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WYMAN-GORDON v. UNITED STEELWORKERS OF AM.

June 13, 1985

WYMAN-GORDON COMPANY, A MASSACHUSETTS CORPORATION DOING BUSINESS IN THE STATE OF ILLINOIS, PLAINTIFF,
v.
UNITED STEELWORKERS OF AMERICA, AFL-CIO AND ITS LOCAL UNION, LOCAL UNION NO. 3669, LABOR ORGANIZATIONS, DEFENDANTS.



The opinion of the court was delivered by: Aspen, District Judge:

MEMORANDUM OPINION AND ORDER

Wyman-Gordon Company ("the Company") filed this suit under § 301 of the Labor Management Relations Act of 1947, 29 U.S.C. § 185, seeking to vacate an arbitration decision ordering the Company to reinstate employee Ronald Brown ("Brown") with full seniority, benefits and back pay of about $30,000. The Company had fired Brown for collecting unemployment benefits while working for and drawing a salary from the Company. The defendant Union ("the Union") grieved the firing, which ultimately led to the arbitration decision favoring the Union. The parties have filed cross-motions for summary judgment. The material facts are undisputed. For the reasons stated below, the Court grants the Union's motion and denies the Company's.

I.

The Company manufactures steel forgings, including crankshafts for the auto and farm implement industries. During the severe 1982 recession, it laid off about half of its hourly workforce of over 900. On September 5, 1982, it closed its Harvey, Illinois, plant, laying off the remaining workers, including Brown. Brown and others filed for and received unemployment compensation from the State of Illinois. The Company recalled Brown from September 14 through October 17 and then laid him off again until November 29, when he was recalled for good. Brown had certified to the State that he was unemployed even during his period of recall. He thereby collected six weeks of benefits unlawfully. Brown was not the only worker to do so. After an investigation in March 1983, the Company learned that thirty-eight employees had received one or more weeks of unlawful benefits. It decided not to discipline employees who received excess benefits for only two weeks or less, because such employees could have received their benefits through some error. But to receive benefits for three or more weeks, an employee must have certified to the State at least twice that he or she was not working. The Company decided to fire the nine workers who fell into this group. The Union grieved each of the nine discharges under the relevant Collective Bargaining Agreement.

Because the grievances involved many common issues, the Union asked the Company to agree to arbitrate all nine before one arbitrator, but the Company refused.*fn1 In March 1984, Arbitrator Dolnick heard the first case, involving another employee. The issue, as in the Brown arbitration, was whether the Company had "just cause" to fire the employee for unlawfully receiving unemployment benefits, and if not, what the proper remedy was. Arbitrator Dolnick ruled that the Company had just cause under the Collective Bargaining Agreement ("Agreement") to fire that employee. That Agreement provides that:

  In discipline and discharge cases, the arbitrator
  shall have the right to change the degree, type or
  method of discipline or discharge as the equities of
  each discipline or discharge case may require.
 
  The decision of the arbitrator shall be final,
  conclusive, and binding on both parties for the life
  of this Agreement.*fn2

The Union did not challenge Arbitrator Dolnick's decision.

The Company fared worse in grievance two, also involving an employee other than Brown. Arbitrator Wolff found that the Company lacked just cause for firing that employee. Although he distinguished Arbitrator Dolnick's decision, Arbitrator Wolff also expressly disagreed with it and rejected the Company's argument that principles of stare decisis or res judicata apply to arbitrations. The Company disagrees with this decision, but abided by it.

The Company then lost its second in a row in arbitration three, the one involving Brown. In a twenty-five page opinion, Arbitrator Goldstein ruled that the Company lacked just cause to fire Brown. As a remedy, he ordered that Brown be reinstated with back pay, benefits and seniority. Agreeing with Arbitrator Wolff, Arbitrator Goldstein also rejected notions of stare decisis and res judicata, and declined to follow Arbitrator Dolnick's decision.

The Company has reinstated Brown, but refuses to comply with the rest of the decision.*fn3 In this suit to vacate the award, the Company makes essentially three arguments. Most significantly, it argues that the arbitrator's decision violated Illinois' clear public policy forbidding fraudulent collection of unemployment benefits. It also complains that the arbitrator read a "subjective intent" requirement into the "just cause" clause and thus modified the clause. Finally, the Company argues that the Collective Bargaining Agreement required Arbitrator Goldstein to follow Arbitrator Dolnick's decision. Below we reject each of these contentions.

II.

Federal courts are not arbiters of labor arbitrators' decisions. The well-established case law holds that arbitrators have great leeway to make even wrong decisions, that is, decisions a reviewing court might disagree with. The Supreme Court defined the Court's narrow scope of review in the Steelworkers' Trilogy.*fn4 When labor and management submit a question of contract interpretation to an arbitrator, the Court's review "is confined to ascertaining whether the party seeking arbitration is making a claim which on its face is governed by the contract." Steelworkers v. American Mfg. Co., 363 U.S. at 568, 80 S.Ct. at 1346. Courts "have no business weighing the merits" of the dispute, id., because in the labor relations context, arbitration replaces and quells strife. Arbitration is "part and parcel of the collective bargaining process itself." Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. at 578, 80 S.Ct. at 1350. But while the court has a highly deferential role, its mission is not merely to rubber stamp an arbitrator's ruling mindlessly. The arbitrator has great freedom only when interpreting and applying the collective bargaining agreement:

  [H]e 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 ...

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