Opinion
CIVIL ACTION NO. 00-2161 (JEI).
August 4, 2000
SAGOT, JENNINGS SIGMOND, BY: JAMES KATZ, Esq., Cherry Hill, N.J., Attorney for plaintiff.
MORGAN, LEWIS BOCKIUS, LLP, BY: RICHARD G. ROSENBLATT, Esq., Princeton, N.J., Attorney for defendant.
OPINION
Presently before the Court is defendant Air Products and Chemicals, Inc.'s motion for judgment on the pleadings, or in the alternative, for summary judgment, and plaintiff Catalyst Employees' Association's cross-motion for summary judgment. Also before the Court is plaintiff Catalyst Employees' Association's motion for prejudgment interest, attorneys' fees, and sanctions. Jurisdiction is based upon section 301 of the Labor-Management Relations Act, 29 U.S.C. § 185 and 28 U.S.C. § 1331 and 1337. For the reasons set forth below, defendant's motion is denied and plaintiff's motion is granted in part and denied in part.
I.
This action arises out of an employment dispute. Plaintiff Catalyst Employees' Association ("plaintiff" or "Union") is an unincorporated labor association which represents employees of defendant Air Products And Chemicals, Inc. ("defendant" or "Air Products"). The Union is the exclusive representative of a unit of employees employed by Air Products at its Paulsboro, New Jersey facility, where the current dispute arose. The Union and Air Products are parties to a collective bargaining agreement which compels arbitration of grievances.
Tyrone Hamilton is a member of the Union and an employee of Air Products at the Paulsboro, New Jersey facility. In March of 1999, Mr. Hamilton filed a grievance with Air Products charging that Air Products failure to promote him to the position of "Top Operator" was motivated by discriminatory animus. Unable to resolve the matter, the Union made a timely request that the grievance proceed to arbitration. On December 3, 1999, the grievance was arbitrated before Louis Aronin, Esq.
On March 31, 2000, Arbitrator Aronin issued his Opinion in the matter. (Pl.'s Ex. E, AAA Case No. 14-300-00905-99). He concluded that: "The failure to promote Grievant, Tyrone Hamilton, to the position of Top Operator, was based on discrimination, because of his race or because he was successful in prosecuting a grievance, was capricious and unreasonable all in violation of the parties' Agreement." (Id. at 25.) He ordered that Hamilton be immediately classified as a "Top Operator" and given all the rights and benefits of a Top Operator retroactive to the first pay period in January of 1996. (Id.)
On May 4, 2000, plaintiff Union filed the Complaint in this matter seeking to enforce the arbitration award. On July 31, 2000, Air Products filed the instant motion for judgment on the pleadings, or in the alternative, for summary judgment. Air Products argues that the issue presented to the arbitrator concerned events subsequent to March of 1999, and that the arbitrator exceeded his authority in awarding Hamilton rights and benefits (including back pay) retroactive to January of 1996. Air Products asks this Court to set aside the award insofar as it granted relief for the period prior to March of 1999.
II.
As both parties have introduced documents which are not attached to or implicitly relied upon by the Complaint, the Court will treat defendant's motion for judgment on the pleadings, or in the alternative for summary judgment, as a motion for summary judgment pursuant to Federal Rule of Civil Procedure 56. See Fed.R.Civ.P. 12(c) ("If, on a motion for judgment on the pleadings, matters outside the pleadings are presented to and not excluded by the court, the motion shall be treated as one for summary judgment . . . .").
"[S]ummary judgment is proper `if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.'" Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986) (quoting Fed.R.Civ.P. 56(c)).
In deciding a motion for summary judgment, the Court must construe the facts and inferences in a light most favorable to the non-moving party.Pollock v. American Tel. Tel. Long Lines, 794 F.2d 860, 864 (3d Cir. 1986). The role of the court is not "to weigh the evidence and determine the truth of the matter, but to determine whether there is a genuine issue for trial." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986).
III.
