Equitable Resources, Inc. v. United Steel, Paper & Forestry, Rubber, Manufacturing, Energy, Allied Industrial & Service Workers International Union

EQUITABLE RESOURCES, INC.,

Plaintiff-Appellant, STEEL, PAPER AND FOR

UNITED RUBBER,

ESTRY, MANUFACTUR

ING, ENERGY, ALLIED INDUS

TRIAL AND SERVICE WORKERS UNION, AFL-

INTERNATIONAL 8-512,

CIO/CLC; Defendants- Local

Appellees.

No. 08-6444. Appeals,

United States Court of

Sixth Circuit.

Argued: March 2010. Sept.

Decided and Filed: Hammett,

ARGUED: J. Richard Baker LLP, Houston, Texas, for & McKenzie Kovalik, Daniel M. Appellant. bargaining agreement United with Ken- (the America, “CBA”). Pittsburgh, tucky Steelworkers West in- CBA Pennsylvania, Appellees. for ON BRIEF: cluded a successorship clause stating that Hammett, J. Richard Baker & McKenzie agreed “sale, West make LLP, Houston, Texas, Blandford, lease, transfer, Jaron P. assignment” op- of “the McGinnis, Kirkland, McBrayer, Leslie & erations covered Agreement” con- PLLC, Lexington, Kentucky, Appel- upon ditional the successor entity assum- Kovalik, lant. Daniel M. United ing Steel- the CBA. The district court dismissed America, Pittsburgh, Pennsyl- workers of the Union’s action after and the vania, Berry, Segal, Lindsay Adrienne A. agreed Union to arbitrate the successor- Janes, PLLC, Louisville, Kentucky, ship for issues under the Equitable CBA. Appellees. moved forward with its corporate restruc- and, turing plan, 1, 2008, July effective KENNEDY, MOORE, Before: and Kentucky West ceased to exist. SUTTON, Judges. Circuit Equitable, purporting represent to Ken- MOORE, J., delivered the opinion tucky interests, of the West’s appeared at the court, SUTTON, J., in which joined. 21, 2008, July arbitration. On the arbitra- KENNEDY, 554), (p. J. delivered a tor entered an award in favor of the Union separate concurring opinion. required Equitable to abide by the (the expired CBA until it in October 2008

OPINION “Award”). The arbitrator concluded as a MOORE, matter of contract interpretation KAREN NELSON Circuit Judge. restructuring triggered the CBA’s succes- sorship clause Equitable and reasoned that § In this case under 301 of the Labor could be liable under the clause for multi- Management Relations Act of 1947 reasons, ple including Equitable’s status as (“LMRA”), § 29 U.S.C. Re- entity Kentucky that assumed West’s sources, (“Equitable”) Inc. challenges the legal obligations after it ceased to exist district court’s an enforcing order arbitra- 1st, July Kentucky as ego, West’s alter tion award entered in favor of the United entity and as the Kentucky received Steel, Paper Rubber, Forestry, and Manu- operations July West’s after Equita- 1st. facturing, Energy, Allied Industrial and ble then filed the complaint instant Union, Service Workers International § 301 of LMRA modify to vacate or (col- and its Local 8-512 AEL-CIO/CLC Award, alleging multiple in defects “Union”). lectively, the In early Eq- Award. The Union counterclaimed for en- uitable announced plan “integrate” its to forcement of the Award and filed a cross- operations employees and of one of its summary judgment. motion for The dis- wholly subsidiaries, Kentucky owned West trict granted summary court in judgment Virginia Company, (“Kentucky Gas L.L.C. Union, favor enforcing the Award. West”) wholly into two other owned 'sub- operating sidiaries in Kentucky. Follow- appeal, Equitable argues On ing integration, announcement of the in district court erred in enforcing the Award June 2008 the Union filed suit the Unit- because the arbitrator exceeded his au- ed States District for the thority ordering Equitable, Court Eastern a non-party Kentucky CBA, District of compel Equitable to the to honor the CBA as the Kentucky West to arbitrate Kentucky successor- for West’s breach of the ship clause, issues under the successorship Union’s then-current which resulted in X the “Juris- alleged in the Award. 39. Article further dictates

multiple defects Arbitrator,” stating, “The highly [the] deferential standard diction Guided and au- jurisdiction shall have that inter review for arbitration awards thority only interpret, apply, or deter- out bargaining agreement a collective pret Resources, of this compliance provisions Inc. mine with the Michigan Family lined authority and will not have Employees agreement, Un International v. Service (6th Cir.) (en banc), ion, any provisions add to or detract or alter cert. denied, decision agreement. 168 this The arbitrator’s 551 U.S. (2007), parties.”- and binding will be final on both affirm the district L.Ed.2d we Id. at 40. enforcing order the Award. court’s early In announced that

