Reyco Granning LLC v. International Brotherhood of Teamsters, Local Union No. 245, 735 F.3d 1018

Background

Reyco Granning LLC appeals a district court grant of summary judgment in favor of Local 245 and denial of Reyco’s cross-motion to vacate an arbitrator’s award under the CBA.
The CBA’s Article XII, section 3 provides that holiday pay requires eight hours on the last scheduled workday before the holiday, with a tardiness exception if late less than 60 minutes.
Tiffini DePalma was denied holiday pay after arriving 45 minutes late on December 22, 2011 due to a flat tire; Reyco denied the exception, claiming insufficient attendance history.
The grievance proceeded to arbitration; the arbitrator found that Reyco had discretion to grant the tardiness exception, but that the parties intended limits allowing exception for vehicle trouble, oversleeping, or car wrecks.
The arbitrator ordered DePalma’s holiday pay under the exception; Reyco sought review and both sides moved for summary judgment.
The district court upheld the arbitrator’s decision and granted Local 245 summary judgment; this court vacates and remands to grant Reyco summary judgment and vacate the award.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the arbitrator exceeded authority by relying on bargaining history.	Reyco argues the term 'may' is unambiguous and the arbitrator modified the contract by considering negotiation history.	Local 245 contends the arbitrator could rely on external sources when language is ambiguous or when further guidance is needed.	Arbitrator exceeded authority by altering unambiguous language.
Whether the word 'may' in Article XII, section 3 is ambiguous and allows outside guidance.	Reyco asserts 'may' is an unambiguous discretionary grant to Reyco.	Local 245 maintains 'may' is ambiguous and allows look to negotiation history.	Term unambiguous; arbitrator's reliance on outside history improper.
Whether the district court correctly reviewed the award under de novo standards for summary judgment and vacatur.	Reyco argues de novo review should lead to vacating the award due to no authority.	Local 245 argues de novo or limited review supports sustaining arbitration.	District court’s vacatur of the award was correct; the arbitrator exceeded authority.

Key Cases Cited

Boise Cascade Corp. v. Paper Allied-Indus., Chem. & Energy Workers, 309 F.3d 1075 (8th Cir. 2002) (extraordinary deference to arbitral awards; draw its essence from the agreement)
Keebler Co. v. Milk Drivers & Dairy Emps. Union, Local No. 471, 80 F.3d 284 (8th Cir. 1996) (arbitrator overstepping by altering contract terms; cannot substitute discretion)
Inter-City Gas Corp. v. Boise Cascade Corp., 845 F.2d 184 (8th Cir. 1988) (vacate when arbitrator disregards contract language)
Manhattan Coffee Co. v. Intl Bhd. of Teamsters, 743 F.2d 621 (8th Cir. 1984) (arbitrator cannot substitute his discretion for the parties’)
Alcan Packaging Co. v. Graphic Communication Conference, Intl. Bhd. of Teamsters, 729 F.3d 839 (8th Cir. 2013) (arbitrator arguably construed or applied the CBA; defer to arbitrator)
Excel Corp. v. United Food & Commercial Workers Int’l Union, Local 131, 102 F.3d 1464 (8th Cir. 1996) (arbitrator may consider parol evidence when language ambiguous)
Dist. No. 72 & Local Lodge 1127 v. Teter Tool & Die, 630 F.Supp. 732 (N.D. Ind. 1986) (vacating where arbitrator relied on intent at contract time over language)
The Star Tribune Co. v. Minn. Newspaper Guild Typographical Union, 450 F.3d 345 (8th Cir. 2006) (vacate when arbitrator ignores plain language of an unambiguous contract)
Misco, United States, 484 U.S. 29 (U.S. Supreme Court 1987) (arbitration deference; 'construction of the contract' principle)
Alcan Packaging Co., 729 F.3d 839, 729 F.3d 839 (8th Cir. 2013) (discusses deference when arbitrator arguably construes the contract)