The role of a court in reviewing the decision of an arbitrator is extremely limited. The court will vacate an arbitrator's award only if there is "absolutely no support at all in the record justifying the arbitrator's decision." United Transp. Union Local 1589 v. Suburban Transit Corp., 51 F.3d 376, 379 (3d Cir. 1995) (quoting News Am. Publications, Inc. v. Newark Typographical Union, Local 103, 918 F.2d 21, 24 (3d Cir. 1990). "[A]s long as the arbitrator is even arguably construing or applying the contract and acting within the scope of his authority, that a court is convinced he committed serious error does not suffice to overturn his decision." United Paperworkers Union v. Misco, Inc., 484 U.S. 29, 40 (1987).
There are, however, a limited number of grounds upon which a court may properly overturn an arbitrator's decision. One such ground is where the arbitrator exceeds the scope of his or her authority. This is because an arbitrator has the authority "to decide only the issues actually submitted" to arbitration. Matteson v. Ryder System, Inc., 99 F.3d 108, 112-113 (1996); see also 9 U.S.C. § 10(a)(4) (stating that a district court may vacate an arbitration award where "the arbitrators exceeded their powers . . . .). However, an arbitrator's interpretation of the issues before him and the corresponding scope of his authority is also accorded substantial deference. See Mobil Oil Corp. v. Independent Oil Workers Union, 679 F.2d 299, 302 (3d Cir. 1982) ("[T]he deference that is accorded an arbitrator's interpretation of the collective bargaining agreement should also be accorded to an arbitrator's interpretation of the issue submitted."). Thus the Court will not overturn an arbitrator's decision on the ground that he exceeded his authority so long as the arbitrator's interpretation "can in any rational way be derived from the [collective bargaining] agreement." Ludwig Honold Mfg. v. Fletcher, 405 F.2d 1123, 1128 (3d Cir. 1969).
In order to determine whether the arbitrator exceeded his authority in this case, the Court must first define the issue or issues submitted to arbitration by the parties. The Court begins with an examination of the collective bargaining agreement ("CBA"). Section IX.2.e of the CBA provides that: "Unless the parties stipulate jointly or separately otherwise, the matter referred to the arbitrator shall be the grievance as reduced to writing for the purpose of step 1.b. of the grievance procedure." Defendant argues that the issue before the arbitrator was limited to the language of an email sent from the Union's president, Robert Klein, to Mr. Hamilton's supervisor. In that email, dated March 28, 1999, Mr. Klein wrote:
Section 1.b. of the grievance procedure provides:
If a satisfactory settlement is not reached on issues involving interpretation of the Agreement, a written grievance identifying the section of the Agreement that the employee or the Association claims has been violated and a statement of the settlement that has been requested, must be filed with the Department Head within three (3) working days following receipt of the immediate supervisor's answers. The Department head will issue a written answer within five (5) working days of the receipt of the grievance.(Compl., Ex. A, 9.)
It is Our contention that His recent appraisal was of a biased nature and did not accurately portray His ability or level of knowledge. . . We believe He has met the conditions for making him eligible for promotion and that it is the biased appraisal that has stopped him. It is our hope that You will revisit His appraisal and allow Justice to prevail. The settlement We would like is to have a non biased appraisal ultimately resulting in Tyrone Mr. Hamiltons promotion to top operator.
(Def.'s Ex. 2.)
Plaintiff argues that the grievance contained in the email defined the scope of the issue to be arbitrated, but did not limit the scope of the remedies which could be awarded by the arbitrator. Plaintiff acknowledges that section 1.b of the grievance procedure requires the Union or aggrieved employee to file a "statement of the settlement that has been requested"; however, plaintiff argues that the settlement proposed in the email, Mr. Hamilton's promotion to Top Operator, does not prevent the arbitrator from awarded other appropriate relief.
