United States Court of Appeals
Fifth Circuit
F I L E D
UNITED STATES COURT OF APPEALS
For the Fifth Circuit March 11, 2004
Charles R. Fulbruge III
Clerk
No. 03-30572
TEAMSTERS LOCAL NO. 5,
Plaintiff-Appellee,
VERSUS
FORMOSA PLASTICS CORP., BATON ROUGE, LOUISIANA,
Defendant-Appellant.
Appeal from the United States District Court
for the Middle District of Louisiana
Before JOLLY, HIGGINBOTHAM, and DeMOSS, Circuit Judges.
DeMoss, Circuit Judge:
This case arises out of a suit by Teamsters Local No. 5 to
vacate the decision of an arbitrator interpreting its collective
bargaining agreement with Formosa Plastics Corporation. The
arbitrator had ruled that the collective bargaining agreement
demonstrated that the parties intended for grievances to be filed
within a reasonable time, and that the grievance at issue was
untimely. The parties filed cross-motions for summary judgment,
and the district court ordered vacatur of the arbitrator’s
decision.
BACKGROUND
Teamsters Local No. 5 (“Local 5") filed a grievance (the
“Grievance”) under its then-existing collective bargaining
agreement (the “CBA”) with Formosa Plastics Corporation
(“Formosa”). It contended that eleven employees, who were
transferred from unskilled “loader” classifications to skilled
“operations” qualifications, were entitled to greater pay than they
received after the transfers. The transfers occurred between March
8, 1999, and March 26, 2001, but Local 5 did not learn of facts it
believed to warrant a grievance until September 13, 2001.
The CBA grievance procedure did not contain a specific time
limit for filing grievances, although it did contain a strict
mechanism and time frame for the processing of grievances. CBA
§§ 40-41. It is undisputed that Local 5 does not receive, in the
regular course of business, documents concerning wage payments, and
discovered the information relating to the Grievance while
investigating another matter. Local 5 filed its Grievance within
five days after receiving sufficient information to do so.
The arbitrator, Elvis C. Stephens (the “Arbitrator”), who had
jurisdiction under the CBA, rendered a written decision that
concluded: (1) the language of the CBA demonstrated that the
parties intended for grievances to be filed within a reasonable
time; and (2) the instant Grievance was untimely because it was
filed six months after the last employee changed classifications.
2
The Arbitrator did not reach the merits of the Grievance.
Local 5 filed this lawsuit to vacate the Arbitrator’s
decision, and both parties then filed cross-motions for summary
judgment. The district court held that, while the parties intended
for grievances to be filed within a reasonable time, this
limitations period only begins to run from the time Local 5 or an
employee has knowledge of the alleged CBA violation. The court
thus granted Local 5's motion, vacated the Arbitrator’s award, and
remanded the case back to the Arbitrator for further proceedings.
Formosa timely filed a notice of appeal.
While the parties diverge in their articulation of the
question(s) presented, they do not dispute the district court’s
acceptance of the Arbitrator’s interpretation of the CBA as
requiring grievances to be filed within a reasonable time. The
only issue before this Court, therefore, is whether the district
court should be reversed for setting aside the Arbitrator’s
decision that the timeliness of the filing should be evaluated from
the time of the alleged violation, rather than its discovery.
Local 5 argues that no “grievance” existed until there was an
“expressed difference, dispute or controversy,” between an employee
(or Local 5) and Formosa. CBA § 40. Thus, according to Local 5,
the Arbitrator ignored the plain language of the CBA in finding
that the imputed limitations period began when the alleged
violation occurred, rather than when Local 5 could express its
grievance and initiate dispute resolution proceedings.
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Formosa counters that, however wrong or unreasonable the
Arbitrator’s determination may have been (Formosa argues, of
course, that it was neither), it drew its “essence” from the CBA,
and did not go against any clear language in that contract.
Formosa points out that though courts vacate awards wholly
inconsistent with contractual language, courts are precluded from
reviewing arbitrators’ fact-finding. Formosa notes that Local 5's
argument is basically that the Arbitrator improperly considered
certain facts, notably the CBA language (which is silent as to
limitations) and Local 5's lack of notice. According to Formosa,
given the extreme deference owed arbitrators, there is no way that
the application of a properly imputed limitations period could have
“left the CBA behind.” Moreover, while the CBA did not have a
specific time limit for filing grievances, the parties clearly
contemplated that grievances would be resolved promptly -- within
a “reasonable time” as stated by the Arbitrator. It is “rationally
inferrable” from this contemplation, Formosa contends, that the
limitations period would commence upon the occurrence of the
violation, rather than at any other particular time. Formosa
concludes in the absence of specific contractual terms, therefore,
the district court impermissibly substituted its own discernment of
the parties’ intent -- and its own evaluation of the equities
involved -- for that of the Arbitrator.
