanying opinion." Maj. Op. at 8 (citing United Steelworkers

of Am., 363 U.S. at 598). However, paragraph one, as read by the

district court, the parties, and me, facially exceeds the scope

of the parties' submission. Thus, the majority cannot simply

dismiss the language in the arbitrator's opinion which supports a

broad reading of paragraph one as being ambiguous.

The district court upheld paragraph one, despite

concluding that paragraph one encompassed all talk-to's,

regardless of Union knowledge. It concluded that the submission

was not limited to situations where the Union was ignorant of the

talk-to's and that therefore, paragraph one did not exceed the

scope of the submission. The majority turns the district court's

reasoning on its head. It rejects the district court's broad

reading of the submission, as I believe it must. However, it

upholds the award because it baldly assumes that paragraph one

only applies to situations where the Union is ignorant of talk-

to's prior to the hearing.

The majority supports its holding by assuming that the

arbitrator's award addresses "only those talk-to's of which the

Union did not have prior knowledge . . ." because that was the

only issue submitted for arbitration. Maj. Op. at 8. It seems

to me that this reasoning is circular. The majority states that

the award cannot exceed the submission because the submission is

narrow and therefore that this court must assume that the award
is narrow. The majority justifies ignoring paragraph one's

language and the arbitrator's opinion by making an unwarranted

assumption. The majority offers no authority for assuming that

paragraph one is narrow, nor does it explain why the district

court's, the Union's and UPS's broad reading of paragraph one is

incorrect. The majority concludes that:
the arbitrator's award, on its face, does not
contain any language indicating that it
extends beyond the scope of the question
presented. Rather paragraph one is logically
read as a direct response to the parties'
submission, pertaining only to talk-to's
about which the Union had no prior knowledge.

Maj. Op. at 8-9.

But where is the logic? The majority offers no support

for its "logical" conclusion. To the majority, it is logical

only because of its unwarranted assumptions. I believe that,

contrary to the majority's "logical" reading, paragraph one of

the arbitrator's award broadly rules against the admission of

talk-to's. It therefore exceeds the scope of the issue submitted

for arbitration, serves no useful purpose, and is wholly
unnecessary to the unchallenged disposition of the issue

submitted for arbitration.

II.

The majority correctly notes that an arbitrator's award

will be upheld so long as it draws its essence from the

collective bargaining agreement unless the award is tainted by

fraud or bias or addresses matters outside the arbitrator's
authority. The majority concludes that pragraph one of the award

draws its essence from the parties' collective bargaining

agreement and therefore, upholds it. I respectfully disagree.

The arbitrator does not satisfactorily explain why he

needed to make paragraph one's broad ruling. The specific limits

of the submission and the conflict between paragraphs one and two

of his award belie his claim that it was necessary to resolve

paragraph one before he could resolve paragraph two.

Under paragraph one of the award, a single Union member

would have the right to bar evidence submitted at a hearing.

This is contrary to the rules of procedure established under the

basic collective bargaining agreement between the parties. The

1990-93 National Master United Parcel Services Agreement and the

Central Pennsylvania Supplement provides that a hearing panel

will be composed of four members, two appointed by the Union, and

two appointed by UPS and that the panel's majority decision will

bind the parties. The members of this joint Union and company

panel sit as neutrals and attempt to equitably resolve disputes.

In creating the panel, the parties struck an even balance of

power with management and the Union having equal representation.

Under this system, decisions are made upon majority vote, or if

deadlocked are sent to an outside arbitrator for resolution. The

essence of the panel structure under the agreement is that panel

decisions are by majority vote.
 Article 48 of the parties' collective bargaining

agreement specifically prohibits an arbitrator from modifying

that agreement.11 By allowing a single Union member to bar

evidence from a proceeding, the arbitrator has overturned the

majority concept of the panel structure and fundamentally altered

the parties' agreement. The parties bargained for equal power on

the panel. Paragraph one of the arbitrator's award shifts the

balance of power towards the Union and upsets the parties'

bargained-for equality. In so doing, the arbitrator's decision

has the potential to undermine the parties' entire grievance and

arbitration procedure.

Paragraph one of the arbitrator's award violates the

essence of the parties' collective bargaining agreement by

depriving the parties of their contractual right to have an

arbitrator resolve deadlocks on evidentiary disputes over the

admissibility of "talk-to's." Accordingly, this court should

reverse the district court's decision and remand with directions

to enter summary judgment on UPS's behalf.

III.

Instead of putting to rest a simple procedural issue,

the arbitrator has unilaterally raised questions that have the

potential to generate labor unrest between the parties.

11
Article 48, § 2 of the basic collective bargaining
agreement provides in pertinent part that an arbitrator "shall
not have the authority to amend or modify this Agreement or
establish new terms . . . under the Agreement."
Paragraph one of the arbitrator's award exceeds the scope of the

submission, violates the essences of the parties' collective

bargaining agreement and should be vacated.12 I therefore

respectfully dissent.

12
The appellant on appeal also contends that paragraph one of
the arbitrator's award should be vacated because it violates "a
well-defined dominant public policy." I see no need to reach
that issue and I therefore do not discuss it.