Natl Assn Letter v. US Postal Ser

Opinions of the United
2001 Decisions States Court of Appeals
for the Third Circuit

11-27-2001

Natl Assn Letter v. US Postal Ser
Precedential or Non-Precedential:

Docket 01-1407

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Filed November 27, 2001

UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT

No. 01-1407

NATIONAL ASSOCIATION OF LETTER CARRIERS,
AFL-CIO
Appellant

v.

UNITED STATES POSTAL SERVICE

On Appeal from the United States District Court
for the District of New Jersey
(D.C.Civ. No. 00-01083)
District Judge: Honorable Alfred J. Lechner, Jr.

Argued October 11, 2001

Before: BECKER, Chief Judge, and SCIRICA and
GREENBERG, Circuit Judges

(Filed: November 27, 2001)

Joseph J. Vitale (argued)
Keith E. Secular
Cohen, Weiss & Simon
330 West 42nd Street
New York, NY 10036

Attorneys for Appellant
 Robert J. Cleary
United States Attorney
Susan Handler-Menahem
Assistant United States Attorney
Office of the United States Attorney
970 Broad Street
Room 700
Newark, NJ 07102

Eric C. Scharf
Managing Counsel
Stephen J. Boardman (argued)
United States Postal Service
475 L'Enfant Plaza, S.W.
Washington, D.C. 20260

Attorneys for Appellees

OPINION OF THE COURT

GREENBERG, Circuit Judge.

I. INTRODUCTION

This matter comes on before this court on appeal from an
order of the district court entered December 29, 2000,
granting a summary judgment upholding an arbitrator's
decision that the United States Postal Service had"just
cause" to terminate letter carrier Carmelita Colatat's
employment. The arbitrator found that Colatat knowingly
filed an application for workers' compensation benefits
under the Federal Employee Compensation Act ("FECA"),
falsely claiming that she suffered a work-related knee injury
and that this conduct constituted "just cause" for her
dismissal. Her union, the National Association of Letter
Carriers, AFL-CIO ("NALC"), brought this action and brings
this appeal, contending that the arbitrator erred by
rendering a decision inconsistent with a determination of
the Office of Workers' Compensation Programs ("OWCP")
that she had been injured at work. In particular, NALC
argues that OWCP's factual determinations were binding on
the arbitrator pursuant to 5 U.S.C. S 8128(b).

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II. FACTS AND PROCEDURAL HISTORY

This case arose from events on October 6, 1998, when
Colatat reported to her supervisor that her knee was in
pain and that she could not walk. As a result, she was
taken in an ambulance to a hospital emergency room for
treatment. Two days later, Colatat submitted a form CA-1,
"Federal Employee's Notice of Traumatic Injury and Claim
for Continuation of Pay or Compensation," that was an
application to the Department of Labor (DOL) for workers'
compensation benefits under FECA. On the CA-1 form
Colatat indicated that she injured her knee while lifting 60-
pound trays of mail at work. The Postal Service contested
her claim by submitting written statements from other
postal employees who heard Colatat admit she had been
injured outside of work.

OWCP, an agency of Department of Labor in charge of
claims made under FECA, denied Colatat's claim on
November 25, 1998, crediting the statements of her fellow
postal employees. On January 22, 1999, Colatat asked
OWCP to reconsider her application and on June 30, 1999,
OWCP reversed its earlier decision and granted her FECA
benefits. OWCP in its June 30 decision found that Colatat's
claim was "supported by a neighbor's statement that she
was performing yard work [on October 6, 1998] and
evidenced no knee problems and statements by her co-
workers that she initially displayed no signs of such a
problem upon reporting to work."

On January 4, 1999, during the period between OWCP's
two decisions, the Postal Service, based on an additional
investigation of the claim by the Postal Inspection Service,
issued Colatat a Notice of Removal charging that she
submitted the form CA-1 knowing it to be false. The postal
workers' collective bargaining agreement authorized this
action as it provides that the service may terminate postal
workers for "just cause," but establishes a grievance
procedure culminating in a hearing before an arbitrator to
determine the existence of "just cause." NALC filed a timely
grievance challenging Colatat's removal, which was denied
at each step of the grievance procedure, following which
NALC sought arbitration. The arbitrator heard Colatat's
appeal from the grievance procedure on June 4, 1999, and

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October 29, 1999, and then held in an award dated
December 15, 1999, that Colatat had submitted the form
CA-1 seeking FECA benefits knowing it to be false and that
her conduct constituted just cause for her removal from
service. When making his award, the arbitrator was aware
of the June 30, 1999 OWCP decision, but did not feel
bound by it.

