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Inc. v. Exxonmobil Research And Engineering Co.

United States District Court, D. New Jersey

February 20, 2018



          PETER G. SHERIDAN, U.S.D.J.

         This matter comes before this Court on Plaintiffs motion to confirm arbitration award. [ECF No.6].


         Plaintiff is Independent Laboratory Employee Union, Inc., an organization that represents the interest of Exxon employees who are based at Defendant ExxonMobil Research and Engineering Company's Clinton facility. In brief, this action seeks the entry of a judgment confirming an arbitration award issued in favor of Plaintiff and against Defendant. (Compl. ECF No. 1-2 ¶l). The arbitration award was entered by Roger E. Maher and delivered to the parties on September 26, 2017. (Id., ¶2).

         The facts that led to the original arbitrated dispute are as follows. The dispute arose from Defendant's decision to abolish the previously offered "United Way Day Off Program" from represented employees. (Id., ¶7). As part of this program, each year, Exxon would set a financial goal for employee charitable donations to the United Way Fund (sometimes combined with a participation goal) and promised employees in advance that if the goal was met, they would obtain an extra paid day off to use as they saw fit. Prior to terminating the program in 2016, Defendant had offered the United Way Day Off for nine years. Given the business industry conditions changed, ExxonMobil's main corporate campus in the Houston area ended the program in 2015. (Tr. 173, 178-79). Other locations followed. The Exxon corporate executives requested that ExxonMobil Research end the program, which it did in September 2016 after internal review. (Tr. 173, 178-79). When the Union heard rumors that Exxon had ended the United Way Day off, and that Defendant was also going to end it, they raised the issue in a regularly scheduled quarterly meeting on September 14, 2016. There, Defendant explained that site management was evaluating whether or not to continue the United Way Day Off and it would notify the Union when it made a decision. (Tr. 13, 16, 32-33, 76-81-108). On the same date, the Company reminded the Union that during the 2013 CBA negotiation, Defendant had referred to the Union Way Day Off as an example of management discretion in allowing a day off with pay outside of the bounds of the CBA, yet they did not request to bargain on the matter at the time. (Tr. 111, 137).

         On September 30, 2016, Defendant provided written notice to the Union that it was eliminating the program. Five weeks later, Plaintiff filed a grievance. The parties proceeded to binding arbitration before a neutral arbitrator of the American Arbitration Association (AAA) to determine whether Defendant violated the CBA between them and the Union by discontinuing the United Way Day off without first bargaining with Plaintiff. (Compl., ¶IO). A hearing was held before the Arbitrator on June 27, 2017. (Id., ¶l 1). After the hearing, the Arbitrator determined that Defendant violated the CBA by unilaterally discontinuing the United Way Day Off. The Plaintiffs grievance was upheld and granted. (Id., ¶¶12-13). In his decision, the Arbitrator recognized that the United Way Day Off was a long standing practice considered by both parties to fall within the excused with pay definition provided by Article X. (Arb. Dec. pg. 10-11). He addressed the requirement to bargain and also did not find the United Way Day Off to be either a modification or an amendment that required to be in writing pursuant to Article XXIII, Section 2(b).

         As a remedy, the Arbitrator determined that the represented employees should be granted a United Way Day Off for 2016; and the parties shall be required to bargain over the terms and conditions of the United Way Day off Program and their implementation for the 2017 campaign prior to the start of that campaign. (Id., ¶14). The Arbitrator further ruled that in the event the 2017 campaign had already started, the represented employers shall similarly be granted a United Way Day Off for 2017 while bargaining takes place and continues. (Id., ¶15).

         Having failed to hear from Defendant as of October 4, 2017, Plaintiff requested bargaining in accordance with the Arbitration Award. Defendant responded, "we are still evaluating the Award including whether to challenge in court. I will keep you apprised of any developments." (Id., ¶18, See Ex. B to Complaint). On October 6, 2017, Defendant sent an email to employees at the Exxon's Clinton facility to officially kick off the 2017 United Way Campaign, which officially began on October 9. (Id. ¶¶20-21, Ex. C).

         On October 11, 2017, Plaintiff filed a complaint in state court, along with an order to show cause. At the time Plaintiff filed the complaint, Defendant had not provided employees with a United Way Day Off for 2016 or 2017. The complaint lists one Count, for confirmation of the Arbitration Award pursuant to N.J.S.A. 2A:24-7. The matter was removed to this Court on December 6, 2017. Defendant removed the matter based on 28 U.S.C. §1331 federal question jurisdiction, because Plaintiff requested confirmation of an arbitration award reached in an arbitration proceeding held pursuant to the parties' Collective Bargaining Agreement. See 29 U.S.C. 185(a), Labor Management Relations Act. Plaintiff has not filed for remand. After the matter was removed, and upon the parties' request for direction, this Court issued a briefing schedule for a petition to confirm an arbitration award. The petition is now before this Court.

