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Young Radiator Co. v. International Union

decided: May 15, 1984.


Appeal from the United States District Court for the Eastern District of Wisconsin. No. 81 C 975 -- Myron L. Gordon, Judge.

Eschbach and Flaum, Circuit Judges, and Swygert, Senior Circuit Judge. Swygert, Senior Circuit Judge, dissenting.

Author: Flaum

FLAUM, Circuit Judge.

This is an appeal from a judgment of the district court 544 F. Supp. 32 enforcing an arbitration award. Because we find that the arbitrator's award was based on considerations not found in the terms of the parties' collective bargaining agreement, we reverse the judgment of the district court and order the court to remand to the arbitrator.


The appellant, Young Radiator Company ("Young Radiator"), and appellees, International Union, United Automobile, Aerospace and Agricultural Implement Workers of America, U.A.W., and its Local Union No. 37, were parties to a collective bargaining agreement covering approximately 300 of the appellant's employees at plants located in Racine, Wisconsin. On or about December 15, 1979, there was a theft from a Young Radiator plant of more than $33,000 worth of silver solder, which the company used in its manufacturing process. Shortly after the theft was discovered, investigators found some physical evidence that, they believed, implicated a Young Radiator employee named Joseph Guerrero. On December 17, Guerrero was arrested by an officer of the Racine County Sheriff's office. The next day, Louis Wynhoff, a detective with that office, interrogated Guerrero. During the course of that interrogation, Wynhoff asked Guerrero to submit to a polygraph test. Guerrero indicated that he did not wish to do so, and he asked Wynhoff if he could speak "off the record." When Wynhoff said yes, Guerrero stated that he did not want to take a polygraph test because he had taken a small quantity of silver solder from Young Radiator in the past and was afraid that this would "show up" on a polygraph test.*fn1 Wynhoff later related Guerrero's remarks to Fred Young, a Young Radiator executive.

On the same day that Guerrero was arrested, December 17, 1979, Young Radiator suspended Guerrero pending investigation of the December 15 theft of silver solder. On December 26, Guerrero filed a grievance protesting his suspension. That grievance was denied, as were subsequent grievances. On January 17, 1980, Young Radiator discharged Guerrero. The termination slip stated, "Due to circumstances indicating that Joe Guerrero is responsible for theft of silver solder, including an admission to sheriff's detectives that he took silver solder from the company on an occasion in the past he is being discharged." Pursuant to the collective bargaining agreement between Young Radiator and the appellees, Guerrero's union, the case went to arbitration.

The precise question before the arbitrator was whether Guerrero was "discharged for just cause." Appellant's Appendix at 7. After conducting a hearing, the arbitrator determined that Young Radiator had not established adequately that Guerrero was responsible for the theft of silver solder on December 15, 1979, and that therefore this could not be the basis for Guerrero's discharge.*fn2 Young Radiator has not challenged that determination. However, the arbitrator also determined that Guerrero's admission concerning his earlier taking of silver solder did not constitute "just cause" for the discharge, and he ordered Guerrero reinstated. Young Radiator appealed this latter determination to the district court. The district court upheld the arbitrator's determination that Guerrero's admission did not constitute just cause for the discharge, and it affirmed the arbitrator's award. Young Radiator's appeal to this court followed.


The law that we must apply in reviewing the arbitrator's decision in this case is very well established. The Supreme Court has stated:

An arbitrator is confined to interpretation and application of the collective bargaining agreement; he does not sit to dispense his own brand of industrial justice. He may of course look for guidance from many sources, yet his award is legitimate only so long as it draws its essence from the collective bargaining agreement. When the arbitrator's words manifest an infidelity to this obligation, courts have no choice but to refuse enforcement of the award.

United Steelworkers of America v. Enterprise Wheel and Car Corp., 363 U.S. 593, 597, 4 L. Ed. 2d 1424, 80 S. Ct. 1358 (1960).*fn3 In accordance with this principle, a court is strictly limited in reviewing an arbitration award to the determination of whether the award "draws its essence from the collective bargaining agreement" and whether "the arbitrator's words manifest an infidelity to this obligation." F.W. Woolworth Co. v. Miscellaneous Warehousemen's Union, Local 781, 629 F.2d 1204, 1215 (7th Cir. 1980), cert. denied, 451 U.S. 937, 68 L. Ed. 2d 324, 101 S. Ct. 2016 (1981); Amoco Oil Co. v. Oil, Chemical & Atomic Workers International Union, Local 7-1, 548 F.2d 1288, 1293-94 (7th Cir.), cert. denied, 431 U.S. 905, 52 L. Ed. 2d 389, 97 S. Ct. 1697 (1977).

The appellant Young Radiator argues on this appeal that the arbitrator failed to confine himself to the terms of the collective bargaining agreement in arriving at his decision and that therefore the arbitrator's award fails to "draw its essence from the collective bargaining agreement." More specifically, Young Radiator contends that the arbitrator refused to accept Guerrero's admission of the earlier taking of solder as a sufficient cause for the discharge only because he did not believe it to be the "motivating cause" for the discharge. According to Young Radiator, this decision was improper because the parties' collective bargaining agreement clearly authorizes the company to discharge employees for theft, and nowhere requires that a "just cause" for a discharge be the motivating cause for the discharge. The appellees respond by arguing that Guerrero's statement was not an unequivocal admission of theft and thus did not constitute sufficient evidence of a theft to justify the discharge.*fn4 According to the appellees, this failure by Young Radiator to meet its burden of proof was the basis for the arbitrator's decision, and therefore the decision was entirely proper. We note that the appellees have not argued that the "motivating cause" line of reasoning that Young Radiator attributes to the arbitrator was proper. Rather, their position seems to be that the arbitrator's "motivating cause" analysis was not the basis for the arbitrator's decision.

As framed by the parties' arguments, the main issue on this appeal is the precise basis for the arbitrator's decision. We agree with the parties that our main task is to interpret the arbitrator's opinion, and we have examined that opinion closely. Based on that examination, we conclude that the arbitrator did rest his decision ...

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