Thereafter NALC instituted this action contending that
the court should vacate the arbitration award because it
was contrary to public policy and violated the plain
language of the postal workers' collective bargaining
agreement. In addition, NALC sought a writ of mandamus
compelling the Postal Service to reinstate Colatat to her
position. The union predicated its argument on section
8128(b) which it contended bound the arbitrator to OWCP's
factual determinations. It argued that the arbitrator could
not validly uphold Colatat's dismissal because OWCP had
awarded her benefits and therefore did not believe that she
filed a false CA-1 form. After filing its answer to the
complaint, the Postal Service moved for and obtained a
summary judgment upholding the arbitration order. NALC
then filed this appeal.1

On April 19, 2001, while this appeal was pending, OWCP,
on motion of the Secretary of Labor, reversed its decision
awarding Colatat workers' compensation benefits, as it
concluded that in light of all of the evidence, Colatat had
not demonstrated that she suffered a work-related injury.
In determining to take this action, OWCP was impressed
that the ambulance driver, who had responded on October
6, 1998, to the report of the injury, submitted a statement
to a Postal Service investigator stating that Colatat told him
that "it was an old injury that had flared up[and] . . . upon
questioning stated that it did not happen at work." OWCP
also was impressed by a statement of an emergency
medical technician, who was in the ambulance, reciting
that Colatat told him that "she had hurt her knee the night
before playing tennis, [but] didn't feel it necessary to call
_________________________________________________________________

1. The district court had jurisdiction to review the arbitrator's award
under 39 U.S.C. S 1208 and 28 U.S.C. S 1331, and we have jurisdiction
pursuant to 28 U.S.C. S 1291.

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911 that night because she felt the pain would go away." As
might be expected, the Postal Service moved for this court
to take judicial notice of OWCP's April 19, 2001 decision,
and we granted its motion.

III. DISCUSSION

The question for us to answer is whether the arbitrator
should have followed OWCP's factual conclusions, which, at
the time he ruled, were consistent with Colatat's claim.
NALC urges, of course, that he should have done so and
thus that the district court erred in granting the Postal
Service summary judgment. We exercise plenary review on
this appeal. See Lucent Info. Mgmt., Inc. v. Lucent Tech.,
Inc., 186 F.3d 311, 315 (3d Cir. 1999). Of course, while we
can affirm only if there is no genuine issue as to any
material fact and the Postal Service is entitled to a
judgment as a matter of law, Fed. R. Civ. P. 56(c), it is
obvious that the issues on appeal are purely matters of law.

The Supreme Court has held that "[j]udicial review of a
labor-arbitration pursuant to [a collective bargaining]
agreement is very limited." Major League Baseball Players
Ass'n v. Garvey, 121 S.Ct. 1724, 1728 (2001) (per curiam).
Thus, a court should not "review the arbitrator's decision
on the merits despite allegations that the decision rests on
factual errors or misinterprets the parties' agreement." Id.
Therefore, if the arbitration award draws its essence from
the collective bargaining agreement, a court should uphold
it. See United Parcel Serv. v. Int'l Bhd. of Teamsters, 55 F.3d
138, 141 (3d Cir. 1995). This rule of deference derives from
the Court's recognition that the parties to the collective
bargaining agreement "bargained for" a procedure in which
an arbitrator would interpret the agreement. See Eastern
Associated Coal Corp. v. United Mine Workers, 531 U.S. 57,
62, 121 S.Ct. 462, 466 (2000). We have recognized the
narrow scope of review that district courts exercise over
labor arbitrators' awards as we have "wryly concluded, `[i]t
should be clear that the test used to probe the validity of a
labor arbitrator's decision is a singularly undemanding
one.' " United Trans. Union Local 1589 v. Suburban Transit
Corp., 51 F.3d 376, 379 (3d Cir. 1995) (quoting News Am.

