2005 | Cited 0 times | D. Maine | June 24, 2005


Even though Tracy Hotham's employer violated the CollectiveBargaining Agreement by discharging him without just cause, anarbitrator ruled he had no right to back pay and should not bereinstated to his job, because he had engaged in post-dischargemisconduct. Dissatisfied with the arbitrator's ruling, Mr.Hotham's union, the Paper, Allied-Industrial, Chemical and EnergyWorkers International Union, Local 1-9, AFL-CIO, CLC (PACE) haschallenged the award in favor of S.D. Warren Company d/b/a SappiFine Paper North America (Somerset Plant) (Sappi) on a variety ofgrounds, chief among them, that the arbitrator's ruling wasgrounded on issues and evidence never properly placed before him.This Court concludes that PACE has failed to provide a sufficientrecord upon which this Court can determine whether the arbitratorexceeded his authority and that PACE has also failed todemonstrate that the arbitrator's award violated the CollectiveBargaining Agreement's (CBA) no-modification clause. This Court,therefore, denies PACE's motion for summary judgment and grantsjudgment in favor of Sappi.

I. PROCEDURAL BACKGROUND On December 5, 2003, PACE initiated in state court anApplication to Vacate, Modify or Correct Award. Sappi removed thecase to this Court and after an inconclusive initial skirmish,PACE filed the Second Motion for Summary Judgment now before theCourt. (Docket # 37).


A. The Collective Bargaining Agreement

PACE and Sappi entered into a labor agreement from December 19,1996 to and including January 31, 2003. See Labor Agreement(Attachment # 3 to PACE Application) (Docket # 1). Theagreement provided that if a labor-management dispute orcomplaint was not resolved through the first three steps of thegrievance process, the party desiring arbitration could filewritten notice and copies with the American ArbitrationAssociation (AAA). Id. at 45.1 — Step 4. The agreementprovided: The arbitration hearing . . . shall hear (sic) the evidence of both sides and render a decision which shall be final and binding on both parties.Id. The CBA required the hearing be held "under the VoluntaryLabor Arbitration Rules of the American Arbitration Association."Id. It further stated, however, that the Arbitrator "shall haveno power to render a decision which adds to, subtracts from, ormodifies the Agreement." Id.

B. The Arbitration Hearing

Arbitrator Lawrence T. Holden held a one-day hearing on July11. 2003. Plaintiff's Statement of Material Fact (PSMF) ¶ 6.PACE was represented by International Representative WilliamCarver, and Sappi was represented by attorney Denis Cole. Id.There was no recording or transcript of the hearing. Defendant'sStatement of Material Fact (DSMF) ¶ 1. The rules of the AmericanArbitration Association do not require that the parties exchangeexhibits or otherwise engage in pre-hearing discovery. DSMF ¶ 2.After some discussion, the parties were unable to agree on the issues to be submitted for decision, andthe arbitrator said he would decide that issue. PSMF ¶ 12.

C. The Arbitrator's Findings

This Court states the facts as the arbitrator foundthem.1 Kraft Foods, Inc. v. Office & Prof'l Emples.Int'l Union, Local 1295, 203 F.3d 98, 99 (1st Cir. 2000) (citingUnited Paperworkers Int'l Union v. Misco, Inc., 484 U.S. 29, 37(1987)).

Tracy Hotham, a powered industrial truck (PIT) operator in theCompany's Finishing/Shipping Department, had been employed by theCompany for approximately 13 years. He was discharged effectiveAugust 13, 2002 for operating a PIT in an unsafe manner on July15, 2002.

In 1997, Mr. Hotham suffered severe injuries including the lossof a leg in an off-duty, automobile accident. He was absent fromwork for more than two years. The Company voluntarily extendedthe time beyond which it was obligated to take him back, and thenwhen he did return to work, the Company placed him in a job whichwas compatible with his physical limitations, namely PIToperator. On December 6, 2000, Mr. Hotham backed his PITaccidentally into a core rack, which set in motion a chainreaction resulting in a broken leg for another employee.

On June 11 and 12, 2001, November 30, 2001, and January 10,2002, he underwent additional PIT training.

On January 15, 2002, Mr. Hotham was involved in anotherincident wherein he had operated his PIT with a load thatexceeded the PIT's rated capacity. No harm occurred even thoughthe rear wheels of his PIT had come off the ground several times.This incident was observed and reported by another bargaining unit employee. Mr.Hotham was warned at the time to adhere to proper safetypractice, and that failure to do so would place his job injeopardy. He was also required to undergo yet another PITtraining course before operating his PIT again.

In effect at the time of the January 15, 2002 incident was amemorandum of agreement, dated March 1, 2001, that established anincident investigation procedure. Its purpose was to encouragethe reporting of unsafe practices or incidents by bargaining unitemployees. It provided that if one employee reported an unsafeincident involving another employee, "no employee would bedisciplined as a direct outcome of incident reporting orinvestigation."