I. FACTS AND PROCEDURE undertaking “corporate it was restruc- efficiency that would turing” purposes with The Union entered into the CBA op- move its “a Delaware eliminate West and West—defined as wholly liability subsidiary employees erations and to two company limited Resources, Equitable, Oc- owned non-union subsidiaries of Inc.”—effective 15, 16, Equitable Midstream Pro- 2008. and through tober October 44). (both (CBA (Answer), 1, of undergone at ductions which had Doc. 8 Ex. 1, changes January to successorship language operations prior The includes CBA 2008). Kentucky this plan, 1 of II Under West Section Article “RECOGNI- 1, July to exist would cease effective 2008. TION”: grievance Kentucky The filed a Union with agrees during if the Company The 7, 2008, on March then an West and Agreement, of this it life discontinues grievance May May amended 16. on On sells, leases, or as- operations, transfers 2008, 23, Equitable responded to the Un- signs operations the covered this ion, stating that grievance the was non- it shall Agreement, purchas- inform the The then filed suit in arbitrable. Union lessee, er, assignees or of the transferee § court the district 301 of the terms of Agreement exact this and shall LMRA, requesting injunc- a preliminary sale, lease, transfer, assign- make the or stay tion to the and restructuring compel ment conditional upon purchaser, the Kentucky arbitration with West so that the transferee, lessee, assignee, assuming Union would be able to Ken- arbitrate with obligations Agreement all the the un- tucky orWest without either expiration treating til affect- its date and party being argue able to that arbitration employees Bargaining ed Unit longer was no available under the CBA. with Agree- accordance the terms of this telephonic After the conference calls with Company provide ment. The to agrees court, parties agreed district the to settle with when the Union written notice arbitration, by submitting the to and case Agree- transaction and the complete the Union withdrew its suit. assumed. ment is 8, X Id. at 2. Article AND was July “GRIEVANCE Arbitration held on 2008. Award, question pre- ARBITRATION” dictates the manner for stated in the As “any resolving difference ... between sented to the arbitrator “Did the was: parties any Company [Kentucky or between one or more of the the col- violate West] employees Company relating to it re- agreement lective when meaning, application, par- or violation of to secure an from its fused assurance Resources, Inc.[,] at any provisions agreement.” company, Equitable this Id. ent signed would be honored after agree- that the Union current ment. Company’s assets were transferred to entity? If so what shall the a new (citation omitted). Id. The arbi- (Award 2). (Answer), Doc. 8 Ex. 5 be?” trator distinguished prior reviewed and ar- predecessor The arbitrator found bitrations between West and the II, to Article 1 that was language Section Union and concluded that none dictated following negotiations included 2000 the outcome here because none had dealt with a similar situation that unambiguous squarely face fell made “clear its II, within Article Section as a transfer of ... applies such wholesale [that it] the entire operations Kentucky West to of work” and that its face “[o]n transfer entity. another Id. at 12-18. applies to both external and internal Id. at 11. The transfers.” arbitrator con- supported ability cluded that “it was clear that insofar as arbitrate the after West concerned, Sons, this contract was ceased to exist prospect Wiley under John 543, Inc. v. very Livingston, 376 sort of internal transfer was U.S. 84 S.Ct. th[is] (1964), 11 L.Ed.2d 898 NLRB v. contemplated by the terms of II. Article Services, Burns Security International understanding The clear was that this was Inc., 406 U.S. 92 S.Ct. precedent a condition to this transfer and (1972), L.Ed.2d 61 and Howard Johnson v. agreed understood and HERE, Detroit Joint Executive Board this well.” as U.S. 41 L.Ed.2d 46 The arbitrator found that is of “[i]t some (1974). discussion, Id. at 20-25. In his significance [Kentucky that while isWest] the in part premised ability preamble referenced in the the ‘Compa- as Equitable to bind to the CBA on the theo ny’ ‘subsidiary it is also identified as a of ry that Equitable was the entity successor Resources, Equitable Inc.’ Id. at 12. agreed and had to be by bound the CBA The arbitrator found that during negotiations its it was clear —-“Here Equitable that directed and responsi was Equitable What was clear was that ble for merger [Kentucky the with West] representatives at negotiating sat the and that representatives its sat at the bar table, participated negotiations the gaining negotiated table and the successor- actively and in fact in reality were ship by very clause which pur its terms making ones most if not all of the deci- ports to Equitable bind as a condition regarding sions the substantive terms of precedent merger.” to the Id. agreement the labor in the bargaining (referring Equitable to “as the successor leading up agree- to the current labor West]”). employer [Kentucky to The arbi ment. trator Equitable also found that was Ken clear, What is also and this too was tucky ego West’s alter is determined —“it by not Company controverted at the that though even the two corporations are