Even if the statement of the grievance and proposed settlement set forth in the email is read so narrowly, plaintiff argues that the email was superceded by the parties' stipulation of the issue. As noted above, section IX.2.e of the CBA provides that the issue to be arbitrated shall be the grievance set forth pursuant to section 1.b, "[u]nless the parties stipulate jointly or separately otherwise." In their post-hearing briefs to the arbitrator, plaintiff and defendant defined the issue to be arbitrated nearly identically: "Whether the Company violated the Agreement when it failed to promote Tyrone Hamilton to Top Operator. If so, what is the remedy." (Complaint, Ex. D, Air Products' post-hearing brief, 1.) Moreover, in his Opinion, the arbitrator adopted the issue presented almost verbatim from Air Product's post-hearing brief: "Did the Employer violate the parties' Agreement by failing to promote Grievant, Tyrone Hamilton, to the position of Top Operator? If so, what is the appropriate remedy?" (Complaint, Ex. E, 2.)
Air Products now claims that the phrase "[i]f so, what remedy?", was mere "boilerplate language" intended to indicate "that the arbitrator should decide whether any remedy is appropriate if liability is established." (Def.'s opp, 6.) Air Products argues that this "boilerplate language" did not authorize the arbitrator to award any relief beyond that requested in the grievance process, namely, promotion to the position of Top Operator. Air Products states, "mere submission of the remedy issue to the arbitrator did not constitute a stipulation under Section IX.2.e of the Agreement to permit a remedy greater than what was requested during the grievance process." (Id.) The Court disagrees.
The Court finds that the parties' submission of nearly identical language identifying the issue presented constituted a stipulation of that issue and superceded the statement of the grievance contained in Mr. Klein's email. Indeed, there is no evidence in the record that the arbitrator was ever given a copy of Mr. Klein's email or any other statement of the grievance aside from the stipulated summary of the grievance contained in the parties' post-hearing briefs.
Even absent the parties' stipulation of the issue presented, the Court would uphold the arbitrator's decision and award. As part of the "grievance" filed with Air Products, the Union requested "a non biased appraisal ultimately resulting in Tyrone Mr. Hamiltons promotion to top operator." (Def.'s Ex. 2.) This grievance, as set forth in the email of Union president, Robert Klein, did not mention or request backpay or other retroactive benefits. However, an award of backpay is a natural and usual remedy in any case where an employer is found to have wrongfully failed to promote an employee. It would not have been irrational for Arbitrator Aronin to interpret the request for Mr. Hamilton's promotion as encompassing a request for all the rights and benefits that correspond to that promotion, retroactive to the date on which he should have been promoted.
As noted above, the Court's role in reviewing the arbitrator's decision is extremely narrow. An arbitration award will be upheld if, "the interpretation can in any rational way be derived from the agreement, viewed in light of its language, its context, and any other indicia of the parties' intention." Ludwig, 405 F.2d at 1128. "[O]nly where there is a manifest disregard of the agreement, totally unsupported by the principles of contract construction and the law of the shop, may a reviewing court disturb the award." Id. Moreover, the Court notes that absent explicit, contrary language in the collective bargaining agreement, an arbitrator is invested with broad discretion to fashion appropriate remedies. As the Supreme Court has stated:
When an arbitrator is commissioned to interpret and apply the collective bargaining agreement, he is to bring his informed judgment to bear in order to reach a fair solution of a problem. This is especially true when it comes to formulating remedies.United Steelworkers of Am. v. Enterprise Wheel Car Corp., 363 U.S. 593, 597 (1960); see also City of Reading v. Wheelabrator Water Tech., Inc., No. Civ.A. 97-7799, 1998 WL 151022 at *3 (E.D.Pa. March 31, 1998) ("In the absence of explicit provision addressing remedies, as is the case here, `arbitrators are given wide latitude in fashioning an appropriate remedy.'") (quoting Chameleon Dental Products, Inc. v. Jackson, 925 F.2d 223, 225-226 (7th Cir. 1990)).
In this case, the CBA does not impose any restrictions or limitations upon the arbitrator's remedial authority. Additionally, the parties stipulated that the issue to be determined by the arbitrator included the appropriate remedy for any violation of the CBA. The Court concludes that the arbitrator did not exceed the scope of his authority in awarding Mr. Hamilton the rights and benefits commensurate with the position of Top Operator retroactive to January of 1996.
IV.