In the spring of 2002, Mr. Hotham inquired as to whether theCompany might be willing to buy out his employment.

Then, there occurred the incident of July 15, 2002 which is thesubject of this (arbitration). On the morning of July 15, 2002,Mr. Hotham was orally warned by Tech Specialist Charlie Hall topay more attention to his duties as a PIT operator inasmuch asMr. Hall had observed him bumping into roll heads. Mr. Hothamresponded to this warning by inquiring about a floating holiday.During the afternoon of July 15, 2002, Mr. Hotham was lifting twopaper rolls with the boom of his PIT when the PIT took a nosediveand the rear wheels rose three to four feet in the air. The PITthen slammed down hard on the rear wheels. Fortunately, neitherMr. Hotham nor any other employee was injured. This incident wasobserved by Jack Ross, a management employee.

Immediately following this incident, Mr. Hotham was told thecompany was going to pull his PIT license; Mr. Hotham alsobelieved that he was likely to be fired as a result of the July15, 2002 incident. Mr. Hotham experienced a stress reactionwherein he was having difficulty breathing and went to theCompany's Medical Office where he was excused from work for the rest of the day. He then went to see his psychologist, Dr. RobertKohl, and obtained a note to be excused from work until furthernotice.

Thereafter, Mr. Hotham applied for long-term disability (LTD)benefits commencing on July 15, 2002. Mr. Hotham began to receiveLTD benefits effective January 14, 2003 to continue fortwenty-four months. Mr. Hotham admitted in another forum — aworkers' compensation proceeding — that he was able to work whilecollecting LTD benefits.

In making the decision to discharge the grievant as a result ofthe incident of July 15, 2002, Plant Manager Cassese testifiedthat she took the January 15, 2002 incident into account indisciplining the grievant. Also, on Mr. Hotham's record was anoral warning he had received for leaving early on July 4, 2001.

A grievance was filed concerning the discharge of Mr. Hotham,and inasmuch as that grievance has remained unresolved, the Unionhas elected to bring the matter on to arbitration for resolution.Mr. Hotham chose not to testify at the arbitration hearing.

D. The Arbitrator's Analysis

The arbitrator concluded Mr. Hotham's discharge was not forjust cause, and ordered his discharge converted to a writtenwarning.2 However, the arbitrator went on to state:

The inquiry does not end here however. Post-discharge evidencewas submitted which is of substantial concern. It is acceptedarbitral practice to receive post-discharge evidence which bearson the question of remedy. (See in this regard the paperdelivered by Arbitrator George Nicolau at the 43rd Proceedings ofthe National Academy of Arbitrators, pp. 73-88 (1990)). Of most serious concern was the post-discharge evidence wherein Mr.Hotham admitted in a workers' compensation proceeding that he wascapable of working at his regular job in the Finishing/ShippingDepartment during the time he was receiving long-term disability(LTD) benefits from the Company. (Footnote 1 — Mr. Hotham beganreceiving such LTD benefits effective January 14, 2003 althoughhe had applied for them effective July 15, 2002). (Co. Exh. # 27,p. 121). This acknowledgment raises serious concerns about hisconduct toward the Company. In addition, Mr. Hotham's attitudetoward the Company and his job is further revealed by his inquiryin the Spring of 2002 as to whether the Company was interested inbuying out his employment. This inquiry was not made in a contextwhere the Company was offering employment buy-outs. Given thisconduct and attitude on the employee's part, I find that he isnot entitled to reinstatement. Also, since he claimed that he wasunable to work since July 15, 2002 and has, in fact, received LTDbenefits for a portion of that period, he is not entitled to anyback pay award.

D. PACE's Causes of Action

PACE's Complaint contains three remaining counts;3 eachcount asks the court to order a rehearing under14 M.R.S.A. § 5938(3):

(1) Count I: PACE claims the arbitrator's award "failed todraw its essence from the CBA.";

(2) Count II: PACE claims the arbitrator ignored the CBA'sprovisions and "dispensed his own brand of industrial justice";and, (5) Count V: Citing 14 M.R.S.A. § 5939(1)(B), PACE claimsthat by deciding the issue of remedy, the arbitrator acted in anmanner inconsistent with the CBA, inconsistent with the evidence,and inconsistent with the procedural rights of PACE.