5
Publ'ns, Inc. v. Newark Typographical Union, Local 103, 918
F.2d 21, 24 (3d Cir. 1990)).

The Supreme Court nevertheless has recognized two
situations in which a reviewing court may vacate an
arbitration award. First, the reviewing court may vacate the
award if the arbitrator's interpretation of the collective
bargaining agreement was "contrary to public policy."
Eastern Associated, 531 U.S. at 62, 121 S.Ct. at 467
(quoting W.R. Grace & Co. v. Local Union 759, Int'l Union of
United Rubber Workers, 461 U.S. 757, 766, 103 S.Ct. 2177,
2183 (1983)). "The Court has made clear that any such
public policy must be explicit, well defined, and dominant.
It must be ascertained by reference to the laws and legal
precedents and not from general considerations of
supposed public interests." Id., 121 S.Ct. at 467 (internal
quotation marks and citation omitted). We treat the inquiry
into whether an arbitration award is "contrary to public
policy" as requiring a determination of whether there is "a
well defined and dominant public policy," and, if so,
"whether the arbitrator's award, as reflected in his or her
interpretation of the agreement, violate[s] the public policy."
Exxon Shipping Co. v. Exxon Seamen's Union, 73 F.3d 1283,
1291-92 (3d Cir. 1996).

The second situation in which a reviewing court may
vacate an arbitration award is when the court concludes
that the arbitrator has ignored the plain language of the
collective bargaining agreement. Eastern Associated, 531
U.S. at 62, 121 S.Ct. at 466 (citing United Paperworkers
Int'l Union, AFL-CIO v. Misco, Inc., 484 U.S. 29, 38, 108
S.Ct. 364, 371 (1987)). " `But as long as[an honest]
arbitrator is even arguably construing or applying the
contract and acting withing the scope of his authority,' the
fact that `a court is convinced he committed serious error
does not suffice to overturn his decision.' " Id., 121 S.Ct. at
466 (quoting Misco, 484 U.S. at 38, 108 S.Ct. at 371). The
language of the collective bargaining agreement at issue in
this case provides:

Employees covered by this Agreement shall be covered
by Subchapter I of Chapter 81 of Title 5, and any
amendments thereto, relating to compensation for work
injuries. The Employer will promulgate appropriate

6
 regulations which comply with applicable regulations of
the Office of Workers' Compensation Programs and any
amendments thereto.

App. at 63. The statutes referred to in the collective
bargaining agreement include section 8128(b).

NALC seeks an order vacating the arbitration award
contending that the arbitrator's award was against public
policy and ignored the plain language of the collective
bargaining agreement. But the arguments conflate because
each rests on the contention that the arbitrator erred in
rendering a decision that, contrary to section 8128(b),
conflicted with OWCP's factual conclusions. Therefore, the
controlling questions on this appeal are (1) whether NALC
is correct that section 8128(b) required that OWCP's factual
conclusions bind the arbitrator; and, if so, (2) whether the
section 8128(b) requirement is "explicit, well defined,
dominant" or clear enough so that we should hold that by
not applying section 8128(b) the arbitrator ignored the
plain language of the collective bargaining agreement.
Inasmuch as we hold that section 8128(b) is not preclusive
we do not reach the second question.

Section 8128 provides:

(a) The Secretary of Labor may review an award for or
against payment of compensation at any time on his
own motion or on application. The Secretary, in
accordance with the facts found on review, may-

(1) end, decrease, or increase the compensation
previously awarded; or

(2) award compensation previously refused or
discontinued.

(b) The action of the Secretary of his designee in
allowing or denying a payment under this subchapter
is-

(1) final and conclusive for all purposes and with
respect to all questions of law and fact; and

(2) not subject to review by another official of the
United States or by a court by mandamus or otherwise.

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The Secretary's designee is OWCP. The arguments here
focus on the meaning of section 8128(b)(1), which states
that an OWCP decision is "final and conclusive for all
purposes and with respect to all questions of law and fact."
NALC argues that we should read this language to mean
that all of OWCP's factual and legal determinations are
binding on all courts and tribunals adjudicating disputes
predicated on the same set of facts as those OWCP
considered. The Postal Service contends that we should
read section 8128(b) to apply only to "the action of the
Secretary . . . in allowing or denying a payment under this
subchapter." Under this reading, "the Act simply reserves
the Secretary the exclusive authority to make final
determinations with respect to granting or denying
payments, and such decisions cannot be challenged
elsewhere." Br. at 8.

