Opinion
Civil Action No. 4:20-cv-00797-P
2021-07-06
BALL METAL BEVERAGE CONTAINER CORP., Plaintiff, v. UNITED AUTOMOBILE, AEROSPACE AND AGRICULTURAL IMPLEMENT WORKERS OF AMERICA, LOCAL 129, Defendant.
John F. McCarthy, Jr, Barbi McClennen Lorenz, Littler Mendelson PC, Dallas, TX, for Plaintiff. Jamie King Harrison, Rod Tanner, Tanner and Associates PC, Fort Worth, TX, for Defendant.
John F. McCarthy, Jr, Barbi McClennen Lorenz, Littler Mendelson PC, Dallas, TX, for Plaintiff.
Jamie King Harrison, Rod Tanner, Tanner and Associates PC, Fort Worth, TX, for Defendant.
ORDER
Mark T. Pittman, UNITED STATES DISTRICT JUDGE Before the Court are the parties’ cross Motions for Summary Judgment. ECF Nos. 15, 18. Having reviewed the Motions, the Responses (ECF Nos. 23, 24), the record, and appliable law, the Court finds that Ball Metal Beverage Container Corporation's ("Company" or "Ball Metal") Motion should be and hereby is GRANTED as to vacatur and DENIED as to attorneys’ fees. Consequently, United Automobile, Aerospace, and Agricultural Workers of America, Local 129's ("Local 129" or "Union") Motion should be and hereby is DENIED .
BACKGROUND
A. Factual Background
Ball Metal produces aluminum cans at its plant in Fort Worth, Texas, and Local 129 acts as collective bargaining agent for Ball Metal's production and maintenance employees. Pl.’s App. at 2, 11. Ball Metal and the Union are parties to a Collective Bargaining Agreement ("CBA") governing the terms and conditions of employment for the Bargaining Union, the relevant agreement covering the period between January 16, 2017 through January 12, 2020. Id. at 9.
Several provisions of this agreement are key to this dispute. First , Article Four contains a standard management rights provision reading:
Except as otherwise expressly limited by this Agreement, all functions of management not otherwise relinquished or limited shall remain vested exclusively in the Company , including, but not limited to ... hire, discipline, or discharge employees for just cause ; ... provided that these rights shall not be exercised in any manner which would constitute a breach of any other Article of this Agreement.
Def.’s App. at 15 (emphasis added). Second , Article Five describes grievance procedures, including the parties’ arbitration procedures. If the parties are unable to resolve a dispute between themselves, the Union may submit it to final and binding arbitration. Article Five states in pertinent part:
The decision of the arbitrator shall be final and binding on all parties. The jurisdiction of the arbitrator shall be limited to interpreting or determining compliance with the terms of this agreement. The arbitrator shall have no power to add to or subtract from, to disregard or modify any part or all of the terms of this Agreement.
Id. at 17 (emphasis added). Third , Article Six provides that "[t]he right of the Company to discipline or discharge employees for good cause including violation of this Agreement or Company rules is hereby acknowledged." Id. at 18.
One of Ball Metal's Union member employees was Shawn Allen, who worked as a Chemical Process Manager and served as an elected Shop Chairman for the Union. Id. at 47, 55–56. Allen was accused of berating and harassing a coworker after learning that the coworker left the Union. See Pl.’s App. at 3. Specifically, he was accused of yelling at the coworker, intimidating him, and calling him a "fucking scab." Id. Allen had been investigated for similar behavior several times over in the past. Id. at 6–7. After an investigation by Ball Metal substantiated the allegations of harassment against Allen, Ball Metal terminated Allen for violating the Company's Plant Rules and Policies, and the Company's Policy Against Discrimination, Harassment, and Retaliation. Id. at 3. The Union filed a grievance over the termination which proceeded to arbitration on March 3, 2020. The sole issue before the Arbitrator was whether the Company had just cause to terminate Allen, and if not, what is the appropriate remedy? See id. at 2.
B. Procedural History
On July 6, 2020, the Arbitrator found that under the language of the CBA, "the Company had proper cause to discipline the Grievant for violation of the Company's Discrimination, Harassment, and Retaliation Policy and Plant Rules No. 21 which states ‘Harassment of others including those of sexual nature, racial nature, a religious nature of any activity that can be construed as harassment.’ " See id. at 7. The Arbitrator also concluded that "[t]he Grievant's conduct created the violations and he alone must bear the repercussions. Besides the CBA and Company Policy, the Grievant's conduct violated the Preamble of the CBA where as it states in part that ‘[i]t is the intent and purpose of the Parties to this Agreement to promote a cooperative and progressive industrial and economic relationship between the Company and its employees.’ " Id.
