Asarco, LLC v. United Steel, Paper and Forest, 910 F.3d 485

Background

ASARCO (employer) and United Steel (Union) were parties to a Basic Labor Agreement (BLA) that provided a Copper Price Bonus (Bonus) to employees who participate in ASARCO’s pension plan.
A 2011 Memorandum of Agreement (MOA) made employees hired on/after July 1, 2011 ineligible for the pension plan; neither party realized at negotiation that pension ineligibility would also eliminate Bonus eligibility.
The Union filed a grievance; the parties submitted the dispute to arbitration and stipulated the arbitrator had jurisdiction to decide the grievance generally.
The arbitrator found a mutual mistake and ordered reformation of the BLA to preserve Bonus eligibility for new hires (effectively adding language), despite a BLA "no‑add" clause: “The arbitrator shall not have jurisdiction or authority to add to, detract from or alter in any way the provisions of this Agreement.”
ASARCO petitioned to vacate in district court arguing the no‑add clause barred reformation; the district court confirmed the award. Ninth Circuit affirmed, applying highly deferential review to the arbitrator’s contract construction and remedy.

Issues

Issue	Plaintiff's Argument (ASARCO)	Defendant's Argument (Union)	Held
Whether the arbitrator had authority to reform the BLA despite the no‑add provision	The no‑add clause forbids arbitrator from adding or altering agreement; therefore arbitrator lacked authority to reform BLA	Arbitrator may reform contract to correct a mutual mistake and reformation merely restores parties’ actual agreement, not an addition	Held: Arbitrator could reform the BLA after finding mutual mistake; award draws its essence from the BLA and is enforceable
Whether the question of the arbitrator’s own authority (delegation/arbitrability of remedy) was for the court or arbitrator	The court should decide because parties did not clearly and unmistakably delegate to arbitrator the power to decide his own jurisdiction to rewrite the BLA	Parties submitted the grievance to arbitration and argued jurisdiction to arbitrator; arbitrator was authorized to decide scope	Held: Court accepted the parties’ stipulation that matter was properly before arbitrator and deferred to arbitrator’s treatment of jurisdictional limits
Whether the award should be vacated as contrary to public policy	Allowing an arbitrator to rewrite a CBA despite an express no‑add clause violates public policy favoring the integrity of collective bargaining products	Reformation corrected a mutual mistake and does not offend public policy; it restores the agreement the parties intended	Held: Public‑policy challenge fails; arbitrator’s reformation does not contravene an explicit public policy basis for vacatur
Whether precedent (e.g., West Coast Telephone) requires vacatur whenever a no‑add clause exists	West Coast Telephone held reformation not arbitrable under its facts and language, so arbitrator powerless here	That case differs procedurally (issue not submitted to arbitrator) and does not negate deference to an arbitrator who was presented the issue and ruled on mutual mistake	Held: West Coast Telephone is distinguishable and does not control; arbitrator’s award stands

Key Cases Cited

Hawaii Teamsters & Allied Workers Union v. United Parcel Serv., 241 F.3d 1177 (9th Cir. 2001) (describing extreme deference to labor arbitrators)
United Paperworkers Int’l Union v. Misco, Inc., 484 U.S. 29 (Sup. Ct. 1987) (arbitrator cannot dispense his own brand of industrial justice)
United Steelworkers v. Enterprise Wheel & Car Corp., 363 U.S. 593 (Sup. Ct. 1960) (award must draw its essence from the CBA)
W.R. Grace & Co. v. Local Union 759, 461 U.S. 757 (Sup. Ct. 1983) (courts must enforce awards even if reasoning is ambiguous)
First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (Sup. Ct. 1995) (delegation question: clear and unmistakable evidence required to let arbitrator decide arbitrability)
Granite Rock Co. v. Int’l Bhd. of Teamsters, 561 U.S. 287 (Sup. Ct. 2010) (arbitration is matter of consent; court must ensure parties agreed to arbitrate dispute)
West Coast Tel. Co. v. Local Union No. 77, 431 F.2d 1219 (9th Cir. 1970) (no‑add clause held to preclude arbitrability of reformation in that case)
Sw. Reg’l Council of Carpenters v. Drywall Dynamics, Inc., 823 F.3d 524 (9th Cir. 2016) (framework for limited judicial review of labor arbitration awards)