E. PACE's Complaint: The Arbitrator Ruled On An Issue NotBefore Him

By obtaining a ruling that Mr. Hotham was not properly subjectto discharge under the CBA, PACE won a significant battle, but byfailing to gain back pay and reinstatement, it lost the war. PACEcontends it lost a war it did not know it was fighting. PACEstrenuously urges this Court to conclude the process was unfairlytainted because Sappi failed to raise before or during thearbitration hearing, Mr. Hotham's testimony at the workers'compensation hearing as a ground for denial of back pay andreinstatement. PACE contends it was only after the close of thehearing and after PACE submitted its brief that Sappi for thefirst time asserted that Mr. Hotham's testimony at the workers'compensation hearing established he had been "fraudulentlycollecting benefits from the Company," Pl.'s Second Mot. forSum. Judg. at 4-5 (citing Post-Hearing Brief On Behalf of SappiFine Paper at 3-4). PACE accuses Sappi of playing "hide theball," Id. at 11, and securing victory by indirection.

Without notice of what turned out to be the decisive issue,PACE argues it was deprived of an opportunity to present criticalevidence and argument. In this way, PACE contends the process andaward were fatally flawed. By issuing an award and fashioning aremedy on grounds not fairly raised and litigated, PACE assertsthe arbitrator dispensed his own brand of industrial justice andthat his decision failed to draw its essence from the CBA.


A. Applicable Statutory Law This Court has jurisdiction pursuant to 28 U.S.C. § 1332, sincethe parties are citizens of different states.4 PACEinitiated this complaint in state court under 14 M.R.S.A. § 5938.Once jurisdiction is established, this Court has the authority toconfirm or vacate an arbitration award under 9 U.S.C. § 9, 10,11.5 Both federal and state statutes provide that anarbitration award may be set aside where the arbitrator exceededhis powers, 9 U.S.C. § 10(a)(1); 14 M.R.S.A. § 5938(1)(A), orwhere the arbitrator issued an award on a matter not submittedfor arbitration. 9 U.S.C. § 11(b); 14 M.R.S.A. § 5939(1)(B).

B. Policy Considerations.

Beyond the narrowness of the statutory justifications forvacating an arbitration award, the party seeking to vacate anaward made pursuant to the provisions of a collective bargainingagreement faces two policy hurdles: (1) a general judicialpredisposition against overturning arbitration awards, seePoland Spring Corp. v. UFCW, 314 F.3d 29, 33 (1st Cir. 2002)("Judicial review of an arbitrator's decision is extremely narrowand deferential."); and, (2) a more specific reluctance to injectfederal courts into an arbitration award issued under the termsof a collective bargaining process resolving a labor-managementcontroversy. See United Steelworkers of America v. EnterpriseWheel & Car Corp., 363 U.S. 593, 596 (1960) ("The refusal ofcourts to review the merits of an arbitration award is the properapproach to arbitration under collective bargainingagreements."). Arbitration has played an increasingly crucial role as thepreferred method for resolving disputes arising over theinterpretation or application of collective bargainingagreements. United Steel Workers of America v. American Mfg.Co., 363 U.S. 564 (1960); Enterprise Wheel, 363 U.S. at 593.In Hoteles Condado Beach, Judge Pieras succinctly described thebenefits of arbitration: the arbitration process is more flexible, efficient, expedient, and less expensive than litigation; the arbitrator has more expertise in resolving controversies that arise under the industrial law of the shop than does a court of law; the parties have voluntarily agreed to submit its dispute to final and binding impartial adjudication; and arbitration is a favored alternative to other non-peaceful methods of conflict resolution, such as strikes, boycotts, etc.Hoteles Condado Beach v. Union de Tronquistas de Puerto Rico,Local 901, 588 F. Supp. 679, 682 (D.P.R. 1984) (citationsomitted).

C. Standards of Review

The general principles of judicial review are well-known andset forth in the "time-honored standards of the SteelworkersTriology."6 S.D. Warren Co., Div. of Scott Paper Co. v.United Paperworkers Int'l Union, AFL-CIO, Local 1069,845 F.2d 3, 5 (1st Cir. 1988). The function of the court is "very limitedwhen the parties have agreed to submit all questions of contractinterpretation to the arbitrator. It is confined to ascertainingwhether the party seeking arbitration is making a claim which onits face is governed by the contract." Misco,484 U.S. at 36-37. To that end, reviews of labor arbitral decisions are"extremely narrow and extraordinarily deferential." Bull HNInfo. Sys. v. Hutson, 229 F.3d 321, 330 (1st Cir. 2000).Exceptions are few and limited. Teamsters Local Union No. 42 v.Supervalu, Inc., 212 F.3d 59, 61 (1st Cir. 2000) ("disputersthat are committed by contract to the arbitral process almostalways are won or lost before the arbitrator. Successful courtchallenges are few and far between."); see also Bettencourt v. Boston Edison Co., 560 F.2d 1045, 1049 (1st Cir.1977). Strong disagreement or skepticism of an arbitrator'srationale is not enough to vacate an arbitrator's decision, aslong as the arbitrator is "even arguably construing or applying"the CBA. Keebler Co. v. Truck Drivers, Local 170, 247 F.3d 8,11 (1st Cir. 2001). Because "parties have contracted to havedisputes settled by an arbitrator chosen by them rather than by ajudge, it is the arbitrator's view of the facts and of themeaning of the contract that they have agreed to accept." KraftFoods, 203 F.3d at 101 (quoting Misco, 484 U.S. at 37-38).

