On Appeal from the United States District Court for the Middle District of Pennsylvania, (D.C. Civ. No. 84-1378)
Before: HIGGINBOTHAM and STAPLETON, Circuit Judges, and TEITELBAUM, District Judge*fn*
A. LEON HIGGINBOTHAM, JR., Circuit Judge.
This is an appeal from a final judgment of the district court in an action brought by Haddon Craftsmen, Inc., under the Labor Management Relations Act, 29 U.S.C. § 185(a). The district court vacated a labor arbitration award in a grievance case which involved Haddon's implementation of production quotas along with disciplinary penalties for failure to meet those quotas. It held that the arbitrator's award was repugnant to the National Labor Relations Act ("NLRA") and therefore unenforceable. We find that, given the limited scope of review over arbitration decisions afforded the federal courts, the district court erred in vacating the award. Accordingly, for the reasons set forth in the opinion that follows, we will reverse the district court and reinstate the arbitration award.
The appellant in this case, Haddon Craftsmen, Inc., Scranton, Pennsylvania. ("Haddon" or "Company") is engaged as a contractor in the manufacture of hardcover and softcover books for various publishers. The appellee, Graphic Arts International Union, Local 97B, ("Union") is the exclusive bargaining representative for all employees in the Bindery Department and all other operations related to bindery materials and products at Haddon's manufacturing plant. App. at 3a. Haddon and the Union have had a collective bargaining relationship for approximately 50 years and the collective bargaining agreement which is the subject of the instant appeal extended from April 4, 1983 to April 6, 1986. App. at 4a. The collective bargaining agreement contained a mandatory grievance procedure which culminated in binding arbitration.*fn1
On February 1, 1984, without bargaining with the Union of obtaining its assent, Haddon instituted production standards, along with disciplinary sanctions for production below those standards, in the flat bed cutting department. App. at 51a, 53a. On February 3, 1984, the Union filed a grievance which was initially submitted by an employee. Later, in response to Haddon's claim that the employee had not authority to file grievance questioning the institution of production standards, the Union adopted the grievance and replaced the employee as the grieving party. App. at 53a.
In the Statement of the Grievance, the Union alleged that Haddon violated Article III, Section 5 of the collective bargaining agreement*fn2 by unilaterally implementing the production quotas in flat cutting. App. at 67a. Neither the employee nor the Union - at that time or since - filed an unfair labor practice charge pursuant to the NLRA with the National Labor Relations Board (NLRB).*fn3 App. at 51a, 53a. In response to the Union's allegations, Haddon denied that is violated Article III, Section 5 of the contract and thus, on August 28, 1984, the unresolved grievance was submitted to arbitration. App. at 75a.
At that proceeding, the Union contended that although no unfair labor practice charge had been filed, the arbitrator had jurisdiction to determine whether the Company's unilateral implementation of the production standards violated § 8(a)(5) of the NLRA. In opposition, Haddon asserted that since (1) no claim had been filed with the NLRB, (2) it had not agreed to submit the § 8(a)(5) allegation to arbitration, and (3) a § 8(a)(5) violation did not fall within the definition of a grievance in Article VIII of the collective bargaining agreement, the arbitrator had not jurisdiction over the § 8(a)(5) claim. App. at 54a.
On September 24, 1984, the arbitrator issued an opinion and award which denied the Union's grievance. In reaching this conclusion, the Arbitrator found that (1) she had no jurisdiction to decide if the Company violated Section 8(a)(5) and (2) the Company did not violate Article III, Section 5 of the Contract. App. at 60a.
After issuance of the Arbitrator's opinion and award, the Union brought an action in federal district court to vacate the Arbitrator's award. On cross-motions for summary judgment, the District Court granted the Union's motion for summary judgment and vacated the Arbitrator's award. The District Court reasoned that
while the Arbitrator may not have jurisdiction to decide a naked NLRA claim, she still must read the contract in the light of clearly established federal labor law ....Unilateral implementation of quota systems is repugnant to section 8(a)(5) of the NLRA, Alfred M. Lewis Inc. v. NLRB, 587 F.2d at 408 (1978). Therefore, ... the award is not enforceable by this Court.
App. at 95a. Accordingly, the District Court vacated the Arbitrator's award and remanded the matter to the arbitrator for further proceeding not inconsistent with its opinion. In this appeal, Haddon Craftsmen contends that the ...