*1 ANHEUSER-BUSCH, INC.,
Plaintiff-Appellant,
v.
BEER, DRINK, SOFT WATER, FRUIT
JUICE, GAS, LIQUOR CARBONIC DRIVERS,
SALES HELPERS, IN WORKERS,
SIDE BOTTLERS,
WAREHOUSEMEN, SCHOOL,
SIGHTSEEING, CHARTER BUS
DRIVERS, GENERAL PRO EMPLOYEES,
MOTIONS AND EM
PLOYEES OF AFFILIATED INDUS
TRIES, MALTSTER, LABORERS,
SYRUP, YEAST, FOOD, VINEGAR,
BREWERY, RECYCLING AND MIS
CELLANEOUS OF WORKERS CHI VICINITY,
CAGO AND ILLINOIS,
LOCAL UNION NO. AFFILIAT
ED WITH THE INTERNATIONAL TEAMSTERS,
BROTHERHOOD OF
Defendant-Appellee.
No. 00-4089.
United States Court of Appeals,
Seventh Circuit.
Argued June 2001.
Decided Feb.
Rehearing and Rehearing En Banc
Denied March 2002.* * Posner, Hon. Richard A. Hon. Frank H. East- Claire Williams participate did not in the con- erbrook, and Hon. Diane P. voted Wood petition sideration of the for rehearing en grant petition banc; rehearing for en banc. Chief Joel M. Flaum and Hon. Ann *2 in 1998. executed agreement
bargaining with instructions remand reverse We judgment and enter the award to vacate Anheuser-Busch, Inc. favor of BACKGROUND I. FACTUAL (the Company Brewing Anheuser-Busch distributor- beer operates a “employer”) Illinois, em- Heights, ship in Arlington (“drivers”) drivers-salespeople Union ploys products pre-sold deliver and assistants 1,300 accounts retail roughly The drivers Chicago. suburbs northern basis, a commission on paid are col- year in a 5 forth set rate commission (the “con- bargaining lective tract”) February 1998.1 effect that took rate commission one provides contract (“one-person alone work for drivers who for routes”) rate a lower commission (“two- helper by a assisted who are drivers routes”). person 1989, the em- April 1986 to May From an under operated and the Union ployer (Argued), Winston Torres Joseph agreement, James bargaining collective earlier IL, Plaintiff-Ap- for Strawn, Chicago, drivers, as- & whether provided which not, pellant. received helper or by a sisted commission rate. This commission same Gittler, Angelueci A. Margaret Marvin negotiations, issue in an became rate Greenfield, Gittler, & Asher, (Argued), reasoned, thorough negoti- long, after IL, Defendant-Appel- D’Alba, for Chicago, a new sessions, executed ating lee. prior that altered in 1990 adopted COFFEY, arrangement EASTERBROOK Before commission struc- payment ROVNER, Judges. commission two-tiered Circuit new com- The same above. as referred ture COFFEY, Judge. Circuit there- provision was payment rate mission part of made a into Anheuser-Busch, incorporated after Plaintiff-Appellant contracts, again and 1998 of the district Inc., judgment appeals the negotiations. and reasoned extensive in after arbitrator’s decision upholding court 1990 and term During the 199k # 744 Union Local of Teamsters favor all driv- contracts, paid employer (“the Union”), the commission concerning (higher) commission one-person at the ers union driv- paid its Anheuser-Busch rate continued Anheuser-Busch rate. of a collective the terms pursuant ers salary addition receive low volume routes equally, the drivers compensate order earned. commissions some drivers provides that also practice of paying Further, drivers in- the contract specified that compensation, creased rate of in contra- arbitrator had “no authority to, to add diction of the written only during from, subtract modify or change” the *3 the first two months of newly the negotiat- terms of the contract. zipper The clause ed, 60-month 1998 contract. In early in its entirety reads: 1998, April the company announced that Agreement This constitutes the and full 27, April 1998, effective the drivers would complete agreement between parties the henceforth be reimbursed according to the supercedes prior agreements and all be- contract language now force. According parties tween representa- the or their testimony to taken during the arbitration tives, written, oral or including all prac- hearings, the decision was by motivated tices not specifically preserved by the company’s the need to create more two- express provisions of Agreement. this person routes and hire additional helpers Agreement This is the entire agreement response to an increasing number of between parties the and is the result of customers as well as complaints customer extensive negotiations in which both dealing with the timeliness of their deliver- parties right had the opportuni- the time, ies. At this same in order to achieve ty to submit proposals and negotiate to pay driver, more for each the employer their proposals with the party. other reduced the number of routes from ten to The nine, eliminating somehow sustained expenses all the associated grievance, Union’s one found dispersed route the the em- cost sav- ployer’s payment ings and of greater workload the among the remaining commis- nine sion rate May drivers. to all drivers during On the Union the brief grievance filed a span (60 of but protesting the first company’s the two days) months decision to the follow the terms of new five-year of the con- contract constituted a tract, dispute and the proceeded “practice,” eyes arbi- the arbitrator, pursuant tration to the terms of the agree- that rose to the level “post-execution of a ment. amendment” of the agreement. This ac- tion, according the allegedly parties
