Ninth Circuit-Award should be enforced even if it is "incorrect"

The Ninth Circuit, reversing the District court, has ordered the enforcement of an arbitration award between Holsum Bakery and the Bakery Workers. Holsum Bakery Inc. v. Bakery, Confectionary, Tobacco Workers, Local 232.  The dispute involved a claim by the Union that Holsum had breached the contract with the Union when it unilaterally ceased what the Union claimed to be a practice of paying "lap," or elapsed time, to certain employees.

The cba provided:

All non-voluntary hours scheduled or required to be worked by an Associate without a 12-hour break between shifts shall be paid for at time and one-half (1 1/2) the regular hourly rate ... for each  non-voluntary hour worked in the 12-hour (or 24-hour period on scheduled days off) ...

A prior arbitration between the parties addressed the issue of payment of lap time during weeks in which a holiday fell. After prevailing in that case, Holsum addressed what it claimed were inconsistent practices between supervisors concerning the payment of lap time in non-holiday weeks. The core of the dispute involved conflicting interpretations of what constituted  employees "scheduled days off." The Company claimed that schedules were posted every Friday for the following week, and that it had the right under the cba to vary employees' days off each week. The Union claimed that each employee had what was essentially a fixed "scheduled day off" regardless of the weekly schedule, and that lap time was owed for days an employee was scheduled to work on their "regular day off."

The dispute was submitted to Arbitrator Bonnie Prouty Castrey for resolution. The Arbitrator upheld the grievance, concluding that the contract language was clear and unambiguous, and the Union had established that employees had been paid lap time when they had been required to work scheduled days off. The Arbitrator's award can be found here.

Holsum sought to vacate the award, claiming that the award failed to draw its essence from the contract, that the Arbitrator had exceeded her authority and exceeded the scope of the issue presented, misapplied "basic principles" of contract construction in violation of public policy, and that the award manifested disregard of the law. The Union cross moved for enforcement.

The District Court vacated the award here. It concluded that the Arbitrator had "altered" rather than interpreted the contract, noting:

  Pursuant to the CBA, the Arbitrator does not have the authority to add to or alter the CBA. That is exactly what she did here. In Section 4D, the Company must post the next week's schedule each Friday. If every employee has  "regularly scheduled" time off, there would be no need to post a schedule. Additionally, Section 4A states that Section 4 "shall not be construed as a guarantee of hours of work per weaker days of work per week." ... The CBA clearly and unambiguously states that an employee shall be paid lap time if they non-voluntarily work on  "scheduled days off." The Arbitrator cannot arbitrarily add the word "regularly" to the CBA; "regularly scheduled days off" has a completely different meaning than "scheduled days off" as stated in the CBA, Section 4C. Here, the Arbitrator did not interpret the CBA; she modified it. Applying the plain meaning rule, the CBA needed no interpretation. ... To the extent the Arbitrator "interpreted" the CBA, she only "interpreted the meaning of "all" and "shall," neither of which were disputed by the parties. 

The Union appealed, and the Ninth Circuit reversed. Noting that an arbitrator's award must be upheld if the arbitrator is even arguably construing or applying the contract the Circuit concluded,  contrary to the District Court,  that this is what Arbitrator Castrey had done:

The arbitrator in this case concluded that the use of the word "all" in § 4.C of the CBA "means that every hour that is scheduled or required to be worked by an employee that is not voluntary is to be compensated." She also concluded that the specific language in § 4.C controlled over general language elsewhere in the CBA governing shift scheduling. And, the arbitrator found that, contrary to Holsum's assertions, employees did have regularly scheduled days off. Finally, she concluded that Holsum violated the CBA when it refused to pay "lap time" to "all employees who were scheduled or required to work on their scheduled day off." Because the arbitrator interpreted and applied the CBA in reaching these conclusions, the award, even if incorrect, drew its essence from the agreement.

Having determined that the Arbitrator's award may have misinterpreted the contract but didn't disregard it, the Court reversed and remanded, effectively confirming the award.