Sixth Circuit refuses to vacate award finding subcontracted drivers and temporary employees were "one in the same" under language in a cba

Faced with a need for additional drivers, Economy Linen and Towel Service of Zanesville entered into a service agreement with ProDrivers for that Company to provide certified drivers on a contract basis. The Union representing Economy's drivers (Teamsters Local 637) filed a grievance challenging that action. The Unions asserted that the ProDrivers were being compensated at a rate higher than full time drivers in violation of the cba. The Company denied the grievance, asserting that it had contracted the work to ProDrivers as allowed by the cba, and it had no knowledge or control over how much ProDrivers paid its drivers. The dispute was unresolved in the grievance procedure and was ultimately submitted to Arbitrator Lawrence Roberts for decision.

In his award, Arbitrator Roberts saw the dispute as being resolved by the "unambiguous language" of the agreement, specifically the definition of temporary "on call" employees.

Sustaining the grievance, the Arbitrator rejected the Company's reliance on its contractual right to subcontract. He found controlling the contractual provision that "In no event will a temporary or part time employee be hired at or given a higher rate than a full time employee." He noted that while the term "full time employee" was defined in the cba, "[t]here is no language found within the same Agreement specifically defining either a temporary or part-time employee in a similar context."

 Concerning the Employer's right to subcontract, he found that right "unimpeded until one reaches the Hours of Work and Overtime provision." There temporary ("on-call") employees were defined as "individuals who are on call to work when regular full-time employees are not available to work or to augment the work force in peak periods." Arbitrator Roberts found this language "precisely defined" the ProDrivers in  this case. He concluded:

The Parties clearly agreed to allow subcontracting, however, failed to specifically draw a distinction between a subcontracted employee and a temporary employee. The negotiators could have easily done so. However, the absence of any language in that regard makes it clear, at the face value of the Agreement, that a subcontract and a temporary employee are in fact, one in the same. And Article 6.08 is unambiguous, in that, it even leads off with the phrase "in no event." And in my view, that particular phraseology is definitive and without exception.

The Arbitrator also found that, while not necessary to his conclusion, the evidence suggested that Economy and ProDrivers were joint employers.

In line with his conclusion, the Arbitrator ordered the Company to pay to unit employees the difference between their hourly rate and the twenty dollar per hour rate paid to the contract drivers.

Economy sought unsuccessfully in the District Court  to vacate the award. (here) The Court found no basis to set aside the award. There was no allegation fraud and no claim that the issue wasn't properly before the arbitrator. Contrary to the Company's claim that the Arbitrator ignored the "unqualified" right to subcontract, the Court concluded that whether or not "correct," the Arbitrator's award was simply an interpretation of the relationship between the management rights provision and the temporary employee language. It found that, at its core, the Company's claim was simply a disagreement with the Arbitrator's interpretation of the Agreement.

The Company appealed, and the Sixth Circuit affirmed. Economy Linen and Towel Service, Inc. v. Teamsters Local 637. It noted the lenient standard of review of arbitration awards and, like the District Court, found that the award simply interpreted the interplay between several provisions of the Agreement. The Company's claim was simply one of "interpretive error" and was beyond the reach of the Court's review.

Concurring, Judge Batchelder wrote:

I write separately to say that I concur only because I am bound by law to do so. See Henry Schein, Inc. v. Archer & White Sales, Inc., 139 S.Ct. 524, 529 (2019) ("We have held that a court may not rule on the potential merits of the underlying claim that is assigned by contract to an arbitrator, even if [the arbitrator's decision] appears to the court to be frivolous." (quotation marks omitted)).

At best, in my view, the arbitrator's interpretation of the provisions of the CBA at issue here is not totally implausible. That it is clearly wrong is not enough.

Note: Several days after this decision, a different panel of the Sixth Circuit reversed a decision confirming an award of Arbitrator Michael Long, finding that the Arbitrator's remedy for a claimed change in retirees' health care benefits didn't "construe the contract" but improperly relied on a plan other than the one set forth in the cba. The dissenting judge observed  "This case illustrates the difficulty of according appropriate deference to an arbitrator's decision. It is easy enough to say that we must affirm an arbitrator's decision so long as it was not "so untethered from the agreement that it casts doubt on whether he was engaged in interpretation." ... Perhaps it is sometimes less easy to apply this standard, but apply it we must. Unfortunately the majority did not do so here. Rather, it substitutes its judgment where the arbitrator's ought to remain." International Union, United Automobile, Aerospace and Agricultural Implement Workers of America v. TRW Automotive U.S. LLC.