Miller Brewing Company v. Brewery Workers Local Union No. 9, Afl-Cio

739 F.2d 1159
CourtCourt of Appeals for the Seventh Circuit
DecidedAugust 23, 1984
Docket83-2048
StatusPublished
Cited by144 cases

This text of 739 F.2d 1159 (Miller Brewing Company v. Brewery Workers Local Union No. 9, Afl-Cio) is published on Counsel Stack Legal Research, covering Court of Appeals for the Seventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Miller Brewing Company v. Brewery Workers Local Union No. 9, Afl-Cio, 739 F.2d 1159 (7th Cir. 1984).

Opinion

POSNER, Circuit Judge.

Miller Brewing Company sued Local 9 of the Brewery Workers Union under section 301 of the Taft-Hartley Act, 29 U.S.C. § 185, to set aside an arbitrator’s award to the union. The award was based on the union’s complaint that Miller had violated a collective bargaining agreement with it. The union filed a counterclaim to Miller’s suit. The counterclaim, which was based both on section 301 and on section 9 of the United States Arbitration Act of 1925, 9 U.S.C. § 9, sought enforcement of the arbitration award. On the union’s motion for summary judgment, the district court entered an order enforcing the award. 562 F.Supp. 1368. It also ordered Miller to pay the union a reasonable attorney’s fee, on the ground that Miller’s challenge to the arbitration award had been frivolous. Miller appeals both orders.

For many years all the brewers in Milwaukee had bargained with Local 9 in a multi-employer bargaining unit, but by 1979 the unit had only three members— Miller, Schlitz, and Pabst. The successive collective bargaining agreements between the union and the brewers’ association contained a union-shop clause requiring every new employee to join the union within 30 days after beginning work and a hiring-preference clause entitling regular employees laid off by any of the brewers to “preference” (not defined) in hiring by any other brewery in the unit. The preference was both over new applicants for employment with the brewery and over any of the brewery’s laid-off temporary employees who might be seeking to be recalled or rehired.

Early in 1981 Schlitz announced that it was withdrawing from the multi-employer unit and would negotiate separately with Local 9. The union’s president told the two remaining members of the unit, Miller and Pabst, that Schlitz had agreed to include in the separate collective bargaining agreement that it was negotiating with the union the same hiring-preference clause that the multi-employer agreement contained, and Miller and Pabst agreed to a modification of that agreement that would preserve to Schlitz’s employees the rights they had had when Schlitz had been a party to it. But *1162 matters did not develop as anticipated. The bargaining between the union and Schlitz broke down. The union called a strike, Schlitz closed its Milwaukee brewery permanently, and Schlitz and the union then entered into a shutdown agreement that provided for the “permanent layoff and termination of seniority and employment relationship from the Company of all employees” in the Milwaukee brewery. About 200 workers were affected.

Several months later Miller recalled 39 temporary employees who had been laid off. This recall precipitated the filing of a grievance against Miller by one of the terminated Schlitz workers, Gene Pearson, who claimed that Miller was required by the hiring-preference clause in the multiemployer collective bargaining agreement to give him preference over Miller’s own temporary workers. As required by the agreement, the grievance was referred to an arbitrator after it could not be settled informally. He interpreted the reference in the clause to “regular employees laid off from ... those Employers signatory to the 1979-81 agreement” to include those employees of Schlitz who had been “permanently laid off” as a result of the shutdown agreement with the union. He therefore concluded that Miller had violated the collective bargaining agreement in failing to give Pearson preference. He ordered Miller “to hire Gene Pearson ... and any other employees similarly situated who had applications on file at the Company and who were not given hiring preference over temporary Miller employees____”

The union sought enforcement of the arbitrator’s award under both the Arbitration Act, which has its own standards for the validity of arbitration awards, see 9 U.S.C. § 11, and section 301 of the TaftHartley Act, which is the source of federal common law principles governing the validity of labor arbitration awards. But the parties quite properly make- no separate point about the Arbitration Act’s standards. We may assume that a multi-employer collective bargaining agreement with Milwaukee brewery workers sufficiently involves interstate commerce to come within the reach of 9 U.S.C. § 2, which we construed broadly just the other day in Snyder v. Smith, 736 F.2d 409, 417-18 (7th Cir.1984). And the Act’s exclusion of “contracts of employment of ... workers engaged in foreign or interstate commerce,” 9 U.S.C. § 1, is inapplicable; it has been, held to be limited to workers employed in the transportation industries. See Pietro Scalzitti Co. v. International Union of Operating Engineers, 351 F.2d 576, 579-80 (7th Cir.1965); Signal-Stat Corp. v. Local 475, United Electrical, Radio & Machine Workers of America, 235 F.2d 298, 301-03 (2d Cir.1956); Tenney Engineering Inc. v. United Electrical Radio & Machine Workers of America, (U.E.) Local 437, 207 F.2d 450 (3d Cir.1953) (en banc). But section 301 was enacted long after the Arbitration Act and deals specifically, as the Arbitration Act does not, with labor contracts; it therefore supersedes, within its domain, the standards of the earlier act. Shearson Hayden Stone, Inc. v. Liang, 653 F.2d 310, 312 n. 3 (7th Cir. 1981).

Miller’s first ground for attacking the arbitrator’s award is that it does not “draw its essence” from the collective bargaining agreement. This somewhat curious, but canonical, see, e.g., W.R. Grace & Co. v. Local Union 759, Int’l Union of Rubber Workers, 461 U.S. 757, 103 S.Ct. 2177, 2183, 76 L.Ed.2d 298 (1983), wording derives from the statement in United Steelworkers of America v. Enterprise Wheel & Car Corp., 363 U.S. 593, 597, 80 S.Ct. 1358, 1361, 4 L.Ed.2d 1424 (1960), that an arbitrator’s award under a collective bargaining agreement “is legitimate only so long as it draws its essence from the collective bargaining agreement.” The surrounding language makes clear that what is meant is that the award is valid provided it is an attempt to interpret the collective bargaining agreement rather than to apply .the arbitrator’s own ideas of right and wrong: “an arbitrator is confined to interpretation and application of the collective bargaining agreement; he does not *1163

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Bluebook (online)
739 F.2d 1159, Counsel Stack Legal Research, https://law.counselstack.com/opinion/miller-brewing-company-v-brewery-workers-local-union-no-9-afl-cio-ca7-1984.