The First Circuit has "developed its own test for determiningwhether an arbitrator's award may be reviewed by a court." Local1445, United Food & Commercial Workers International Union v.Stop & Shop Cos., 776 F.2d 19, 21 (1st Cir. 1985). InBettencourt, 560 F.2d at 1050, the First Circuit held that acourt may review and set aside an arbitrator's decision only ifthe decision was (1) unfounded in reason and fact; (2) based onreasoning so palpably faulty that no judge, or group of judges,could ever conceivably have made such a ruling; or, (3)mistakenly based on a crucial assumption that is concededly anon-fact. See also Wheelabrator Envirotech Operating Servs., v.Massachusetts Laborers Dist. Council Local 1144, 88 F.3d 40,43-44 (1st Cir. 1996); Advest, Inc. v. McCarthy, 914 F.2d 6,8-9 (1st Cir. 1990); Hoteles Condado Beach, La Concha &Convention Center v. Union de Tronquistas Local 901,763 F.2d 34, 38 (1st Cir. 1985). When a claim to set aside an arbitrationaward is made, the moving party bears the burden of proof.Health Services Management Corp. v. Hughes, 975 F.2d 1253, 1258(7th Cir. 1992).

D. The Limits of Judicial Restraint: Drawing Its Essence andOwn Brand of Industrial Justice The courts' deference to arbitration, although considerable,has its limits. The arbitrator cannot ignore the contract anddispense "his own brand of industrial justice." EnterpriseWheel, 363 U.S. at 597. Rather, his decision must draw "itsessence" from the labor agreement. Id. The decision to settlelabor-management disputes is "a wholly voluntary decision byprivate parties, grounded on their will as expressed in thecollective bargaining agreement." Poland Springs,314 F.3d at 33. The "paramount point to be remembered in labor arbitration isthat the power and authority of an arbitrator is totally derivedfrom the collective bargaining agreement and that he violates hisobligation to the parties if he substitutes `his own brand ofindustrial justice' for what has been agreed to by the parties tothat contract." Georgia-Pacific Corp. v. Local 27, UnitedPaperworkers Int'l Union, 864 F.2d 940, 944 (1st Cir. 1988)(quoting Enterprise Wheel, 363 U.S. at 597)). For example, infashioning a remedy, the arbitrator does not have "unfettereddiscretion" and may not "impose a remedy which directlycontradicts the express language of the collective bargainingagreement." Georgia-Pacific Corp., 864 F.2d at 945. On theother hand, so long as the arbitrator "is even arguablyconstruing or applying the contract and acting within the scopeof his authority," a court may not disturb his judgment even ifit is "convinced he committed serious error." Kraft Foods,203 F.3d at 101; see also Advest, 914 F.2d at 9.

E. What the Record Reveals

Whether the issue of post-discharge conduct was properly beforethe arbitrator depends on what the record reveals. When there isa claim regarding an arbitration award that depends on thecontents of the record before the arbitrator, "the court is underan obligation to scan the record." See Hughes,975 F.2d at 1258. Here, this essential task simply cannot be performed.Ordinarily, upon a controversy as to whether an issue was fairlyraised or evidence properly admitted, the reviewing court can make an independentdetermination by reviewing a transcript of the proceedings. Here,there is no transcript.

In an effort to provide a record, PACE submitted certaindocuments and proposed statements of material fact. PACE attacheda copy of the arbitration award to its application,7Pl.'s Application ¶ 35, Attachment B, and it supplied a copy ofthe labor agreement in its statement of material fact. PSMF ¶ 3,Attachment A. In addition, PACE submitted forty-nine statementsof material facts to which it attached two affidavits, settingforth witnesses' recollections of events at the arbitrationhearing. Pl.'s Second Mot. for Summ. Judg. at Ex. 1 (SecondAffidavit of William Carver), Ex. 2 (Affidavit of Denis E. Cole).

But, PACE's attempt to provide a record has run aground. First,PACE failed to place relevant documents before the court forreview and this alone justifies denial of its motion.8But, even as to the evidence properly before the Court, not allrecollections coincide. Sappi repeatedly denied, qualified, orobjected to PACE's statements of material fact and PACE did thesame responding to Sappi's statements of material fact. SeePSMF ¶¶ 4, 9-14, 16-20, 23-25, 27-48; DSMF ¶¶ 2, 6-9, 12-14, 16,18, 20, 22, 25, 28, 30, 34-39, 43-46, 49-50, 54, 58. Sappi also filed two motions to strike. (Docket #'s 41, 50). This leaves theCourt with an arbitration record that is murky, truncated, anddisputed.9 Oddly, the one matter upon which the partieshave agreed is that they "were unable to agree on the issues tobe submitted for decision by Arbitrator Holden at the hearing onJuly 11, 2003, and the Arbitrator said he would decide theissue." PSMF ¶ 12.