hearing, that at purposes least for of legally separate, Equitable fact, inwas for negotiations, these Companies the two purposes negotiations of leading to the very though they acted much as were CBA and for this determination the alter Certainly one. as a factual determina- ego [Kentucky West] and was therefore tion, quite Equitable it was clekr that expressly by bound the terms of the suc agreed knew and to the terms of the II, cessorship clause found at Article sec agreement labor and was based on parties’ tion 1 of the agreement.” labor expression agreement that that “fairly Id. 29. The arbitrator found “argument employees covered under transparent” Equitable’s West] really agreement. did this is ‘parent’ company [sic] cannot bound and therefore be 34-35. wholly subsidiary agreements its owned Equitable filed the instant suit in the faith at the agreed good to 1, 2008, August seeking district court on to Id. at 35. table.” vacate the Award. The counter- Union ultimately concluded that The arbitrator claimed for enforcement and filed a motion summary judgment; for filed a Equitable II, ap- Article Section [of 1] The terms summary judgment. cross-motion for The transferee, any such as a subsid- ply to granted summary judgment court district frankly and it iary Equitable makes to the and affirmed the Award Union entity no difference what the assets are the reasons stated on the record and “[f]or merged sold to or with. The contract is provided those their [Union] hereby to as a condi- interpreted apply (Dist. briefs.” Doc. 25 at 1 Minute Ct. in- precedent tion to such transfer Order). Entry & Equitable timely appeals Equitable one another subsid- cluding summary-judg- from the district court’s iary. ment order.1 only logical reading language II. ANALYSIS II if of Article section is that even the Equitable claims the Award is de- parent require made the decision to First, four assets, separate fective for reasons. [Kentucky to transfer West] it[s] asserts the arbitrator acted either inside or outside of the authority by imposing outside of his companies, prec- the conditions stable Second, non-parties. CBA on a edent such transfer would be for necessarily asserts that the arbitrator re- [Kentucky to assure that West] representation dispute solved not terms of the were hon- Third, Equita- .... committed arbitration. again ored This is a matter of con- argues that tract ble the the Award requiring and clear terms such dictates public policy imple- will violate prior assurance the transfer. finally, mentation. And con- Accordingly, for the reasons stated tends that the arbitrator “dispensed his herein, it plain is determined justice.” own brand of industrial willWe unambiguous agree- and terms of the address, reject, Equitable’s each of II required ment at Article section 1 in turn. contentions Equitable, employer as the successor West], [Kentucky to honor all of the A. Standard of Review terms and conditions of the agree- [Kentucky ment between West] and the “This reviews a district [c]ourt expiration Union herein until its on grant summary judgment Oc- court’s in a 15, novo,” tober 2008 for the former [Kentucky dispute apply- labor arbitration de order, subsequent 1. appeal The district court entered a or- filed its notice of (The remanding summary-judgment der the matter to the arbitrator for from the order. expiration pur- propriety clarification of the CBA’s date remand order is not before us 59(e) timely appeal.) jurisdiction suant to the Union’s Rule motion. We have to review summary-judgment then Corp. district court ruled that its sum- order. M & C Co., KG, 772, mary-judgment appeal- order was a final and Emin Behr GmbH 326 F.3d (6th Cir.2003). displaced by able not order this later remand 779-81