Having determined that the arbitrator did not exceed his authority, the Court will grant plaintiff's motion for summary judgment and issue an order enforcing the arbitrator's award. The Court must also determine whether, as plaintiff suggests, defendant should properly pay to plaintiff prejudgment interest and reasonable attorneys' fees.
The award of pre-judgment interest in an action under section 301 of the Labor-Management Relations Act is within the discretion of the court. Gulf Western Manufacturing Co. v. United Steelworkers of America, 694 F. Supp. 38, 46 (D.N.J. 1988). As an exercise of its discretion, this Court concludes that prejudgment interest is appropriate, therefore, interest is awarded from the date of the arbitrator's decision. Pre-judgment interest shall be calculated in accordance with the post-judgment interest rate specified at 28 U.S.C. § 1961. See Sun Ship, Inc. v. Matson Navigation, Co., 785 F.2d 59, 63 (3d Cir. 1986) (suggesting that district court follow 28 U.S.C. § 1961 in calculating pre-judgment interest in case brought under the Federal Arbitration Act).
In reaching this conclusion, the Court is guided by the Third Circuit's decision in Feather v. United Mine Workers of America , 711 F.2d 530 (3d Cir. 1983). In that case, the Circuit Court outlined four factors relevant to a court's decision to award pre-judgment interest:
(1) whether the claimant has been less than diligent in prosecuting the action;(2) whether the defendant has been unjustly enriched; (3) whether an award would be compensatory; and
(4) whether countervailing equitable considerations militate against a surcharge.Id . at 540. In this case, each factor weighs in favor of awarding plaintiff pre-judgment interest. First, there is no evidence to suggest that plaintiff was less than diligent in prosecuting this action. Second, pre-judgment interest is necessary to wholly compensate plaintiff and to prevent the unjust enrichment of defendant. See Retail, Wholesale Chain Store Food Employees Union, Local 338 v. Red Apple Supermarkets , No. Civ.A. 98-0215, 1999 WL 551253, at *3 (E.D.N.Y. June 24, 1999) ("[I]n a case . . . where the backpay award is an equitable attempt to make the employee whole, there is a presumption in favor of the award of prejudgment interest so as to avoid requiring an employee to make an interest free loan to an employer."); see also Sun Ship, Inc. v. Matson Navigation Co . , 785 F.2d 59, 63 (3d Cir. 1986) (holding that a confirmed arbitration award under the Federal Arbitration Act should bear interest from the date of the arbitrator's judgment). Finally, the Court can find no countervailing equitable considerations which would militate against an award of pre-judgment interest.
The Union's request for attorneys' fees is also granted. Attorneys' fees are recoverable in an action to enforce an arbitration award if the party challenging the award acted without justification or did not have a "reasonable chance to prevail." Chauffeurs, Teamsters Helpers, Local Union No. 765 v. Stroehmann Bros. Co., 625 F.2d 1092, 1094 (3d Cir. 1980). In this case, defendant acted without justification and did not have a reasonable chance to prevail. Defendant's claim that the issue of appropriate remedies was not properly before Arbitrator Aronin is illogical when defendant itself framed the issue as "If [liability is established] what is the remedy." (Complaint, Ex. D, Air Products' post-hearing brief, 1.); see Sun Ship, 785 F.2d at 64 (holding that an award of attorneys' fees was warranted against appellant who claimed that arbitrators acted outside of their authority after it had agreed in writing to submit precise question to arbitrators). As discussed above, district courts have an extremely narrow scope of review of arbitration awards and the decision of Arbitrator Aronin was amply supported by the record and the CBA. For these reasons, the Court concludes that defendant did not have a "reasonable chance to prevail," and therefore, the Union's request for attorneys' fees will be granted.
In its moving papers, plaintiff indicates that it is also moving for sanctions under Federal Rule of Civil Procedure 11. However, plaintiff has not, as yet, complied with the procedural requirements of Rule 11. Therefore, the Court will deny plaintiff's request for Rule 11 sanctions without prejudice to plaintiff's right to refile a timely, procedurally proper request.