Limitorque Corp v. Intl Assn Machinists ( 1998 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
LIMITORQUE CORPORATION,
Plaintiff-Appellee,
v.
No. 97-2345
INTERNATIONAL ASSOCIATION OF
MACHINISTS AND AEROSPACE
WORKERS, LODGE NO. 10,
Defendant-Appellant.
Appeal from the United States District Court
for the Western District of Virginia, at Lynchburg.
Jackson L. Kiser, Senior District Judge.
(CA-96-64-L)
Argued: May 5, 1998
Decided: July 6, 1998
Before HAMILTON and MOTZ, Circuit Judges, and
BEEZER, Senior Circuit Judge of the
United States Court of Appeals for the Ninth Circuit,
sitting by designation.
_________________________________________________________________
Affirmed by unpublished per curiam opinion.
_________________________________________________________________
COUNSEL
ARGUED: James Joseph Vergara, Jr., VERGARA & ASSO-
CIATES, Hopewell, Virginia, for Appellant. Eric Hemmendinger,
SHAWE & ROSENTHAL, Baltimore, Maryland, for Appellee.
_________________________________________________________________
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
_________________________________________________________________
OPINION
PER CURIAM:
Limitorque Corporation ("Limitorque") brought an action to vacate
an arbitration award in favor of the International Association of
Machinists and Aerospace Workers, Lodge No. 10 ("IAM"). IAM
appeals from the district court's grant of summary judgment in favor
of Limitorque. We have jurisdiction, 28 U.S.C. § 1291, and we
affirm.
I
IAM and Limitorque had operated under a long-standing series of
collective bargaining agreements ("CBAs"). From 1986 through
1995, the CBAs provided the same dental benefits to hourly employ-
ees as Limitorque provided to its salaried employees. The CBAs did
not, however, require this parity.
In May 1995 the parties negotiated a new CBA. The negotiations
were conducted under Negotiating Ground Rules, one of which, rule
3, provided that "[t]here will be no tentative agreement reached on
any issue not reduced to writing and signed by both parties." At the
time of the CBA negotiations, Limitorque was also negotiating with
its dental insurer regarding changes to the Limitorque dental plans.
On May 10, 1995, during the CBA negotiations, the IAM negotiators
asked the Limitorque negotiator how benefits would change under the
new dental plans. The Limitorque negotiator stated that hourly and
salaried employees would receive the same benefits. On May 11
Limitorque presented a "Final Offer" that did not mention the dental
plan. The IAM negotiators accepted the Final Offer. On May 12 the
IAM negotiators again asked about the dental plan, and the Limitor-
que negotiator again stated that hourly and salaried employees would
receive the same benefits. Both parties agree that there is a new CBA
("the 1995 CBA"), but the 1995 CBA has not been reduced to writing
because of disagreement over its terms.
2
On August 1, 1995, Limitorque and its dental insurer arrived at a
new agreement providing greater benefits to salaried employees than
to hourly employees. IAM sought arbitration, claiming that under the
1995 CBA hourly employees were entitled to the same dental benefits
as salaried employees. At the arbitration, Limitorque reserved its right
to obtain de novo review of the issue of arbitrability. The arbitrator
found that the dispute was arbitrable and that the 1995 CBA provided
for equal dental benefits. Limitorque filed suit in district court, seek-
ing to vacate the arbitration award. The district court granted sum-
mary judgment to Limitorque on the ground that the dispute was not
arbitrable. This timely appeal followed.
II
We review de novo a grant of summary judgment. General Driv-
ers, Warehousemen and Helpers Local Union No. 509 v. Ethyl Corp.,
68 F.3d 80, 83 (4th Cir. 1995). An arbitration award may be over-
turned if it "violates well-settled and prevailing public policy, fails to
draw its essence from the collective bargaining agreement or reflects
the arbitrator's own notions of right and wrong." Mountaineer Gas
Co. v. Oil, Chemical & Atomic Workers Int'l Union , 76 F.3d 606, 608
(4th Cir.), cert. denied, 117 S. Ct. 80 (1996).