The stipulated to the parameters nullified the company’s right to invoke the the of issue as being, “Did company the thoroughly negotiated and mutually violate the agreement labor by changing agreed upon provision contract dealing practice to conform to the with the agreement to have the provision relating two-person route two-tiered commission rate. commission The arbitra- rates?” is interesting to tor somehow made this finding spite note that question presented the of was: “Is very specific the limiting the company violating language in the contract when zipper complying clause of with the written terms of the “This Agreement most recent ... agreement?” supercedes labor prior all agree- The con- tract contained ments parties two clauses that between limited oral or written, power, all including practices arbitration clause specifi- clause,” the “zipper cally preserved or merger express clause. provisions (1) that: Agreement,” clause states writ- as specific well as the agreement ten constitutes arbitration forbidding him full complete agreement between parties; modifying the umtten contract. The arbi- (2) agreement written supercedes trator recognized that company’s April prior agreements all and practices (low- to pay the two-tier specifically preserved er) in the contract. commission rate to working drivers the iden- well as agreement, entire ties’ compliance full inwas routes
two-person dealing with commission tical bargaining the collective terms of with the failed to Further, contracts these Union rates. agreed indication, language, much less contracts three contain in each company herein; any type had reached (1990-2003) referred all drivers understanding contained contract also oral un- much clause; the 1998 less equally, and that compensated be But negotiations. product exhaustive derstanding that was product limitations adhering reflecting an enforce- instead the minds meeting of *4 the and to authority offer, accep- on his placed by contract supported agreement able the plain language and vital unambiguous consideration, is so which and tance written, arbitrator the it as was contract any contract. to un- and the clear around end-run took an the writ- cast aside Thus, the arbitrator con- terms of the restrictive ambiguous the terms thoroughly negotiated ten reasoned somehow arbitrator The tract. the terms to and returned agreement the employer allowed the that because by prior to in effect contract the sixty-month the months first two higher the pay to employer ordering the practice changing its elapse before tract of wheth- regardless to drivers commission commis- contract’s the written to adhere two-per- or working on one they were er the clause, “deprived it thus rates sion arbitrator finding by the This routes. son commis- bargain [over right itsof Union lan- express the ignores contradicts a result years,” five for almost rates] sion at is- the 1998 throughout guage (without felt somehow arbitrator that the unambiguous terms sue, including the un- “fundamentally awas any explanation) rates commission the within contained with well-set- inconsistent fair maneuver clause, zip- the arbitration bargaining.” collective principles of tled Moreover, clause. per his support for attempt to find In vain a struc- commission re-institutes finding remedy, newly fashioned negotiation in agreed drivers that the ture justified his way back all reached in 1990 up as a concession give testi- partial overreaching decision in 1994 contracts the last two in reaffirmed hearing that arbitration at the mony taken summarized The 1989, some in strike a worker’s during follows: conclusion distributorship’s ago, years thirteen driv- to the commented manager general pa- clause nor [NJeither same “have the the drivers ers that post-execution rule bars role evidence alone or with they worked pay” whether agree- of an or modification amendment found The arbitrator helper. to, “add I cannot Although ment. someway somehow passing statement from, change or modify subtract which, understanding,” an “oral became I am Agreement,” of this the terms way “readopt- according giving effect precluded two during the first employer ed” under- or oral practice long-standing spite of the 1998 months readopted standing reaffirmed most recent of the three each fact that following execution Company (ratified agreements bargaining collective agreement. 1998) very 1990, contained 1994 and court in federal suit employer filed limited properly explicit and award, vacate court to requesting par- contract contained stating
H37 and the Union counter-claimed for [T]he enforce- arbitrator’s decision should not be ment of the arbitrator’s upset decision. The tri- unless it arbitrary is capricious or al granted court summary judgment fails to draw its essence from the Union, favor of the holding bargaining collective because contract because it “interpreted arbitrator had exceeds the confines of interpreting and applying the to include contract.... both written [col- when the arbitrator must bargaining agreement] lective have based sepa- and a award some body agreement,” thought, rate oral or feel- decision should ing, or policy, or law be affirmed outside under high degree of def- contract that the award can be given said not erence to arbitral orders. Anheu- to “draw its essence from the collective appeals. ser-Busch
bargaining agreement.”
Id.
(quoting Burkart Randall v. Lodge
II. STANDARD OF REVIEW
#
(7th Cir.1981)
Indus.,
In Tootsie Roll
and Ethyl Corp. v.
Inc. v. Local
United Steelworkers of
Am.,
(7th
#
Union
*5
Cir.1985)).
F.2d 81
F.2d
Cir.1987),
184-85
we
applicable
set
forth
standard of review
Supreme
The
Court recently reit
for arbitration
Quoting
awards.
from lan-
judicial
erated that
of
review
an arbitra
guage
approved
that has been
Supreme
in
limited,
tor’s decision is
stating that “the
Court decisions that are of no
vitality
less
fact that
court is
a
convinced [the arbitra
today,
pertinent
we stated in
part as fol-
tor] committed serious error does not suf
lows:
fice to overturn his
Major
decision.”
League
Players
Baseball
Ass’n v. Garvey,
[A]n arbitrator is
interpreta-
confined to
504, 509,
532 U.S.
1724,
121 S.Ct.
149
application
tion and
of the collective
(2001)
L.Ed.2d 740
(quoting Eastern As
bargaining agreement; he does not dis-
soc.
Workers,
Coal Corp. v. Mine
pense his own brand of
jus-
industrial
57, 62,
462,
121 S.Ct.
words manifest
infidelity
an
to this obli-
beyond,
outside,
trator went
the bounds
gation, courts have no choice but to re-
of interpreting the contract before him
fuse enforcement of the award.
while fashioning his
question
The
award.
Id.