While we have not addressed the issue, the Court of
Appeals for the Federal Circuit and a district court have
adopted the Postal Service's interpretation that section
8128(b) only precludes subsequent courts and tribunals
from challenging or contradicting OWCP's factual or legal
determinations with respect to granting or denying
payments under FECA. See Minor v. Merit Sys. Prot. Bd.,
819 F.2d 280 (Fed. Cir. 1987); United States v. Carpentieri,
23 F. Supp. 2d 433 (S.D.N.Y 1988). Both of these courts
held that in proceedings following OWCP determinations
courts are bound only by the "Labor Department's
decisions on the making or denying of compensation
awards," and are not bound by the OWCP's factual
conclusions. Minor, 819 F.2d at 283; see Carpentieri, 23 F.
Supp.2d at 438.

Minor involved an appeal by a Postal Service employee
from the Merit System Protection Board's ("MSPB")
dismissal for lack of jurisdiction of her appeal from the
Postal Service's denial of her request for restoration to her
former position as a distribution clerk. Minor, claiming that
she was injured at work, filed a claim for FECA benefits.
OWCP initially awarded her benefits. The Postal Service
then became suspicious of her claim, investigated the
matter, and terminated her employment on the ground that
she lied on her application for benefits. Her union

8
challenged the grounds for her dismissal and
unsuccessfully invoked the applicable grievance procedures
and then sought arbitration. The arbitrator analyzed the
site of the accident and the testimony at the hearing and
concluded that the accident could not have happened as
Minor described. See Minor, 819 F.2d at 281. Consequently,
he gave Minor the opportunity to resign or be removed for
just cause. She did not resign and thus was removed. Id.
Subsequently, OWCP reconsidered its compensation award
and terminated Minor's FECA benefits. Minor, however,
then appealed OWCP's decision to the Employees'
Compensation Appeals Board, which overturned the OWCP
decision terminating benefits and remanded the matter to
OWCP for a de novo decision. OWCP then retroactively
terminated Minor's benefits.

After the Employees' Compensation Appeals Board
decision, Minor sought restoration to her position but her
application was denied on the ground that she was
removed for cause after filing a false claim. Id. at 282.
Minor then appealed this denial to the MSPB which found
that Minor had been removed for cause by reason of having
filed a false claim and, therefore, that it did not have
authority to order her restoration because the regulation on
which she was relying to establish her entitlement to
reinstatement applied only to employees whose employment
had been suspended due to a "compensable injury." Minor
then appealed to the Court of Appeals for the Federal
Circuit.

In the court of appeals the issue was whether Minor was
removed by reason of a compensable injury or for cause
because the MSPB's jurisdiction was limited to situations in
which the removal had been by reason of a compensable
injury. The court noted that:

The complexity arises from the formal ruling of the
Employees' Compensation Appeals Board . . . that the
escalator incident had occurred as Ms. Minor had
described it. Thus there are two final determinations
directly opposing each other - one made by the
Employees' Compensation Appeals Board and the other
by the arbitrator. Which is the dominant in this case?

9
. . . .

[Minor] invokes the federal employees compensation
statute (5 U.S.C. S 8128(b)) . . . . That provision
obviously relates only to the Labor Department's
decision on the making or denying of compensation
awards. That realm is the Labor Department's
authorized area, and S 8128(b) does not prevent an
employing agency from deciding, in an authorized
adverse action, that the employee had received a
compensation award through making a false claim for
which removal is the appropriate penalty. That is the
sphere of the employing agency and of the M.S.P.B. or
arbitrator on review of the adverse action.

Id. at 283.

While NALC attempts to distinguish Minor, we are
satisfied that its holding is applicable here, as the court of
appeals differentiated between compensation proceedings
and other proceedings in determining the effect of section
8128(b), holding it binding only in the former. In sum, there
is simply no escape from the conclusion that Minor adopted
the interpretation of section 8128(b) that the Postal Service
contends is correct.

