Wiregrass Metal Trades Council AFL-CIO v. Shaw Environmental & Infrastructure, Inc.
2016 U.S. App. LEXIS 16535
11th Cir.2016Background
- Shaw Environmental, a government contractor, suspended and later fired union employee Jack Endicott for possessing government property without authorization under a collective bargaining agreement (CBA) possession policy.
- The CBA forbids “Possessing . . . Government property without proper authority” and lists termination as the only possible penalty for that offense; the policy is silent on whether knowledge that the property was government-owned is required.
- The Union (Wiregrass Metal Trades Council) compelled arbitration; the arbitrator found Endicott did not know the property was government-owned, concluded he did not violate the possession policy, and awarded reinstatement and back pay.
- Shaw moved in district court to vacate the award, arguing the arbitrator exceeded her authority by effectively adding a mens rea (knowledge) requirement to the clear terms of the CBA (i.e., modifying the contract rather than interpreting it).
- The district court vacated the award; the Union appealed. The Eleventh Circuit reviewed de novo and assessed whether the arbitrator interpreted the CBA (which merits extreme deference) or impermissibly modified its unambiguous terms.
- Applying Enterprise Wheel and related jurisprudence, the Eleventh Circuit held that, because the arbitrator’s reasoning was ambiguous and the award could plausibly be read as an interpretation, the award must be enforced and the district court’s vacatur reversed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the arbitrator exceeded authority by adding a knowledge requirement to the possession policy | The arbitrator properly interpreted the silent CBA term and discovered an implied mens rea requirement | The arbitrator impermissibly modified clear CBA language by turning a strict-liability offense into a knowledge-based one | The award is ambiguous but plausibly an interpretation; under Enterprise Wheel presumption, uphold the arbitrator’s interpretation and reverse vacatur |
| Whether courts must defer to an arbitrator’s interpretation even if arguably wrong | Arbitrators’ constructions of CBA are final and binding; deference required even if interpretation is debatable | Courts may vacate awards that contradict plain, unambiguous contract language | Courts must defer: if an award arguably interprets the CBA, review ends and award stands (extreme deference) |
| Whether an ambiguous or sparsely reasoned award permits vacatur | Ambiguity allows reading the award as interpretation; refusal to enforce would undermine arbitration | Ambiguity may indicate the arbitrator rewrote the contract, justifying vacatur | Ambiguity favors enforcement—when it’s “not apparent” the arbitrator exceeded authority, enforce the award (Enterprise Wheel presumption) |
| Applicability of FAA vs LMRA standards for vacatur | Union: LMRA governs; FAA guidance may be used but outcome is same on excess-of-authority ground | Shaw invoked FAA vacatur; circuit treated excess-of-authority standard as cognizable under either FAA or LMRA federal common law | Court relied on excess-of-authority vacatur standard available under LMRA and FAA guidance; outcome turns on traditional labor-arbitration deference |
Key Cases Cited
- United Steelworkers of Am. v. Enter. Wheel & Car Corp., 363 U.S. 593 (1960) (ambiguity in arbitrator’s reasoning that permits a plausible construction as interpretation requires enforcement)
- Oxford Health Plans LLC v. Sutter, 569 U.S. 564 (2013) (courts must defer to arbitrator’s construction of a contract even if arguably wrong)
- United Paperworkers Int’l Union v. Misco, Inc., 484 U.S. 29 (1987) (arbitrator cannot ignore plain contract language; courts defer to arbitrator’s interpretation of agreements bargained to allow arbitration)
- Bruno’s, Inc. v. United Food & Commercial Workers Int’l Union, Local 1657, 858 F.2d 1529 (11th Cir. 1988) (no-modification clauses are a weak basis for overturning arbitrator interpretations)
- Wise Alloys, LLC v. United Steelworkers, 642 F.3d 1344 (11th Cir. 2011) (LMRA governs labor-arbitration awards; FAA may provide guidance; vacatur for excess of authority is limited)
- IMC-Agrico Co. v. Int’l Chem. Workers Council of UFCW, 171 F.3d 1322 (11th Cir. 1999) (arbitrator exceeds authority when award contradicts explicit contract terms)
- Butterkrust Bakeries v. Bakery, Confectionery & Tobacco Workers Int’l Union, 726 F.2d 698 (11th Cir. 1984) (arbitrator acts beyond authority when imposing remedies the CBA does not permit)