Coal Industry Decisions - Construction or maintenance, remedies for contracting, and "production of coal"

Several recent decisions of the District Court for the Northern District of West Virginia address issues involving coal industry arbitration awards as the parties sought to confirm or vacate them.

Maintenance or construction

Two cases turned on whether the arbitrator correctly determined whether the work that was the subject of the grievance involved construction or maintenance. Generally speaking maintenance work could not be contracted out  while, with certain exceptions, construction work could.

In The Harrison County Coal Company v. UMWA and Local 1501 the Court confirmed an award of Arbitrator Thomas Hewitt. Arbitrator Hewitt had found that construction of a belt drive in a new section of the mine was more properly categorized as Maintenance work. In doing so he relied on a prior settlement between the parties that "recognized that belt drive installation work customarily performed at the Robinson Run Mine is classified work."

The Company sought to vacate the award, claiming that the Arbitrator exceeded his authority and substituted his own brand of industrial justice for the provisions if the cba. The Court rejected this claim, concluding "by focusing on the 2002 Settlement, the Arbitrator was not ignoring contractual language or applying his own notions of industrial justice. Recognizing the Court's extremely limited  role in reviewing labor arbitrators' decisions, the Courts finds that the Arbitrator's decision draws it essence from the Agreement."

In The Monongalia County Coal Company v. UMWA and Local 1702  the Court vacated another award of Arbitrator Hewitt. Arbitrator Hewitt had concluded that the Company's use of contractors to build cribs (a "supplemental roof support") was maintenance rather than construction work and sustained the grievance. In doing so he distinguished the case from one in which the District Court had previously held (here) that installation of a "pumpable crib" was construction, not maintenance work.  He further found:

An Employer who regulates/reduces the size of the workforce and assigns work that is unable to be performed within its self-imposed time limit if it uses only its current fully employed classified employees creates an "impossibility of performance" situation. If this Employer then relies upon Article A l, subsection (1) as authority to utilize sub-contractors to perform work customarily performed by classified employees, the Employer is circumventing the intent of the contract under Article I. This use of abuse of authority cannot then be relied upon as a reason to permit the use of outside contractors even when all classified employees are fully employed working no less than five (5) days a week, Obviously, this is not the intent of the drafters of the contract and this self-imposed scheduling may not be used to circumvent the intent and purpose of the NBCWA or diminish the use of the workforce under Article I.

 On the Company's Petition to Vacate the award, the Court found:

Here, under the guiding principles in the 2017 Decision, which considered a large amount of binding precedent, the work at issue was construction work because the contractors were hired to "build" new cribs (i.e., create something new at the mine). The Court agrees with Defendants that the work is production work, but it also falls into the secondary category of construction work pursuant to binding precedent.

The Court also found unsupported by the evidence the Arbitrator's finding of a "concerted effort to abridge the rights" of employees. Notwithstanding the limited role of Courts in reviewing arbitration awards, the Court found that the Arbitrator had ignored plain language in the contract and accordingly vacated the award.

Remedies for improper contracting - Confirmed, vacated, remanded

In UMWA and Local 1702 v. The Monongalia Coal Company the Court confirmed an award of Arbitrator William A. Babiskin.  The Union claimed that the Company had improperly contracted what it claimed to be unit work. Arbitrator Babiskin denied the grievance without addressing the merits, concluding:

It is not necessary to reach or decide the issues raised by the parties as there was no financial loss to the employees in this case. As held by me in Blacksville No. 2 Mine, Case 07-31-09-040, I strongly believe in the principle of "no harm, no foul." See ex. Sterling Winthrop Research Institute, FMCS 86K/07572; Wisconsin Public Corp., 52 LA 1028. Since Grievants suffered no financial harm, there is nothing to be remedied.

The Union sought to vacate the award, arguing that the Arbitrator failed to consider the evidence, ignored the issue, and adopted a principle of "no harm, no foul" that did not appear in the cba.

The District Court confirmed the award. It concluded that while the Arbitrator's description of the principle may have been inartful, it was an effort to apply "long standing" principles that monetary awards in absence of compensatory damages are improper. The Court held that:   

The arbitration award issued here is entitled to significant deference, and the Court will not substitute its own judgment based on Plaintiffs' preference for an arbitration award with a less-casual statement of a long-standing legal principle.

A somewhat similar issue was addressed in the Court's decision in Monongalia Coal Company v. UMWA and Local 1702. That case involved a challenge to the award  of Arbitrator Ralph Colflesh.  Arbitrator Colflesh found that the Company had improperly contracted work which should have been performed by the bargaining unit. However, he also found that no identifiable unit employee had suffered economic harm. Rejecting the Company's argument that there are some contractual violations that must go without remedy, he provided for an alternate remedy:

 Based on the foregoing, I join Arbitrator Drucker in awarding damages to the Union for the breech [sic], and concur with the principle implied in her award that  in general every sustained grievance must have some remedy. At the same time, I depart from any thinking that Union members should rewarded for not working when they had the opportunity.  Rather, remedial compensation in this case should go to the Union only for the costs of prosecuting this grievance. Such costs shall be reasonable and shall be based on the documented fees, if any, the Union's legal team billed for the preparation of the grievance as well as  the documented per hour cost of the work of Mr. Frey, who represented the Union here, that was spent preparing and presenting the case. The latter amount shall be calculated on his hourly salary as a Union staff member and based on a 40-hour work week.  The cost shall not include any costs of witnesses, nor shall it include the Union's share of the undersigned's fees and expenses, as those must contractually be divided equally by the parties. 

