Storer Broadcasting Co. v. American Federation of Television & Radio Artists

600 F.2d 45

• Court: Court of Appeals for the Sixth Circuit
• Decided: June 7, 1979
• Docket: No. 77-3360
• Status: Published

Opinions

CELEBREZZE, Circuit Judge.

Plaintiff-appellant, Storer Broadcasting Company, appeals from an adverse decision by the district court in this action to vacate an arbitrator’s award. The arbitration, initiated by the American Federation of Television and Radio Artists (“the union”),¹ yielded an award in favor of union members in a dispute concerning payments due from Storer’s profit sharing plan. Finding no evidence in the record to support the arbitrator’s findings, we reverse the’ district court’s refusal to vacate the award.

Storer operates a radio station, WJW-AM, and television station, WJW-TV, in Cleveland. For many years prior to 1973 Storer had made voluntary payments into its profit sharing plan² on behalf of the employees involved in this dispute. The profit sharing plan was operated as a separate trust administered by an independent trustee who was not a party to the arbitration or this action. In 1973 Storer and the union entered into collective bargaining agreements ³ which required Storer instead to make contributions on behalf of these employees into the union’s pension and welfare plan. The union agreed that its members would cease to participate in all aspects of the Storer profit sharing plan. This portion of the 1973 agreements concluded: “The Union represents that it has fully disclosed to its members the benefits being given up by its members in consideration for the Company’s contribution to the AFTRA P & W fund and indicates that this arrangement is fully acceptable to the Union and its members.” ⁴

In early 1974, the employees covered by these collective bargaining agreements were advised by the Storer profit sharing plan trustee that they would receive the amounts that had “vested” in their favor, as set forth in the profit sharing plan agreement. Thirteen employees accepted checks in these amounts. Seven employees rejected such checks and demanded payment of the full amounts “credited” to their accounts, which was a larger sum. Storer refused to pay such additional amounts.

The union took the matter to an arbitrator,⁵ who initially ruled that the matter was arbitrable between the union and Storer even though Storer claimed it had no control over the profit sharing plan trustee and was not entitled to receive any sums back from the trust when an employee left the plan’s coverage. On the merits, the arbitrator construed the language quoted above⁶ as binding Storer to whatever reasonable interpretation the union had made and communicated to its members concerning their rights upon termination of their participation in the Storer profit sharing plan. Pursuant to this construction, the arbitrator made a factual finding that the union had represented to its members that they would receive all amounts credited to their accounts, not just vested amounts. Thus, the arbitrator entered an award in favor of the seven employees who had claimed they were entitled to such credited amounts.⁷

Storer filed an application in the district court to vacate the award on the grounds that there was no evidentiary support for the arbitrator’s finding that the union had represented to its members that they would receive the credited amounts. The district court noted that “the arbitrator’s decision does not clearly indicate the basis upon which [this] finding [was] predicated.” The court ordered a limited remand to allow the “arbitrator to state in writing the factual predicate upon which he based his conclusion that the local union had advised its members that they would receive full payment upon termination of participation” in the profit sharing plan.

In response to the remand, the arbitrator informed the court that “since the Union’s version of how the affected employees should be paid out upon cessation of participation seemed more logical than the Company’s version, the arbitrator concluded that it was the Union’s version which was related, or disclosed, to the members of the two bargaining units.” The arbitrator also reasoned that the union must have told its members that they would receive the full credited amounts because otherwise the seven members would not have objected to receiving only the vested amounts. The arbitrator cited nothing in the record supporting his factual finding that the union had so informed its members.

The district court then reviewed the case, granted the union’s motion for summary judgment, and dismissed Storer’s application. The court reasoned that the “arbitrator was entitled to draw reasonable inferences and conclusions from the agreement in evidence before him.”

It is very well settled that the courts are generally required to refrain from reviewing the merits of an arbitrator’s award due to the policy favoring arbitration as a means of resolving labor disputes. This was established in the Steelworkers Trilogy⁸ and has been applied numerous times by this court.⁹ But there are at least two important exceptions to this general rule.¹⁰ First, “the arbitrator is confined to the interpretation and application of the collective bargaining agreement, and although he may construe ambiguous contract language, he is without authority to disregard or modify plain and unambiguous provisions.” Detroit Coil Co. v. Int’l Ass’n of Machinists, 594 F.2d 575, 579 (6th Cir. 1979), citing cases. Thus, the courts are empowered to set aside an award if the arbitrator exceeds these confines. Second, “although a court is precluded from overturning an award for errors in the determination of factual issues, ‘[nevertheless, if an examination of the record before the arbitrator reveals no support whatever for his determinations, his award must be vacated.’ ” Id. at 580-81, citing NF & M Corp. v. United Steelworkers of America, 524 F.2d 756, 760 (3d Cir. 1975). See also Timken Co. v. Local Union No. 1123 United Steelworkers of America, 482 F.2d 1012, 1014-15 (6th Cir. 1973).

Storer has not argued that the arbitrator went beyond the plain meaning of the contract in construing it to bind Storer to pay to the union’s members whatever amounts the union reasonably represented to them that they would receive.¹¹ Rather, Storer has contested only the arbitrator’s factual finding that the union did indeed represent to its members that they would receive the credited amounts in their profit sharing accounts.

We agree with Storer that there is absolutely no evidentiary support in the record before the arbitrator for this factual finding. Our search of the record revealed no testimony or documentary evidence to this effect. The union’s brief to this court has pointed to no such evidence in the record.

