Storer Broadcasting Co. v. American Federation of Television & Radio Artists
Storer Broadcasting Co. v. American Federation of Television & Radio Artists
Opinion of the Court
Plaintiff-appellant, Storer Broadcasting Company, appeals from an adverse decision by the district court in this action to vacate an arbitrator’s award. The arbitration, initiated by the American Federation of Television and Radio Artists (“the union”),
Storer operates a radio station, WJW-AM, and television station, WJW-TV, in Cleveland. For many years prior to 1973 Storer had made voluntary payments into its profit sharing plan
In early 1974, the employees covered by these collective bargaining agreements were advised by the Storer profit sharing plan trustee that they would receive the amounts that had “vested” in their favor, as set forth in the profit sharing plan agreement. Thirteen employees accepted checks in these amounts. Seven employees rejected such checks and demanded payment of the full amounts “credited” to their accounts, which was a larger sum. Storer refused to pay such additional amounts.
The union took the matter to an arbitrator,
Storer filed an application in the district court to vacate the award on the grounds that there was no evidentiary support for
In response to the remand, the arbitrator informed the court that “since the Union’s version of how the affected employees should be paid out upon cessation of participation seemed more logical than the Company’s version, the arbitrator concluded that it was the Union’s version which was related, or disclosed, to the members of the two bargaining units.” The arbitrator also reasoned that the union must have told its members that they would receive the full credited amounts because otherwise the seven members would not have objected to receiving only the vested amounts. The arbitrator cited nothing in the record supporting his factual finding that the union had so informed its members.
The district court then reviewed the case, granted the union’s motion for summary judgment, and dismissed Storer’s application. The court reasoned that the “arbitrator was entitled to draw reasonable inferences and conclusions from the agreement in evidence before him.”
It is very well settled that the courts are generally required to refrain from reviewing the merits of an arbitrator’s award due to the policy favoring arbitration as a means of resolving labor disputes. This was established in the Steelworkers Trilogy
Storer has not argued that the arbitrator went beyond the plain meaning of the contract in construing it to bind Storer to pay to the union’s members whatever amounts the union reasonably represented to them that they would receive.
We agree with Storer that there is absolutely no evidentiary support in the record before the arbitrator for this factual finding. Our search of the record revealed no testimony or documentary evidence to this effect. The union’s brief to this court has pointed to no such evidence in the record.
The arbitrator himself, in the face of a specific request from the district court, could cite no factual support for his finding. Instead, the arbitrator was reduced to arguing that the union must have disclosed to its members that they would receive the credited amounts because that was “more logical.” While logic can be helpful to supplement evidence or to draw inferences from evidence, it cannot substitute for evidence.
The arbitrator also reasoned that the union must have disclosed that its members would receive the credited amounts because otherwise the seven union members would not have objected when offered only the vested amounts. Putting aside the fact that almost twice as many union members accepted the vested amounts, we think this reasoning by the arbitrator proves too much. Initially, common sense teaches that the mere fact that a dispute has arisen does not weigh in favor of either party in resolving the dispute. More importantly, the mere fact that a dispute has arisen cannot substitute for evidence on the issues involved in the dispute.
It is apparent that rather than base his award on evidence in the record, the arbitrator “dispense[d] his own brand of industrial justice.”
Since the union’s and its members’ real dispute is with the profit sharing plan trus
The judgment of the district court is reversed and the cause is remanded to that court with directions to vacate the award of the arbitrator and for further proceedings consistent with this opinion.
. Both the Cleveland Local and the national union were defendants in the action below, while the arbitration appears to have been initiated by only the local union. Both were parties to the relevant collective bargaining agreements with Storer.
. The profit sharing plan included other welfare and insurance programs.
. There were separate agreements for the. radio and television stations, but they were identical insofar as relevant here.
. ¶ 34, WJW-AM Agreement; ¶ 33, WJW-TV Agreement.
. Both agreements contained a provision requiring arbitration of disputes arising thereunder. The arbitrator was Mr. Charles F. Ipavec of the American Arbitration Association.