545 of review that ing answering questions the same standard we three related to summary judgment in other cases. employ “procedural aberration”: Corp. v. Int’l Totes Isotoner Chem. Work Did arbitrator act “outside his au- 664C, Local ers Union Council/UFCW thority” by resolving a dispute not (6th Cir.2008). However, 405, F.3d we committed to arbitration? Did the ar- great afford deference to the arbitrator’s fraud, bitrator commit have a conflict decision: of interest or dishonestly otherwise act In from an appeal an arbitrator’s deci- issuing the award? And in resolving interpreting sion a collective any legal disputes or factual in the agreement, our review is confined to case, was the arbitrator “arguably con- ascertaining whether struing applying or the contract”? so, In doing apply highly erred. we Id. at 753. contemplated “[W]here Michigan deferential standard of Fami- that the arbitrator will determine remedies ly and uphold Resources the arbitrator’s finds, for contract violations that he courts long “arguably decision so as she was authority have no to disagree with his construing applying the contract” and judgment Misco, honest in that respect.” disqualified by was not fraud or a con- 38, 108 U.S. S.Ct. 364. flict of interest. Co., Goodyear Nance v. Tire & Rubber 527 B. The Arbitrator Did Not Exceed His (6th Cir.2008) (quoting F.3d Mich. Authority by Creating Parties to the Res., Family Inc. v. Employees Serv. Int’l CBA (6th Cir.) (en Union, “An arbitrator does not exceed banc), denied, cert. 551 U.S. authority every time he makes an in (2007)), S.Ct. 168 L.Ed.2d 704 cert. error; terpretive he authority exceeds that — denied, U.S. -, only when the bargaining agree (2009). L.Ed.2d 586 We must affirm the ment not does commit the to arbi arbitrator’s decision even if we “ believe Res., Family tration.” Mich. 475 F.3d at “serious,” ‘the arbitrator “improvi made “ approach ‘severely This curtail[s] “silly” dent” or in resolving errors ” ” the scope authority concept’ such that dispute,’ merits of the which “allow[s us] an award should not be vacated “an unless ‘only to vacate egregious the most [arbi question arbitrator reaches a not commit (quoting tral] awards.’ Id. at 552 Mich. Isotoner, ted to him parties.” Totes 753) (second 475 F.3d at 532 F.3d at (quoting Truck Drivers alteration in original). disputes For re Local No. Sys., Allied Waste 512 quired to 164 be arbitrated under a collective (6th Cir.2008) (internal F.3d 217 quo bargaining agreement, underlying “the omitted)). tation Equitable marks does ‘question interpretation of contract [is] for ” argue not that the arbitrator exceeded his the arbitrator.’ Mich. 475 in authority finding that Kentucky West (quoting F.3d at 750 United Steelworkers CBA, Co., breached the 564, 568, and indeed Mfg. v. Am. conceded U.S. 80 S.Ct. (1960)). this at the summary judgment hearing. L.Ed.2d 1403 in Keeping “ (Summ. 14-15). very Instead, Doc. 27 J. Tr. at mind our ‘limited role’ when Equitable that losing party judicial argues to an arbitration the arbitrator ex seeks intervention,’ authority at ceeded his in (quoting ordering Equitable id. United Misco, Inc., Paperworkers remedy Int’l Union v. honor the CBA as the for Ken 29, 36, tucky Equitable U.S. 98 L.Ed.2d West’s breach because (1987)), scope our of review is confined not a party to the CBA. Id. at 61. The rejected argument, ages period July con- for the time from district court this through October 2008. wrong if cluding that determin- “[e]ven contract, ing parties the terms or to the 3). (Compl. Doc. 1 The Union stated in legal that is a error” that the court could summary judgment its motion for that the court not fix. Id. at 89. The district effectively parties ques- submitted four found that the factual further arbitrator’s tions to the arbitrator: finding Equitable agreed step into (1) Whether the was arbitrable? purposes the shoes of West for (2) or Whether the its successor- [CBA] any remedy of the arbitration and was provisions ship parent compa- bound finding of fact supported,2 and ny, Equitable its other non-union and/or subsidiaries, part subsidiary was made as the arbitrator’s con- as well as its (3) interpretation. [Kentucky tract Id. at 89-92. The West]? [W]hether by was violated the transaction at Equitable put [CBA] district court concluded that (4) Equitable issue? and [I]f [Ken- it question of whether was bound tucky West] had violated their obli- “clearly, squarely the CBA before the arbi- gations agreement, what rejected [Equitable’s argu- trator and he remedy should the be? Id. at 92. ment].” (Union Doc. 14 Summ. J. Mot. at 4-5 question present- The Award states the (citations omitted)). These re- statements ed to the arbitrator as: “Did the Company flect the party issue statements each sub- [Kentucky violate the bar- West] mitted to pre-hear- the arbitrator their gaining agreement when it refused to se- ing briefs. parent cure an assurance from its compa- We conclude the arbitrator’s deter- Resources, Ine.[,] ny, Equitable mination that could held lia- be agreement would be honored after the ble under the terms of the CBA was a Company’s assets were transferred to a question of contract that the entity? new If what so shall the parties submitted to the arbitrator. The (Award 2). (Answer), be?” Doc. 8 Ex. 5 errors that alleges the arbitra- complaint, Equitable In its stated that tor made are errors of law based find- primary issues at the arbitration ings of fact—that the arbitrator could not (1) were: whether the core issues of have if correctly entered the Award he had representation raised the Union’s interpreted the contract under precedent. (2) grievance unarbitrable; render However, repeatedly the arbitrator stated whether West breached Arti- that his conclusions grounded were II cle Section 1 of the ... See, CBA when interpretation of e.g., the contract. Equitable imposed (Award 26) a corporate-wide (Answer), re- Doc. 8 Ex. 5 (3) found, (“[T]his structuring; and if a breach is matter is one which remains a any monetary whether there are dam- matter of contract: Equitable agree did court, contractual, subsidiary, Before the district main- former because Kentucky entity tained that West was the that any legal obligations Kentucky that West had arbitrating Equi- was with the Union because bargaining agreement, the representatives table had sent on behalf of standing was in the shoes of Ken- West, Kentucky which ceased to exist as [sic], tucky purposes West for that but it was legal entity July Kentucky after so that expanding not the collective obligation” West could its as the "fulfilin agreement anyone to cover other than Ken- (Summ. party to the CBA. Doc. 27 J. Tr. at West.”). tucky 4-5) ("Equitable was there on behalf of its (“It by of existing significant be bound the terms the is that in none of the agreement labor between the Union and prior complete awards was the and total West].”). [Kentucky The Award all “has loss of the unit involved.... Here the hallmarks of interpretation[;] the re- [h]e question is whether the terms of the to, quotes analyzes perti- fers from and the by must be honored the succes- provisions agreement, nent and entity precondition sor as a of the sale. say point anything indicating no does he herein, As discussed there is no limitation doing anything that he was other than entity whether the successor is internal trying good-faith interpretation to reach a external;] the integration cannot occur Family Res., of the contract.” Mich. 475 without provisions the II being Article F.3d at 754. The arbitrator reasoned that triggered.”); id. at 30-31. Distinguishing II, Equitable could be liable under Article length transaction,” “a true arms the arbi- reasons, multiple Section 1 for including as specifically trator found that entity that Kentucky assumed West’s agreed “knew and to the terms of the obligations it legal after ceased to exist [CBA],” that the contract contemplated 1st, July Kentucky ego, as West’s alter type issue, of internal transfer at and entity and as the that received clear understanding “[t]he was that operations July after 1st. West’s Con- II, Section [Article was a condition prec- 1] contention, trary Equitable’s the arbi- edent to this transfer and that Equitable interpretation of trator’s the CBA did not agreed understood and to this as well.” actually Equitable or “par- make others a rejected 19. The arbitrator Equita- CBA; ty” to the the arbitrator determined ble’s argument that representational issues of the CBA that the precluded arbitrability, finding support un- II, parties intended Article Section to be der Supreme precedents Court to arbitrate triggered by the instant transaction and after Kentucky West ceased to West, Equitable, through Kentucky exist. Id. at 20-25. by was bound these terms. We acknowledge that the arbitrator was First, interpreted the arbitrator Article by influenced the facts and circumstances II, clearly Section to manifest the intent here —“that through successor its ac- Union, West, parties —the express tions and by statements made its Equitable, and as a participant the CBA authorized representatives at bargain- negotiations prior negotiations and —that ing agree table in fact did by to b[e] bound any internal or external transfer of Ken- the terms of the predecessor’s agree- tucky operations require West’s would ment and did fact respon- assume those Kentucky West to compliance secure with But, sibilities.” Id. at 23-24. as the II, Article Section 1 as a prece- condition concluded, arbitrator dent, regardless of who or what was the this case is not governed necessarily by entity. (Answer), “successor” Doc. 8 Ex. 5 (Award 11-12). operation of by law or NLRB precedent, this interpreta- With tion, although those arbitrator determined that considerations are rele- Ken- vant, tucky governed West violated the the terms provision when Equitable’s restructuring agreed parties. contract place. took The one fact through arbitrator then had to determine who was comes this case lightening liable for this violation. The like a bolt of is that the [sic] addressed distinguished pri- parties negotiated very and all of the for this scenario or arbitration awards NLRB rulings agreed, with representa- that Equitable appeal. cites on Id. at 12- part tives a agreement, that[] prior agreement honored. as the successor

