new disciplinary policy went outside the bounds of the contract. The court found that establishing store rules and operating procedures was a function exclusively reserved to the supermarket by contract, and that the arbitrator had encroached on this management right.
The easy answer to Bruno's and cases like it is to cite Local 1589. To the extent they reach results different than Local 1589 on the same issue, we are bound to follow the Third Circuit. It seems too elementary to mention, but the court is continually surprised at the insufficient attention paid to the idea that the binding effect of law is based on a fairly rigid hierarchy, and that sensitivity to this hierarchy is the most reliable form of persuasion. Many issues in cases, and cases themselves, are resolvable by a more sober assessment of the effect of Third Circuit precedent. The Third Circuit binds all within its jurisdiction. If there is a Third Circuit decision on an issue close to the one being decided, counsel must address the substance of it. It is as simple as that, since the Third Circuit has decided almost all of the issues we see. Conscientious representation requires no less. This is to be contrasted with the ignorance or avoidance of Third Circuit law that we see in many briefs, in the apparent belief that we owe similar allegiance to any other court (besides the Supreme Court of the United States) simply because that court has ruled in favor of the party's position.
Bruno's is also distinguishable on its facts. There, the arbitrator imposed affirmative new obligations on the company, as noted above. Here, the arbitrator did not create a new standard. Rather, he applied an existing standard -- proper cause -- to Mitchell's new work rule in order to reconcile the two clauses. This does not create a new obligation and does not change the contract. The arbitrator did change the discipline from discharge to suspension, to which Mitchell strongly objects. But even the Bruno court accepts that "arbitrators have broad powers to craft appropriate relief." 858 F.2d at 1531. A remedy short of discharge was appropriate in this case because of the vagueness of the work rule, and the arbitrator's sensible conclusion that not all damage or destruction justified discharge. That being so, the arbitrator was compelled by his interpretation to find a form of discipline consistent with his findings. Simply because Mitchell did not foresee this outcome, or does not agree with it, does not lead to the conclusion that it is beyond the terms of the CBA. The arbitrator did not, as in Bruno's, establish new disciplinary policies.
V. Attorneys' Fees
The Union seeks attorneys' fees under Federal Rule of Civil Procedure 11 and the court's inherent powers, contending that Mitchell's position has no basis in law. The Union states that it warned Mitchell of its intention to seek such fees in advance of its motion for summary judgment to allow Mitchell to withdraw its action without risking such liability.
Mitchell asserts that it was merely exercising its right to protect the integrity of the CBA. As on the merits Mitchell argues that the Arbitrator rewrote the work rule, and this action was necessary to preserve its management right to impose work rules.
Rule 11(b)(2) requires that a party's pleadings and motions be warranted by existing law or by a nonfrivolous argument for the extension, modification, or reversal of existing law or the establishment of new law. "The intended goal of Rule 11 is accountability." Mary Ann Pensiero, Inc. v. Lingle, 847 F.2d 90, 94 (3d Cir. 1988). Rule 11 sanctions are based on an objective standard of reasonableness under the circumstances. Id. Rule 11 "'imposes on counsel a duty to look before leaping and may be seen as a litigation version of the familiar railroad crossing admonition to "stop, look, and listen."'" Id., (quoting Lieb v. Topstone Industries, Inc., 788 F.2d 151, 157 (3d Cir. 1986)).
The Third Circuit had the occasion to consider Rule 11 sanctions in an arbitration case in Teamsters Local Union No. 430 v. Cement Express, Inc., 841 F.2d 66 (3d Cir.), cert. denied, 488 U.S. 848, 102 L. Ed. 2d 101, 109 S. Ct. 128 (1988), on which Mitchell relies in opposing sanctions. In Local 430, the court reversed a district court decision imposing Rule 11 sanctions against a union in a case involving successor obligations under a collective bargaining agreement. The union also failed to support its allegations in opposing the companies' summary judgment motions. The Third Circuit found that "the complaint in this case relied upon an expanded theory of the arbitrability of successor liability which, while novel and unsuccessful, was not plainly unreasonable." Id. at 70. We cannot say as much for Mitchell's Complaint, which appears to rest only on disagreement with the arbitrator's decision. Local 430 also mandates great caution in considering Rule 11 sanctions, which we believe we have exercised. Local 430 is sufficiently different from this case for us to find it does not control the imposition of sanctions.