83 (quoting
United Steelworkers v.
is not
whether
arbitrator misinterpret
Enterprise Wheel & Car Corp., 363 U.S.
ed the agreement,
but
whether the
593, 597,
1138 scope his au v. Chi arbitrator exceeded Newspaper Publ’rs’ Ass’n Chicago 7,# be Printing and his award must reversed. cago thority, Pressmen’s Union Web (7th Cir.1987); Hill v. Young 395 Co. v. International See Radiator Co., Union, UAW, F.2d Ry. & W Cir. Norfolk (7th Cir.1987). 1984) (an will not be arbitration award when arbitrator enforced “failed we not re- The dissent claims that collec to the terms decision, himself “given the confine verse the arbitrator’s bargaining agreement.”). tive East- Garvey.” law laid down imply Garvey erbrook seems of ar- worked radical revision
somehow III. DISCUSSION charac- But the dissent’s bitration law. claims that Anheuser-Busch Garvey groundbreaking terization (rather interpret- than modified confusing be- can be classified as best ed) he terms of the contract when re- contained no landmark Garvey cause way employ language found found of review in standard formulation (in any place contrary fact the contract fact, Garvey itself arbitration cases. contract) express of the 42-year-old Enterprise relies on the “long he to as a relying on what referred case, majority throughout Wheel cited (the practice” of one standing payment opinion, recognizes situations drivers) in spite commission for all rate this, strays “when the arbitrator like zipper clause very language interpretation application Agreement “This stating, constitutes effectively ‘dispensed] *6 complete agreement between justice’ ... own brand industrial full of parties supercedes prior agree- all may his decision be unenforceable.” parties repre- ments their between the or 509, at 121 1724 Garvey, 532 U.S. S.Ct. sentatives, written, Wheel, including oral or all (quoting Enterprise at 1358). 597, practices specifically preserved by The that a notion Agreement.” express provisions “cor- reviewing court does not review the of lan- company argues very rectness” of an arbitrator’s conclusion The certainly hardly Garvey novel one. everything of the contract contained guage merely Enterprise Wheel—a deci- follows the arbitrator needed render his deci- forty years sion more than rendered him considering sion and barred ago—and accept refuse the dis- we Additionally, parties’ practices. the com- exaggerated implication that it sent’s has pany arbitrator improperly claims that the fundamentally the standard of reworked outside the contract and on reached relied in review arbitration cases. practices place in parties’ agree- of the unambiguous language clear and ment’s pointed have out that an We arbitrator requiring payment disparate com- of judicial cannot shield himself from correc- working mission rates between drivers by merely “making tion noises contract using place alone helpers. and those “To Ethyl Corp., interpretation.” 768 past practice par on a with the words, 187. “In other the arbitrator can- agreement would anom- up written create the policy dress his desires in contract that, aly parties expend great while interpretation v. clothing.” NIPSCO Am., negotiating details energy United 243 F.3d time Steelworkers of (7th Cir.2001). situations, they 347 In Agreement, unknowingly these apply award failed to construe the con- tract.
unintentionally commit themselves to un- implies that the arbitrator “might” have stated perhaps important more mat- relied clearly on pre-arbitration forbidden ters which in may the future be found to conduct and thus the award should be past practice.” have been Chicago Web preserved at all costs. But despite Judge Printing Pressmen’s Union # 7 v. Chicago (and Easterbrook’s creative factually un- Ass’n, Newspaper Publ’rs 772 F.2d supported) characterization of the arbitra- (7th Cir.1985). employer further opinion, tor’s it is clear the arbitrator did contends that the arbitrator exceeded the (not actually might rely relied) have on contract’s limitation power on his not to the employer’s past practices. Indeed, de- to, from, “add subtract modify or change spite the arbitrator’s best vain efforts in any way” the terms of the written 1998 to disguise the fact that rely he did past contract. agree We with the employer. practices, he actually admitted in his deci- sion that he was Industries, going
In outside very Tootsie Roll 832 F.2d at terms that, written by we noted stating “[w]hile [an arbitrator’s] “giving he was reliance long-stand- on the to a shop law the is appropri effect ing practice or ate to oral interpret ambiguous understanding reaf- terms firmed readopted shop of the law cannot be the Company.” relied Second, upon parties all modify clear unambiguous agreed provisions.”3 tract clear See also and unambiguous, International facts Mach., Ass’n entirely ignored Lodge dissent, #1000 v. General as well as Co., Cir.1989) Elec. written specific language that defined (the “common law of the shop of the negotiated comes into limits agreement and play” only scope when an ambiguity writ arbitrator’s authority. ten collective bargaining agreement required re neither interpretation in- nor quires interpretation); Ethyl Corp., terpretative fact, devices. neither (“The F.2d at 186 arbitrator not modi nor contend fy the contract unless authorized to do there ambiguity so.”); Works, Judson Rubber Inc. Mfg. v. the contract establishing commission rates *7 Prod’n & #24, Serv. Workers Union Thus, 889 for drivers. there was no need for F.Supp. (N.D.Ill.1995) (an the in reaching his desired re- award will not be enforced when it sult, “draws to “interpret” unambiguous the it solely essence parties’ from past the by tract reaching the outside contractual practice.”). language and creating a rely scheme to on past contradictory practices or customs.
In reaching out for
validity
some
explained:
As we have
decision,
Judge Easterbrook
suggests that the
arbitrator was
existence of ...
unable to
“industrial common
“sharply
pre-
mean,
differentiate
law”
from
does not necessarily
post-sign-
howev-
ing
er,
conduct” and that
parties
“[i]t is not
the
that
sufficient
should be
bound
to annul an award that an arbitrator
their customs to
might
same
the
extent as
acquiesced
have
in a temptation to
explicitly negotiated provisions
enforce
in their
pre-contractual conduct in the name of fair
collective bargaining agreement. Unlike
play.”
assumptions are,
best,
These
at
contractual agreements, past practices
problematical.
most
always
Easterbrook
be the
joint
result of
3.
phrase
Our
use
cases
the
Roll,
"law of the shop,”
parties.”
