Appeal from the United States District Court for the Eastern District of Wisconsin. No. 79 C 46 -- John W. Reynolds, Judge.
Pell, Circuit Judge, Swygert, Senior Circuit Judge, and Marovitz, Senior District Judge.*fn*
Appellant Kohl Corporation (Kohl) appeals from a judgment of the district court vacating an arbitrator's award in favor of Kohl because of what the court termed the company's fraud at the arbitration hearing. The court held that by not calling one of its attorneys to testify about a telephone conversation, Kohl had deceitfully withheld important information from the arbitrator and thereby tainted the proceeding.
Kohl raises five challenges to the district court's decision. First, it says that there was no fraud because the arbitrator had all of the facts before him, including an uncontradicted account of the telephone conversation. Second, it says that even if there was fraud, appellee's action, brought under section 301 of the Labor Management Relations Act, 29 U.S.C. § 185, was barred by the statute of limitations. Third, it says that the posttrial amendment of the complaint to make Kohl a party defendant was improper. Fourth, it says that in vacating the award the district court should have remanded the entire case to the arbitrator, not just the issue of the appropriate relief. Fifth, it says that the award of attorney's fees was improper.
Appellee Thomas Grisbaum was employed by Kohl as a meat cutter and was a member of the Amalgamated Meat Cutters & Tannery Workers Union (the Union). On June 17, 1975, he suffered a disabling back injury that rendered him unable to work for more than a year. On December 30, 1976, the Union notified Kohl that Grisbaum would be able to return to work on January 3, 1977.
Kohl, asserting that Grisbaum's injury was not work related, responded that it would not rehire Grisbaum because, under the collective bargaining agreement, the company was not required to reinstate a worker who had not worked for more than a year because of a non-work-related injury. In a letter to the Union dated January 17, the company affirmed that its decision was final.
The collective bargaining agreement provided that the Union had twenty-four hours in which to request that a panel of arbitrators hear a grievance. Instead of responding on January 18, the Union requested arbitration on January 28. Citing this delay, Kohl refused to agree to submit the grievance to arbitration. The company did agree, however, to arbitrate whether the Union could institute Grisbaum's grievance despite its failure to meet the twenty-four-hour deadline.
At the arbitration hearing, the parties agreed that the issues to be determined were whether the grievance was arbitrable despite the Union's failure to meet the deadline and, if so, whether Grisbaum was estopped from asserting his claim for reinstatement or back pay. They also agreed that if the arbitrator decided against Kohl on both of those issues, they would be bound by the determination of the Wisconsin Division of Worker's Compensation as to whether Grisbaum's back injury was occupational. On October 4, 1977, the agency ruled that the injury was occupational, but, because the arbitrator ruled in Kohl's favor on the time bar issue, this ruling had no effect.
At the May 13, 1977, arbitration hearing, the Union claimed that Kohl's attorney Barton Peck had telephoned Gordon Loehr, the Union's business representative, on January 8, and waived strict compliance with the time limits of the collective bargaining agreement. The Union asserted that because of this telephone conversation it did not respond to Kohl's January 17 letter within twenty-four hours. Kohl did not deny that the conversation occurred, but asserted that it had wanted to expedite the arbitration proceedings rather than delay, and pointed to the language of the January 17 letter indicating a desire to hurry.
Only Loehr testified about the conversation at the hearing; neither side called Peck to testify, nor did he volunteer his version of the conversation.*fn1 On June 30, 1977, the arbitrator ruled that the Union's failure to meet the twenty-four-hour deadline barred it from instituting Grisbaum's grievance. The arbitrator said that the letter of January 17 was "entirely inconsistent" with the Union's claim that Peck had waived the time limits in the January 8 telephone conversation.
On January 5, 1979, Grisbaum filed an action in a Wisconsin county circuit court against the Union under section 301 of the Labor Management Relations Act, 29 U.S.C. § 185. On January 18, the Union removed the action to the district court and, on July 20, the court granted the Union leave to file a third-party complaint against Kohl. The trial was held on October 27, 1979; both Peck and Loehr testified about the telephone conversation and substantially agreed as to what was discussed. Following the trial, Grisbaum moved pursuant to Rule 15(b) of the Federal Rules of Civil Procedure to add Kohl as a party defendant and to amend his pleadings to assert his claim that the arbitrator's award was not binding on the parties because of Kohl's fraud.
On February 10, 1982, the district court vacated the arbitrator's decision, remanded the case to him to determine the relief to which Grisbaum was entitled, and granted the motions to add Kohl as a party defendant and to amend the complaint. The court dismissed Grisbaum's complaint against the Union and the Union's ...