F. The Moving Party's Obligation

It is PACE's obligation as the moving party to submit "therecord" and any supplemental materials in support of itsapplication. Hughes, 975 F.2d at 1258 n. 3. See also LewLieberbaum & Co. v. Randle, 85 F. Supp. 2d 123, 126 (E.D.N.Y.2000) ("It is the Petitioners' burden to demonstrate manifestdisregard of the law, and the failure to offer the entire recordleaves the Court unable to exclude the possibility that the awardis supported by evidence that the Petitioner has not supplied.");Green v. Progressive Asset Management, Inc., 2000 WL 1229755,at *2 (S.D.N.Y. 2000) (Petitioner's failure "to supply a fullrecord makes it impossible for the Court to determine whether the Panel's decision was based on a manifestdisregard for the law or the evidence before it. Because[Petitioner] bears the burden of proof, this failure is fatal toher motion.") (internal citations omitted); Commonwealth Assocs.v. Letsos, 40 F. Supp. 2d 170, 175 (S.D.N.Y. 1999); Brown v.Premiere Designs, Inc., 597 S.E.2d 466, 468 (Ga.App. 2004) ("theabsence of a record or transcript precludes review of the Browns'claims of error committed by the arbitrator."); Wittenberg v.Gallagher, 2001 WL 34048121, at *3 (Ariz.Ct.App. 2001) ("wepresume that the evidence produced in the arbitration supportedthe award particularly where, as here, Gallagher failed toprovide any transcript or record of the arbitrationproceedings."); Clairol, Inc. v. Enertrac Corp., 690 A.2d 418,422 (Conn.App.Ct. 1997) ("To determine whether that Clairolwas, in fact, denied a full and fair hearing, the court wouldhave had to review a complete transcript of the arbitrationproceeding, and, in particular, the transcript of Thompson'stestimony . . . Absent that transcript, it was impossible for thetrial court to determine whether any of his testimony wasdetrimental to Clairol."); Motor Wheel Corp. v. Goodyear Tire &Rubber Co., 647 N.E.2d 844, 850 (Ohio Ct. App. 1994) (Absent averbatim transcript of the arbitration hearing, the court "mustpresume regularity of the arbitration proceedings and theresulting arbitration award.").

Facing this wall of authority, PACE retreats topolicy.10 It asserts that as most arbitrations are nottranscribed, a rule that requires transcription "wouldeffectively prevent any judicial review of most labor arbitrations." Pl.'s Reply at 1-2(Docket # 46). The court's need to review a transcript of thearbitration hearing, however, applies where the moving party hascomplained of an issue that requires such review and where thereis no substitute for a transcript.11 See WesterbekeCorp. v. Daihatsu Motor Co., 162 F. Supp. 2d 278, 283 (S.D.N.Y.2001), reversed on other grounds, 304 F.3d 200 (2d Cir. 2002)(". . . a party seeking to vacate an arbitration award mustproduce a record from the proceedings below that is `sufficientlycomplete' for the court to make an informed judgment.") Here,PACE contends the parties did not agree to submit post-dischargeconduct to the arbitrator and Sappi responds they did. Thepenalty for failing to provide a record of the arbitrationhearing that would allow this Court to divine who is right, fallson PACE as the moving party.

G. The Impact of the Failure to Provide a Record

PACE's failure to supply a record of the arbitration proceedingdoes not necessarily mean all its claims must fail. But, it doesmean that to the extent its claims depend upon this Court'sreview of the record, they must fail. Simply put, the truncatedand disputed record before this Court prevents a fairdetermination as to the issues the parties agreed to present tothe arbitrator and, thus, whether the arbitrator violated PACE'srights to present evidence and argue those issues. To the extentan accurate record is necessary to determine whether thearbitrator's award failed to draw its essence from the CBA andallowed him to dispense his own brand of industrial justice,PACE's claim must fail as well. H. Whether the Arbitrator's Award Violated the Terms of theCollective Bargaining Agreement

1. The No-Modification Contract

The parties have placed the CBA before the Court and there is,therefore, a sufficient record to reach PACE's contention thatthe arbitration award violated the express terms of theCBA.12 Relying on Kraft Foods, PACE contends thearbitrator violated the "no-modification" clause in the CBA byimposing a remedy not provided for in the contract. In KraftFoods, the labor agreement provided: . . . the arbitrator shall have no authority to amend, alter, or modify this Agreement or its terms and shall limit the decision solely to the interpretation and application of this Agreement.Kraft Foods, 203 F.3d at 101. The First Circuit described thislanguage as being a "standard `no modification' clause." Id.This Court concludes the CBA here contains a standard"no-modification" clause.13 See Id.; Larocque v.R.W.F., Inc., 8 F.3d 95, 97 (1st Cir. 1993) (describing languagevirtually identical to the language in the PACE-Sappi CBA as a"standard `no-modification' clause"); Local 1445, United Food &Commercial Workers International Union, AFL-CIO v. The Stop &Shop Companies, 776 F.2d 19, 22 (1st Cir. 1985).

