United Steel Paper v. Neville Chem Co , 298 F. App'x 209 ( 2008 )

Opinions of the United
2008 Decisions States Court of Appeals
for the Third Circuit
11-10-2008
United Steel Paper v. Neville Chem Co
Precedential or Non-Precedential: Non-Precedential
Docket No. 07-3554
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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT
No.07-3554
UNITED STEEL, PAPER AND FORESTRY,
RUBBER, MANUFACTURING, ENERGY,
ALLIED INDUSTRIAL AND SERVICE WORKERS
INTERNATIONAL UNION
v.
NEVILLE CHEMICAL COMPANY,
Appellant
On Appeal from the United States District Court
for the Western District of Pennsylvania
(D.C. No. 06-cv-00640)
District Judge: Honorable Terrence F. McVerry
Submitted Under Third Circuit LAR 34.1(a)
October 30, 2008
Before: SLOVITER, STAPLETON, and TASHIMA,* Circuit Judges
(Filed November 10, 2008 )
OPINION
*
Honorable A. Wallace Tashima, Senior Judge of the
United States Court of Appeals for the Ninth Circuit, sitting by
designation.
SLOVITER, Circuit Judge.
United Steel, Paper & Forestry, Rubber, Manufacturing, Energy, Allied Industrial
& Service Workers International Union (the “Union”), brought this action to enforce an
arbitration award which directed Neville Chemical Company (“Neville”), the employer,
to reinstate Gregory McCann, a Union member, and make him whole. Neville appeals
the District Court’s Orders granting the Union’s motion for summary judgment and
ordering Neville to pay damages consisting of back pay from the date of McCann’s
discharge and unemployment compensation.
I.
The parties agree on the facts. McCann, a longtime employee of Neville, became a
Packager in 2003, a position requiring repetitive lifting of fifty pound bags. From July
2004 until his discharge, McCann was working in a light duty capacity as a result of a
back injury he sustained in May 2004. McCann’s physician reported that McCann’s
condition was improving; thus he remained eligible for light duty work under Neville’s
Return to Work Procedure because his injury was deemed temporary and he was making
progress toward a return to full duty.
In February 2005, McCann was disciplined for his involvement in two work
incidents. The first incident, which occurred on February 15, 2005, resulted in McCann
being suspended for three days without pay. The second, which occurred on February 20,
2005, resulted in McCann being suspended without pay for five days and subject to
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discharge. McCann last worked on March 14, 2005. On March 15, 2005, the Union filed
grievances relating to the two incidents pursuant to the collective bargaining agreement,
which were submitted to arbitration. On January 19, 2006, the arbitrator issued Awards
deciding each grievance. The arbitrator decided that Neville had proper cause to
discipline McCann for the second incident only. Therefore, the arbitrator rescinded the
first suspension and reduced the discharge to a three-day suspension without pay from
March 20 through March 22 as the next step in progressive discipline. The arbitrator
directed Neville to reinstate McCann and make him whole from March 23, 2005 until his
reinstatement.
The parties agree that Neville subsequently reimbursed McCann for the reduction
in his suspensions, reinstated his health insurance benefits and seniority, and paid him the
balance due for his 2005 vacation and holiday pay. Neville did not, however, reinstate
McCann or pay him back pay from March 23, 2005. Neville contended that it could not
reinstate McCann because he was physically unable to perform his former job and,
because his condition was permanent, he was no longer eligible for light duty work under
the Return to Work Procedure.
The District Court, in granting summary judgment in favor of the Union, held that
Neville waived the right to raise McCann’s physical limitations as a defense to the
enforcement of the award because it failed to raise the issue before the arbitrator.
Furthermore, Neville failed to make a timely motion to vacate or modify the arbitration
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award. The District Court’s damages award included back pay from the date the
arbitration award ordered reinstatement, and the amount of unemployment compensation
McCann would have received during a lockout at Neville’s facility had he been
reinstated. In ordering back pay, the District Court rejected Neville’s argument that back
pay cannot be awarded during a period of disability, once again because Neville failed to
raise McCann’s physical limitations before the arbitrator or in a motion to vacate the
arbitration award.
