Stonemor Inc v. International Brotherhood of Teamsters Local 469
U.S. Court of Appeals for the Third Circuit
Stonemor Inc v. International Brotherhood of Teamsters Local 469, 107 F.4th 160 (3d Cir. 2024)
Stonemor Inc v. International Brotherhood of Teamsters Local 469
Opinion
PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
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No. 23-1489
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STONEMOR, INC.
v.
THE INTERNATIONAL BROTHERHOOD OF
TEAMSTERS, LOCAL 469,
Appellant
_______________
On Appeal from the United States District Court
For the District of New Jersey
(D.C. No. 3-22-cv-1388)
District Judge: Honorable Georgette Castner
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Argued
March 5, 2024
Before: JORDAN, PHIPPS, and FREEMAN, Circuit Judges
(Filed: July 10, 2024)
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Raymond G. Heineman
Seth B. Kennedy [ARGUED]
Kroll Heineman Ptasiewicz & Parsons
91 Fieldcrest Avenue Suite 35
Edison, NJ 08837
Counsel for Appellant
Elizabeth Mincer
Leah A. Mintz [ARGUED]
Robert M. Palumbos
Duane Morris
30 S. 17th Street
Philadelphia, PA 19103
Counsel for Appellee
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OPINION OF THE COURT
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JORDAN, Circuit Judge.
The International Brotherhood of Teamsters, Local 469
(the “Union”) appeals the District Court’s decision vacating an
arbitration award. “[C]ourts are restricted in reviewing the
decision of an arbitrator resolving a labor dispute under a
collective bargaining agreement … [b]ut that deference is not
unlimited.” Monongahela Valley Hosp., Inc. v. United Steel
Workers Int’l Union, 946 F.3d 195, 199 (3d Cir. 2019). Here,
the arbitrator evinced a manifest disregard for the underlying
collective bargaining agreement when she held that a grievance
by the Union was timely filed, so we will affirm the District
Court’s judgment.
2
I. FACTS
Appellee StoneMor, Inc. operates cemeteries and
funeral homes. Maintenance workers at two of its cemeteries
unionized and certified the Union as their exclusive bargaining
representative. The Union then entered into negotiations for a
collective bargaining agreement with StoneMor.
Those parties came to a tentative agreement (the
“Agreement”), which they signed and through which they
intended to be “legally bound.” (J.A. at 59; see also J.A. at 81
(“This Agreement shall be binding upon the parties
hereto[.]”).) The Agreement was to remain “tentative until
ratified by a majority of the [cemetery maintenance]
employees[.]” (J.A. at 59; see also J.A. at 62 (“These
Agreements are tentative until ratified by the employees.”).) It
provided a grievance procedure, giving the Union ten days to
write StoneMor about a disagreement “as to the interpretation
of or alleged violation of” the Agreement. (J.A. at 71.) The
Agreement emphasized that “[t]ime is of the essence” in the
handling of disputes. (J.A. at 71.) If the parties could not settle
a dispute, it would be subject to binding arbitration.
The Agreement was ratified on October 5, 2020. Soon
after, StoneMor sent the Union a cleaned-up draft that mostly
tracked the ratified Agreement but contained what StoneMor
described as a clarification of a wage provision granting
employees a salary increase every October 1st. The parties
disagreed on whether the pay bump would occur on the just-
passed October 1st, or instead was meant to begin on October
1st of the next year. The Union contested the proposed change
in the language of the wage provision, and StoneMor
responded, “You can file a grievance, if you wish, and we will
3
arbitrate the issue.” (J.A. at 177.) Later that month, StoneMor
sent another draft Agreement with the same proposed change.
The Union did not file a grievance at that time, nor did it file
one on October 30th when the maintenance employees’
paychecks arrived without the contested salary increase. In
November 2020, the Union sent the draft Agreement
containing the originally agreed-upon language of the wage
provision. The parties finally executed the Agreement
containing that original wage provision on December 29, 2020.
