International Union v. Trane U.S. Inc. ( 2020 )

United States Court of Appeals
For the Eighth Circuit
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No. 19-2255
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International Union, United Automobile, Aerospace & Agricultural Implement
Workers of America, AFL-CIO; UAW, Local 716
lllllllllllllllllllllPlaintiffs - Appellants
v.
Trane U.S. Inc.
lllllllllllllllllllllDefendant - Appellee
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Appeal from United States District Court
for the Western District of Arkansas - Ft. Smith
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Submitted: January 15, 2020
Filed: July 30, 2020
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Before KELLY, MELLOY, and KOBES, Circuit Judges.
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KELLY, Circuit Judge.
International Union, United Automobile, Aerospace & Agricultural Implement
Workers of America, AFL-CIO; and UAW, Local 716 (collectively, the Union) appeal
the district court’s dismissal of its claims against Trane U.S. Inc. concerning an
arbitration award. Because we find that the Union is not time-barred from seeking to
vacate the arbitration award, we reverse and remand.
I.
In February 2017, Trane announced that it would close its Fort Smith, Arkansas
manufacturing plant and lay off hundreds of employees. The closure happened in two
stages: a partial closure on April 4, 2017, and then a full closure on July 28, 2017.
After the plant shut down completely, the Union and Trane disagreed about whether
Trane violated their Collective Bargaining Agreement and Memorandum of Agreement
(MOA) when it refused to provide vacation pay to approximately 200 union employees
who were terminated because the plant closed.
After failing to resolve their differences through an internal grievance process,
the parties entered into arbitration proceedings. The issue submitted to the arbitrator
was “Did [Trane] violate the Collective Bargaining Agreement and MOA/Closing
Agreement by denying 2017 vacation pay and unused accrued sick leave in 2017 to
employees who were terminated at plant closing? If so, what shall be the proper
remedy?”
On June 29, 2018, the arbitrator entered an award (the June Award) that stated
“all employees shall be made whole for the full allowance of vacation pay for which
they would have qualified for in 2017, according to the amount of their seniority.”1
The June Award did not further specify the number of employees or identify the
specific employees that should be paid. The award also noted that the arbitrator
“retains jurisdiction of this matter until the terms of the award are met.”
1
The arbitrator also denied the Union’s grievance for sick pay, but the Union
does not challenge that decision on appeal.
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The parties interpreted the June Award differently. Trane believed the June
Award required it to pay employees who would have been entitled to additional
vacation pay based on employment milestones they would have reached in 2017 had
the plant not closed. Trane sent checks to the three employees who qualified under this
interpretation. In contrast, the Union thought the June Award also ordered Trane to
pay the approximately 200 other employees who “might have qualified in 2017 and
would have been entitled to receive [2017 vacation pay on] January 1, 2018” had the
plant not closed. Given this disagreement, Trane contacted the arbitrator to address its
compliance with the June Award.
On September 13, 2018, the arbitrator responded with the following email (the
September Award):
It is my understanding that the Company complied with this
award by paying a week’s additional vacation pay to three
employees who had a milestone anniversary dates [sic] in
2017 that would have happened after their 2017 plant
termination dates . . . . Thus, the Company complied with
my award and I am no longer retaining jurisdiction in this
matter.
The Union brought suit against Trane on December 10, 2018, seeking to compel
further arbitration, or in the alternative, to vacate and remand the final arbitration
award. The district court granted Trane’s Rule 12(b)(6) motion to dismiss on two
grounds. First, it determined that the June Award was the final arbitration award, and
thus, the Union was untimely in filing its claim to vacate the award. Second, it held
that the Union could not compel arbitration regarding the 200 additional employees’
vacation pay because the arbitrator had already considered the issue in his June Award.
This appeal followed.
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II.
Both parties agree the applicable statute of limitations for seeking to vacate a
final arbitration award in this case is ninety days after the parties received notice of the
award. See United Parcel Serv., Inc. v. Mitchell, 451 U.S. 56, 60 (1981) (“[T]he
timeliness of a [Labor-Management Relations Act] § 301 suit . . . is to be determined,
as a matter of federal law, by reference to the appropriate state statute of limitations.”);
Ark. Code. Ann. § 16-108-223(b) (imposing a 90-day statute of limitations for a
motion to vacate an arbitrator’s award). They disagree, however, about which
arbitration award—June or September—constitutes the final arbitration award that
triggers the statute of limitations clock. The Union argues the June Award cannot be
the final award because the arbitrator expressly retained jurisdiction to resolve remedy
disputes.2 According to the Union, because the September Award is the final award,
its claim to vacate was timely. Trane’s position is that the September Award was not
an award at all but instead merely a confirmation that it had complied with the final
award issued in June.
We review de novo the district court’s grant of a motion to dismiss. See ABF
Freight Sys., Inc. v. Int’l Bhd. of Teamsters, 728 F.3d 853, 857 (8th Cir. 2013).
Whether an arbitration award is final depends on “[w]hether the award indicates that
it is final and whether the arbitrator intended the award to be final.” Local 36 Sheet
Metal Works Int’l Ass’n AFL-CIO v. Pevely Sheet Metal Co., 951 F.2d 947, 949 (8th
Cir. 1992).
2
The Union also argues, in the alternative, if we determine the June Award is the
final award, then we should compel further arbitration concerning Trane’s compliance
with the June Award. Because we find that the September Award is the final
arbitration award, we do not address this alternative argument.
