Beaird Industries Inc. v. Local 2297

"The conclusion that the subcontracting rights were not limited by the CBA should have ended the Arbitrator's inquiry the remainder of his decision, which balanced the interests of the Union with Beaird's economic savings, can only be characterized as the Arbitrator's 'own brand of industrial justice.'"

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Click here for the full text of this decision FACTS:The workers at Beaird Industries’ manufacturing plant in Shreveport are part of the Local 2297 of the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America. They are covered by a collective bargaining agreement that includes final and binding arbitration to settle grievances. When a new ownership team took over Beaird in December 2001, the team began reviewing all non-revenue-producing segments of the business, including Beaird’s buildings and grounds department. Beaird sought bids from landscaping contractors to perform work outside the fence line of the facility. Beaird informed the union of its intent to subcontract out the landscaping work. Beaird accepted the lowest bid on the work outside the fence and reassigned three of its own workers to do work inside the fence line. The union filed a grievance against Beaird over its decision to subcontract out the landscape work. Pursuant to the CBA, the union appealed the grievance to arbitration. The arbitrator sustained the union’s grievance and ordered Beaird to restore union employees to work outside the fence line. The arbitrator noted that the CBA allowed for subcontracting without reservation, but that when viewed in the context of the whole CBA, the right to subcontract could not be unqualified. The arbitrator weighed the costs and benefits to both parties if subcontracting were or were not allowed in this case, noting that the harm to the CBA would outweigh the cost savings to Beaird. Beaird filed a complaint in district court asking to vacate the arbitration award. Beaird and the union filed motions for summary judgment. The district court denied the union’s motion and granted Beaird’s motion, finding the arbitrator had exceeded his authority. On appeal, the union says the arbitrator did not exceed his authority, that he properly construed the subcontracting clause within the context of the entire CBA, and properly relied on his own judgment and experience to determine that the ambiguous subcontracting clause did not give Beaird the unfettered right to subcontract. In response, Beaird says the subcontracting clause is not ambiguous. It clearly allows for subcontracting without limit. Thus, the arbitrator’s decision did not “draw its essence” from the CBA. HOLDING:Affirmed. The court reviews the terms of the CBA and notices that, as the arbitrator acknowledged, the right to subcontract is not limited. But, unlike the arbitrator, the court finds the subcontracting provision unambiguous, and an arbitrator is limited by the express terms of the contract. Although the CBA does qualify the management rights if “specifically provided in this agreement,” the arbitrator points to no provision in the agreement that limits the subcontracting rights. Simply referencing the agreement is insufficient for this court to uphold the award. The arbitrator must show that the award is rationally inferable in some logical way from the agreement. No such inference can be drawn here to support the arbitrator’s award. Once the arbitrator concluded that the subcontracting rights were not limited by the CBA, his inquiry should have stopped there. “[T]he remainder of his decision, which balanced the interests of the Union with Beaird’s economic savings, can only be characterized as the Arbitrator’s”own brand of industrial justice’. We do not affirm the district court’s decision to vacate the Arbitrator’s award because we disagree with the outcome, but because the Arbitrator has failed utterly to draw his conclusions from the essence of the CBA.” OPINION:Jolly, J., delivered the court’s opinion.

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