the
Tootsie
determination^] the con change modify or authority to com- obligation or thought is no there contrast, in this By way. in any practices tract future. Such for the mitment award an issued case, the prescribed ways, present merely are language reading of or not on based doing things. ways, personal his on but rather Pressmen’s, 772 Printing Web Chicago read if contract of how view 387. at somehow were conduct Anheuser-Busch’s to the earlier, parties As stated document into the inserted and codified we, do and so agree, contract arbitra Thus, it is evident itself. neither this case is at issue document the con plain language of rejected tor very and the incomplete, nor ambiguous “inter claiming to be tract, ever without made clear contract language doing itof provision preting” any was without the arbitrator specific his inscribed contract rewrote the so modi to, from, subtract “add authority to contract; some upon own any way the terms change in fy or to do.4 authorized was not thing that he Nevertheless, dis Agreement.” [the] recently very sister circuit Another any reference to without sent insists Co. v. Power Pennsylvania agreed. or discus record, explanation much less (3d Cir.2001), the IBEW, F.3d 174 “performed Berman sion, Arbitrator an the award reversed Circuit Third dissent task.” But interpretive ignored arbitrator who or what was this task explains never what and, by con this one in contract like the term, in the contract other practices sidering the inter required unambiguous, was agreed evidence, powers “exceeded extrinsic Indeed, ignores the dissent pretation. “altered Agreement” under no required the fact provi direct violation Agreement in un clause was interpretation: Id. so.” power no to do had that he sion un clause was the arbitration ambiguous; “the arbitra held that The court commission-rates ambiguous; express conflicts decision tor’s Any interpreta unambiguous. clause was between Agreement provisions of the written drawing its essence tion therefore, Union” Company recog have necessarily would because, everyone involved simply, quite dispute “if suggests that 4. The dissent unambiguous. agreed that the contract arbitrable, adjudicator 'within acts then the Further, any justi- to offer failed authority’ bad if even *8 derived decision was dispute was how his the fication for thus because the merits” contract, as it could arbitrable, language inter- of the an from the the made arbitrator ap- by the not, employed disagree. The dissent pretive error. We because authority, express jurisdiction contrary terms of equate to the pears to arbitrator is scope fully explain within the in can act we more arbitrator As but an the contract. below, (reviewing mat- an arbitrable arbitrator's jurisdiction opinion his text authority ter) scope of his still exceed transparent to burden effort is a decision plain language (by ignoring the subjective no- personal, parties own with his authority). To state other- bargaining. tract that limits The collective in of fairness tions cited the caselaw ignore much wise is authority, we dis- as exceeded arbitrator opinion. throughout this below, he made because fully more cuss because he instead interpretive error —but case, clear that let us make this In unambigu- a clear and terms of modified the single clause in this point out fails dissent interpretation no that needed ous contract par- thoroughly negotiated contract whatsoever. ambiguous— labeled as ties or the to draw its essence Let us not forget that parties “fails have from Agreement.” Id. at 181. stipulated that the contract before us is an unambiguous, exclusive statement written, Carefully well-reasoned, parties’ rights and obligations. The con- and thoroughly negotiated contracts are parties duct of the is absolutely irrelevant complete, presumptively and the added in situations like involving this zip- a dual presence of a merger clause is further per clause-arbitration as the Sec- strong evidence “that the intended ond Circuit noted in Leed Architectural the writing to be the complete and exclu Prods., Inc. v. Am., United Steelworkers of sive between them.” Regens (2d Cir.1990). 916 F.2d Leed, burger v. Consultants, China Adoption court considered effect of an arbitral Ltd., Cir.1998). clause, like the case, one which The dissent in seeking states to avoid the “denie[d] the arbitrator right to ‘add impact of merger suggests clause and to, from, subtract any way or modify’ its that the arbitrator made an “effort to in terms.” Id. at 66. The court held that terpret post- reference to ‘zipper “[t]he clause’ in [the] collective bar- conduct, signing and a bargain collective gaining agreement, which denies the arbi- ing agreement may be post- altered right to, trator the to ‘add from subtract or signing acts of the sought party to be in any way modify’ terms, is a pragmat- bound.” He (dissenting judge) goes on to ic restatement of the holdings. above Its cases, cite several contending they purpose is to make the written contract support his theory that “a collective bar the exclusive statement of gaining agreement may be altered by the rights obligations.” Thus, Id. Leed post-signing party acts of the sought to be makes clear that the combined effect of bound.” But it is obvious that these cases the arbitration zipper clauses was to irrelevant; are none of the contracts in prohibit from deviating those cases contain a strong, rock-solid clearly and thoroughly defined clause well as an arbitration negotiated written contract. barring arbitrator from “adding to, from, subtracting modifying chang paid only lip ing way the terms the Agree service to the limitations on his authority Further, ment.” as imposed Rovner ex by the combination of the lan- plains (contrary to the dissent’s notion that guage arbitration clause and the the concurring opinion supports the dis clause. He fit saw to withdraw the theory) sent’s that whether the arbitrator commission provision specifically delineat- justified was concluding Anheuser ed and 1998 contracts Busch effectively modified the contract proceeded “is to add to the agreement a question we are upon called to an while ignoring its clear language and in- swer, for that is not what the arbitrator tent personal and substituted his views of held.” There be no prevent need to fairness based on a factor he forbid- to, the ai'bitrator from “adding subtracting consider, den to namely parties’ past *9 from, modifying or changing any way practices. The dissent cleverly makes the terms Agreement” of the brief, unless only the passing reference to the arbi- parties clearly prevent intended to clause, the ar tration suggesting explana- without bitrator from relying on tion, what the dissent that it is not “sound to a no- read calls “post-signing conduct” when inter clause as it were a arbitral-modification if preting the agreement. no-arbitral-error (emphasis clause” add- maneuver,” making clear mentally unfair premised is ed). argument The dissent’s decision, the arbitra- spite the that any (unsupported assumption
upon its
hand,
arbitra-
dispensed the
sleight of
tor’s
in the arbitrator’s
wording
the
to
reference
justice.
