Appeal from a judgment of the District Court for the Southern District of New York (Lee P. Gagliardi, Judge) confirming a labor arbitration award.
Feinberg, Chief Judge, Lumbard and Newman, Circuit Judges. Lumbard, Circuit Judge dissents.
Parex, Inc. appeals from a February 10, 1982, judgment of the District Court for the Southern District of New York (Lee P. Gagliardi, Judge) confirming a labor arbitration award against it. Parex claims that the arbitrator exceeded his authority by failing to adhere to the plain language of the collective bargaining agreement and by basing his decision on an interpretation of federal labor law. For the reasons that follow, we affirm the judgment of the District Court.
Parex and Local 259, UAW (the Union) were parties to a collective bargaining agreement covering twenty-two part-time employees. On July 18, 1980, during the term of this agreement, Parex's full-time employees, who were covered by a separate collective bargaining agreement between Parex and the Union, went on strike. The part-time employees decided to honor the Union's picket lines and stayed out of work until January 9, 1981, when they, through the Union, made an unconditional offer to Parex to return to work.*fn1 When the part-time employees reported for work on January 13, 1981, Parex informed them that they had been permanently replaced.
Contending that Parex's replacement of the part-time employees violated the terms of their collective bargaining agreement, the Union submitted the dispute to arbitration pursuant to a broad arbitration clause contained in the agreement. Specifically, the Union claimed that Parex had violated the agreement by replacing the part-time employees without just cause and formal advance notice and by hiring replacements without using the Union's employment service and without notifying the Union shop steward. In addition, the Union argued that Parex's actions constituted a "lock-out" in violation of section 12 of the agreement. After a hearing, the arbitrator ruled for the Union, finding that Parex had failed to notify its part-time employees that they would be replaced if they refused to cross the picket lines and that, by refusing to reinstate these employees, Parex had engaged in a lock-out.
On appeal, Parex contends that the award must be vacated because the arbitrator failed to adhere to the language of the collective bargaining agreement. In essence, the employer argues that the arbitrator's interpretation of the agreement is not only wrong, but so clearly wrong that the resulting award fails to draw its essence from the agreement. We disagree. In his opinion and award, the arbitrator stated that three sections of the collective bargaining agreement were applicable to the dispute: section 2, which provided that Parex "shall hire such additional employees [as it needs] from an employment office operated by the Union" and required Parex to notify the Union shop steward whenever any new employee was hired; section 5, in which Parex agreed not to discharge any employee without just cause and written notice; and section 6, which provided for arbitration of grievances and disputes. Though the arbitrator's opinion explaining his award is not unambiguous, it is evident that he considered the replacement of the part-time employees to be a discharge within the meaning of section 5, and it is fairly inferable that he construed the requirement of "notice" to mean not merely advance warning that a discharge will occur but also advance warning of what would constitute a ground for discharge. Whether or not we would so construe the contract, we cannot say that the arbitrator exceeded his authority in making these interpretations. Cf. Edna H. Pagel, Inc. v. Teamsters Local Union 595, 667 F.2d 1275 (9th Cir. 1982) (upholding decision of arbitrator that construed contract provisions barring discharge for crossing bona fide picket line to prohibit replacement of those honoring picket line). The District Court correctly stated that an arbitration award will not be vacated when the arbitrator explains his decision "in terms that offer even a barely colorable justification for the outcome reached," Andros Compania Maritima, S.A. v. Marc Rich & Co., 579 F.2d 691, 704 (2d Cir. 1978), even if the arbitrator's interpretation of the contract is clearly erroneous, I/S Stavborg v. National Metal Converters, Inc., 500 F.2d 424, 432 (2d Cir. 1974).
Parex further contends that the award must be vacated because the arbitrator relied on federal law, rather than the terms of the collective bargaining agreement, and that his interpretation of federal law was erroneous. In rejecting Parex's argument that it considered the part-time employees to be "sympathy strikers" who could be replaced immediately, the arbitrator pointed out the distinctions between this case and Redwing Carriers, Inc., 137 N.L.R.B. 1545 (1962), enforced sub nom. Teamsters Local 79 v. NLRB, 117 U.S. App. D.C. 84, 325 F.2d 1011 (D.C. Cir. 1963), cert. denied, 377 U.S. 905, 12 L. Ed. 2d 176, 84 S. Ct. 1165 (1964), which had approved replacement of a sympathy striker. In Redwing Carriers the employer had told the employee involved that he would be discharged if he did not cross the picket line. The employer in that case had also proved that he acted only to preserve the efficient operation of his business.
In United Steelworkers v. Enterprise Wheel & Car Corp., 363 U.S. 593, 597-98, 4 L. Ed. 2d 1424, 80 S. Ct. 1358 (1960), the Supreme Court, interpreting a similarly ambiguous arbitrator's award, stated:
[The award] may be read as based upon the arbitrator's view of the requirements of enacted legislation, which would mean that he exceeded the scope of the submission. Or it may be read as embodying a construction of the agreement itself, perhaps with the arbitrator looking to "the law" for help in determining the sense of the agreement. A mere ambiguity in the opinion accompanying an award, which permits the inference that the arbitrator may have exceeded his authority, is not a reason for refusing to enforce the award.
We agree with the District Court that the arbitrator did not clearly base his award on federal labor law. Although the arbitrator discussed the ability of an employer under federal labor law to replace "sympathy strikers" under some circumstances, this discussion appears not to be the basis of his award, but simply a response to Parex's argument that federal law, and in particular Redwing Carriers, Inc., supra, permitted the employer's action. Even if the arbitrator had misread Redwing Carriers, which we do not suggest, his possibly erroneous view of the employer's substantive rights under federal labor law would not undermine his authority to determine that the contract entitled the replaced employees to the procedural protection of prior notice and that replacement without such notice was a lock-out, prohibited by section 12 of the agreement.
Given the limited scope of review of arbitration awards, we cannot say that this arbitrator failed to base his decision on the collective bargaining agreement. Accordingly, we affirm the judgment of the District Court.