That was the question presented to the District Court in United Electrical, Radio & Machine Workers of America and Local 506 v. General Electric Company.
GE dismissed an employee for unacceptable attendance. That action was grieved and ultimately submitted to arbitration. The parties stipulated the issue as "Was the discharge of [grievant] for just cause? If not, what should be the remedy?"
Arbitrator Christopher Miles issued an award finding the termination to have been made without just cause. He sustained the grievance, and ordered that grievant be reinstated and "made whole for lost wages and benefits."
The Company reinstated grievant, and asked the Union for information on any earnings of grievant during his time off. The Union declined to produce the information, stating that they believed the award was final and binding and noting that the Company had not raised the issue of the appropriate remedy or mitigation of back pay during the hearing.
The Company requested the Arbitrator to participate in a conference call, but the Union opposed the request. Arbitrator Miles was unwilling to participate in such a call without the agreement of both parties, stating that since he had not retained jurisdiction both parties would have to agree to his continuing involvement.
The union filed a complaint seeking to confirm the award, requesting an order compelling the Company to comply with the Award, including the "make whole" remedy.
The District Court for the Eastern District of Pennsylvania granted the union's request. The Court concluded that the decision was not ambiguous. It agreed with the Union's position that the "clear meaning" of the Award "does not provide for any offset or mitigation." The Court observed that the Award itself contained no language that the make whole remedy was subject to offset or mitigation, and that, while the absence of such language was not dispositive, "the silence of the Arbitration Award on this matter speaks volumes."
The Court also relied on the Arbitrator's failure to retain jurisdiction as suggesting that the Award was not intended to create issues that would need to be resolved after the fact, as well as the absence of any language in the cba providing for offset. The Court noted further:
Moreover, GE did not raise the issue of offset with Arbitrator Miles at all, despite the fact that the appropriate remedy was one of the issues the arbitrator was deciding. Regardless of whether GE’s decision not to raise the issue at the hearing or in its post-hearing brief constituted a “waiver” of its right to do so, it does suggest that offset and mitigation were not issues GE deemed to be relevant.
While recognizing that there was no "binding" Third Circuit precedent on the question of whether the absence of language on offsets or mitigation unambiguously establishes that none were intended, it found "persuasive" authority from several other circuits demonstrating that "as a general matter, the absence of language regarding offsets or mitigation unsurprisingly means that none were intended."
The Court also rejected the Company's argument that "there is a universal principle, at least in labor and employment law, that a make whole remedy is not intended to make the aggrieved party more than whole, and therefore that interim outside income must be deducted from the award." It noted that the cases relied on by the Company involved employment discrimination statutes, where the courts were dealing with language specific to those statutes, finding:
The cases do not establish that offsets and mitigation are legally required in all labor and employment cases and in no way provide a basis for how to interpret the meaning of a make whole remedy that is silent as to the matter.
The Court concluded:
Requiring that backpay be offset, as GE asserts, is not uncommon, but that is not what happened here.
Accordingly, the Court will enforce the plain language of the Arbitration Award that provides simply that [grievant] be made whole for lost wages and benefits.
A similar issue is discussed in Court: Employer waived interim earnings offset of back pay award by failing to raise the issue with the arbitrator
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