industrial
brand of
tor’s own
ef
made “an
decision)
that the
though
the contract”-even
interpret
fort to
the arbitrator’s
that
further
note
We
negotiat
thoroughly
and
unambiguous
“fairness”
concerning
the
the
opinion
personal
inter
any
sup-
such
ed,
lacking of
contract barred
written
actions
employer’s
of the
Anheu
find
on to
he concluded
He went
pretation
in the record.
port
—when
deal.
the
modified
that Anheuser-Busch’s
had itself
in the fact
inequity
ser-Busch
theory,
“deprived
accept
the dissent’s
the contract
to
to abide
we
But were
decision
over
bargain”
he con
to
right
claim that
its
need
union of
an arbitrator
the
remaining
arbitrator,
the
“parties
during
cluded,
rates
did this
commission
as
analy-
But this
com
contract.
the 1998
in order
term of
contract”
modified
between
fact that
review,
obvious
ignores
which sis
judicial
all
eviscerate
pletely
employ-
and
the Union
and
to do
attempted
has
what
each oc-
on
er,
negotiation
after extensive
a view.
to such
agree
cannot
here. We
of the most
casion,
to all
terms
agreed
can
that arbitrators
clear
Garvey makes
contract, including
agreement’s
recent
applica
and
interpretation
stray “from
not
zip-
structure
specific commission
at
532 U.S.
agreement.”
tion of
once,
different
on three
not
but
clause
per
out,
pointed
have
1724. As we
121 S.Ct.
1998). Fur-
(in 1990, 1994, and
occasions
de
policy
cannot “dress
an arbitrator
record
thermore,
the fact that
despite
cloth
interpretation
up in contract
sires
inclu-
to the
agreed
that the Union
reflects
still
clothing is
sheep’s
ing”; a wolf
com-
language of
two-tiered
of the
sion
NIPSCO, 243
than
nothing other
a wolf.
con-
previous
the two
provision in
mission
added).
(emphasis
at 347
agreement,
in the current
as
as well
tracts
unambigu
case,
clear and
was
the contract
herein indicates
nothing contained
Accord
interpretation.
no
needed
ous and
manner, much
surprised
Union
that the
are convinced
ingly, we
com-
renegotiating
precluded
less
the contract
parties,
modified
during the re-
drivers
rates for
mission
authority.
thereby
exceeded
concerning
sessions
spective bargaining
“stray from
must
Arbitrators
zipper
contracts.
of the three
each
agree
of the
application
interpretation
of the three
in each
set forth
clause
‘dispense
[their]
effectively
three
ment and
by the Union
tracts, as ratified
” Garvey,
justice.’
industrial
occasions,
clearly
own brand
states
different
(quoting
negotia-
at
121 S.Ct.
extensive
532 U.S.
“is the result
Wheel,
right
parties had
Enterprise
which
tions in
both
1358).
proposals
arbi
what the
precisely
that is
submit
opportunity
But
and the
proposals
exten
negotiate
cast aside the
their
when he
trator
did
interesting to
most
ignored
is also
party.”
sively negotiated
other
called
the witnesses
of the commis
all of
specific
note
clear and
(both
clause,
hearing
Un-
at the
testify
arbitration
arbitration
sion-rates
they were
Indeed,
employer) agreed
arbi
ion
clause.
the two-
fact that
fully cognizant
stated
when he
admitted
himself
trator
structure and
commission
tiered
adhere
employer’s
of the three
in each
written,
was included
negotiated
the contract
testified
further
The witnesses
contracts.
“funda-
was a
past practice,
rather than
*10
that following the execution of the
However,
first
device.
point
dissent fails to
employer
made abso-
even a scintilla of evidence in the record
lutely
“promises”
support
no
agreements”
speculation
or “oral
its
that the arbitra-
tor
payment
the Union that
was
relying upon any
interpretive prin-
ciple in
greater
fashioning his
commission rate would
award.
continue
On the oth-
hand,
er
because
into the
the arbitrator explicitly
future.
stated that his award was designed to
event,
In any
the word “fairness” is as
stamp out what he saw as “fundamentally
wide and as deep as the ocean and can
unfair
that
maneuvers]”
worked to what
a
have multitude of meanings depending
he believed was the detriment
the labor
on an individual
personal
arbitrator’s
union, we are quite confident that he was
Thus,
caprice.
whims and
any decision
simply effectuating
personal
bias re-
motivated
an arbitrator’s view of what
garding proper
labor-management
rela-
prohibited
“fair” is
by the rule that “[a]n
tions.
If the
read,
arbitrator’s decision is
arbitrator is confined
interpretation
paid
attention
to the
context which
application of the collective bargaining
the arbitrator
“fairness,”
uses the word
it
agreement; he
dispense
not sit to
does
is clear that
the arbitrator
reference to
brand of
justice,”
own
industrial
‘fairness’ was not mere slippage of tongue,
“courts have no choice but to refuse en
as the
argues
dissent
unconvincing
forcement of the award” when the award
attempt
explain
away the arbitrator’s
fails to “draw its essence from the collec
actions;
instead it was a—clear and un-
bargaining agreement.”
tive
Enterprise
ambiguous
that unequivocally
—statement
Wheel,
at
U.S.