2. The Arbitrator's Ruling and the No-Modification Contract

PACE contends that since the sole issue before the arbitratorwas whether Sappi had breached the CBA by terminating Mr. Hothamwithout just cause, his conclusion that Mr. Hotham had committedother misconduct that justified the remedies of no back pay andno reinstatement went beyond the terms of the CBA. As posed,however, PACE's argument depends upon what the parties agreed was at issue before thearbitrator and for the reasons set forth above, this Court cannotmake a reasoned determination of that issue, since the record isinadequate.

Furthermore, other than the general proposition that anarbitrator cannot modify a "no-modification" contract, PACEpoints to no language in the CBA it claims the arbitratorimproperly modified. The typical "no-modification" issue ariseswhen the arbitrator ordered a remedy the CBA expressly excludedor failed to order a remedy the CBA expressly imposed. See e.g.,Kraft, 203 F.3d at 102 (". . . the arbitrator's back-pay awardhad the effect of eliminating the break-in wage clause entirelyduring the time period in which Kraft had applied it in adiscriminatory fashion."); S.D. Warren Co. v. UnitedPaperworkers Int'l Union, Local 1069, 845 F.2d 3, 8 (1st Cir.1988) (remedies "pre-determined" for violations);Georgia-Pacific Corp. v. Local 27, 864 F.2d 940, 944-45 (1stCir. 1988) (employee committed offense listed in contract asground for immediate discharge). But, here, PACE makes no claimthat the CBA forbids the refusal to award back pay or toreinstate an employee when he engages in post-dischargemisconduct.

In addition, PACE's objection is to the arbitrator's remedy,and Kraft re-emphasized that where the agreement neitherrequires nor bars particular remedies, the arbitrator'sdiscretion is "at its zenith." Airline Pilots Ass'n, Int'l v.Pan Am Corp., 405 F.3d 25, 31 (1st Cir. 2005) (quoting Kraft,203 F.3d at 102). Arbitrators' remedial choices "are notrestricted to the array of anodynes proposed during the hearing."Advest, 914 F.2d at 10-11; Challenger Caribbean Corp. v. UnionGeneral de Trabajadores de Puerto Rico, 903 F.2d 857,869 (1stCir. 1990). If the parties "do not pre-negotiate remedies, thearbitrator can fashion them as part of his decisional discretion." S.D. Warren Co., Div. of Scott Paper Co., v. UnitedPaperworkers' Int'l Union, AFL-CIO, Local 1069, 845 F.2d 3, 8(1st Cir. 1988).

Here, the parties could not agree on what issues were properlybefore the arbitrator and expressly authorized him to resolvethis issue. PSMF ¶ 12. Once the arbitrator found that Mr. Hothamhad engaged in serious post-discharge misconduct, there wasnothing in the CBA that restricted his authority to remedy thismisconduct by refusing to award back pay and reinstatement.Airline Pilots, 405 F.3d at 31 (quoting Misco, 484 U.S. at 38("where it is contemplated that the arbitrator will determineremedies . . . courts have no authority to disagree with hishonest judgment in that respect")).


This Court orders both the Plaintiff's Application to Vacate,Modify, or Correct the Arbitration Award and its Motion forSummary Judgment be DENIED. Judgment shall be entered in favor ofDefendant S.D. Warren Company, d/b/a Sappi Fine Paper NorthAmerica (Somerset Plant).14


1. This opinion sets forth the Arbitrator's Decision virtuallyverbatim, changing references appropriate for the grievance stageof the proceedings. Mr. Hotham, for example, has been substitutedfor "grievant."

2. In reaching this conclusion, the Arbitrator enforced the"safe haven" concept in a Memorandum of Agreement dated March 1,2001. He found the report of Mr. Hotham's unsafe act of January15, 2002 fell within this safe haven and Sappi could not use thatincident to determine the degree of discipline for a subsequentincident. As of July 15, 2002, therefore, Mr. Hotham had only anoral warning for leaving work early for prior discipline.Although the Arbitrator concluded the July 15, 2002 incident wasan unsafe act, he concluded a written warning, not discharge,would have been the next step in the disciplinary process for Mr.Hotham. The parties have not challenged this part of theArbitrator's Award.