On January 5, 2021, seven days after the Agreement
was executed, but over ninety days after it had been ratified,
the Union filed its grievance over the meaning of the disputed
wage provision. Arbitration followed. The parties asked the
arbitrator to resolve the dispute and determine if the grievance
was timely filed. The arbitrator held that the grievance was
timely filed and then found in favor of the Union on the merits.
On timeliness, she reasoned that the contested provision
had been unresolved from ratification on October 5, 2020, until
execution of the finalized Agreement on December 29, 2020.
StoneMor did not include the originally agreed-upon wage
provision in any of its cleaned-up drafts after ratification; it was
not included again until the Union’s November 2020 draft. By
the arbitrator’s lights, “it was reasonable that the Union would
ensure that the [originally agreed-upon] language was
incorporated in the [final Agreement] before it filed a
grievance[.]” (J.A. at 55.) The arbitrator continued:
“Moreover, the Union was not required to file a grievance
while the parties were continuing to clarify and negotiate the
provisions of the [Agreement] until the [Agreement] was fully
executed.” (J.A. at 55.) She found that the Agreement was
executed on December 29, and that the Union filed its
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grievance less than 10 days later, on January 5. Thus, the
arbitrator held, it was timely.
StoneMor petitioned the District Court to vacate the
arbitrator’s award under the Federal Arbitration Act, 9 U.S.C.
§ 10. The Court granted that petition, holding that the award
had no basis in the underlying Agreement. The Court reasoned
that “[t]he [Agreement] was enforceable as soon as it was
ratified by the Union members” on October 5, 2020, and that
the grievance provision was triggered by at least October 30,
2020, when the paychecks arrived without a salary increase.
(J.A. at 18; 21.) The Court said the ruling that the Union was
reasonable and within its rights to wait until January to pursue
a grievance was contrary to the plain meaning of the
Agreement. The Union has now timely appealed.
II. DISCUSSION1
Under the Federal Arbitration Act, a district court may
overturn an arbitrator’s award only if the “award was procured
1
The District Court had jurisdiction under 28 U.S.C. §
1331and29 U.S.C. § 185
. We have jurisdiction pursuant to28 U.S.C. § 1291
and9 U.S.C. § 16
(a)(1)(E). “On appeal from a district court’s ruling on a motion to confirm or vacate an arbitration award, we review its legal conclusions de novo and its factual findings for clear error[,]” CPR Mgmt., S.A. v. Devon Park Bioventures, L.P.,19 F.4th 236
, 244 n.8 (3d Cir. 2021) (citation and internal quotation marks omitted), and we “apply the same standard the district court should have applied.” Citgo Asphalt Ref. Co. v. Paper, Allied-Indus., Chem. & Energy Workers Int’l Union,385 F.3d 809, 815
(3d Cir. 2004).
As the party moving to vacate, StoneMor “bears the burden of
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by corruption,” 9 U.S.C. § 10(a)(1), if the arbitrators were corrupt or guilty of misconduct,id.
§ 10(a)(2)-(3), or if “the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made[,]” id. § 10(a)(4). An arbitrator exceeds her powers if her award fails to “draw[] its essence from the collective bargaining agreement.” United Steelworkers of Am. v. Enter. Wheel & Car Corp.,363 U.S. 593, 597
(1960); see Swift Indus., Inc. v. Botany Indus., Inc.,466 F.2d 1125
, 1130 n.11 (3d Cir. 1972) (finding Steelworker’s principles consistent with9 U.S.C. § 10
(a)(4)).
“It’s a steep climb to vacate an arbitration award.”