trator of felt offended cast and disregard and ignore pletely his conduct, uphold still we would ty’s contractual unambiguous aside clear his own impose him permit award and limited beyond the traverse language par- upon the justice industrial brand of ” invoking the by merely review scope his We “good guise ties under of faith. of interpretation.” “contract words magic See view. accept this not and will cannot deci- arbitration 597, are convinced We Wheel, at Enterprise its es- to “draw in this case failed sion bargaining the collective sence” cloak his attempted to The arbitrator 1, February effect on that took interpre- of contract “noises” with actions exceeded the decision because used tation, improperly but he applying interpreting of confines and his agreement, to add to practices contract. deeply was though it reads as of industri- personal idea own his rooted note, with agree we a final On very up to the living rather than justice, al of arbitration purpose that one dissent at issue. of the contract language specific swift, inexpen parties provide telling that the particularly It is But this does sive, final decisions. claiming to consider one hand on the while an arbitrator’s judicial review vitiate during the first occurring practices to dis not free are Arbitrators decision. contract, actually of the 1998 two months justice of industrial own brand pense their pay- employer’s on the fact relied plain “may ignore rate to all commission higher ment Misco, v. Paperworkers the contract.” own was, the arbitrator’s to quote drivers 98 S.Ct. Inc., U.S. or oral words, “long-standing practice added). (1987) (emphasis L.Ed.2d giving was he understanding” to which agree to arbi Thus, may while by the abided Had the arbitrator effect. did in they as tration, agree, they also past disregarded of the contract terms au limit the this he “understandings” practices chal right preserve their thority and clause and by to do both bound has the arbitrator decisions when lenge have rec- law, certainly he our case a decision and rendered reached out no au- had he and concluded ognized authority and delegated his strays beyond upon, consider, rely much less thority to See contract. negotiated is barred “long-standing practice.” supposed Co.,& Son, Tiffany v. Inc. George &Watts Cir.2001) (“People 577, 581 himself to upon it took fewer to have their arbitrators want wrong in who perceived be what he right con only provide this need powers so, improperly doing he workplace. case, ig tract.”). In this notions fairness personal injected his clauses of three plain language nored the “an thus manifested into his decision concerning contract —the to follow obligation” infidelity to clause, and rates, commission contract and the language law and limited of which clause—all any the arbitration change” modify “add to not to par by the written authority and were negotiated thoroughly portion improper award prevent type Roll, ties to F.2d Tootsie See agreement. See appeal. subject of is the negotiated thoroughly Long and 83-84. Corp., 182 Betts Thomas & IBEW v. to have would cease contracts written *12 1145 (6th Cir.1999) (“Wben 469, 472 practice, a collective Busch’s for two months after the prohibits bargaining agreement the addi- effect, took of paying terms, may tion the arbitrator two-person workers on high- routes so.”). proceed er, (what not to do one-person rate Judge Easter- conduct”) brook refers to as “post-signing merely The arbitrator did not misread effectively modified the terms the 1998 contract; intentionally he disregarded Agreement, is not a question we are called clear, and thus specific violated the lan- answer, upon to for that is not what the guage of the and created an es- arbitrator held. The arbitrator never in- cape hatch through which he could dis- quired parties’ whether the post-signing pense justice. his own brand of industrial sufficient, itself, conduct was in and of to Accordingly, judgment of the district trump plain language of the contract. court is ReveRSed. This case is Remanded times, At all he was concerned with wheth- with instructions to Vacate the award of parties er the had signaled an intent judgment arbitrator and Enter in fa- carry forward their pre-signing under- Anheuser-Busch, vor of Inc. standings practices in the 1998 Agree- ment. ROVNER, This much ILANA is evident from way DIAMOND Circuit in which the Judge, concurring in framed judgment. ques- tion before him: “I must decide whether a The 1998 bargaining agree- collective long-standing past practice supersedes the ment, written, as gave Anheuser Busch the language.” Opinion Arbitrator’s authority pay working individuals on and Award (emphasis mine), at 17 quoting two-person routes a lower commission the Union’s Brief at 12. But question than assigned one-person workers unequivocally answered by Article routes. The unambiguous terms of that prior Section 20—all practices express- not agreement also barred the arbitrator from ly preserved by displaced, the contract are looking practices pre-dating agree- and the written terms contract con- (what ment Judge Easterbrook refers to trol. conduct”) as “pre-signing as a source of terms; new or modified contract Article enough, True the arbitrator did advert 20, Section expressly provided parties’ to the post-signing conduct. But “[tjhis Agreement constitutes full as the arbitrator’s rationale plain, makes complete agreement between the parties he post-signing viewed the conduct as a supersedes prior all agreements be- parties’ past window onto the practices, tween the representatives, or their independent as an revision of the 1998 written, oral or including practices all regarding terms commission rates. What specifically preserved by express provi- upon arbitrator seized parties’ is the Agreement.” sions this (Emphasis failure, upon Agree- execution of the 1998 mine.) therefore, agreed, We are any ment, promptly pre-sign- abandon their prior oral understandings that Anheuser- practice ing and conform their conduct to union, Busch have had with the pertinent terms of the new contract— previous practice respect to the if longstanding practices were to be paid two-person routes, commissions on read into the contract timely unless discon- imported cannot be agree- into the 1998 parties. tinued See Arbitrator’s ment. (“Had Opinion prac- and Award at Whether the arbitrator would have been tice under review not carried been over justified in concluding that Anheuser- into the term Agreement, of the 1998-2003 My col- court reverses. cision. Now parol clause, as the as well principally opinions rely separate leagues’ have in- rule, undoubtedly evidence integration agreement’s end, it.”). it is the In the validated pre-signing any reference which forbids conduct pre-signing *13 The arbi- history. negotiating conduct contract; post-signing their read into believe, decision, ef- colleagues my trator’s merely as a convenient is cited conduct to continue employer bound fectively but longstanding, bootstrap to reinsert of two-driver treatment pre-agreement agreement. unwritten, into practice integration routes, offending the thus Award Opinion and See, e.g., Arbitrator’s clause. fact, did, carry the (“the Company at 20