III
IAM argues that the district court erred in holding that this dispute
was not subject to arbitration. We affirm on an alternate ground. See
Thigpen v. Roberts, 468 U.S. 27, 30 (1984).
A
A court will not usually set aside an arbitrator's award "[m]erely
because [the] court finds that the arbitrator has seriously misconstrued
a contract." Walker v. Consolidated Freightways, Inc., 930 F.2d 376,
381 (4th Cir. 1991) (citing United Paperworkers Int'l Union, AFL-
CIO v. Misco, Inc., 484 U.S. 29, 36 (1987)). But where the language
of a CBA is unequivocal, an arbitration award that modifies the con-
tract language fails to draw its essence from the CBA and may be
overturned by the courts. See id.3
Limitorque contends that the 1995 CBA unequivocally does not
contain the agreement requiring equal benefits for both hourly and
salaried employees. By interpreting the 1995 CBA to include that pro-
vision, Limitorque continues, the arbitrator modified the 1995 CBA
and his award should thus be overturned. We must therefore deter-
mine whether the arbitrator's award "ignore[d] the plain language of
the contract." See Misco, 484 U.S. at 36.
The parties agree that the 1995 CBA has not been reduced to writ-
ing. Despite this lack of a writing, both parties agree that the 1995
CBA consists, at the minimum, of the most recent CBA (the 1992
CBA) plus the modifications set forth in the Final Offer. Limitorque
contends that this is all that the 1995 CBA contains. IAM argues that
the 1995 CBA also includes certain oral agreements that were not
reduced to writing. Among those agreements, according to IAM, is an
agreement requiring Limitorque to provide the same dental benefits
to hourly employees as to salaried employees.
IAM's interpretation is contrary to rule 3 of the Negotiating
Ground Rules. As noted above, rule 3 provided that"[t]here will be
no tentative agreement reached on any issue not reduced to writing
and signed by both parties." The oral agreement on the new dental
plan was a "tentative"--i.e., preliminary--agreement. Because that
agreement was not in writing, it had no force and could not be incor-
porated into the final agreement.
IAM argues further that Limitorque's practice shows that the 1995
CBA contains provisions orally agreed upon by the parties during the
contract negotiations. This argument, though, is precluded by the
CBA itself, which provides that "[t]he waiver of, or any breach of
conditions of this Agreement, by either party, shall not constitute a
precedent in the future enforcement of all the terms and conditions
herein." Limitorque's honoring of any other oral agreements therefore
lacks precedential value.
B
Having determined that the 1995 CBA consists only of the 1992
CBA as modified by the Final Offer, we must next determine whether
4
the 1995 CBA contains the provision requiring parity of dental bene-
fits.
Neither the 1992 CBA nor the Final Offer contains the promises
made by the Limitorque negotiator on May 10 or 12. Similarly, the
new Limitorque dental plan is mentioned in neither the 1992 CBA nor
the Final Offer. Neither document requires that Limitorque provide
the same dental plans to both hourly and salaried personnel. Instead,
the 1992 CBA incorporated by reference the dental plan provided by
Limitorque through its dental insurer before August 1995. Because
the Final Offer does not alter the 1992 CBA in that regard, the 1995
CBA provides the same dental plan as provided under the 1992 CBA.
By interpreting the 1995 CBA to require parity of dental benefits
between salaried and hourly employees, the arbitrator's award modi-
fied the unequivocal language of the 1995 CBA. The arbitrator's
award thus failed to draw its essence from the CBA. See Walker, 930
F.2d at 381. The district court did not err in vacating the arbitration
award.
IV
The judgment of the district court is affirmed. Because Limitorque
did not oppose the arbitration award "without justification," IAM's
request for attorneys' fees is denied. See United Food and Commer-
cial Workers, Local 400 v. Marval Poultry Co., 876 F.2d 346, 350
(4th Cir. 1989).
AFFIRMED
5