The arbitrator himself, in the face of a specific request from the district court, could cite no factual support for his finding. Instead, the arbitrator was reduced to arguing that the union must have disclosed to its members that they would receive the credited amounts because that was “more logical.” While logic can be helpful to supplement evidence or to draw inferences from evidence, it cannot substitute for evidence.¹²

The arbitrator also reasoned that the union must have disclosed that its members would receive the credited amounts because otherwise the seven union members would not have objected when offered only the vested amounts. Putting aside the fact that almost twice as many union members accepted the vested amounts, we think this reasoning by the arbitrator proves too much. Initially, common sense teaches that the mere fact that a dispute has arisen does not weigh in favor of either party in resolving the dispute. More importantly, the mere fact that a dispute has arisen cannot substitute for evidence on the issues involved in the dispute.¹³

It is apparent that rather than base his award on evidence in the record, the arbitrator “dispense[d] his own brand of industrial justice.”¹⁴ This he cannot do.

Since the union’s and its members’ real dispute is with the profit sharing plan trustee, who was not a party to the arbitration or this action, our disposition is without prejudice to whatever legal rights they may be able to assert against the trustee or the plan’s administrative committee pursuant to the dispute resolution mechanism set forth in the profit sharing plan.

The judgment of the district court is reversed and the cause is remanded to that court with directions to vacate the award of the arbitrator and for further proceedings consistent with this opinion.¹⁵

1 . Both the Cleveland Local and the national union were defendants in the action below, while the arbitration appears to have been initiated by only the local union. Both were parties to the relevant collective bargaining agreements with Storer.

2 . The profit sharing plan included other welfare and insurance programs.

3 . There were separate agreements for the. radio and television stations, but they were identical insofar as relevant here.

4 . ¶ 34, WJW-AM Agreement; ¶ 33, WJW-TV Agreement.

5 . Both agreements contained a provision requiring arbitration of disputes arising thereunder. The arbitrator was Mr. Charles F. Ipavec of the American Arbitration Association.

6 . See note 4, supra, and accompanying text.

7 . The thirteen other employees were held to have been estopped by accepting their checks for the vested amounts.

8 . United Steelworkers of America v. American Mfg. Co., 363 U.S. 564, 80 S.Ct. 1343, 4 L.Ed.2d 1403 (1960); United Steelworkers of America v. Warrior & Gulf Navigation Co., 363 U.S. 574, 80 S.Ct. 1347, 4 L.Ed.2d 1409 (1960); United Steelworkers of America v. Enterprise Wheel & Car Corp., 363 U.S. 593, 80 S.Ct. 1358, 4 L.Ed.2d 1424 (1960).

9 . See most recently Detroit Coil Co. v. Int’l Ass’n of Machinists, 594 F.2d 575 (6th Cir. 1979); General Drivers, Warehousemen and Helpers’ Local Union No. 89 v. Hayes & Nicou-lin, Inc., 594 F.2d 1093 (6th Cir. 1979).

10 . See 9 U.S.C. § 10.

11 . While a portion of Storer’s brief to this court could be construed as so arguing, counsel conceded at oral argument that Storer was only contesting the arbitrator’s factual findings. While we express no opinion on the matter, we note that Storer could have at least made a plausible argument that this construction of the contract exceeded its plain meaning. Storer could have made an even stronger argument that the arbitrator exceeded his authority in binding Storer to pay amounts due, if at all, from the profit sharing plan trustee. Since Storer did not make these arguments, we do not address them.

12 . The district court, in ruling that the “arbitrator was entitled to draw reasonable inferences and conclusions from the agreement in evidence before him,” allowed such “inferences” to support both the arbitrator’s construction of the contract and his factual findings. They could support only the former.

The dissent would allow the arbitrator to make factual findings based upon “logical inferences.” The dissent points to the provisions of the pension plan agreement, none of which are directly applicable to this case, from which it can be argued that it was “more logical” that the union had informed its members that they would receive their credited amounts. But this misses the point. The arbitrator was construing the collective bargaining agreement, not the pension plan agreement, and he construed the collective bargaining agreement to bind Storer to whatever the union represented to its members. Thus, the issue is not what representation would be “more logical;” if it were, we might agree with the dissent. Rather, the issue is what representation was actually made and there is absolutely no record evidence that the union represented that its members would receive their credited amounts. The dissent appears to concede as much since it cites no such evidence. If we were to allow an arbitrator to make a factual finding that a certain event occurred based upon an inference that said event should have occurred because an ambiguous document can be construed to make said event “more logical,” then we would reduce the requirement that arbitration awards be supported by at least some evidence to a meaningless recitation which could easily be avoided by a clever arbitrator. This we decline to do.

Similarly, the union’s brief to this court argues that the arbitrator was allowed to “presume” that the union had informed its members they would receive the credited amounts. This confuses contract interpretation with factual findings. A presumption allows a tribunal to infer one fact from another fact proven in the case. It does not allow a tribunal to infer one fact from a construction of ambiguous contractual language. If it did, no arbitration award would have to be supported by evidence since all evidentiary findings could stem from the collective bargaining agreement.

13 . If the mere fact that a party believes he has been wronged were held sufficient evidence to prove that he has indeed been wronged, then the requirement that arbitration awards be supported by at least some evidence would be completely hollow.

14 . Enterprise Wheel & Car Corp., supra, 363 U.S. at 597, 80 S.Ct. at 1361. See also Detroit Coil Co., supra, 594 F.2d at 579.

It is particularly apparent that the arbitrator “dispense[d] his own brand of industrial justice” here since he adopted a construction of the collective bargaining agreement urged by neither party to the arbitration.

15 . While the case was disposed of below on the union’s motion for summary judgment, there is no need for a trial since Storer also filed a motion for summary judgment and there were no material factual disputes.