GLOUCESTER TERMINALS, LLC v. TEAMSTERS LOCAL UNION 929
2:16-cv-05322
E.D. Pa.May 22, 2017Background
- Gloucester Terminals, LLC (GLT) and Teamsters Local 929 were bound by a CBA that (1) requires just cause for discharge, (2) contains a multi-step grievance procedure culminating in binding arbitration, and (3) expressly provides that the arbitrator "shall determine any questions of arbitrability."
- In Nov. 2014 GLT fired Gary Akers (a shop steward) for insubordination/leaving without permission; the parties entered a Last Chance Agreement (LCA) reinstating him and stating that a future violation of the "leaving" rule would result in immediate termination and that any arbitrator would have jurisdiction only to decide whether the offense occurred and not to reduce the penalty.
- On April 7, 2016 GLT terminated Akers for skipping mandatory overtime and leaving without permission; the Union grieved and the parties proceeded to arbitration.
- The arbitrator found GLT proved Akers left without permission (just cause) but mitigated the discharge to reinstatement without back pay, citing supervisory confusion and inconsistent enforcement as industrial practice factors.
- GLT petitioned to vacate the award arguing the LCA stripped the arbitrator of power to mitigate and that mitigation contradicted the CBA; the Union sought enforcement and back pay/prejudgment interest. The district court reviewed cross-motions for summary judgment.
Issues
| Issue | Plaintiff's Argument (GLT) | Defendant's Argument (Union) | Held |
|---|---|---|---|
| Whether the LCA deprived the arbitrator of jurisdiction to mitigate discipline | LCA unambiguously limits arbitrator to deciding only whether the offense occurred and forbids reducing penalty | LCA was context-specific to steward duties and did not apply to this termination; arbitrator decides arbitrability per CBA | Arbitrator plausibly concluded LCA did not apply; court defers to arbitrator's jurisdictional determination |
| Whether the arbitrator exceeded authority or manifestly disregarded the CBA by mitigating discharge | Mitigation violated CBA Schedule E (Group I rules mandate immediate dismissal) as modified by LCA | Arbitrator permissibly relied on industrial common law, shop practice, and inconsistent enforcement to mitigate | Award draws its essence from the CBA and industrial practice; no manifest disregard; award enforced |
| Whether the award should be vacated under FAA § 10(a)(4) for exceeding powers | GLT contends arbitrator exceeded powers by imposing relief the LCA/CBA forbid | Union contends arbitration clause grants arbitrator authority and his interpretation is arguable | Court declines to vacate; FAA grounds not met given deference to arbitrator |
| Attorneys' fees and prejudgment interest/back pay | GLT opposes fee award and prejudgment interest; argues award limited to reinstatement without back pay | Union seeks attorneys' fees and back pay/prejudgment interest from arbitrator's reinstatement date | No attorneys' fees (no bad-faith litigation). Court awards back pay from arbitrator's reinstatement date to decision date; will order briefing to calculate back pay and consider prejudgment interest |
Key Cases Cited
- AT&T Techs., Inc. v. Communications Workers of America, 475 U.S. 643 (arbitrability presumptively for arbitrator unless clearly and unmistakably reserved to court)
- First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (who decides arbitrability depends on parties' agreement; courts give leeway if parties submitted arbitrability to arbitrator)
- Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79 (gateway procedural questions presumptively for arbitrator when parties agree)
- United Steelworkers of America v. Warrior & Gulf Navigation Co., 363 U.S. 574 (industrial common law and shop practice are part of CBA interpretation)
- Misco, Inc. v. United Paperworkers International Union, 484 U.S. 29 (courts cannot reconsider merits of an award based on alleged errors of fact or law)
- Brentwood Medical Associates v. United Mine Workers of Am., 396 F.3d 237 (award must draw its essence from CBA; review is highly deferential)
- Major League Baseball Players Ass'n v. Garvey, 532 U.S. 504 (if arbitrator arguably construed or applied contract, courts should not overturn for serious error)
- United Steelworkers of America, Dist. 36, Local 8249 v. Adbill Management Corp., 754 F.2d 138 (arbitration awards ordering reinstatement without back pay can be unambiguous; courts consider employer's failure to stay award when awarding back pay)