On Appeal From the United States District Court for the District of New Jersey
(D.C. Civ. No. 94-cv-04967)
Before: BECKER, MANSMANN, Circuit Judges, and SCHWARZER, *fn* District Judge.
This is an appeal from an order of the district court granting summary judgment for defendant trucking companies in an action by plaintiff owner-operators seeking to set aside a labor arbitration award. Jurisdiction arises under Section(s) 301 of the Labor Management Relations Act. 29 U.S.C. Section(s) 185. The appeal presents the question whether the arbitrators acted within the authority conferred upon them by the parties' agreement, or rather decided issues beyond the parties' submissions. Concluding that the arbitrators exceeded their authority, we reverse.
I. Facts and Procedural History
Plaintiffs are 46 truck drivers and two local chapters of their union, Local 560 and Local 917 of the International Brotherhood of Teamsters. Defendants Ryder Systems, Inc. and related companies ("Ryder" or "company") are engaged in the commercial carriage of automobiles. Plaintiffs use their own tractors to pull defendants' trailers, delivering cars and light trucks out of Ryder's terminal in Northern New Jersey to new car dealers throughout New England, the Middle Atlantic States, and parts of the Midwest.
At all relevant times, the parties were subject to a collective bargaining agreement known as The National Master Automobile Transporters Agreement ("Master Agreement"). From June 1, 1991, when the Master Agreement went into effect, until August 16, 1994, when the arbitration award that is the subject of this appeal was rendered, the drivers' compensation was governed by the Master Agreement and related leases by which the drivers dedicated their tractors exclusively to Ryder's business. Payment to the drivers was based on a percentage of the gross revenue paid to Ryder by the shippers. Despite the fact that the Master Agreement provides that no negotiated agreement between an employer and its drivers shall entitle the drivers to payment of any amount less than 65% of the gross revenues the employer receives from a shipper, the lease agreements provide that drivers receive 60% or 61% depending on the number of vehicles shipped. It was the lease agreements that determined the drivers' share. The agreement (and practice under the lease) further makes clear that the drivers were to be reimbursed for the full amount of all tolls they actually paid.
The Master Agreement and the related leases also included a "toll schedule," which (very roughly) represented an average of the tolls that would be incurred on a trip from Ryder's terminal to certain broadly defined geographical areas encompassing entire states or groups of states. Prior to calculating the driver's share, Ryder would deduct from the gross revenue the amount specified by the toll schedule for the particular trip. *fn1 At some point, Ryder unilaterally (and in the drivers' submission, arbitrarily) increased this toll schedule, retroactive to April 1992. In so doing, Ryder decreased the base (gross revenue) from which the drivers' share was calculated, thereby decreasing payments to the drivers. Ryder's actions precipitated the dispute that is now before us.
In addition to concern over changes in the toll schedule, a number of drivers discovered instances in which Ryder paid them 60% of the gross revenue when, in their opinion, they were entitled to 61%. Those drivers invoked the grievance machinery of the Master Agreement. *fn2 In the initial grievance (the "Matteson grievance"), they complained that Ryder's actions with respect to the toll schedule and the gross revenue share calculations had violated "Addendum 'C'" and "Exhibit 'B'" of the lease agreements. *fn3 Addendum C of the lease agreements establishes the toll schedule for trips originating from the Port Jersey terminal; Exhibit B assigns the threshold number of cars a driver must transport to receive 61% rather than 60% of the company's gross revenue.
When members of Local 560 learned that they were also being charged increases in the toll schedule and that the increases were effective retroactively to April 1992, their shop steward, Fred Worth, submitted a "class action" grievance on behalf of the drivers (the "560 grievance"). The written grievance identified the subject matter in the following language:
I FIND THE COMPANY IN VIOLATION OF ARTICAL [sic] #49 OF THE MASTER AGREMENT [sic]. I ASK FOR ALL MONIES TO BE RETURN [sic] TO DRIVERS ...