The opinion of the court was delivered by: TIMOTHY SAVAGE, District Judge
In this action seeking to vacate a labor arbitration award, the
plaintiff Osram Sylvania Products, Inc. ("Osram") contends that the
arbitrator's reducing an employee's punishment for insubordination from
termination to a five-day suspension exceeded her authority under the
collective bargaining agreement ("CBA"). Specifically, it argues that the
arbitrator's decision altered the express terms of the CBA, which gives
Osram the sole right to determine whether an employee engaged in serious
enough misconduct to warrant immediate discharge. In short, Osram
maintains that the arbitrator's reinstatement of the insubordinate
employee was in manifest disregard of the CBA's terms.*fn1
The International Brotherhood of Teamsters Local Union No. 773
("Union") counters that the arbitrator acted within the scope of her
authority because the award is based on her interpretation of the CBA and
draws its essence from the contract. The Union asserts that under the CBA
the arbitrator had the power to determine whether Osram had "just cause"
to terminate the employee. It reasons that because the term "just cause"
is not defined in the CBA, it was the arbitrator's responsibility to interpret
the ambiguous contract provision.
We conclude that the arbitration award deciding the issue submitted by
the parties is based on a rational interpretation of the CBA and draws
its essence from the CBA. Therefore, applying the deferential standard of
review accorded a labor arbitration award, we shall confirm the
The arbitration award resulted from the grievance process initiated by
the Union when member Richard Hammel, a 13 year Osram employee, was fired
for insubordination. Decision in Grievance Involving Discharge of Rick
Hammel ("Decision") at 1-3. Osram, hosting a Super Bowl party, extended
the usual lunch period from one-half to a full paid hour for that day.
Id. at 3. For payroll purposes, Osram directed the employees to punch
back into work after lunch at noon instead of the usual 11:30 a.m. time.
Osram's instructions were imparted to the employees through the shift
supervisor, Joe Simpson, at a group meeting. Overhearing Hammell tell a
co-worker to punch in at 11:30 a.m. despite his instructions, Simpson
personally told Hammel that he had to punch in at noon like the other
employees. Id. at 4. Hammel, according to Simpson, defiantly stated that
he intended to punch in at 11:30 regardless of Simpson's directive. Id.
Simpson reported the incident to Operations Manager Tom Loughran, who
determined that Hammel had punched in at 11:27 a.m. Id. at 5. Loughran
then met with Simpson, Hammel, and the union steward. Hammel initially
claimed not to hear any instructions about punching in at noon. Simpson
contradicted him, stating that he had specifically repeated the
instruction to Hammel. Hammel did not dispute Simpson's statement to Loughran. Instead, he claimed that punching in at an
irregular time would have affected his pay. Id. at 5-6.
In light of the conflicting versions, Loughran interviewed five
employees, four of whom confirmed that Simpson had instructed Hammel
personally to punch in at noon. Loughran determined that Hammel had
disobeyed a direct order and recommended dismissal. Id. at 6. Reviewing
Hammel's personnel file, Osram's manager, Claude Mickle, learned that
Hammel had been disciplined on two prior occasions for insubordination.
Mickel concurred with Loughran and fired Hammel because he felt the
progressive discipline procedure provided in the CBA had not worked in the
past. Id. at 6-7.
The Union lodged a grievance pursuant to the CBA. The process proceeded
through the required steps to the arbitration hearing. Id. at 7-8. After
a full hearing at which the parties presented evidence and were
represented by counsel, the arbitrator issued her award. She found that
Hammel had been insubordinate and was subject to discipline, but she
reduced the punishment to a five-day suspension. Id. at 18.
Judicial Review of Arbitration Awards
Labor arbitration awards are presumed valid. Major League Umpires Ass'n
v. Am. League of Prof'l Baseball Clubs, 357 F.3d 272, 280 (3d Cir.
2004). A court must confirm an arbitration award that draws its essence
from the CBA because the parties bargained for a procedure in which the
arbitrator and not a court would interpret the agreement. Nat'l Ass'n of
Letter Carriers, AFL-CIO v. United States Postal Serv., 272 F.3d 182, 185
(3d Cir. 2001); United Parcel Serv., Inc. v. Int'l Brotherhood of
Teamsters, Chauffeurs, Warehousemen and Helpers of Am., Local Union No. 430, 55 F.3d 138, 141
(3d Cir. 1995). An award draws its essence from the CBA "`if the
interpretation can in any rational way be derived from the agreement,
viewed in light of its language, its context and any other indicia of the
parties' intention.'" Major League Umpires Ass'n, 357 F.3d at 280 (quoting
United Transp. Union Local 1589 v. Suburban Transit Corp., 51 F.3d 376,
379-80 (3d Cir. 1995)). Thus, a district court must not tamper with an
arbitration decision that draws its essence from the CBA even if another
interpretation of the CBA makes more sense or if the court would have
reached a different result. Major League Umpires Ass'n, 357 F.3d at 280,
283-84; United Transp. Union Local No. 1589, 51 F.3d at 380-81.
Only if the arbitrator's decision demonstrates fraud, bias or manifest
disregard for the CBA can it be vacated. United Parcel Senv., Inc., 55
F.3d at 141; United Transp. Union Local 1589, 51 F.3d at 379. Manifest
disregard*fn2 is established when an arbitrator's decision is "`totally
unsupported by principles of contract construction and the law of the
shop.'" United Transp. Union Local 1589, 51 F.3d at 379 (quoting News
Am. Publ'ns, Inc. v. Newark Typographical Union, Local 103, 918 F.2d 21,
24 (3d Cir. 1990)); see also Major League Umpires Ass'n, 357 F.3d at
280. Legal or factual error does not rise to the level of manifest
disregard. Major League Baseball Players Ass'n v. Garvey, 532 U.S. 504,
509 (2001) (per curiam); Exxon Shipping Co. v. Exxon Seamen's Union,
73 F.3d 1287, 1295-96 (3d Cir. 1996). Alleged misinterpretation of the
agreement does not permit judicial intervention. Garvey, 532 U.S. at
509. Nor does an ambiguity in the arbitrator's opinion allow a court to vacate the award. Roadway Package Sys., Inc. v. Kayser,
257 F.3d 287, 301 (3d Cir. 2001).
In the final analysis, as long as the arbitrator was interpreting the
CBA and was acting within the scope of her authority, we must confirm the
award even in the ...