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Sun Petroleum Products Co. v. Oil

decided: July 7, 1982.

SUN PETROLEUM PRODUCTS CO.
v.
OIL, CHEMICAL AND ATOMIC WORKERS INTERNATIONAL UNION, LOCAL 8-901, APPELLANT; SUN PETROLEUM PRODUCTS CO., APPELLANT V. OIL, CHEMICAL AND ATOMIC WORKERS INTERNATIONAL UNION LOCAL 8-901



ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA

Before Garth and Becker, Circuit Judges, and Muir, District Judge*fn*

Author: Garth

Opinion OF THE COURT

In a suit filed by Sun Petroleum Products (Sun) against the Oil, Chemical, & Atomic Workers International Union (the Union), the district court vacated an arbitration award which sustained a grievance submitted by the Union. We hold that the district court erred in vacating the Award, thus, we reverse.

I.

During negotiations leading to a collective bargaining agreement in 1977, Sun agreed to reserve certain inside painting work for its own union employees. In exchange, the Union permitted Sun to reorganize certain of its maintenance force, including painters, into a "builder mechanic group." This agreement was reflected in Item 13 of a 1977 Letter of Understanding, which provided:

In consideration of the 1977 creation of the Builder Mechanic Department, Company and Union agree that no painting contractor will paint the inside of the buildings within the Refinery.

(A. 270)*fn1

In October 1979, Sun was obliged to repair certain badly deteriorated concrete floors in one of its warehouses. (A. 167a-168a). Sun contracted with First State Maintenance Co. of Wilmington, Delaware to repair the floors. The process which First State contracted to undertake involved scrubbing, scarifying,*fn2 and acid-etching the floors. Once the floors were so prepared, First State was then to apply several coatings of moisture coated urethane.

On learning of Sun's contract with First State, the Union filed a grievance claiming that the floor renewal contract violated Item 13 of the Letter of Understanding between Sun and the Union. (A. 36). The grievance could not be resolved by the parties, and pursuant to the arbitration clause in their Collective Bargaining Agreement, the Union submitted a "Demand for Arbitration." (A. 32, 38).

On July 2, 1980, after extensive hearings, the Arbitrator issued an award sustaining the Union's grievance with respect to the urethane coating process. He denied the grievance, however, with respect to scrubbing, scarifying, and acid-etching-or the preparation process. The Arbitrator granted the Union's request for a remedy, requiring Sun to compensate bargaining unit members for the time spent by the outside contractor in performing the coating work (A. 269a).

Subsequently, on November 18, 1980, Sun filed a suit seeking to overturn the Arbitrator's award on the grounds that it deviated from the terms of the Collective Bargaining Agreement. The Union filed an Answer and Counterclaim seeking enforcement of the Award. In an amended complaint, as an additional ground for overturning the award, Sun charged the Arbitrator with bias and demanded that the Arbitrator be disqualified from any further proceedings in the case. Finally, Sun contended that even if the award was upheld, the Union should be precluded from proving damages because of certain of the Arbitrator's "procedural rulings," which Sun argues prohibited the Union from claiming backpay. Sun asserted that in providing for a backpay remedy, the Arbitrator's award had ignored these earlier procedural rulings. Cross-motions for summary judgment were filed.

The district court denied both motions for summary judgment, but entered an order vacating the award.*fn3 According to the district court, the Arbitrator's award did not "draw its essence from an interpretation of Item 13." Nevertheless, the district court was unconvinced that the Arbitrator had any bias against Sun, and thus the court remanded the question to the same Arbitrator. (A. 329, 333). Furthermore, the district court held that on remand the Union ...


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