the terms of the CBA would be on the “clear contractual terms” and based entire case is The bottom line on this negotiations. “the facts” of the Id. at 32. bargaining agreement that the collective Although Equitable is correct that the ar- [Kentucky- merger the between survived from the point bitrator did to evidence Equitable par- because the and West] negotiations, prefaced the arbitrator it ties, including agreed that Equitable, his reference to evidence with lan- this would. guage showing that he understood its lim- (first added). Further, emphasis Id. at 25 value, evidentiary stating ited found that the arbitrator in- merely supported findings his earlier essential facts this case demon- the Id. at terpreting the CBA.3 33-34. very a clear intent that strate Award, From our review of the we con- [Kentucky parent company as the “arguably clude that the arbitrator was place in the first and the surviv- West] or construing applying contract” ing company [Kentucky for all the West] required manner he deemed to resolve the operations employees and all of its in- him. parties placed before See through operation of the suc- tended (inter- Mich. 475 F.3d at 753 cessorship clause to be bound it[s] omitted). quotation Any nal legal marks [Kentucky West] terms for former may or factual errors the arbitrator it a matter employees. This does make ego” committed have related “alter sta- of contractual and thus interpretation terminology4 tus “successor” were re- authority appears to invoke Courts’ lated to his contract and to order arbitration under the contract. application attempts and did not exceed his finding at 27. Even with his authority. ‘an arbitrator “[W]hen resolves parent was liable as the and disputes regarding application of a successor, legal proceeded contract, the arbitrator dishonesty alleged, and no is express to find that had both an improvident, silly, arbitrator’s even fact- implied obligation finding provide and to honor the terms does not a a basis for ” policies.' 3. We note that with the effectuate federal is consistent labor Yolton v. recognition non-signa Co., 587, 571, Second Circuit's that a Pipeline El Paso Tenn. 435 F.3d tory may to an to arbitrate be (6th Cir.) (quoting 586-89 NLRB v. Fullerton signatory bound an arbitral award if the Ltd., Inc., 331, Storage & 910 F.2d Transfer “ can at least one of the five theo 'establish (6th 1990)) (second original), Cir. alteration in Thomson-CSF[, ries described in S.A. v. Amer denied, 1019, rt. U.S. ce Association, ican Arbitration 64 F.3d (2006). 166 L.Ed.2d 410 ''To determine (2d Cir.1995)]:’ T) incorporation by refer situation, ego alter status in this courts ask ence; 2) 3) 4) assumption; agency; veil-pierc enterprises 'whether the two have substantial ” 5) ing/alter ego; estoppel.' and Local Un business, management, ly purpose, identical ion No. Sheet Metal Workers' Int’l Ass'n v. customers, operation, equipment, supervision Inc., (2d Sys., Custom Air 357 F.3d ownership.' (quoting Id. at 587 Fuller Cir.2004) (quoting Lynch Manag Merrill Inv. Ltd., 336). Storage ton 910 F.2d at Transfer 125, 131, (2d Optibase, ers v. Yolton, In we noted that “even when reor Cir.2003) (internal quotation marks and alter reasons, ganization supported by legitimate omitted)) (vacating remanding ation employer may prevented avoiding be from non-sig threshold determination of whether 14; prior obligations.” its Id. at 587 n. natory ego). was alter Ready Sup also v. Cent. Mix see Southward S. 4. Even if we could review the arbitrator's (6th 1993) ply Corp., 7 F.3d Cir. conclusion, legal we would do so under the (discussing regarding ego cases alter and suc " relaxed, exacting' application 'more less cessorship). ego the alter [used] ‘[i]n doctrine order