The Arbitrator concluded by explicitly finding that the Company terminated Allen for just cause, but then stated that "while the Company's decision to terminate the Grievant was for just cause , the Arbitrator must give some recognition to his thirteen (13) years of service." Id. (emphasis added). In the Award, the Arbitrator modified the Company's termination decision in the following way:
1. [Allen's] termination shall be change[d] to a suspension from the date of his discharge until the date he returns.
2. [Allen] will be offered immediate reinstatement without back pay or benefits.
3. [Allen] will retain his seniority.
Id. at 8. Notably, the CBA is devoid of any provision permitting the consideration of tenure in termination decisions, nor did the Arbitrator provide any rationale whatsoever for considering Allen's tenure in ordering his reinstatement despite making an explicit finding of just cause for termination.
Ball Metal filed suit under Labor Management Relations Act Section 301 seeking vacatur of the Arbitrator's award alongside attorneys’ fees and costs. Comp. The Union counterclaimed for the award's enforcement and attorneys’ fees. The parties filed cross motions for summary judgment (ECF Nos. 15, 18) and responses (ECF Nos. 23, 24). The Motions are now ripe for consideration.
LEGAL STANDARDS
A. Summary Judgment
Summary judgment is appropriate where the movant demonstrates "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." FED. R. CIV. P. 56(a). A genuine dispute of material fact exists "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) ; see also Bazan ex rel. Bazan v. Hidalgo Cnty. , 246 F.3d 481, 489 (5th Cir. 2001) ("An issue is ‘genuine’ if it is real and substantial, as opposed to merely formal, pretended, or a sham."). To demonstrate an issue as to the material facts, the nonmoving party "must do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp. , 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). The nonmoving party must show sufficient evidence to resolve issues of material fact in its favor. Anderson , 477 U.S. at 249, 106 S.Ct. 2505.
When evaluating a motion for summary judgment, the Court views the evidence in the light most favorable to the nonmoving party. Id. at 255, 106 S.Ct. 2505. Finally, when parties file cross motions for summary judgment, "we review each party's motion independently, viewing the evidence and inferences in the light most favorable to the nonmoving party." See e.g. , Six Dimensions, Inc. v. Perficient, Inc. , 969 F.3d 219, 224 (5th Cir. 2020) (quoting Green v. Life Ins. Co. of N. Am. , 754 F.3d 324, 329 (5th Cir. 2014) ).
B. Judicial Review of Arbitration Awards
Judicial review of an arbitrator's award is "very deferential," "extraordinarily narrow," and "severely limited." Commc'ns Workers of Am., AFL-CIO v. Sw. Bell Tel. Co. , 953 F.3d 822, 826 (5th Cir. 2020) (citing YPF S.A. v. Apache Overseas, Inc. , 924 F.3d 815, 819 (5th Cir. 2019) and Rain CII Carbon, LLC v. ConocoPhillips Co. , 674 F.3d 469, 471–72 (5th Cir. 2012) ). Indeed, it is "one of the most deferential standards known to the law." Id. , (quoting Cont'l Airlines, Inc. v. Air Line Pilots Ass'n Int'l , 555 F.3d 399, 405 (5th Cir. 2009) ) (citation omitted). Moreover, "[w]here an arbitration award stems from a labor dispute, judicial review is particularly constrained." Id. (citing Teamsters Loc. No. 5. v. Formosa Plastics Corp. , 363 F.3d 368, 371 (5th Cir. 2004) ) (internal quotation marks omitted).
