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United Steelworkers of America v. Danly Machine Corp.

decided: July 26, 1988.


Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 86 C 6294 -- Harry Leinenweber, Judge.

Wood, Jr., Flaum, and Kanne, Circuit Judges.

Author: Kanne

KANNE, Circuit Judge.

The United Steelworkers of America, AFL-CI0-CLC and Local Union 15271 (collectively "the union") brought an action in the district court pursuant to 29 U.S.C. ยง 185 to enforce an arbitration award. The district court granted judgment in the union's favor and enforced an order by the arbitrator awarding the grievant, Carmine DiSandro, sickness and accident benefits ("S & A benefits"). In so ruling, the district court denied Danly Machine Corporation's ("Danly") cross-motion for summary judgment. Danly appeals. We affirm.

Following a strike at the Danly Corporation, Carmine DiSandro, an employee of Danly, sought reinstatement to his former position as a "crib attendant." The job required DiSandro to lift 35 pounds or more on a regular basis, a requirement DiSandro had not been able to meet without an assistant even before the strike.*fn1 As a result, Danly refused to reinstate DiSandro either as a crib attendant or in any other position, ostensibly because all jobs at Danly involved lifting 35 pounds or more.

DiSandro then requested, but was denied, sickness and accident benefits under Danly's Insurance Plan, incorporated into and made a part of the collective bargaining agreement between the union and Danly.

DiSandro filed a grievance against Danly seeking S & A benefits, or in the alternative, reinstatement. Following the procedures outlined in the collective bargaining agreement for settling labor disputes, the matter was eventually heard by an arbitrator.

At arbitration, Danly argued that DiSandro's back problems made reinstatement impossible and that its employees were not permitted to go from "lay-off"*fn2 status to "disability" status in order to collect S & A benefits. With respect to the argument concerning benefits, the union pointed out that Danly had instituted a policy permitting employees returning from lay-off status to receive benefits. Danly responded that it had not instituted a practice of permitting employees to go from lay-off status to disability status but had simply made a policy exception for certain employees at the union's request.*fn3 Danly argued this policy exception had now been rescinded, as evidenced by the denial of several other S & A benefit claims.

The arbitrator found that DiSandro's grievance primarily involved a request for S & A benefits and that his request for reinstatement, though an alternative request, was not the underlying basis for his grievance. The arbitrator ruled that Danly properly refused to return DiSandro to work but then held that although Danly had not instituted a practice of permitting employees on lay-off status to proceed to disability status, it had, by official policy,*fn4 made an exception for certain employees. The arbitrator also held that although Danly was permitted to unilaterally rescind that policy at any time (since the policy never had been formally incorporated into the collective bargaining agreement), employees had to be notified of the policy's rescission. The arbitrator then found that DiSandro did not have notice that Danly was changing its policy at the time he sought benefits. Therefore, the arbitrator concluded DiSandro was entitled to rely on the existing policy and was entitled to receive benefits.

The arbitrator ordered Danly to pay DiSandro S & A benefits "subject to applicable waiting periods and any other restrictions that would apply if grievant went from active employment status to S & A status on that date." Under the section of the opinion entitled "AWARD," the arbitrator directed Danly " to pay grievant S & A benefits in accordance with the above opinion." (emphasis added).

Following receipt of the arbitrator's decision, Danly sent DiSandro an S & A benefit claim form requiring a signature by a treating physician. DiSandro met with Danly personnel a short while later and explained he was unable to complete the form as he was not under a treating physician's care. Danly then denied DiSandro's S & A benefits.

DiSandro's union filed an action in federal court seeking enforcement of the arbitration award. The district court, after considering the parties' cross-motions for summary judgment, ruled that Danly's failure to raise the issue of the claim form requirement at the time of the arbitration proceeding, constituted a waiver of that issue. The court also determined that the arbitrator had unconditionally awarded DiSandro S & A benefits. It therefore granted the union's motion for summary judgment and ordered Danly to pay.

On appeal, Danly argues the district court overstepped its jurisdictional bounds by interpreting an ambiguous award in DiSandro's favor. Danly argues that to find for DiSandro, the district court must have made a factual determination that DiSandro was not required to meet claim form eligibility requirements-a determination left open by the arbitrator's opinion. The union responds that the arbitrator unambiguously awarded DiSandro benefits. Thus, Danly cannot now impose an after-the-fact requirement on DiSandro's eligibility for that award.

Danly argues that it is not clear whether the arbitrator unequivocally awarded DiSandro S & A benefits or whether he only found DiSandro eligible for those benefits. Danly asserts that given the ambiguity in the award, the district court should not have interpreted the award to mean that DiSandro had been awarded benefits. ...

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