France v. Bernstein, 43 F.4th 367, 377(3d Cir. 2022). Nevertheless, our review is “not toothless,” and we will reverse if the arbitrator “rewrites the contract[.]” Indep. Lab’y Emps.’ Union, Inc. v. ExxonMobil Rsch. & Eng’g Co.,11 F.4th 210, 219
(3d Cir. 2021).2
Here, the arbitrator did just that. The Agreement, by its
terms, became final once “ratified by a majority of the
employees[.]” (J.A. at 59.) After that happened on October 5,
2020, the Agreement, including its grievance provision, was
binding upon the parties. The Union acknowledges that, as it
should, since the pertinent language is crystal clear. (See J.A.
proof.” PG Publ’g, Inc. v. Newspaper Guild of Pittsburgh, 19
F.4th 308, 314 (3d Cir. 2021).
2
Because it garnered a majority vote, Judge Bibas’s
“concurrence” is, in fact, the majority opinion in Independent
Laboratory Employees’ Union, Inc. v. ExxonMobil Research
& Engineering Co. 11 F.4th 210, 211 (3d Cir. 2021).
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at 206 (“[The Court:] [Y]ou agree that on October 5th, 2020,
the agreement was ratified and it becomes a binding agreement
at that point in time; correct? [Union:] Yes, your Honor.”).)
Despite the clarity of that provision, the arbitrator declared, “It
is reasonable that the Union would ensure that the [originally
agreed-upon] language was incorporated in the [final
Agreement] before it filed a grievance asserting that the
Employer violated the [Agreement].” (J.A. at 55.) There is,
however, no “reasonableness” exception to the grievance
procedure in the Agreement. In fact, the parties explicitly
agreed that “time [was] of the essence.” (J.A. at 71.) The
arbitrator’s holding was not based on anything in the
Agreement. See Monongahela, 946 F.3d at 201(overturning arbitrator award “[w]here an arbitrator inject[ed] a restriction into a contract to which the [employer] did not agree”). Instead, the arbitrator simply asserted that “the Union was not required to file a grievance while the parties were continuing to clarify and negotiate the provisions of the [Agreement] until the [Agreement] was fully executed.” (J.A. at 55.) That holding directly contradicts the Agreement’s express language setting ratification, and not execution, as the binding date for the Agreement. See Southwest Airlines Co. v. Transport Workers,912 F.3d 838, 846
(5th Cir. 2019) (overturning an arbitrator’s award that set execution as the binding date instead of ratification as required by the collective bargaining agreement). Thus, the arbitration award “reflects a manifest disregard of the agreement[,]” Monongahela,946 F.3d at 199
,
and was rightly vacated.
The Union argues that the parties’ negotiations after
ratification demonstrate that that “the parties had not reached a
meeting of the minds … on an essential term of the contract[.]”
(Reply Br. at 6.) But that is the very circumstance covered by
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the grievance procedure, which was binding upon the parties at
ratification. If the Union did not like StoneMor’s interpretation
of the wage provision, and StoneMor did not relent, the Union
could and should have filed a grievance within ten days. It did
not, and so its grievance was not timely filed. The arbitrator’s
decision to the contrary cannot stand because it ignores that the
grievance procedure was mandatory at ratification.3
III. CONCLUSION
For the foregoing reasons we will affirm the judgment
of the District Court vacating the arbitrator’s award.
3
The Union also argues that each paycheck is a
continuing violation which ought to toll the grievance time
limit. The Union, however, did not raise this argument at the
District Court, accordingly, it is forfeited. DirectTV Inc. v.
Seijas, 508 F.3d 123, 125 n.1 (3d Cir. 2007). Though the
District Court raised the issue sua sponte, it did so in the
context of continuing negotiations, not paychecks, so the
Union’s paychecks argument remains unpreserved.
While an appropriate remedy following a properly
vacated arbitrator’s award may often be “to remand the case
for further arbitration proceedings[,]” Major League Baseball
Players Ass’n v. Garvey, 532 U.S. 504, 511 (2001) (per
curiam), here, StoneMor only challenged the District Court’s
vacatur of the arbitration award but not its failure to remand.
Thus, we will not disturb the order vacating the arbitration
award without remand.
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Reference
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