549 to reviewing (unpublished opinion) (upholding court to refuse enforce the arbitra- (quoting Major at 752 making award.’ tion award because the contested Players Garvey, Ass’n v. League Baseball determination was “a way reasonable to 509, 1724, 504, 532 U.S. determine whether that party violating is (internal (2001) quotation L.Ed.2d 740 that clause” and “arguably construing” omitted)). contract); marks Peterbilt Motors Co. v. Union, 434, Fed.Appx. UAW Int’l considering the conces Without Cir.2007) (6th (unpublished opin- has us ac urged sions that the Union ion). The Award represents the arbitra- Equitable’s representation cept regarding legal findings tor’s and factual under the West before the district court CBA—“an may only arbitrator’s award be arbitrator, and the we conclude deemed to have not drawn its essence scope did not exceed the of his from the bargaining agreement in authority determining Equita whether express when conflicts with terms of the ble was liable for West’s breach agreement, imposes additional require- once he determined that a CBA expressly ments that are not provided in breach of the CBA did occur. a “[W]hen agreement, rationally cannot be de- contract is scrutinized for evidence of an rived from the agreement.” terms of the a particular intention to arbitrate kind of Ass’n, (internal Int’l 155 F.3d at 771 quota- requires, dispute, policy national omitted). Any tion marks ambiguity in reason, that an within the collective agreement “per- dispute covers the asserted be favored.” mitted, required, indeed the arbitrator to Sons, Wiley Livingston, Inc. v. John engage in construction agreement, of the 4, 376 U.S. 550 n. S.Ct. which is all we are asked to determine.” (1964) (internal quotation L.Ed.2d 898 Res., Family Mich. 475 F.3d at 755. Even omitted); (finding marks id. at 554 if we concluded he wrong “[t]hat chose the specific arbitration can issues raise a path justifying the award” that would question merg broader of the effect of a give “not aus warrant to vacate it.” Id. er). Further, extraordinary defer “[t]he Therefore we conclude that the arbitrator given ence an arbitrator’s ultimate deci did not scope authority exceed the of his applies sion on the merits equally to an interpreting way the CBA arbitrator’s threshold decision that allowed to be found liable parties particular have indeed submitted a breach. issue for arbitration.” Int’l Ass’n Ma Aerospace chinists & Workers Tenn. (6th Auth., C. The Arbitrator Did Not

Valley Exceed His Cir. 1998) (internal Authority omitted). Representa- to Resolve quotation marks Questions tional

Because it is not “clear” that scope the arbitrator exceeded the of the Although rejected the arbitrator issue submitted in determining Equitable’s argument whether that representation breach, could precluded be liable for the al arbitrability, Equitable issues we cannot overturn the Award on necessarily asserts that the arbitrator had basis. Id. This is not one that is representational decide issues to create without basis See Mich. the specific-performance remedy, CBA. and that 753; representation 475 F.3d at Dobson issues are of an ar outside Indus., authority Inc. v. Iron Workers Local Union bitrator’s and thus were not (6th Cir.2007) Fed.Appx. scope No. within the presented. issue 550 within the ques- representation without issue arose con-

“Although the federal courts in of presumption interpretation, in a favor tract we concluded in Dob- indulge tion arbitration, arbitrator, determining in son that the arbitrator’s decision “drew its princi- arbitrability, and, is constrained light essence from the contract” in of may forced to ple party that a not be a broad arbitration clause similar to the not, by that it any dispute arbitrate has here, one in the CBA the issue could be contract, obligated itself to arbitrate.” decided in arbitration. Id. at 46. The Co., Fed.Appx. at 436 Peterbilt Motors 219 reasoning applies same here. As the dis- at 475 F.3d (citing Mich. found, only trict court the arbitrator or- 750-51; v. Mead United Steelworkers CBA, Equitable dered to honor Cir.1994)). (6th Corp., F.3d company figure for the out in that “Cat’s con- The arbitrator is not “free to invent legally” how to do it run- scenario without provisions support finding tract that will a majority unit ning appro- afoul of status or arbitrability.” Id. at 437. (Summ. priateness issues. Doc. 27 J. Tr. 55).

