United Steel, Paper & Forestry, Rubber, Manufacturing, Energy, Allied Industrial & Service Workers International Union v. Wise Alloys, LLC
642 F.3d 1344
11th Cir.2011Background
- Wise Alloys and three unions entered into materially identical 2007–2012 CBAs providing for final and binding arbitration of disputes.
- COLA: $0.01 per hour for each 0.3 point CPI change, applied to offset health insurance costs, not wages.
- Healthy premium increases were agreed: from $2.50 to $20 weekly, then to $45 weekly through 2012, offset by COLA.
- Dispute arose over whether COLA should be calculated hourly or weekly; arbitrator heard July 23, 2008 arbitration and ruled November 21, 2008 for the unions.
- Wise alleged scrivener's error and union deceit; arbitrator rejected these defenses, holding the language unambiguous and consistent with hourly calculation.
- Wise did not vacate the award; in 2009 unions sued to enforce; Wise defended on fraud grounds and sought related discovery, which the district court limited.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does §301 preempt Wise's fraud counterclaims? | Wise: fraud claims independent of CBAs. | Unions: fraud depends on CBA interpretation. | Preempted; fraud claims tied to CBA interpretation. |
| Whether Wise may raise essence-of-the-agreements defense without time bar. | Wise: essence defense is independent of limitations. | Unions: essence defense is part of enforcement and not time-barred separately. | Denied; essence defense treated as cognizable but subject to limitations. |
| Is Wise's fraud challenge time-barred under the LMRA/FAA limitations? | Wise: timely defense; not time-barred. | Unions: three-month FAA-based limit applies if tied to vacating an award. | Time-barred; three-month period governs motion to vacate a §301 award. |
| Did the district court abuse by denying discovery on fraud given time-bar? | Wise: discovery on fraud should proceed to probe defenses. | Unions: discovery improper where defense time-barred. | No abuse; discovery properly denied. |
Key Cases Cited
- Textile Workers Union of Am. v. Lincoln Mills of Ala., 353 U.S. 448 (1957) (arbitration awards are enforceable under §301 and require interpretation of CBAs)
- Lingle v. Norge Div. of Magic Chef, Inc., 486 U.S. 399 (1988) (preemption when resolution depends on CBA interpretation)
- Allis-Chalmers Corp. v. Lueck, 471 U.S. 202 (1985) (preemption where resolution depends on terms of the agreement)
- American Postal Workers Union v. United States Postal Serv., 823 F.2d 466 (11th Cir. 1987) (uniform federal limitations for challenges to arbitration awards)
- Cullen v. Paine, Webber, Jackson & Curtis, Inc., 863 F.2d 851 (11th Cir. 1989) (three-month FAA-based period borrowed for §301 motions to vacate)
- Teamsters Local No. 579 v. B & M Transit, Inc., 882 F.2d 274 (7th Cir. 1989) (finality of arbitration and timing for challenging awards)