II.
The District Court had subject matter jurisdiction pursuant to Section 301(a) of the
Labor Management Relations Act, 29 U.S.C. § 185(a) and 28 U.S.C. § 1331. This court
has jurisdiction from the entry of the District Court’s Orders pursuant to 28 U.S.C. §
1291. We have plenary review of the District Court’s Orders. See United Food &
Commercial Workers Union Local 1776 v. Excel Corp., 470 F.3d 143, 145 (3d Cir.
2006).
III.
Neville argues that the District Court committed legal error in granting summary
judgment in favor of the Union because McCann was physically unable to return to work.
Neville argues that because McCann applied for workers’ compensation claiming total
disability as of March 14, 2005, he admitted he had become totally disabled as of the date
of his discharge. Therefore, Neville complied with the arbitration agreement in that it
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made McCann whole by restoring him to the state he was in on the date of his discharge
as a totally disabled inactive employee. Neville argues that the District Court’s Orders, in
effect, granted McCann a permanent light duty job, which is an issue the arbitrator did not
decide and a result that is contrary to the terms of the Return to Work Procedure.
As the District Court concluded, Neville waived these arguments. An employer’s
failure to raise defenses to the enforcement of an arbitration award in a timely motion to
vacate or modify the award bars it from raising them thereafter. See Serv. Employees
Int’l Union Local 36 v. City Cleaning Co., 982 F.2d 89, 93 (3d Cir. 1992). As Neville
failed to bring an action to modify, vacate, or correct the arbitration award within thirty
days as required under Pennsylvania law, it is precluded from arguing that it was unable
to reinstate McCann due to physical inability and that it cannot be ordered to pay back
pay. 42 Pa. Cons. Stat. Ann. § 7314(b); Serv. Employees Int’l Union Local 36, 982 F.2d
at 93. In addition, Neville failed to raise this issue at the arbitration hearings even though
the medical records and testimony in connection with McCann’s workers’ compensation
proceeding, which are the basis of Neville’s argument, were available at the time of the
arbitration hearings. The District Court’s award of back pay from the time McCann was
discharged does not grant a permanent light duty position. It merely enforces the
arbitration award.
We reject Neville’s argument that the District Court’s holding is in conflict with
our opinion in United Food and Commercial Workers Union Local 1776 v. Excel Corp.,
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470 F.3d 143 (3d Cir. 2006). In Excel, we held that an employer’s payment of back pay
from the date of an employee’s wrongful suspension to the date of his second termination
for separate conduct acted as effective reinstatement in satisfaction of the arbitration
award and “the employer was free to terminate the employee a second time based on
independent grounds, pending a second arbitration.” Id. at 144. Important to our decision
were the facts that the employer notified the employee that he was being terminated for
the independent grounds and the employer presented the independent reason to the
arbitrator but the arbitrator did not consider it. Id. at 149. Here, in contrast, Neville did
not notify McCann that his alleged disability was a ground for termination until well after
the arbitrator’s award and, most importantly, it failed to present this basis for termination
to the arbitrator. As we noted in Excel, “[t]he long-established federal policy of settling
disputes by arbitration would be seriously undermined if parties kept available
information from the arbitrator and then attempted to use the information as a defense to
compliance with an adverse award.” Id. (quoting Chicago Newspaper Guild v. Field
Enters., Inc., 747 F.2d 1153, 1157 (7th Cir. 1984)).
Finally, Neville argues that the damages awarded for the unemployment
compensation McCann would have received had he been reinstated allows the Union to
collaterally attack the denial of McCann’s unemployment compensation claim and
violates the Rooker-Feldman doctrine. On the contrary, the District Court did not impose
these damages as a second opportunity to receive unemployment compensation, but rather
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to satisfy the arbitration award’s direction that McCann be “made whole.” App. at 136a.
IV.
For the above-stated reasons, we will affirm the District Court’s Orders.
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