In this case, the circumstances counselled strongly against litigation. The reasons are easily discernible. First, attempts to overturn arbitration awards face a rigorously applied and extremely narrow standard of review, as set forth above. One purpose of this standard, of course, is to avoid exactly what we are doing now -- entertaining the parties' contentions in a lawsuit -- when the parties, for the proven benefit of all involved, have agreed to take their contract disputes elsewhere. For this reason, we are much less sensitive to a factor to which courts must always be aware when its power to review a dispute is restrained for any reason: the ability of an aggrieved party to have its day in court. The fact is, the parties themselves have decided that they prefer not to take their labor disputes to court. It is not necessary to list the advantages of this approach, fully admitting the occasional perceived injustice that may result.
One's day in court can be a burden as well as a benefit because of cost, delay, and extended friction in the workplace. Employers and unions in any given trade have wisely recognized this truth as it applies to disputes between them.
A second reason against filing the Complaint is precedent from the Third Circuit that Mitchell recognized as an obstacle to its case. It cites Local 1589 as a "hurdle in front of parties attempting to vacate an arbitrator's award." Mitchell SJ Br. at 11. Simply citing the case reveals two characteristics about which there can be no dispute: it is binding, and it is recent. For those reasons alone, precedent that is not binding, or not recent, should be carefully scrutinized to determine how it might disclose a path to deciding this case that is better than, or not covered by, binding, recent law. Rather than a hurdle, which, at least in sports, runners almost always reach the other side of, binding, recent authority is better viewed as a wall. The complaining party must be prepared to show us exactly where the door is and the key to unlock it.
Mitchell's efforts fall far short. It repeatedly contends that the arbitrator rewrote the work rule. Merely saying this does not make it so. The ambiguity of the work rule is apparent on its face, which is not the case for other rules in the same list. Perhaps it is possible for questions to arise as to the interpretation of the work rules prohibiting punching another employee's time card, or gambling on company premises, for example, but the subject matter and phrasing of the rules make such questions much less likely. The arbitrator did not "rewrite" the work rule; he compared it to other language in the contract essential to any determination of whether a discharge is appropriate. Thus, this argument does not convince us of the need for a lawsuit.
Next, Mitchell argues that the arbitrator failed to adhere to his own interpretation of the agreement. That is, the arbitrator found that substantial damage had been done, but would not impose discharge as a penalty. Mitchell's argument seems to rest on the notion that any damage found "substantial" must be met with discharge. This does not necessarily follow. Depending on the circumstances, there can be substantial damage to an expensive item, or substantial damage to an inexpensive item, with different expectations of care. Or, as the arbitrator said, there can be vindictive damage to an inexpensive item that reveals much about the worth and attitude of an employee. Whether discharge is appropriate must be decided case by case because the term "substantial" represents a range of meaning and severity. Though he made this observation, the arbitrator did not, as Mitchell contends, impose his own system of penalties for damage to company property. There is nothing stopping another arbitrator from upholding the termination penalty in a different case.
Mitchell's arguments against attorneys' fees are the same as those it advances on the merits: conclusory, without support in the facts or law. Mitchell's failure to discuss or attempt to distinguish two matters -- the proper cause standard and Local 1589 -- stamps its arguments as hollow. By failing to grapple forthrightly with these key issues, Mitchell was not being creative or enthusiastic or adventuresome. Here, Mitchell was simply prolonging a process which a reasonable investigation of the law would have revealed was at its end. This view should have been expressed by Mitchell's counsel, if by no one else. Thus we cannot find that Mitchell's claims are warranted by existing law or by a nonfrivolous argument for the extension, modification, or reversal of existing law or the establishment of new law.