This is because a court "must affirm an arbitral award if the arbitrator is ‘even arguably construing or applying the contract and acting within the scope of his authority.’ " Teamsters Loc. No. 5 , 363 F.3d at 371 (quoting United Paperworkers Int'l Union v. Misco, Inc. , 484 U.S. 29, 38, 108 S.Ct. 364, 98 L.Ed.2d 286 (1987) ). "If the arbitrator has not exceeded his authority, ‘the fact that a court is convinced he committed serious error does not suffice to overturn his decision.’ " Id. (quoting Major League Baseball Players Ass'n v. Garvey , 532 U.S. 504, 509, 532 U.S. 1015, 509, 121 S.Ct. 1724, 149 L.Ed.2d 740 (2001) ). "As long as the arbitrator's decision ‘draws its essence from the collective bargaining agreement’ and the arbitrator is not fashioning ‘his own brand of industrial justice,’ the award cannot be set aside." Id. (quoting Weber Aircraft Inc. v. Gen. Warehousemen & Helpers Union Loc. 767 , 253 F.3d 821, 824 (5th Cir. 2001) ). "This deference means that even if we believe the arbitrator seriously erred in his fact finding or contract interpretation, we will uphold a decision that is rationally inferable from the purpose of the CBA." Delek Refin., Ltd. v. Loc. 202, United Steel, Paper & Forestry, Rubber, Mfg., Energy, Allied Indus. & Serv. Workers Int'l Union, AFLCIO , 891 F.3d 566, 570 (5th Cir. 2018) (internal citations omitted).
That said, "an arbitrator's power is not unlimited." Id. (internal quotation marks and citations omitted). An arbitrator's decision must draw its essence from the CBA, id. (citing Executone Info. Sys., Inc. v. Davis , 26 F.3d 1314, 1320, 1324 (5th Cir. 1994) ), and "the company and union may limit the discretion of the arbitrator in the collective bargaining agreement." Delta Queen Steamboat Co. v. Dist. 2 Marine Eng'rs Beneficial Ass'n, AFL-CIO , 889 F.2d 599, 602 (5th Cir. 1989) (citing United Paperworkers Int'l Union v. Misco, Inc. , 484 U.S. 29, 37–38, 108 S.Ct. 364, 98 L.Ed.2d 286 (1987) ). "By so doing, it is possible to vest in the employer complete discretion over terminations which the arbitrator is not free to usurp." Id. Importantly, an arbitrator cannot exercise their powers to forge their "own brand of industrial justice." Misco , 484 U.S. at 36, 108 S.Ct. 364. "[W]here the arbitrator exceeds the express limitations of his contractual mandate, judicial deference is at an end." Delta Queen Steamboat Co. , 889 F.2d at 602 (5th Cir. 1989).
Thus, while extensive, judicial deference "does not extend to those instances when the arbitrator exceeds the jurisdictional limits drawn in a CBA ..., or acts contrary to its express provisions. " Delek Refin. , 891 F.3d at 570 (citing Albemarle Corp. v. United Steel Workers ex rel. AOWU Local 103 , 703 F.3d 821, 824 (5th Cir. 2013) and Smith v. Transp. Workers Union of Am., Local 556 , 374 F.3d 372 (5th Cir. 2004) ) (emphasis added). "An arbitrator cannot, for example, ignore the plain language of a contract." Id. (citing Misco , 484 U.S. at 38, 108 S.Ct. 364 and Delta Queen Steamboat Co. , 889 F.2d at 602–04 (overturning the arbitrator's decision to reinstate a riverboat captain who the arbitrator found "grossly careless" because the CBA mandated discharge for carelessness)). In those instances, "an arbitrator is no longer applying or interpreting the agreement, but [impermissibly] rewriting it." Id.
ANALYSIS
A. The Arbitrator's decision was not rationally inferable from the contract.
In the Fifth Circuit, a district court may vacate an arbitrator's award where the award failed to draw its essence from the CBA. Delek Refin. , 891 F.3d at 570 ; Delta Queen Steamboat Co. , 889 F.2d at 601. In Delta Queen , the court dealt with an arbitration decision regarding CBA language that granted the employer the contractual authority to terminate employees for "proper cause," defined as "inefficiency, insubordination, carelessness , or disregard of the rules of the Company." Delta Queen Steamboat Co. , 889 F.2d at 601 (emphasis in original). The CBA also provided that "[t]he right to discipline and discharge for proper cause are [sic] likewise the sole responsibility of the Company. " Id. (emphasis in original). Although the arbitrator in Delta Queen found the employee was "grossly careless," the arbitrator also opined that the employee was the "victim of disparate company discipline" and ordered reinstatement. Id.
In vacating the arbitration award, the Fifth Circuit held that the "plain language" of the CBA conferred upon the arbitrator only the authority to determine whether "proper cause" existed for discipline. Id. at 601–02 If such cause existed, the CBA granted the company the exclusive right to determine the appropriate level of discipline. Id. at 603. In that case, the arbitrator found gross carelessness, which implied a finding of "just" or "proper" cause. Once such a determination was made, the arbitrator exceeded his authority by considering whether the company disparately imposed discipline and then ordering reinstatement. Id. at 603–04.
