Northern New England Telephone Operations LLC v. Local 2327, International Brotherhood of Electrical Workers
735 F.3d 15
1st Cir.2013Background
- FairPoint acquired Verizon New England's operations (Apr. 1, 2008) and succeeded to Verizon’s 2003 CBA with IBEW Local 2327; parties negotiated a revised CBA effective Aug. 3, 2008–Aug. 3, 2013.
- The dispute concerns Wholesale Group LSR work: Verizon had largely automated simple LSRs (~94%); FairPoint’s automation lag and a ten-day blackout created backlog and led FairPoint to hire temporary "bubble" workers via TeleTech (later APAC) to perform simple LSRs.
- The revised CBA contained a Limitation on Transfer of Jobs clause stating the Company may not permanently transfer represented jobs to any entity not signatory to the CBA; earlier CBA language and an incorporated agreement letter referenced a deleted 0.7% cap.
- The Union grieved in 2010 alleging unlawful transfer of LSR work to TeleTech/APAC; an arbitration panel found the CBA prohibited transfers to non‑signatories, found a shared expectation that Union employees would perform the work, and awarded reinstatement/return of work.
- FairPoint sued under § 301 LMRA to vacate the award, arguing the panel exceeded its authority (contradicted express CBA management/subcontracting rights and created new terms) and that no "transfer" occurred because the Union never had prior possession; district court affirmed the award but denied fees; both parties appealed.
Issues
| Issue | FairPoint's Argument | Union's Argument | Held |
|---|---|---|---|
| Whether the arbitrator exceeded authority by adding/subtracting contract terms despite a no-modification clause | Arbitrator violated clause and exceeded authority; interpretation effectively added a subcontracting ban and limited management rights | Arbitrator plausibly interpreted CBA; no‑mod clause does not raise review standard above ordinary deferential standard | Court: No excess; generic no‑mod clause does not narrow the usual highly deferential review; award plausible and within arbitrator's authority |
| Whether the Limitation on Transfer of Jobs forbids subcontracting to any non‑signatory entity | The clause should be read narrowly (pre‑amendment arbitration limited transfers to between Verizon entities); specific subcontracting exceptions in CBA show parties knew how to carve out permissions | Plain language "any entity" and bargaining history support a broad ban; specific exceptions can coexist as limited carveouts | Court: Arbitrator’s broad reading of "any entity" is plausible given text and bargaining history; did not manifestly disregard other subcontracting clauses |
| Whether a "transfer" occurred when work previously automated was performed by subcontractors (no predicate possession) | "Transfer" requires prior possession by Union employees; automated work was never in Union hands, so no transfer | Mutual expectation and staffing plan created a legitimate claim/possession such that assigning the work out constituted transfer | Court: Accepting arbitrator’s factual findings, it is plausible that the Union had a legitimate expectation amounting to possession and thus a transfer occurred |
| Whether the Union is entitled to costs and fees for defending the award | N/A (Union sought fees) | Requests fees as deterrent to frivolous appeals of arbitral awards | Court: District court erred procedurally by using Rule 11 rather than federal common law, but did not abuse discretion in denying fees because FairPoint’s appeal was colorable, not frivolous |
Key Cases Cited
- Teamster Local Union No. 42 v. Supervalu, Inc., 212 F.3d 59 (1st Cir. 2000) (standard of review for district court affirmance of arbitration award)
- United Paperworkers Int'l Union v. Misco, Inc., 484 U.S. 29 (1987) (arbitral review is highly deferential; awards must draw their essence from the contract)
- Local 2322, Int'l Bhd. of Elec. Workers v. Verizon New England, Inc., 464 F.3d 93 (1st Cir. 2006) (fees and costs available under federal common law in § 301 cases; standards for frivolous claims)
- Kraft Foods, Inc. v. Office & Prof'l Emps. Int'l Union, 203 F.3d 98 (1st Cir. 2000) (no‑modification clause generally reinforces arbitrator must draw essence from contract)
- Labor Relations Div. of Constr. Indus. v. Int'l Bhd. of Teamsters, 29 F.3d 742 (1st Cir. 1994) (arbitrator’s interpretation must be at least plausible)
- El Dorado Technical Servs., Inc. v. Unión Gen. de Trabajadores de P.R., 961 F.2d 317 (1st Cir. 1992) (courts accept arbitrator’s factual findings)
- United Steelworkers v. Enterprise Wheel & Car Corp., 363 U.S. 593 (1960) (arbitrator confined to interpretation and application of collective bargaining agreement)
- Local 1445, United Food & Commercial Workers Int'l Union v. Stop & Shop Co., Inc., 776 F.2d 19 (1st Cir. 1985) (arbitral awards will only be vacated where reasoning is palpably faulty)