DISCUSSION
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Whether the district court erred in vacating the Arbitrator’s
decision on the ground that the limitations period for the instant
grievance only began to run when Local 5 or an employee learned of
the potential CBA violation.
In an appeal from a grant of summary judgment in an action to
vacate an arbitration award, we review the district court’s ruling
de novo. Weber Aircraft Inc. v. General Warehousemen & Helpers
Union Local 767, 253 F.3d 821, 824 (5th Cir. 2001). A court must
affirm an arbitral award if the arbitrator is “arguably construing
or applying the contract and acting within the scope of his
authority.” United Paperworkers Int’l Union v. Misco, Inc.,
484 U.S. 29, 38 (1987). If the arbitrator has not exceeded his
authority, “the fact that a court is convinced he committed serious
error does not suffice to overturn his decision.” Major League
Baseball Players Ass’n v. Garvey, 532 U.S. 504, 509 (2001)
(internal quotes and citation omitted).
Further, this Court has made clear that, a district court’s
review of an arbitrator decision is “extremely deferential.” Nat’l
Gypsum Co. v. Oil, Chem. & Atomic Workers Int’l Union, 147 F.3d
399, 401 (5th Cir. 1998). When reviewing an arbitration award
under the Labor-Management Relations Act, a district court is
particularly constrained: “As long as the arbitrator’s decision
‘draws its essence from the collective bargaining agreement’ and
the arbitrator is not fashioning ‘his own brand of industrial
justice,’ the award cannot be set aside.” Weber, 253 F.3d at 824
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(citing Misco, 484 U.S. at 36).1
Here, the Arbitrator interpreted CBA §§ 40-41, the sections
that discuss grievance procedures, and inferred the parties’
intention was that grievances be filed, processed, and resolved
within a reasonable time. The Arbitrator was construing the CBA
and acting within the scope of his authority. The Arbitrator’s
determination that the Grievance was not timely filed does not
violate or change any of the language in CBA §§ 40-41. See Houston
Lighting & Power Co. v. Int’l Bhd. of Elec. Workers, Local Union
No. 66, 71 F.3d 179, 184 (5th Cir. 1995) (“If the language of the
agreement is clear and unequivocal, an arbitrator is not free to
change its meaning.”). Likewise, although there is not language in
CBA §§ 40-41 requiring that the Arbitrator find that any
limitations period for filing a grievance begin to run when the
grievance occurs and therefore this Grievance was not timely, this
finding is inferrable from CBA §§ 40-41 which outlines the
procedures for timely and prompt resolution of grievances. See
1
Both Weber and Misco are grounded in the Supreme Court’s
well-settled standard for judicial review of arbitration awards,
first established in the “Steelworker Trilogy” in 1960. United
Steelworkers of America v. Enterprise Wheel & Car Corp., 363 U.S.
593 (1960); United Steelworkers of America v. Warrior & Gulf
Navigation Co., 363 U.S. 574 (1960); United Steelworkers of
America v. American Mfg. Co., 363 U.S. 564 (1960). The essence
of the Steelworker Trilogy is that, when the parties have agreed
to submit all questions of contract interpretation to the
arbitrator, courts are not to review the merits of the resulting
award (or the equities of a claim), but must merely “ascertain[]
whether the party seeking arbitration is making a claim which on
its face is governed by the contract.” American Mfg. Co., 363
U.S. at 568.
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Nat’l Gypsum, 147 F.3d at 402 (“Although the arbitrator’s
construction of the contractual provision may not be the only
possible construction or even a correct one, it must nevertheless
be upheld unless [it] . . . is not ‘rationally inferrable’ from
the letter (or even the purpose) of the [CBA].”) (citations
omitted). Accordingly, the Arbitrator’s interpretation of the CBA
was not a radical departure from the terms of that document --
going so far beyond serious error -- as to warrant vacatur by the
district court. Therefore, the decision of the district court must
be reversed and the award reinstated.
CONCLUSION
Having carefully reviewed the record in this case, the
parties’ respective briefing and arguments, for the reasons set
forth above, we reverse the district court and reinstate the
Arbitrator’s award.
REVERSED AND RENDERED.
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