. See note 4, supra, and accompanying text.
. The thirteen other employees were held to have been estopped by accepting their checks for the vested amounts.
. United Steelworkers of America v. American Mfg. Co., 363 U.S. 564, 80 S.Ct. 1343, 4 L.Ed.2d 1403 (1960); United Steelworkers of America v. Warrior & Gulf Navigation Co., 363 U.S. 574, 80 S.Ct. 1347, 4 L.Ed.2d 1409 (1960); United Steelworkers of America v. Enterprise Wheel & Car Corp., 363 U.S. 593, 80 S.Ct. 1358, 4 L.Ed.2d 1424 (1960).
. See most recently Detroit Coil Co. v. Int’l Ass’n of Machinists, 594 F.2d 575 (6th Cir. 1979); General Drivers, Warehousemen and Helpers’ Local Union No. 89 v. Hayes & Nicou-lin, Inc., 594 F.2d 1093 (6th Cir. 1979).
. See 9 U.S.C. § 10.
. While a portion of Storer’s brief to this court could be construed as so arguing, counsel conceded at oral argument that Storer was only contesting the arbitrator’s factual findings. While we express no opinion on the matter, we note that Storer could have at least made a plausible argument that this construction of the contract exceeded its plain meaning. Storer could have made an even stronger argument that the arbitrator exceeded his authority in binding Storer to pay amounts due, if at all, from the profit sharing plan trustee. Since Storer did not make these arguments, we do not address them.
. The district court, in ruling that the “arbitrator was entitled to draw reasonable inferences and conclusions from the agreement in evidence before him,” allowed such “inferences” to support both the arbitrator’s construction of the contract and his factual findings. They could support only the former.
The dissent would allow the arbitrator to make factual findings based upon “logical inferences.” The dissent points to the provisions of the pension plan agreement, none of which are directly applicable to this case, from which it can be argued that it was “more logical” that the union had informed its members that they would receive their credited amounts. But this misses the point. The arbitrator was construing the collective bargaining agreement, not the pension plan agreement, and he construed the collective bargaining agreement to bind Storer to whatever the union represented to its members. Thus, the issue is not what representation would be “more logical;” if it were, we might agree with the dissent. Rather, the issue is what representation was actually made and there is absolutely no record evidence that the union represented that its members would receive their credited amounts. The dissent appears to concede as much since it cites no such evidence. If we were to allow an arbitrator to make a factual finding that a certain event occurred based upon an inference that said event should have occurred because an ambiguous document can be construed to make said event “more logical,” then we would reduce the requirement that arbitration awards be supported by at least some evidence to a meaningless recitation which could easily be avoided by a clever arbitrator. This we decline to do.
Similarly, the union’s brief to this court argues that the arbitrator was allowed to “presume” that the union had informed its members they would receive the credited amounts. This confuses contract interpretation with factual findings. A presumption allows a tribunal to infer one fact from another fact proven in the case. It does not allow a tribunal to infer one fact from a construction of ambiguous contractual language. If it did, no arbitration award would have to be supported by evidence since all evidentiary findings could stem from the collective bargaining agreement.
. If the mere fact that a party believes he has been wronged were held sufficient evidence to prove that he has indeed been wronged, then the requirement that arbitration awards be supported by at least some evidence would be completely hollow.
. Enterprise Wheel & Car Corp., supra, 363 U.S. at 597, 80 S.Ct. at 1361. See also Detroit Coil Co., supra, 594 F.2d at 579.
It is particularly apparent that the arbitrator “dispense[d] his own brand of industrial justice” here since he adopted a construction of the collective bargaining agreement urged by neither party to the arbitration.
. While the case was disposed of below on the union’s motion for summary judgment, there is no need for a trial since Storer also filed a motion for summary judgment and there were no material factual disputes.
Dissenting Opinion
dissenting.