In American Eagle Airlines, Inc. v. Air Line Pilots Association International , the Fifth Circuit upheld a vacatur issued by Judge McBryde where the Arbitration Board found implicit findings of just cause for termination but ordered reinstatement anyway. 343 F.3d 401 (5th Cir. 2003). At issue was whether the district court correctly vacated the award, given that the Board was "without jurisdiction to fashion a remedy beyond what was contemplated in the CBA, namely that an employee can be terminated only for just cause." Id. at 410. The Fifth Circuit held that, "if the relevant bargaining agreement requires just cause for dismissal, an arbitrator acts beyond its jurisdiction by fashioning an alternate remedy once it has concluded—implicitly or otherwise—that an employee's conduct constitutes just cause for dismissal ..." Id. (emphasis added).
The results in Delta Queen and American Eagle command vacatur in this instance. Not only did the Arbitrator find that Allen committed the underlying act, but he made a finding that the Company had "just cause" for terminating Allen's employment. Pl.’s App. at 6–7. Despite the Arbitrator's express finding of "just cause" and his acknowledgement of the Company's right to terminate in such circumstances, he ordered reinstatement in direct contravention of CBA Articles Four and Six. See id. at, 13–14, 16; see also Delek Refin. , 891 F.3d at 570 (holding that judicial deference "does not extend to those instances when the arbitrator exceeds the jurisdictional limits drawn in a CBA ..., or acts contrary to its express provisions."). Like in Delta Queen , "the arbitrator was without authority, under the bargaining agreement, to reinstate [the employee]" once it found that just cause existed. Delta Queen Steamboat Co. , 889 F.2d at 604.
Furthermore, the Arbitrator's explicit finding of just cause supports vacatur. See Pl.’s App. at 7. Per the Fifth Circuit's holding in American Eagle Airlines , where there is either an implicit or explicit finding of just cause for termination required by the CBA, the Arbitrator lacks jurisdiction to craft any other remedy once it concludes that just cause existed to terminate. 343 F.3d at 410 ; see also E.I. DuPont de Nemours & Co. v. Loc. 900 of Int'l Chem. Workers Union, AFL-CIO , 968 F.2d 456, 459 (5th Cir. 1992) (affirming vacatur by the district court and holding that the "plain, unambiguous language of the stipulation reveals that an ‘appropriate remedy’ is only at issue if Grievants were discharged without just cause. The stipulation does not address any authority on the part of the arbitrator in the event just cause was shown").
The Arbitrator here did precisely that—he found just cause for termination—and then went beyond the authority and jurisdiction provided him by the CBA and awarded reinstatement based on tenure, a consideration found nowhere in the CBA. Pl.’s App. at 6–7. The Arbitrator's finding of just cause ended the analysis of the issue presented to him. See Delta Queen Steamboat Co. , 889 F.2d at 602–04 and Am. Eagle Airlines, Inc. , 343 F.3d at 410 (upholding Judge McBryde's vacatur and holding that it is beyond the arbitrator's jurisdiction to fashion an alternate remedy once it has concluded there was just cause for dismissal). By exceeding the scope of his authority, the Arbitrator's award failed to "draw its essence" from the CBA. Teamsters Loc. No. 5 , 363 F.3d at 371. Accordingly, the Court finds that the award should be and hereby is VACATED.
B. Neither party is entitled to attorneys’ fees.
Far from being a "frivolous and wasteful challenge to [a] conscientious and fair arbitration" decision, Intern. Ass'n of Mach. & Aerospace Workers, Dist. 776 v. Texas Steel Co. , 538 F.2d 1116, 1122 (5th Cir. 1976), the Court concluded that the Arbitrator's Award exceeded the scope of his authority and failed to draw its essence from the CBA, mandating vacatur. Supra. Thus, the Union is not entitled to attorneys’ fees. Furthermore, despite praying for fees in its complaint, the Company provides no argument or support whatsoever in either its Motion for Summary Judgment or Response for awarding such fees. Thus, both parties’ requests for attorneys’ fees are DENIED.
CONCLUSION
For the above reasons, the Court finds that Ball Metal's Motion for Summary Judgment (ECF No. 15) should be and hereby is GRANTED and the Arbitrator's Award is VACATED. Consequently, the Union's Motion for Summary Judgment (ECF No. 18) should be and hereby is DENIED. Finally, both parties’ requests for attorneys’ fees are DENIED.
SO ORDERED on this 6th day of July, 2021.