The district court found that the arbitra treat legal tor made a decision to the issue Moreover, that an arbitrator Equitable was bound as a suc whether may represen have “implicitly” decided a interpretation a issue cessor as contract necessarily tational issue does not mean representational and not as a issue under that he authority exceeded his because (Summ. law. Doc. 27 J. Tr. at 92- labor representational may collateral issues re 93). Indeed, repeatedly the arbitrator juris main outside the NLRB’s exclusive dealing question stated that he was with a dispute ‘primarily diction. “When a of contract matter is —“this § § representational’ under 7 or 8 of the a one which remains matter of contract: Act, National Labor ‘simply Relations re agree did to be bound ferring to the claim as a “breach of con terms of the existing be purposes tract” insufficient for the [is] tween the and [Kentucky Union West].” § jurisdiction,’ 301 federal courts’ but (Award 26). (Answer), Doc. 8 Ex. 5 We primarily interpreta of contract ‘matter[s] agree with the arbitrator’s conclusion that tion, potentially implicate] repre whi[ch] necessarily he did not have decide the issues,’ sentational remain within the fed representation in issues raised § jurisdiction.” eral courts’ Int’l Bhd. interpret impose order to the CBA and a Workers, Trafftech, Elec. Local 71 v. imposed because the arbitrator Inc., (6th Cir.2006) 461 F.3d specific performance as the Allied-Industrial, (quoting Paper, Chem. Contrary stand-in for West. Energy Workers Int’l Union Air contention, Equitable’s unpublished our Chems., Inc., 667, 672, Prods. & Industrial, opinion in Dobson Inc. v. Iron (6th Cir.2002)) (alterations original). in Workers Local Union No. 25 does not types There are “two of situations in which require opposite conclusion. In con dispute primarily will Dobson, rep be treated as struing the contract the arbi resentational: where the al Board has trator determined that it must also deter ready jurisdiction exercised over a matter ego mine whether an alter relationship existed, considering already and is either it or has company which the asserted matter, raised an decided the or where the issue is impermissible representation is representation sue that the an initial decision against arbitrator decided (internal Indus., citations, company. Fed.Appx. quota Dobson area.” Id. at 695 omitted). However, marks, potential 44-46. because the tion and alteration As in (§ NLRA). § case “the 9 of the instant Traffiech, “narrow” arbitfra representational public policy need not resolve the exception to]r makes an arbitra compa [the to determine whether tion contrary award unenforceable if it is “ bargaining violated its collective ny] defined,’ has to an ‘explicit,’ ‘well and ‘domi ” “ The agreement.” 695-96. Union nant’ public policy is ‘ascertained it question may repre not whether does by reference legal prece to the laws and the of the employees sent non-union other general dents and not from considerations ” subsidiaries, and it not ask the arbitra did of supposed public interests.’ E. Associ possible decide whether this was or tor to Workers, Corp. ated Coal v. United Mine require bargain with to to the 17, 57, 62-63, 462, Dist. 531 U.S. ongoing for representation.5 Union The (2000) 148 L.Ed.2d 354 (quoting W.R. issue was whether could be lia 759, Grace & Local Co. v. Union Int’l Kentucky for violation ble West’s of the Rubber, Cork, Union United Linoleum of existing CBA and not future rep whether Workers, 757, & 766, Plastic 461 U.S. 103 possible. was See Air Prods. resentation (1983) 2177, (internal S.Ct. 76 L.Ed.2d 298 Chems., 675-76, 677-78; & 300 F.3d at see omitted)). quotation question marks The Sons, 376 Wiley also John U.S. at 551 & is whether the actual arbitration award— 5, (holding n. 84 909 that a S.Ct. union the the interpretation enforcement of of in majority without the newly status the public policy, CBA—violates not company represent merged could still em whether the breach of the in ployees agree arbitration former potential the actions could be taken ment). The fact that po sees in response to award public the violate representation remedy tential issues Id.; policy. County Shelby Health Care preclude remedy, not and Equita does State, Corp. v. Am. County Fed. & Mun. may present ble still such issues to the 1733, Employees, 1091, Local 967 F.2d 694, 461 Trafftech, NLRB. See F.3d at (6th Cir.1992); 1096 see also Columbia Ohio, Union, Gas Inc. v. Util. Workers (6th Cir.2009) (un- 329 FedAppx. Therefore conclude that we published opinion). did not the scope exceed of his We “tak[e] the facts authority to representational decide a as found is the arbitrator” in “deter- sue in this case minfing] because arbitrator’s interpre- whether the arbitrator’s successor decision in fur permissible was tation of jeopardizes the contract a well- therance of the CBA. defined public policy.” and dominant Int’l Union, Corp., UAW v. Dana Remedy D. The Award’s Does Not Vio- (6th (internal Cir.2002) 558 quotation Policy late Public omitted). marks Equitable next contends that the above, we stated specific-performance ordered in Award As “ policy clearly Award essence public by requir violates ‘draws its from the con ing recognition minority tract.’ bargaining Mich. F.3d Misco, a non-party,

unit violation 752 (quoting U.S. 364). policy public in the National Labor Rela S.Ct. The arbitrator found that the (“NLRA”), Act specifically Kentucky tions Union and U.S.C. West included suc- argument, beyond scope 5. At oral confirmed future the Union of the CBAat issue seeking not it was to assert or determine its litigation. rights represent employees other in the grant not The Award does policy). would lie in the CBA that language cessorship representation, to condition to future any rights West Union require one at issue here as the status, rights transaction such at or other such bargaining the CBA. continuation of on the Indeed, might be the NLRA. tendant as the requires Equitable, merely Award policy not to enforce against public West, honor this stand-in clause.7 See NLRB successorship Eq- breach. liable for its mandate and be Servs., Inc., 406 U.S. Burns Int’l Sec. II, Article Sec- argue that uitable does not (1972) 282-83, L.Ed.2d 61 S.Ct. as a violation 1 is unenforceable tion (“ essence of ‘[T]he way legal there is no or that public policy, be free to decide party that either shall or the award. See fulfill its mandate to it are satisfac made to proposals whether 13, Co., n. 461 U.S. at 769 Grace & W.R. 74-573, at 12 S.Rep. No. tory.’ (quoting specific that (recognizing 2177 103 S.Ct. (“ (1935))); Act is theory ‘The of the id. bargaining of performance with negotiation free for opportunity that public policy violate term would agreement employees of representatives accredited federal discrimina- in violation of because may peace industrial and likely promote to laws, arbitration award upholding tion but adjustments agree bring about contract). We of damages of breach not the Act in itself does ments which court,6 conclude, that the as did the district ” (quoting NLRB v. attempt compel.’ to acting well within arbitrator “was 1, Laughlin 301 U.S. Corp., & Steel Jones Shelby County See bounds” of CBA. (1937))); 615, 45, see 57 S.Ct. 81 L.Ed. 893 Care, (finding 967 F.2d at 1096-97 Health Co., at 461 U.S. also W.R. Grace & company’s of that followed mandate award (recognizing “the federal pub- not violate S.Ct. with union did agreement 278-85, the arbi- argument 92 S.Ct. here rejected U.S. 6. The district court agreed, prior Equi- to arbi- Equitable had on the fact that because tration, trator based the Award step it would into pur- that acting Kentucky West for table was as po- purposes of the Union’s West's shoes for remedy, not poses the arbitration and the (Summ. remedy. J. Tr. at 94- tential Doc. 27 merely employer. Eisenmann the new See 95). summary judgment hearing, During the Corp. Metal WorkersInt’l Ass'n Local v. Sheet disagreed Equitable's court with the district Cir.2003) (6th No. remedy effectively argument ordered that the (holding award that enforced that arbitration labor Equitable to act in violation of federal company's agreement with union did terms of unit, recognize minority to a law extending agree- public policy by not violate only finding had ordered that the arbitrator workers); see also John ment to non-union "[ijt’s'for the the CBA and to honor Sons, Wiley U.S. at 551 & n. company figure out in that scenario how to to majority (holding a without union legally.” The district court do it Id. 55. newly merged company could status in interpreted the con- found that the arbitrator employees under represent in arbitration still whether a breach occurred tract to determine though “[pjroblems even former terms, remedy imposed a its and then might by an award which be created arbitral specific performance Equitable as the on company] give special required new [the agreed entity who had to stand in successor [company's] employ- to the former treatment 32-35, West. the shoes rights found to have accrued to ees because of 52-53, 58. contract,” because them under the [union] Although Equitable argues that it would be hypothetical problems could be avoided such employ- public policy require a new against procedures "within the flexible a solution predecessor's collective bar- er to follow a arbitration”). Equitable has not cited requisite majority gaining agreement if the position binding precedent support its lost, appropriateness even and unit are status this issue. voluntarily employer assumed the if the new Servs., agreement, see Burns Int’l Sec. added). parties to a policy (emphasis Here, collective Id. at 756 bargaining agreement repeatedly must have reason- stated that he was that their contract dealing question able assurance will be with a of contract inter- honored”). circumstances, pretation, Under the we and the arbitrator’s remedy is agree cannot the Award’s vio- related to his of the CBA public policy. lates necessarily flows finding from his requirement to honor the CBA was a “Dispens[e] E. The Arbitrator Did Not precedent condition to the transaction. Brand His Own of Industrial Jus- Because the transaction had occurred tice” without the precedent, condition the arbi- trator specific performance ordered many

