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Pennsylvania Power Company v. Local Union No. 272 of the International Brotherhood of Electrical Workers, AFL-CIO

Date: Dec. 21, 2001
Location: Court of Appeals, Third Circuit




Appeal from the United States District Court
For the Western District of Pennsylvania
D.C. No.: 00-cv-01735
District Judge: Honorable Gary L. Lancaster

Argued: October 17, 2001

Before: ALITO, BARRY, and ROSENN, Circuit Judges.

(Filed: December 21, 2001)

ALITO, Circuit Judge, dissenting.

Just last Term, the Supreme Court reminded us how narrow our proper scope of review is in a case such as this. In Eastern Associated Coal Corporation v. United Mine Workers of America, 531 U.S. 57 (2000), the Court wrote that when an "employer and union have granted to the arbitrator the authority to interpret the meaning of their contract's language," "[t]hey have `bargained for' the `arbitrator's construction' of their agreement, .. . [a]nd courts will set aside the arbitrator's interpretation of what their agreement means only in rare instances." 531 U.S. at 61-62 (citation omitted). The Court continued:

Of course, an arbitrator's award "must draw its essence from the contract and cannot simply reflect the arbitrator's own notions of industrial justice." Paperworkers v. Misco, Inc., 484 U.S. 29, 38 (1987). "But as long as [an honest] arbitrator is even arguably construing or applying the contract and acting within the scope of his authority," the fact that "a court is convinced he committed serious error does not suffice to overturn his decision." Ibid. Eastern Associated Coal Corporation, 531 U.S. at 62; see also Major League Baseball Players Association v. Garvey, 121 S. Ct. 1724, 1728 (2001).

The majority in this case overturns the arbitrator's decision because the majority strongly disagrees with his interpretation of the collective bargaining agreement. The arbitrator held that the collective bargaining agreement obligates the employer to provide voluntary retirement benefits to union-member employees on the same terms as supervisors. In so construing the agreement, the arbitrator relied on article 1, section 3 of the agreement, the so-called anti-discrimination provision, which states that the company may not "discriminate" against "any employee because of membership or non-membership in the Union." Tracing this clause to Sections 8(a) and (b) of the National Labor Relations Act, 29 U.S.C. S 158(a) and (b), the majority disagrees with the arbitrator's interpretation, reasoning that "[b]ecause supervisors are not `employees' under the NLRA for purposes of collective bargaining, an employer's affording retirement benefits to supervisors but not providing them to union member employees cannot possibly constitute discrimination between employees under the anti-discrimination section of the Agreement." Maj. Op. at 9-10. The majority goes on to observe that the arbitrator's reasoning is supported by "neither the law nor industry practice" and "is highly impractical, costly and may even be unmanageable" for some companies. Maj. Op at 10.

I find the majority's interpretation of the collective bargaining agreement more persuasive than the arbitrator's, but I cannot agree that the arbitrator's decision did not "draw its essence from the contract" or that the arbitrator was not "even arguably construing the contract." As noted, the arbitrator's decision drew its essence from and was based on a construction of the anti-discrimination section. That the arbitrator probably misconstrued that provision is beside the point. The parties bargained for the arbitrator's construction of the agreement, and that is what they got. By intervening to rescue the Pennsylvania Power Company from one of the consequences of its bargain, the majority has exceeded the proper scope of our court's authority. I must therefore respectfully dissent.