As noted by the majority opinion, federal courts set aside the awards of labor arbitrators only in a limited number of circumstances. One such circumstance, and the one appellant argues is now before this Court, occurs when an arbitrator renders a .decision that is not based on the evidence presented. The majority opinion concludes that there was “absolutely no evidentiary support” for the arbitration award in dispute. I can not agree.
The substance of the present appeal resolves into a single issue.
“Although there are no specific provisions in the profit sharing plan which would govern a distribution of funds under the circumstances present in this case, Section 6.9, Vesting on Termination of the Plan, is the one section which comes nearest to providing a solution of this issue. Specifically, sub-paragraph 2, provides for termination of participation in the plan by a subsidiary. Each of the two bargaining units with which we are involved here, may, in the opinion of the arbitrator, be considered to be analogous to a subsidiary within the Company and therefore, when the members of the two bargaining units ceased to participate in the Company’s profit sharing plan, on the basis of the entirety of each bargaining unit, each bargaining unit could be compared to a subsidiary of the Company. The type of termination in such instance, is most closely aligned to the termination of participation which is involved in this case, and such similarly would seem to be reasonable.”
Accordingly, the arbitrator found it “logical” that Storer had agreed to pay the full credited amounts, as it would have done under the plan termination provision, and that the union had so advised its members. In my mind, the arbitrator’s logic amounted to a reasonable inference. Not only should the parties have agreed to a disbursement of the full credited amounts, but, based on their previous dealings under the discontinued pension plan, it was reasonable for the arbitrator to find that the parties had in fact agreed to such terms. As did the district court, I conclude that, from adequate evidence, the arbitrator drew acceptable inferences and made proper factual findings.
. See note 11, majority opinion, and accompanying text.
. The pension plan that was discontinued by the 1973 collective bargaining agreements contained the following provisions:
“Article VI: Vesting and Forfeiture Sec. 6.1 Vesting on Termination of Employment. Upon termination of a Participant’s employment by the Company and all of its Subsidiaries for any reason other than retirement, death, or total and permanent disability, the Vested Amount of any Participant’s Account shall be a percentage of the total amount credited to his account, determined as of the effective date of termination of his
participation under Sec. 4.5, on the basis of the number of completed years that such Participant has been a Participant, according to the following vesting schedule. (Emphasis added.)
. Id.
. The discontinued pension plan provided as follows:
“(2) Termination of Participation in Plan by a Subsidiary. If a Participating Subsidiary shall withdraw from the Plan and terminate its participation under the provisions of Sec. 10.4, then the entire amount credited to each Participant under the Employer Account of such Subsidiary shall be vested and non-for-feitable as of the close of the year of such termination of participation by the Subsidiary, subject to the adjustment under Sec. 5.7, to forfeiture under Sec. 6.10 or 6.11, if applicable and to adjustment for a proportionate share of the expenses of distribution incurred by the Trustee in connection with the termination of the participation of such Subsidiary. Such vested and non-forfeitable accounts shall mature and shah become payable in accordance with the provisions of Article VII. Such accounts which have not matured and become payable under Sec. 7.1, because the Participant remains in the employ of the Company or any Subsidiary, shall be classified as non-forfeitable Active Participants’ Accounts, as defined in Sec. 5.1(1), in the event the new Employer is the Company or a Participating Subsidiary, or as non-for-feitable Deferred Participants’ Accounts, as defined in Section 5.1(1), in the event the new Employer is the Company of a Participating Subsidiary, or as non-forfeitable Deferred Participants’ Accounts, as defined in Sec. 5.1(4), in the event that the new Employer is a non-participating Subsidiary. Such non-forfeitable accounts shall be handled by the Trustee in accordance with Secs. 6.9(3) and 6.9(4).” (Emphasis added)
Reference
- Full Case Name
- STORER BROADCASTING COMPANY v. AMERICAN FEDERATION OF TELEVISION AND RADIO ARTISTS, CLEVELAND LOCAL, AFL-CIO, and American Federation of Television and Radio Artists
- Cited By
- 3 cases
- Status
- Published