APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY
Before Seitz, Chief Judge, Adams, Circuit Judge, and Stapleton, District Judge*fn*
Mobil Oil Corporation appeals from the district court's order enforcing an arbitrator's award of conditional reinstatement of an employee whom Mobil discharged. Independent Oil Workers Union, Local 8-831 appeals from the district court's order denying its request for costs and attorneys' fees. This court has jurisdiction pursuant to 28 U.S.C. § 1291 (1976).
Article X of the collective bargaining agreement between Mobil and Local 8-831 reserved to Mobil the right to discharge an employee "for cause." On December 3, 1979, Mobil discharged Dominic Licciardello, an employee at its refinery in Paulsboro, New Jersey. Local 8-831 filed a grievance on behalf of Licciardello, arguing that he had been discharged without cause and that he should be reinstated with full back pay. The parties could not resolve the grievance, and the Union submitted the matter to arbitration pursuant to the arbitration provisions of the collective bargaining agreement. On the initial day of the arbitration hearing, counsel stipulated that the issue to be decided by the arbritrator was: "Did the Company have cause on December 3, 1979 to discharge Dominic Licciardello ...?"
The arbitrator found that Licciardello had fought on the job and had a poor work record. The arbitrator stated that he "normally would have no hesitation in sustaining a discharge where (such behavior had been established)." The arbitrator did not, however, uphold the discharge. He found that Licciardello had suffered from a "severe mental disorder" during the period just before his discharge and that he had been hospitalized for six weeks following his discharge. The arbitrator found that Licciardello's belief that he was a prime suspect in an FBI investigation into the theft of oil had contributed to his mental disorder. Prior to discharge, however, Mobil did not know of Licciardello's mental disorder.
The arbitrator concluded that under the circumstances Mobil did not have cause to discharge Licciardello and ordered conditional reinstatement without back pay. Mobil refused to reinstate Licciardello and sought to vacate the award in federal district court. Local 8-831 filed a counterclaim seeking enforcement of the award. The district court granted Local 8-831's motion for summary judgment, but denied its request for costs and attorneys' fees. Both parties appeal.
Mobil argues that: (1) the award should be vacated because the arbitrator exceeded the scope of his authority as defined by the collective bargaining agreement and by the issue submitted to him by the parties; and (2) the arbitrator dispensed his own brand of industrial justice in violation of the agreement. Local 8-831 argues that the award was rationally derived from the collective bargaining agreement and thus should be enforced.
We first consider whether we should defer to an arbitrator's definition of the submitted issue.
Federal courts do not ordinarily review de novo the merits of an arbitration award where the parties have agreed to be bound by an arbitrator's decision. See United Steelworkers v. American Manufacturing Co., 363 U.S. 564, 567-68, 80 S. Ct. 1343, 1346, 4 L. Ed. 2d 1403 (1960). There are, however, limitations to the judicial deference given an arbitrator's decision. An arbitrator's award must draw its essence from the collective bargaining agreement, and an arbitrator must not exceed his authority and dispense his own brand of industrial justice. See United Steelworkers v. Enterprise Wheel & Car Corp., 363 U.S. 593, 597, 80 S. Ct. 1358, 1361, 4 L. Ed. 2d 1424 (1960). This court has emphasized that federal court review of an arbitrator's award is extremely narrow, however, and if the arbitrator's "interpretation (of the meaning of the collective bargaining agreement) can in any rational way be derived from the agreement," courts must enforce the award. Ludwig Honold Mfg. Co. v. Fletcher, 405 F.2d 1123, 1128 (3d Cir. 1969).
The scope of an arbitrator's authority is limited to the issue that the parties submit for him to decide. See, e.g., Textile Workers Union, Local 1386 v. American Thread Co., 291 F.2d 894, 896 (4th Cir. 1961). That rule, however, does not indicate the standard by which federal courts should review the arbitrator's determination of his authority as defined by the submitted issue. There are several reasons why we believe that the deference that is accorded to an arbitrator's ...