         Plaintiff argues that no ground exists to vacate or modify the arbitrator's award. Defendant rebuts arguing that the award fails to draw its essence from the CBA and cannot in any rational way be derived therefrom. Defendant also argues that the CBA contains a zipper clause that states the "agreement contains the entire agreement between the parties, " and "any modifications or amendments shall be in writing." Further, Defendant supports that the CBA provides that no course of dealing shall affect the terms of the agreement. Overall Defendant argues that the Arbitrator disregarded the clear and unequivocal limitations on him and on reading the terms of the CBA.


         Pursuant to the Federal Arbitration Act ("FAA"), there is a strong presumption in favor of enforcing arbitration awards. Brentwood Medical Associates v. United Mine Workers of America, 396 F.3d 237, 241 (3d Cir.2005). The Act underscores the overarching federal policy favoring arbitration to resolve labor disputes. Major League Baseball Players Association v. Garvey, 532 U.S. 504, 121 S.Ct. 1724, 149 L.Ed.2d 740 (2001); see also Penntech Papers, Inc. v. United Paperworkers Int'l Union, 896 F.2d 51, 53 (3d Cir.1990) (finding that the overwhelming presumption in favor of arbitration awards "protects] the benefits of labor arbitration, namely, speed, flexibility, informality, and finality."). Accordingly, a district court may only vacate an arbitrator's award in limited circumstances:

(1) where the award was procured by corruption, fraud or undue means; (2) where there was evident partiality or corruption in the arbitrators, or either of them; (3) where the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; or of any other misbehavior by which the rights of any party have been prejudiced; or (4) where the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made.

9 U.S.C. § 10(a)(1)-(4); see also Hall Street Associates, LLC v. Mattel, Inc. 128 S.Ct. 1396(2007). "As long as the arbitrator's award 'draws its essence from the collective bargaining agreement, ' and is not merely 'his own brand of industrial justice, ' the award is legitimate." United Paperworkers Int'l Union v. Misco, Inc., 484 U.S. 29, 36, 108 S.Ct. 364, 98 L.Ed.2d 286 (1987) (quoting Steelworkers v. Enterprise Wheel & Car Corp., 363 U.S. 593, 597, 80 S.Ct. 1358, 4 L.Ed.2d 1424 (1960); Exxon Shipping Company v. Exxon Seamen's Union, 801 F.Supp. 1379, 1384 (3d Cir. 1992).

         A court may, however, vacate an arbitration award if the arbitrator's decision is wholly unsupported by the agreement's plain language or the arbitrator fails to adhere to basic principles of contract construction. News Am. Publications, Inc., Daily Racing Form Div. v. Newark Typographical Union, Local 103, 921 F.2d 40, 41 (3d Cir.1990); Exxon Shipping, 801 F.Supp. at 1384. This Court may not "sit as the panel did and reexamine the evidence." Mutual Fire, Marine, & Inland Ins. Co. v. Norad Reins. Co., Ltd., 868 F.2d 52, 56 (3d Cir. 1989). Thus, if an "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.'" Eastern Associated Coal Corp. v. United Mine Workers of America, District 17, 531 U.S. 57, 62, 121 S.Ct. 462, 148 L.Ed.2d 354 (2000) (quoting Misco, 484 U.S. at 38). In other words, it is not within the province of this Court to substitute its judgment for that of an arbitrator's, however injudicious it may be. Rather, Congress' intent in passing the FAA and concurrent policy considerations guide this Court's obligation to uphold an arbitrator's judgment if the decision, on its face, was drawn from the parties' agreement or is remotely based on reasonable contractual interpretation. See United Trans. Union Local 1589 v. Suburban Transit Corp., 51 F.3d 376, 379 (3dCir.l995).

         Alternatively, courts have vacated arbitration awards in instances where the arbitrator demonstrates a manifest disregard for the applicable law. Although not explicitly enumerated as a grounds for vacatur under the FAA, the Third Circuit has recognized the "manifest disregard of the law doctrine [as] a judicially-created one that is to be used 'only [in] those exceedingly rare circumstances where some egregious impropriety on the party of the arbitrators is apparent, but where none of the provisions of the [FAA] apply." Black Box Corp. v. Markham, 127 Fed.Appx. 22, 25 (3d Cir.2005). To prevail under this doctrine, the moving party must demonstrate that the arbitrator ignored law that was "well defined, explicit, and clearly applicable to the case." Koken v. Cologne Reinsurance (Barb.) Ltd., No. 98-0678, 2006 U.S. Dist. LEXIS 59540, at *6, 2006 WL 2460902 (M.D.Pa. Aug. 23, 2006); O'Leary v. Salomon Smith Barney, Inc., No. 05-6016, 2008 WL 5136950, at *4 (D.N.J. Dec.5, 2008).

         Here, there appears not to have been any fraud, misconduct, corruption, or abuse of power. Thus, the Court will review to determine whether the Arbitrator's construction of the CBA was so irrational and ...

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