3. On February 26, 2004, PACE filed a motion for summaryjudgment on Counts III and IV. (Docket # 14). In her RecommendedDecision dated June 4, 2004, Magistrate Judge Kravchuk not onlyrecommended that PACE's motion for summary judgment on Counts IIIand IV be denied, but also strongly suggested they did not statea claim. Report and Recommended Decision at 21-23 (Docket #26). At oral argument on November 8, 2004, PACE informed thisCourt it was no longer proceeding on Counts III and IV and byOrder dated November 10, 2004, this Court granted withoutprejudice PACE's oral motion to dismiss them. Order Affirming InPart and Rejecting In Part Recommended Decision of the MagistrateJudge at 2, n. 3 (Docket # 36).

4. PACE originally filed this action in state of MaineSuperior Court for Somerset County. (Docket # 1, Attachments 2,3). Sappi removed the case to this Court on December 30, 2003pursuant in part to its diversity jurisdiction. (Docket # 1,Attachment 1). This Court does not reach the question of whetherit would have jurisdiction in the absence of such diversity.Compare Hogan v. 50 Sutton Place S. Owners, Inc.,919 F. Supp. 738, 745 (S.D.N.Y. 1996) (jurisdiction granted under29 U.S.C. § 185); with General Atomic Co. v. United Nuclear Corp.,655 F.2d 968, 968 (9th Cir. 1981), cert. denied, 455 U.S. 948 (1982),reh denied 456 U.S. 939 (1982) (applicants who seekconfirmation of an arbitration award in federal court mustdemonstrate independent grounds of federal jurisdiction); seealso Transportation Cybernetics, Inc. v. Forest Transit Com.,950 F.2d 350,352 (7th Cir. 1991).

5. 9 U.S.C. § 9 allows the parties to an arbitration to applyto the court for an order confirming the award and "thereupon,the court must grant such an order unless the award is vacated,modified, or corrected as prescribed in sections 10 and 11 ofthis title."

6. United Steelworkers v. American Mfg. Co., 363 U.S. 564(1960); United Steelworkers v. Warrior & Gulf Navigation Co.,363 U.S. 574 (1960); United Steelworkers v. Enterprise Wheel &Car Corp., 363 U.S. 593 (1960).

7. Even the arbitration award may not be properly before thecourt. PACE's SMF assumes the award is a matter of record,presumably based on Sappi's Answer to paragraph 35 in PACE'sApplication, which referred to the award as Attachment B.However, Sappi answered ¶ 35 by asserting that PACE wasattempting to restate or characterize the decision, that theaward speaks for itself, and to the extent the allegationrequired a response, Sappi denied the allegations contained in ¶35 of the Application. This Court has construed Sappi's answer —that the award speaks for itself — as an admission thatAttachment B was an accurate copy of the arbitration award.PACE's SMF never addressed the need to authenticate the award.

8. The collective bargaining agreement is before the court,because PACE referenced a copy in its SMF # 3 and Sappi admittedPACE's SMF # 3. However, PACE failed to do the same for any otherdocuments. For example, one of PACE's main points has been thatwhen PACE filed it post-hearing brief, it did not mention Mr.Hotham's post-discharge conduct. But, PACE did not place itspost-hearing brief before the Court in its Motion for SummaryJudgment. PACE's SMF # 26 states only: "Both Carver and Colesubmitted briefs on behalf of their respective parties." Itreferences paragraph 29 in an Affidavit of William Carver, whichwas submitted with its SMF, but paragraph 29 only states that"Both Cole and I submitted briefs on behalf of our respectiveparties." Affidavit of William Carver at ¶ 29 (Docket # 37,Exhibit 1). Although this Court can consider the admitted factthat both parties submitted post-hearing briefs, the Court cannotconsider what was or was not in the briefs, because the briefswere never made a matter of record. PACE's failure to placenecessary documents before the Court in its Motion for SummaryJudgment would be sufficient grounds to deny its motion, sincethe factual predicate for much of its argument is absent.

