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Tanoma Mining Co. v. Local Union No. 1269

argued: January 16, 1990.

TANOMA MINING COMPANY, INC.
v.
LOCAL UNION NO. 1269, UNITED MINE WORKERS OF AMERICA AND DISTRICT 2, UNITED MINE WORKERS OF AMERICA, APPELLANTS



On Appeal from the United States District Court for the Western District of Pennsylvania, D.C. Civil Action No. 87-1300.

Becker, Greenberg and Nygaard, Circuit Judges.

Author: Nygaard

Opinion OF THE COURT

NYGAARD, Circuit Judge

Appellant Local 1269 of the United Mine Workers of America (UMWA) and appellee Tanoma Mining Company (Tanoma Mining) submitted a labor dispute to an arbitrator under the terms of a collective bargaining agreement. After the arbitrator rendered a decision in favor of the UMWA, Tanoma Mining filed an action in district court, pursuant to section 301 of the Labor Management Relations Act, seeking to overturn the arbitrator's award. The district court vacated the award and the UMWA filed this timely appeal. Because we conclude that the district court impermissibly substituted its view of the facts and law for the arbitrator's view, we will reverse.

I.

In August, 1979, Tanoma Coal Company, N.V. (Tanoma Coal) obtained the property and mining rights to the Tanoma Mine in Indiana County, Pennsylvania. Tanoma Coal was and is a wholly owned subsidiary of Pohang Iron & Steel, Ltd. (Pohang), a Korean corporation. Tanoma Coal hired Barnes & Tucker (B & T), a Pennsylvania corporation, to construct, develop and operate the Tanoma Mine. The plan to open the mine was announced through a press release dated December 12, 1979 which stated, in pertinent part:

Anthony DiGiovanni, President and Chief Executive Officer of Barnes & Tucker Company announced today that Barnes & Tucker Company, Barnesboro, Pa., in conjunction with Pohang Iron & Steel, Ltd., Republic of Korea, is planning to develop a large metallurgical mine near the community of Tanoma, eight miles northeast of Indiana, Pa.

Joint App. p. 52 (emphasis supplied).

Pursuant to the management agreement between Tanoma Coal and B & T, B & T entered into an agreement with the UMWA which would give preferential hiring rights at the Tanoma Mine to UMWA members who were laid off from other B & T mines. In exchange, UMWA members hired at the Tanoma Mine would waive their right to be recalled to their mother mines. This agreement was negotiated by Richard Painter, who was Vice President of Operations at B & T at the time. B & T abided by the hiring agreement for as long as it operated the Tanoma Mine.

In late 1986, Tanoma Coal formed a wholly owned subsidiary known as Tanoma Mining Company (Tanoma Mining).*fn1 Tanoma Coal terminated its management agreement with B & T on January 1, 1987 and entered into a new management agreement with Tanoma Mining. Richard Painter resigned as Vice President at B & T to become the President of Tanoma Mining.

In December of 1986, Tanoma Mining notified the UMWA that it was willing to sign the National Bituminous Coal Wage Agreement of 1984 (the same agreement that had governed the relationship between B & T and the UMWA) on the condition that Tanoma Mining not be bound by B & T's preferential hiring agreement with the UMWA. The UMWA, believing that Tanoma Mining was bound to honor the agreements reached by B & T and the UMWA, filed a grievance under the terms of the 1984 Agreement.*fn2 The parties agreed to submit the dispute to final and binding arbitration.

In an Opinion and Award dated May 14, 1987, the arbitrator directed Tanoma Mining to honor the preferential hiring agreement. In his opinion, the arbitrator first noted that he intended to apply agency principles in order to resolve the dispute. The arbitrator then determined that B & T had been Pohang's agent, and that Tanoma Mining was Pohang's new agent. Tanoma Mining was bound by the preferential hiring agreement since, according to the arbitrator's reasoning, Pohang was bound.

Tanoma Mining filed this action in district court pursuant to section 301 of the Labor Management Relations Act, 29 U.S.C. ยง 185, seeking to overturn the arbitrator's award. The district court vacated the arbitrator's award, holding that the arbitrator's finding that B & T was an agent of Pohang was a clear misstatement of fact, that the arbitrator disregarded well settled principles of agency law, and that the arbitrator ...


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