practice embodied in Green’s [1989] prom- Because post-agreement conduct con contract”). pre-agreement Yet, of a continuation was into the 1998-2003 ise of understanding duct, possible is a this Section Article effect unmistakable of an inevitable it is not but happened, what previ- clean of such wipe the slate 20 is recognized that Berman Arbitrator one. no And understandings practices. ous prior agree invalidates “clause or parties modified arguing one incorporated not practices prior ments provision. Without abandoned (see 22 page of written contract” into the the arbi- rely upon, conduct pre-signing Anheuser- wrote that opinion). He agreement of the construction trator’s deal, the union’s modified the Busch support. wholly bereft of high paying the benefit, it continued when think that I do not the new months after for er rates two faith, purposely that he bad acting in became agreement bargaining collective of brand dispense his own set about wrong right or This be effective. —if perception justice. own His industrial join my I plenary, would review were our appear to have influenced equities does wrong it is holding that colleagues —but contract, however. of the his construction integration transgress it does Award See, Opinion and e.g., Arbitrator’s interpret It effort is an clause. I it think importantly, at 23-24. More con post-signing by reference in- purporting to that his decision evident agree duct, bargaining a collective relied substan- agreement terpret the post-signing by the may be altered ment understandings and the unwritten tially on See sought to be bound. party acts preceded course conduct lengthy Employ Transportation-Communication pre- resort to such agreement —and R.R., U.S. v. Union ees Pacific under the was verboten conduct signing 160-61, 17 L.Ed.2d To that contract. express terms Business (1966); International see also exceed- extent, agree I & Tele Lists, Telephone Inc. v. American award must and that his authority, ed (7th Co., Cir. graph be vacated. Co., 927 Torrington 1998); v. Matuszak Cir.1991). Judge Cof 320, 324 EASTERBROOK, Judge, Circuit principle of this fey applicability denies dissenting. clause integration that an ground on the (which pre-sign- significance negates found M. Berman Herbert Arbitrator conduct) posi-signing un- makes words ing and its drivers’ that Anheuser-Busch This impossible. by conduct collective written modification had modified their ion it contains. more into the clause than post-signing con- reads agreement bargaining believes, matters if, Coffey as de- But court enforced that district duct. The
H47 turn on the meaning particular of the text contract. The arbitrator concluded that that is subject itself a Anheuser-Busch had itself modified the deal, for the and a disagree- court’s and nothing in this collective bargain ment with an ing arbitrator’s understanding forbids post-signing changes contractual language by the justify employer does not dis- that benefit the placement employees. arbitrator’s decision. be sound to read clause if it no-arhitral-modification To see the difference between misinter were (on a no-arbitral-error preting it, clear and ignoring ground that if the arbitrator errs then he consider a clear federal statute —42 U.S.C. has effectively contract); modified the 1997e(a), § the exhaustion requirement would imply that courts intervene to cor *14 Litigation Prison Act. Reform This law rect all blunders. Likewise with ques provides that “No action shall brought be tion whether an arbitrator has “exceeded respect prison conditions [42 under his authority.” A court exceeds its au 1983], § U.S.C. or any law, other Federal thority when it jurisdiction; acts without by a prisoner any jail, confined prison, in so too with an arbitrator. But if the dis or other facility correctional until such ad pute arbitrable, is then the adjudicator ministrative remedies as are available are acts “within his authority” even if the deci exhausted.” Some appeals courts con sion is bad on the merits. To say other that, cluded even if some administrative wise is to turn every interpretive error “available,” remedies are exhaustion is un into a decision “in excess of authority” necessary unless these are the same reme (because no arbitrator is “authorized to prisoner dies the seeks in court. Booth v. err”) and so to every make error (perhaps Churner, 532 U.S. 121 S.Ct. error) every “plain” ground for refusing (2001), L.Ed.2d 958 that holds this is not to enforce the award. The concede what the statute means: exhaustion al that dispute at hand was arbitrable. ways is required. Supreme Should the Thus one cannot say that arbitrator Ber- Court have said appeals courts of man “exceeded his authority” because he that had come to a different conclusion may have misunderstood or misapplied an 1997e(a) “ignored” § “dispensed or their integration clause that we judges find own prison justice”? brand of What it clear. The Justices themselves sometimes actually is said that those courts misinter infer exceptions to the seemingly clear and 1997e(a). preted § It is clear and compre sweeping language E.g., statutes. INS (just hensive like the zipper clause in this v. St. Cyr, 2271, 150 collective bargaining agreement), but texts (2001). L.Ed.2d Even when a forceful that seem clear to some readers be dissent remarks on the lack of a textual differently understood by others. This dif (as basis for Cyr) maneuver in St. ference not imply need that one side has majority does not concede it has ei ignored the text or grounds decided on ther exceeded lawful authority or failed to extrinsic to it. Arbitrator Berman did not interpret at all. ignore or refuse the integration follow Judge Rovner I agree post- clause; he it explained discussed why, signing conduct employer an may in view, in it does not have the effect that principle create legal obligations an al-
Anheuser-Busch my colleagues attrib teration of the agreement. agree, We ute to it. moreover, that arbitrator Berman acted in
Nor does the award offend the good faith and did attempt to smuggle forbidding the modify into the award preconceptions la- about say often play. judges fair Even not, name of for exam- He did entitlements.
bor’s
one result over another
they
about the
reach
personal notions
implement
ple,
they think
for one-driver
a contract because
wages
interpreting
relative
appropriate
(a
systems.
policy
Like-
delivery
grounds
better on
two-driver
the result
“fairness”).
employer’s
that because
for
agree
wise we
concrete substitute
more
pre-
identical to its
conduct is
this kind
post-signing
considerations of
By ruling that
conduct,
to disen-
very
it is
hard
signing
yield to
spoil
my colleagues
an award
corre-
there is a
tangle the two—and
profession
our own
temptation of
—to
pre-
to enforce
sponding temptation
failure to
interpretive
error with
equate
post-sign-
name
conduct
signing
contract at all.
interpret the
reference to
ing acts. The
a federal
question for
“[T]he
that he
an inference
permits
“fairness”
aside an arbitration
asked to set
court
my
step, and both
that forbidden
took
whether the arbitrator
award
is not
ground.
him on this
fault
colleagues
con
interpreting
arbitrators erred
contempla-
“f” word
both
Avoiding the
tract;
they clearly erred
it
not whether
thought
promotes clear
exposition
tion and
contract;
it
interpreting the
it cannot be
Yet
and accurate decision.