The Company sought vacate the award, and the District Court granted that request. Finding the ordered remedy beyond what was authorized by the cba, the Court  concluded:

Had the Arbitrator calculated Defendants' loss based on the actual breach, the award could possibly be upheld. As discussed above, compensating a Union based upon loss of Union work has been held to be permissible under the NBCWA. See Cannelton, 951 F.2d at 594. The Arbitrator did not, however, take that approach. His award contained no supporting findings of monetary loss to establish the award as compensatory, and it did not find any basis in the language of the contract. Instead, the Arbitrator chose to award Defendants their costs in preparing the grievance. The monetary award issued did not stem from the breach of the contract but, instead, stemmed from the Arbitrator's own sense of industrial justice.

Arbitrator Drucker's award, referenced by Arbitrator Colflesh, can be found here. That award was also subject to a petition to vacate, but the Court remanded the case to the Arbitrator for clarification as to how she determined the remedy. here.

In another case, The Monongalia Coal Company v. UMWA and Local 1702 , the court confirmed an award of Arbitrator Mathew Franckiewicz. Arbitrator Franckiewicz upheld the Union's grievance and ordered a make whole remedy. However he noted that the method of allocating the pay for the work performed by the contractors was not clear:

The evidence discloses the number of contractor employees and the number of hours they worked on each day in issue. There are more Grievants than there were contractor employees on any of the days involved. The easiest, but perhaps not the fairest, method for allocating damages would be to award a pro rata share to each  of the Grievants. This, however, would ignore individual considerations as to which individuals likely would have worked on particular days, or whether particular Grievants were or were not available on particular days. 

He therefore assigned to the parties the initial responsibility to allocate the damages, retaining jurisdiction in the event of a dispute. 

Rejecting the Company's Petition to vacate the award, the Court concluded:

After considering the arguments and the evidence, the Arbitrator found that it was more appropriate to categorize the work as "performing repairs, although extensive repairs," because many original components were reused. ECF No. 11-4 at 8. The Arbitrator then found, based on evidence presented, "that the repairs performed by the contractor were and are normally and customarily performed by bargaining unit employees." Id. at 9. He did so based on careful analysis of the contract and the evidence presented at the hearing.

Further, there are no grounds to overturn the Arbitrator's monetary award. The Arbitrator left the issue of damages up to the Parties to distribute, while retaining jurisdiction in case the parties cannot agree. The monetary award is clearly aimed to compensate because it left the issue of damages to the parties to decide. Further, as Defendants have noted, it "granted only the amount of time directly related to the amount of work performed by contractors." ECF No. 17 at 13. Because the NBCWA is silent as to an appropriate remedy, it is within the Arbitrator's discretion to select one, and the Court finds that this Award draws its essence from the NBCWA.

Production of coal and work jurisdiction

In The Ohio Valley Coal Company v. UMWA the Court vacated an award of Arbitrator Mollie Bowers that had found the Company in violation of its cba. The Court summarized the somewhat complicated facts as follows:

Ohio Valley formerly operated the Powhatan No. 6 Mine ("Mine") in Belmont County, Ohio. Defendant United Mine Workers of America, District 31 represented all bargaining unit employees of the Mine since it was constructed and commenced operation in 1972. The 2016 National Bituminous Coal Wage Agreement ("NBCWA") governs the terms and conditions of employment for all bargaining unit employees at the Mine.
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The Mine was in operation through exhaustion of its coal reserves with production permanently ceasing on October 16, 2016. Ohio Valley finished processing mined coal from the Mine on December 15, 2016, and it was permanently sealed on December 31, 2016. The Mine, which once employed nearly 500, was staffed by only 16 classified employees when the underlying grievance was filed....
In 2001, an unrelated subsidiary of Murray Energy Corporation, American Energy Corporation, opened the Century Mine to mine a coal reserve contiguous with the Mine. Ohio Valley has no ownership interest in the Century Mine and the UMWA does not represent any employees at the Century Mine.
On July 15, 2002, Ohio Valley and American Energy Corporation entered into a Slurry Disposal Agreement. Ohio Valley licensed rights to dispose of coal slurry materials to American Energy Corporation in the impoundment on property formerly associated with the Mine.... Pursuant to the terms of the agreement, American Energy Corporation retains sole responsibility for the transportation of its slurry materials to the impoundment.... Ohio Valley did grant an easement and right-of-way entry onto its property for installation and maintenance of the necessary pipeline. ... American Energy continued to dispose of its slurry materials in the impoundment as of briefing in this matter.

The Court determined that the cba limited work jurisdiction to activities related to "the production of coal" and since the mine had been permanently closed, no work jurisdiction claim was viable. The Court rejected the Arbitrator's contrary conclusion as being based on a false premise.  Arbitrator Bowers had found that while production had ceased, work performed at the mine was essential to coal production and operation at an adjacent mine "which is also owned by the Company." The Court concluded that "Despite wholly inaccurate assumptions to the contrary, Ohio Valley was not engaged at any relevant time in the production of coal at the Mine as it was closed and sealed ...." The use of the property by American Energy "a separate legal entity" was insufficient to sustain a work jurisdiction claim. Finding the Arbitrator's decision based on an "inaccurate factual premise" the Court vacated the award.