For of the same reasons place CBA to position Union above, agree stated we cannot with Equi II, would have been had Article Section table’s contention that the arbitrator’s prior been honored to the transaction. decision is tainted a “results-driven” approach that the Award makes unen We are also unpersuaded by “ ‘[0]nly forceable. when Equitable’s argument that the Award dis strays from applica pensed the arbitrator’s own brand of in tion,’ ... does he enter the forbidden justice dustrial by ignoring prece arbitral ‘effectively dispensing] world of his own dent. We decline employ the strict justice,’ of industrial making brand application judicata of arbitral res Eq ” arbitrator’s decision ‘unenforceable.’ urges uitable because precedent our in Mich. 475 F.3d at 752 structs “that absent a provision contractual (quoting Garvey, 532 U.S. at contrary, to the the preclusive effect of an (internal S.Ct. 1724 quotation marks earlier arbitration award is to be deter omitted)) (alterations original). by Dana, mined the arbitrator.” danger imposing justice” “industrial at 557. The arbitrator here followed our may arise if “the arbitrator’s decision on suggestion matter, practical “[a]s ... the merits was so untethered from the take into prior consideration arbitration agreement that it casts doubt on whether decisions involving provision the same he was engaged interpretation.” Id. bargaining agreement.” at 754. long So as the current arbitrator’s inter pretation draws its essence from the con above,

As stated we conclude that the tract, may the arbitrator disagree with a supported by arbitrator’s decision is prior Here, arbitral decision. Id. the arbi interpretation of the contract. trator prior discussed each arbitral deci deciphering That of this contract length sion at distinguished both the required implications and inferences suf- issues and factual scenarios involved from fices itself to show that the arbitrator Thus, the current case. we reject also was permissibly engaged interpreta- Equitable’s argument final for vacating the tion .... It was the “arbitrator’s con- Award. struction,” layers not three of federal review, judicial parties “bar- III. CONCLUSION gained for, delegation and that of deci- sion-making authority must be respected We conclude the district court did even when time and further review granting show not err in summary judgment to parties in the end have bar- enforcing here, Union and the Award gained for nothing more than error. in light great deference afforded to made arbitrators. For determinations reasons, AFFIRM we foregoing court.

judgment of the district KENNEDY, Circuit

CORNELIA G. concurring.

Judge, I majority opinion.

I concur with the to note that we are not separately

write equitable

deciding ongoing that there are

obligations Equitable. RENEWAL

CLEVELAND HOUSING

PROJECT, Plaintiff-Appellee, COMPANY; BANK TRUST

DEUTSCHE

Deutsche Bank National Trust Com Fargo

pany; Deutsche Bank National Company; Deutsche Bank Trust

Trust

Company Americas, fka Bankers Company, Defendants-Appel

Trust

lants,

City Cleveland, Defendant. 09-3571,

Nos. 09-3648. Appeals,

United States Court of

Sixth Circuit.

Argued: April 2010. Sept.

Decided and Filed:

Case Details

Case Name: Equitable Resources, Inc. v. United Steel, Paper & Forestry, Rubber, Manufacturing, Energy, Allied Industrial & Service Workers International Union

Court Name: Court of Appeals for the Sixth Circuit

Date Published: Sep 16, 2010

Citation: 621 F.3d 538

Docket Number: 08-6444

Court Abbreviation: 6th Cir.