On Appeal from the United States District Court for the District of New Jersey; D.C. Civil Action No. 89-03552.
Leon Higginbotham, Jr., Chief Judge, Scirica and Aldisert, Circuit Judges.
HIGGINBOTHAM, JR., Chief Judge
The District Court vacated a labor arbitration award concerning a dispute over a new economic package. It held that the arbitrator had exceeded his authority under the collective bargaining agreement. The union has appealed from the order of the District Court. Because this is not one of those rare cases in which the labor arbitration award fails to draw its essence from the collective bargaining agreement, we will vacate the judgment of the district court.
I. FACTS AND PROCEDURAL HISTORY
In February of 1985, News America Publications, Inc., Daily Racing Form Division ("the Racing Form") entered into a collective bargaining agreement with Newark Typographical Union, Local 103 ("Typographical Union"). This agreement covered the period from November 1, 1983, through October 31, 1993. Section 36 of the agreement specified wage increases that became effective on November 1 of 1983, 1984, and 1985. After November 1, 1985, the following language in the agreement governed wage increases:
The contract may be reopened for wage adjustments by written notice of either party sixty (60) days prior to the November 1, 1986 anniversary of the contract, and on subsequent anniversary dates prior to contract expiration.
In the event the parties do not reopen the contract for wage adjustments, or are unable to reach agreement on wage adjustments, the following formula will apply:
The equivalent of any economic package granted by the DAILY RACING FORM to New York Mailers Union No. 6 or Newark Newspaper Printing Pressmen's Union No. 8 (whichever is greater) during the twelve months prior to November 1 of any year will be automatically granted to Newark Typographical Union members effective on November 1. Such economic package will be added to wages unless the parties mutually agree to divert some portion of the package to other purposes.
As noted in the section quoted above, the Racing Form also had collective bargaining agreements with New York Mailers Union, Number 6 ("Mailers"), and the Newark Newspaper Printing Pressmen's Union, Number 8 ("Pressmen"). In 1983, when the Racing Form and the Typographical Union agreed upon Section 36, the Pressmen received increases in their economic benefits each year on April 26, while the Mailers, like the Typographical Union, received increases in their economic benefits each year on November 1.
Both the Pressmen and the Mailers negotiated a two part wage increase in 1986. First, they received a $25.00 increase in their weekly rate. Second, each union's wage increase was accelerated. Instead of receiving their wage increase on April 26, 1987, the Pressmen's increase was accelerated by five months to November 26, 1986. Similarly, the Mailers received their increase three months earlier, on August 1, 1987. Pursuant to Section 36 of the collective bargaining agreement, the Racing Form granted the Typographical Union a $25.00 increase effective August 1, 1987.
In 1988, the Pressmen and the Mailers received an increase of $27.50. This increase was made effective for the Pressmen on November 26, 1987, and for the Mailers on August 1, 1988. At a meeting held in February of 1988, the Racing Form presented the new wage package to the Typographical Union, and told the Typographical Union that the $27.50 increase would go into effect for them on November 1, 1988, not August 1, 1988. At this meeting, the Racing Form explained to the Typographical Union that it thought an error was made when the Typographical Union received the 1987 wage increase on August 1, 1987 instead of on November 1, 1987, but that in the interest of labor peace the Racing Form would not attempt to recover the accelerated 1987 wage increase from its employees. The Typographical Union filed a grievance over the Racing Form's position, contending that they were entitled to an economic package that was equivalent to that of the Mailers and Pressmen, but were denied that package because their benefits package was neither accelerated nor supplemented to reflect the new effective dates of the other two unions' increases.
The grievance was arbitrated on May 22, 1989, and an award in favor of the Typographical Union issued on July 7, 1989. The arbitrator framed the issue before him as follows: "Did the Company violate the collective bargaining agreement when it granted the Mailer Union's August 1, 1988 increase to Typographical Union #103 effective November 1988 without retroactivity? If yes, what is the appropriate remedy?" In answering these questions, the arbitrator focused on the following phrase from Section 36: "'the equivalent of any economic package granted by the Daily Racing Form to . . . Mailers or Pressmen . . . (whichever ...