*15
interpreting
in
they grossly erred
whether
referring to “fairness”
every opinion
that
contract;
interpret
they
it is whether
deal-
parties’
and the
that the law
shows
v.
& West
the contract.” Hill
ed
Norfolk
If that
put to one side.
ings have been
(7th
1192, 1194-95
Cir.
Ry.,
ern
814 F.2d
so,
our own
number of
goodly
were
1987).
an
performed
Berman
Arbitrator
suspect. Many refer-
would be
opinions
complicated by the
interpretive task —one
for a
just
is
a code word
to “fairness”
ence
conduct can become
post-signing
rule that
principle.
mis-
interpretive
genuine
fact
obligation, and
a contractual
faith
“good
leadingly named doctrine
continued a
post-signing conduct
is an
in contract
law
dealing”
fair
latest collective
predated
L.A.P.D.,
practice
Inc. v. General
example. See
Cir.1997).
(7th
interpretive
an
agreement, but
bargaining
402
Corp.,
Electric
who want to
nonetheless. Parties
exercise
together, Judge
come this far
Having
from treat
preclude courts or arbitrators
company. She con-
part
and I
Rovner
altering
performance as
ing their course of
rely
did not
on
that the arbitrator
cludes
provide that deals
bargain
have
post-agreement
Anheuser-Busch’s
(or,
modified
conduct
more
may not be
means that the arbitra-
By this she
duct.
any way
writing).
in
other than
broadly,
conduct
implement post-signing
tor did not
in
appears
this collective
No such clause
1145)
is,
(op. at
“in and of itself’
—that
harp
me
on a
agreement. Let
bargaining
pre-signing con-
from the
taken
isolation
the real
point:
to the extent
vital
that the arbitrator
duct. She also believes
meaning
and effect
dispute
about
part by
a desire to
swayed at least
a matter of
that is itself
accept
I
fair outcome.
achieve a more
on
the ar
interpretation
which
contractual
do not
propositions but
these as factual
The conclu
is conclusive.
bitrator’s view
consequences. How
they
legal
think
have
I
Rovner
sions
which
sharply differentiate
could an arbitrator
“acting
the arbitrator was
agree
One was
pre-
post-signing
conduct?
—that
faith,
purpose
he
not]
did
[and
bad
not suffi-
the other.
a continuation of
brand of
ly
dispense
about to
his own
set
that an arbitrator
cient
annul an award
1146)
(op. at
justice”
temptation to industrial
in a
might
acquiesced
have
—should
enforcing
straight
order
lead
pre-eontractual
conduct
enforce
award, for if he
ladling
was not
out “his
“improvident,
Court called an
even silly”
justice”
Nonetheless,
own brand of industrial
then he
conclusion.
given the law
implementing
must have been
laid
down Garvey
predecessors,
and its
it,
bargain as he understood
rather than
award
must be
par-
enforced'—for the
acting on extra-contractual grounds.
delegated interpretation
ties
to an arbitra-
tor, not a court. To equate error with
May
Supreme
Last
Court reiterated
non-interpretation is to vitiate the doctrine
principles
govern
the enforcement
that awards must be enforced
if they
even
of arbitral awards:
factual,
reflect
interpretive, or legal blun-
are
Courts
to review
authorized
ders,
Son,
see George
&Watts
Inc. v.
arbitrator’s decision on the merits de
Co.,
Tiffany &
Cir.2001),
F.3d 577
spite allegations that the decision rests
deprive
and to
the parties of what they
on factual
misinterprets
errors or
bargained for when
chose
they
arbitration:
parties’ agreement.
Paperworkers v.
swift, inexpensive, and final decision. Ar-
Misco, Inc.,
29, 86,
U.S.
S.Ct.
can
bitration
be neither swift
inexpen-
nor
(1987).
364,
authority,’ the fact ‘a court is con he
vinced committed serious error does ” not suffice to overturn his decision.’
Eastern Corp. Associated Coal v. Mine
Workers, 57, 62, *16 (2000) Misco,
supra, at 108 S.Ct. when the strays from inter America, UNITED STATES pretation application agree Plaintiff-Appellee, ment and effectively “dispenses his own v. justice” brand of industrial that his deci THOMAS, Defendant-Appellant. Leon sion be unenforceable. Steelwork v. Enterprise ers Corp., & Car Wheel No. 00-3381. 593, 597, 1358, 80 S.Ct. United States of Appeals, Court (1960). L.Ed.2d 1424 When an arbitra Seventh Circuit. tor disputes resolves regarding ap plication of a and no dishonesty 12, Argued April 2001. alleged, “improvident, the arbitrator’s Decided Feb. silly, even does factfinding” provide a basis for a reviewing court to refuse Misco,
enforce the award. U.S.
39,
Major League Players Baseball Ass’n v.
Garvey, 532 U.S. (2001).
concede for argument the sake of
arbitrator Berman whopper of an made
error, the sort of Supreme thing