In United States v. Carpentieri, 23 F. Supp. 2d 433, the
court reached a conclusion similar to that in Minor.
Carpentieri involved a civil action against a government
employee under the False Claims Act based on false
statements he made in his application for employment and
in his subsequent applications for FECA benefits.
Carpentieri moved to dismiss the complaint on the ground
that by reason of section 8128(b) the court could not hear
the case. Adopting essentially the same position as Minor,
the court concluded that the False Claims Act action could
proceed because the government did not seek a review of
the underlying decision of OWCP "that Mr. Carpentieri's
submission, if not fraudulent, establishes eligibility for
benefits." Id. at 435. Rather, the question was "whether or
not Mr. Carpentieri supplied information he knew to be
false to the federal government." Id. at 436. The court
acknowledged that "a finding that Mr. Carpentieri did in
fact falsify documents to obtain FECA benefits would be

10
philosophically incompatible with the ongoing payment of
benefits to Mr. Carpentieri," but nevertheless concluded
that it "would not constitute a judicial review of the OWCP
determination." Id..

After careful consideration, we agree with Minor and
Carpentieri, both of which we regard as well reasoned, and
thus will affirm.2 In reaching our result we have taken note
of the Postal Service's observation that:

Federal employees may receive payments under [FECA]
for injuries sustained in the performance of their
duties. The determination of whether to grant or deny
such payments is made by the Secretary of Labor, or
his designee, and is non-adversarial in nature. 20
C.F.R. SS 10.110-18, 615-21.

Br. at 3 n.1. In its reply brief, NALC does not challenge this
characterization which in any event is correct. See 20
C.F.R. S 10.0 (proceedings under the FECA are non-
adversarial in nature). Of course, the characterization is
consistent with FECA's primary purpose which, as we
indicated in Lorenzetti v. United States, 710 F.2d 982, 984
(3d Cir. 1983), rev'd on other grounds, 467 U.S. 167, 104
S.Ct. 2284 (1984), is to create a compromise similar to that
in workers' compensation laws, i.e., the employee has the
right to receive immediate fixed benefits regardless of fault
and without litigation but in turn loses the right to sue her
employer, the government, for damages on account of work-
related injuries. See also Miller v. United States Postal Serv.,
26 M.S.P.R. 210, 212 (1985). We are convinced that it
would be strange if a determination in a non-adversarial
proceeding had a preclusive effect in an adversarial
proceeding as "the general rule [is] that issue preclusion
attaches only `[w]hen an issue of fact or law is actually
litigated and determined by a valid and final judgment
. . . .' " Arizona v. California, 530 U.S. 392, 414, 120 S.Ct.
2304, 2319 (2000). While we do not suggest that Congress
could not make a ruling under section 8128(b) preclusive in
the circumstances here, we hold that it did not do so.
_________________________________________________________________

2. Significantly our result also is consistent with that the MSPB has
reached. See Miller v. United States Postal Serv., 26 M.S.P.R. 210 (1985).

11
We also point out that NALC is taking a position that it
later might regret if it prevails. Here it contends that under
section 8128(b) "decisions by OWCP are final and
conclusive for all purposes and with respect to all questions
of law and fact" and that the arbitrator thus was obligated
to respect OWCP's previous finding that Colatat injured
herself while at work. It thus follows from NALC's position
that in some circumstances if the OWCP rejected a claim,
and the Postal Service then terminated the employee, the
arbitrator would be required without regard for other
information available to him to uphold the termination.
Indeed, in some cases under NALC's position an arbitration
proceeding regarding an employee's termination following
an OWCP determination would be a mere formality with a
preordained outcome. We cannot believe that Congress
could have intended such a result. Instead of adopting
NALC's position, we sensibly construe section 8128(b) and
reach the result we do. See Government of Virgin Islands v.
Berry, 604 F.2d 221, 225 (3d Cir. 1979).

We recognize that in the OWCP's latest decision with
respect to Colatat's claim it determined that she did not
demonstrate that her injury was work related and that it
possibly could change its position again. Because we base
our result on the ground that section 8128(b) did not oblige
the arbitrator to follow the OWCP result, a change in
outcome subsequent to this opinion in the FECA
proceedings would not affect our disposition of this appeal.3

IV. CONCLUSION

For the foregoing reasons, the order of the district court
entered December 29, 2000, will be affirmed.
_________________________________________________________________

3. In view of our result we have no need to consider the possible
application of the doctrine of functus officio in this case. That
doctrine,
although subject to exceptions, provides that once an arbitrator executes
his award he does not have the power or authority to proceed further.
See Teamsters Local 312 v. Matlack, Inc., 118 F.3d 985, 991 (3d Cir.
1997).

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A True Copy:
Teste:

Clerk of the United States Court of Appeals
for the Third Circuit

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