9. PACE strenuously argues the issue of remedy was not beforethe arbitrator, but the record on this point is far from clear.First, the parties agreed at the outset to disagree on whatissues were to be resolved and the arbitrator agreed to decidethat issue. PSMF ¶ 12. If the parties leave it to the arbitratorto decide what issues need to be resolved, they can hardlycomplain when he does what they ask. See JCI Communications,Inc. v. IBEW, Local 103, 324 F.3d 42, 49 (1st Cir. 2003) ("Oncethe submission to the arbitrators was made without . . .reservation, it was for the arbitrators to determine the scope oftheir own authority.") Second, although it is apparently truethat PACE did not address post-discharge conduct in itspost-hearing brief, the brief was relatively brief, only fivepages, and this Court cannot draw definitive conclusions fromwhat PACE did not argue. Silence is often strategic. Presumably, Sappi had a purpose in seeking to admit (and PACE apurpose in objecting to) the 137 page transcript of Mr. Hotham'stestimony before the Workers' Compensation Commission. PSMF ¶ 17.In fact, the parties agree that when PACE objected to therelevance of the transcript, Sappi responded that it had to dowith "the remedy." PSMF ¶ 17. Contrary to PACE's contention, therecord establishes that Sappi made it clear to both PACE and thearbitrator why it was seeking to introduce the transcript: it wason the issue of remedy. PACE cannot now be heard to contend thearbitrator's later use of the transcript on the issue of remedycame as a surprise. Finally, once Sappi filed its post-hearing brief, PACE knewSappi was asserting that the arbitrator should consider Mr.Hotham's post-discharge misconduct in formulating an appropriateremedy. See PSMF ¶ 29. PACE, however, failed to take any actionto alert the arbitrator that this issue was not properly beforehim. PACE explains its inaction by stating that "there is noprovision for reply briefs or other response by Carver or PACEunder American Arbitration Association rules." Pl.'s Second Mot.for Summ. Judg. at 5. However, PACE thought Sappi itself wasbreaking the rules by urging the arbitrator to base his decisionon an issue neither litigated nor argued. PACE's position is,therefore, anomalous: that the rules prevented it from bringing aviolation of the rules to the arbitrator's attention. It is justas logical that PACE elected to see what the arbitrator decidedand thus preserve the right to call foul, depending on theresult.

10. PACE also asserts this issue is law of the case: "SAPPIattempts to resurrects (sic) its prior argument, made to theMagistrate in its Motion to Dismiss, and rejected by her (thatrejection then being adopted by this Court in its Order ofNovember 10, 2004) that there can be no judicial review of thisarbitration in the absence of a verbatim transcript." Pl.'sReply at 1 (Docket # 46). PACE is incorrect. It is true that inher Recommended Decision, Magistrate Judge Kravchuk concludedthat the documentation before her was sufficient to "raise areasonable inference that the issue of whether Hotham'spost-discharge misconduct was a sufficient ground for denyingHotham's reinstatement was introduced in a manner thateffectively prevented the Union from having an opportunity topresent evidence and argument on that issue." RecommendedDecision at 4-5 (Docket # 26). But, this Court rejected theMagistrate Judge's recommendation, except to the extent sherecommended a denial of PACE's Motion for Summary Judgment onCounts III and IV. Order Affirming In Part and Rejecting In PartRecommended Decision of the Magistrate Judge at 3 (Docket #36).

11. This Court understands PACE's policy point about thetypical practice in arbitration hearings not to transcribe thehearing. But, not all objections to arbitration awards dependupon a verbatim transcript and for those they do, there arealternatives that allow a sufficient record in its absence.Documents that clarify the issues before the arbitrator,including pre-hearing filings, documentary evidence at thehearing, post-hearing memoranda, and similar documents; requestsfor admission; stipulations of counsel; and, similar means areall available. If the parties wish to limit the arbitral issues,particularly if the limits are not clearly delineated in thelabor agreement, they need to document with precision what thelimits are. Here, to the extent there is documentation of whatissues were to be submitted, the parties agree that they couldnot agree and that they allowed the Arbitrator to decide what todecide. PSMF ¶ 12.

12. This is another way of raising the question of whether thearbitrator's award failed to draw its essence from the CBA andwhether he dispensed his own brand of industrial justice. TheCourt is able to reach this issue despite the sparse record,because it can simply compare the terms of the CBA and thearbitration award.

13. The CBA here contains language similar to the language inKraft: The Arbitrator shall have no power to render a decisionwhich adds to, subtracts from, or modifies this Agreement. CBA at§ 45.1

14. A denial of a Plaintiff's motion for summary judgment doesnot usually result in judgment against the Plaintiff, because aruling he is not entitled to a judgment is not the same as aruling that the defendant is. Sappi has not moved for judgment inits favor. A cause of action to vacate, modify, or correct anarbitration award is, however, not a typical case. As MagistrateJudge Kravchuk aptly stated, PACE is not entitled to "full-blownlitigation," Recommended Decision at 9, and this Court hastreated PACE's Application as a motion, not a complaint. Id. at7-10; 14 M.R.S.A. § 5942 (any application under the act "shall bemade by motion and shall be heard in the manner and upon thenotice provided by law or rule of court for the making andhearing of motions."); see also 9 U.S.C. § 6. Rule 81 statesthat "[i]n proceedings under Title 9, U.S.C., relating toarbitration, . . . [the Civil Rules] apply only to the extentthat matters of procedure are not provided for in [Title 9]." FedR. Civ. P. 81(a)(3). Commonly, motions to affirm or vacatearbitration awards are resolved through motions for summaryjudgment. See Airline Pilots, 430 F.3d at 30; JCICommunications, 342 F.3d at 44, 48; Poland Springs,314 F.3d at 29; Kraft, 203 F.3d at 99. Here, the cause of action is amotion and, therefore, the denial of PACE's motion is effectivelya ruling against PACE on the merits and entitles Sappi tojudgment in its favor.

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