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The text of the June Award indicates it was not the final award. In the June
Award, the arbitrator expressly retained his jurisdiction “until the terms of the [June]
award are met.” We have previously stated that even if an arbitration decision “was
final as to liability,” it is “not intended to be a final enforceable award” if the arbitrator
retains jurisdiction to determine damages. Id. at 949. An arbitration award is also not
final if the arbitrator retains jurisdiction for the purpose of resolving disputes
concerning “the application or interpretation” of an awarded remedy. SBC Advanced
Sols., Inc. v. Commc’ns Workers of Am. Dist. 6, 794 F.3d 1020, 1031 (8th Cir. 2015).
Here, the June Award indicates the arbitrator did not intend for it to be final because
he explicitly retained jurisdiction “until the terms of the award are met”—that is, he
contemplated possible disputes concerning the terms of the award and retained
jurisdiction until such disputes were resolved.
And indeed, a dispute did arise regarding damages. The arbitrator resolved that
dispute in the September Award and then expressly stated that he was “no longer
retaining jurisdiction in this matter.” In contrast to the June Award, the express
relinquishment of jurisdiction in the September Award indicates the arbitrator intended
the September award to be final and did not contemplate further disputes regarding the
award.3 Because the September Award is the final award and the Union filed its claim
to vacate within 90 days of it, the Union’s claim was timely.
Accordingly, we reverse the judgment of the district court and remand for
further proceedings consistent with this opinion.
3
Whether it was proper for the arbitrator to entertain additional argument from
the parties, given his express relinquishment of jurisdiction in the September Award,
is not an issue before us.
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KOBES, Circuit Judge, dissenting.
The court holds that the June Award is not final because the arbitrator retained
jurisdiction to resolve disputes about damages. This implicitly adopts the Union’s
position that there was significant work to do after the June Award. There was not.
The June Award is the final award, and because the Union filed its case more that 90
days later it is untimely. I respectfully dissent.
An award lacks finality if the “determination of damages d[oes] not merely
involve a simple calculation, but require[s] the resolution of significant issues.” Local
36, Sheet Metal Workers Int’l Ass’n, AFL-CIO v. Pevely Sheet Metal Co., 951 F.2d
947, 949 (8th Cir. 1992) (emphasis added). In Pevely, the arbitrator “had to determine
the number of employees covered by the collective bargaining agreement; the rate of
pay these employees should have received during this period; the type of work
performed by Pevely; and what fringe benefit contributions should be made.” Id. And
in SBC Advanced Solutions, Inc. v. Communications Workers of America, District 6,
794 F.3d 1020, 1032 (8th Cir. 2015), we found “the factual determination of how
many tours each [employee] worked during which weeks” which involved a
complicated pay differential formula “is more akin to the significant issues in Pevely.”
That is not the case here.
All Trane had to do was identify three employees that qualified for an additional
week of vacation for milestone anniversaries—a “simple calculation.” This is a
“ministerial detail” that does not affect the June Award’s finality. SBC Advanced Sols,
794 F.3d at 1032. The arbitrator confirmed this in an August 24 email, explaining that
Trane “did what I stated should have happened--paid the three employees who would
have reached their milestone anniversary dates in 2017 (after the plant closing
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termination date) an additional week of vacation pay.”4 D. Ct. Dkt. 17-4, at 1. He
reconfirmed it in the September email that the majority misconstrues as an award.5
The majority claims that the September email is the final award because the
arbitrator stated that he “no longer retained jurisdiction.” Maj. Op. 5–6. Even the
Union does not call the email a final award. The use of the magic word jurisdiction
does not make it final, but this is the only factor the court considers. See Pevely, 951
F.2d at 949 (“Whether the award indicates that is final and whether the arbitrator
intended the award to be final are factors in determining if an arbitration award is
final.”). Here, the arbitrator’s September email was not even his final email on the
subject. The Union initiated another round of briefing on October 24, claiming that
the arbitrator had “not yet addressed the central issue” and “resolve[d] only a portion
of the Union’s claim.” D. Ct. Dkt. 23-3, at 1–2. That central issue is the same issue
that the September email allegedly resolved. Id. at 2. After Trane requested more time
to fully respond to the Union, the arbitrator agreed and stated he “look[ed] forward to
reading your response.” D. Ct. Dkt. 23-6 at 1. Those are not the words of an arbitrator
that intended the September email to end the matter as he continued to entertain
argument over the exact same issue.6
4
Even assuming that it was not clear that the June Award gave employees their
milestone vacation pay until this email, the Union’s complaint is untimely.
5
The court does not address the Union’s request, in the alternative, to compel
further arbitration on whether Trane complied with the June Award. I would affirm
the district court because the record clearly shows that the arbitrator has answered this
question twice: Trane has complied.
6
None of this untimely squabbling changes my view about the threshold question
over whether this damages dispute is a ministerial detail. As a result, it has no effect
on the June Award’s finality.
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The Union refuses to accept the outcome of the June Award. But that does not
mean the June Award is not final. Twice the arbitrator confirmed that the June Award
only left the parties to identify three employees. If the Union disputed or
misunderstood the June Award, it could have filed a motion with the arbitrator to
modify the award within 20 days or a motion with the district court within 90 days.
See Ark. Code Ann. §§ 16-108-220(b), 16-108-224. It did neither, so the claim is time
barred. I would affirm the district court and respectfully dissent.
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