Moreover, these justifications for resisting established law must be watered down in an arbitration review case. We are not addressing constitutional rights, for example, in whose protection courts have a special role. Instead we are called into a dispute that the parties themselves have agreed to take elsewhere. Given this direct expression by the parties against court review, we are not justified in encouraging creativity to escape this bargain when a party loses arbitration. Newark Morning Ledger Co. v. Newark Typographical Union, 797 F.2d 162, 165 (3d Cir. 1986) ("frequent judicial disapproval of the awards of labor arbitrators would tend to undermine a system of private ordering that is of the highest importance to the well-being of employer and worker alike"); Teamsters Local Union No. 764 v. J.H. Merritt & Co., 770 F.2d 40, 43 n.2 (3d Cir. 1985) ("in suits to compel one party to submit to arbitration or abide by an award, fees are generally awarded if the defaulting party acted without justification, . . . or if the party resisting arbitration did not have a reasonable chance to prevail") (citations omitted).
That is, we should resist interfering in a voluntary choice of the parties by blindly accepting that appeals from arbitration awards are cases like any other. Like the policy favoring settlement of cases, the policy favoring arbitration of disputes rests on the same foundation of court respect for dispute resolution agreements. This is not to say that we are precluding a party that seeks to overturn an arbitration award from being creative. Rather, the party who challenges an arbitration award simply must give closer scrutiny to his decision, leaving as little room as possible for the risk that his creativity will be construed as a repudiation of his own choice that courts properly should discourage.
In years past, law firm letterhead would often bear the inscription "attorneys and counsellors at law." This practice has waned, and we rarely see those paired words. Firms should revive the practice; it might remind lawyers about the "counsellor" aspect of their profession. Part of that aspect involves listening, understanding, researching, and advising. It might not involve litigating, where there is a slight but, it is to be hoped (for the sake of all the participants in the legal system), firm risk that a damn-the-consequences plunge into the court system will backfire, in the form of sanctions against the claimant. Indeed, because of such a risk and for other reasons of common sense, the counselling might involve actively advising against litigation. That is where the lawyer's judgment -- his or her stock-in-trade, and by definition an uncertain enterprise -- comes into play.
Mitchell had an opportunity to withdraw its claims up to the time the Union moved for summary judgment, but decided otherwise. If the Union has complied with the conditions of Rule 11, we will award attorneys' fees for all time incurred by the Union after notification to Mitchell that it intended to move for summary judgment and seek sanctions, stating the grounds therefore. As explained above, this award is based on the type of case this is, the clarity of controlling precedent of which plaintiff was aware, plaintiff's failure to find a legitimate basis on which to challenge the controlling precedent, and its failure to address an obvious and key justification for the arbitrator's decision.
An order consistent with this memorandum opinion will be entered.
In accordance with the accompanying memorandum opinion:
1. Plaintiff's Cross-Motion for Summary Judgment (Doc. No. 13) is DENIED.
2. Defendants' Motion for Summary Judgment (Doc. No. 8) is GRANTED.
3. The November 14, 1995 arbitration decision at issue is valid and enforceable, and shall be followed by the parties.
4. Defendants' Motion for Attorneys' Fees (Doc. No. 9) is GRANTED. The parties shall attempt to stipulate to an amount of fees incurred since the time defendants advised plaintiff of their intent to file their motion for sanctions. If the parties are unable to so stipulate, defendants shall file 20 days from the date of this order an accounting in support of their attorneys' hours and fees charged. Plaintiff may respond 20 days after defendants' accounting is filed.
5. Judgment is hereby entered for the defendants and against the plaintiff.
SO ORDERED this 20th day of November, 1996.
ROBERT J. CINDRICH
United States District Judge