Appendix — Satterwhite v. United Parcel Service, Inc.

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APPENDIX A

UNITED STATES COURT OF APPEALS

FOR THE TENTH CIRCUIT

No. 73-1166

Ricuarp R. SATreRwWuitE, JR., ET AL.,

Appellants

v.

Unitep Parcen Service, Inc., Appellee

(D. C. Civil Action No. C-3070)

AppEaL From tue Unirep States District

Court ror THE District or CoLorapo

Decided May 3, 1974

‘fore BREITENSTEIN, Barnes and Barrett, Circuit Judges.

BREITENSTEIN, Circuit Judge :—-The issue here is

iether an employee’s right to sue under §16(b) of the

ir Labor Standards Act, 29 U.S.C. § 216(b), for overtime

mpensation claimed under §7(a)(1), 29 U.S.C. § 207 (a)

) is foreclosed by prior submission of his claim to final

bitration under the grievance procedure of a collective-

rgaining agreement. The trial court granted judgment

the employer. We affirm.

The facts are not in dispute. Plaintiff-appellant Satter-

ite sued for himself and others similarly situated.

'ty-eight other employees of defendant-appellee have

d their written consents to become parties plaintiff in

‘Senior Judge, United States Court of Appeals, Ninth

cuit, sitting by designation.

2a

accordance with $16(b). Plaintiffs are members of

Delivery Drivers, Warchousemen and Helpers, Local Union

No. 435, which has a collective-bargaining agreement with

the employer. The period involved is December 29, 1970,

to September 15, 1971, the date of expiration of the perti-

nent labor contract. The cause of the controversy was the

elimination by employer of two 15-minute coffee breaks for

which there had previously been no deduction in pay.

Employer claimed the right to eliminate the coffee breaks

because the labor contract did not cover that subject.

The labor contract has a three-step grievance procedure

eulminating in compulsory arbitration. A grievance is

defined as ‘fa dispute, misunderstanding, or controversy

involving the interpretation, construction, intent, or mean-

ing of this Agreement”’ with exceptions which are not

pertinent. The arbitration award is binding and con-

elusive unless beyond the jurisdiction fixed by the contract.

No claim is made here that the award exceeded the juris-

dictional grant.

The labor contract provides for compensation at 1 and

14, times the straight hourly rate for time worked in excess

of 40 hours per week or 8 hours per day, each exclusive of

lunch periods. The employees filed a grievance claiming

pay for the extra !, hour a day of work, or 2 and 14 hours

per week, resulting from the elimination of the two 15-

minute coffee breaks. The matter was not settled in the

first two grievance steps and the union demanded

arbitration.

The company asserted that the controversy was not

arbitrable because the laber contract did not cover coffee

breaks. The union then sued in the United States District

Court for the District of Colorado for specific performance

of the arbitration clause. The court) gave summary

judgment to the union and ordered the company to

arbitrate.

3a

The controversy was then submitted to an arbitrator who,

in a comprehensive written opinion, held that the company

could not unilaterally eliminate the paid coffee breaks and

that the employees were entitled to % hour pay for each

day worked during the pertinent period. The union and

the company then executed and presented to the arbitrator

a written joint request for a supplemental decision on

whether the award should be paid at straight time or at

time and 45. The arbitrator, in a carefully considered

written opinion, held that payment should be at straight

time. It is reasonable to infer that the arbitrator eom-

promised by giving the employees all the time which they

sought while deciding the rate of pay in favor of the com-

pany. The award was paid andthe employees have

received what was due to them thereunder.

é

This suit was then brought under FLSA $16(b) to

recover time and 14 for work in excess of 40 hours per week.

FLSA §7(a)(1) provides for pay at 1 and 14 times the

straight rate for work in excess of 40 hours per week.

This differs from the arbitration award which gave the

employees a straight rate extra 14 hour pay for each day

worked. The company pleaded the arbitration award as

a defense.

On the authority of Alexander v. Gardner-Denver Com-

pany, 10 Cir., 466 F.2d 1209, the district court held that

the arbitration award was final and dispositive. Judgment

was entered dismissing the action. During the pendency

of the instant appeal, the Supreme Court reversed Gardner-

Denver. 94 S.Ct. 1011.

Tn Gardner-Denver an employee’s claim of racial dis-

crimination had been submitted to arbitration in ac-

cordance with a collective-bargaining agreement. Prior

to the arbitration hearing the employee filed a charge of

racial discrimination with the Colorado Civil Rights Com-

mission which referred the complaint to the federal Equal

4a

imployment Opportunity Commission. The arbitrator

ruled that the employee had been discharged for just cause

and made no reference to the discrimination claim. There-

after EEOC determined that there was not reasonable

cause to believe that a violation of Title VII of the Civil

Rights Act of 1964, 42 U.S.C. § 2000e et seq., had occurred.

The employee then filed suit in federal court asserting a

violation of the Act. See 42 U.S.C. § 20000-2(a) (1).

In Gardner-Denver the Supreme Court was concerned

with Title VII of the Civil Rights Act. We are concerned

with the Fair Labor Standards Act. The employees here

read Gardner-Denver as holding that the arbitration of a

contract right is no defense to judicial determination of

a statutory right and, hence, they may maintain and secure

their statutory right by federal court suit. Gardner-

Denver dealt with racial discrimination. The dispute here

is over the rate of pay for overtime.

Gardncr-Denver recognizes the federal policy favoring

arbitration of labor disputes and reviews the pertinent

decisions. See 94 S.Ct. at 1018 and particularly n. 6, 7.

The Court summarized jis decision thus, Ibid. :

‘*For the reasons ycated in Parts IIT, IV, and V of this

opinion, we hold that the federal policy favoring arbitra-

tion does not establish that an arbitrator’s resolution of a

contractual claim is dispositive of a statutory claim under

Title VII.”’

Our problem is whether such an award is dispositive

of a statutory claim under FLSA.

Gardner-Denver says that the legislative history of Title

VII manifests a congressional intent to allow an individual

to pursue rights under both Tithe VII and other applicable

state and federal statutes. Aecordingly, Title VIL supple-

ments rather than supplants existing laws and institutions

relating to employment discrimination, 94 S.Ct. at 1019-

da

1020. The doctrine of election of remedies is held in-

applicable in a situation involving statutory rights dis-

tinetly separable from contract rights even though the

violation of both rights may have resulted from the same

factual occurrence, Tbid. at 1020-1021. Resort to arbitra-

tion does not waive the Title VII cause of action because

the statutory rights conferred cannot be prospectively

waived and they form no part of the collective-bargaining

process, Ibid. at 1021-1022. The Court comments that an

arbitrator's authority ix confined to the resolution of ques-

tions of contractual rights, regardless of whether they

resemble or duplicate Title VIT rights. Thid. at 1022.

The Court rejects the argument that to permit an employee

to have recourse to both arbitral and judicial forums is

unfair to the employer, stating that by a Title VIT action

an employee is asserting a statutory right independent of

the arbitration process and such right simply is not given

by statute to the employer. Ibid. at 1022-1023. The

Court also says that a poliey of deferral by federal courts

to arbitral decisions would not comport with the congres-

sional objective that federal courts should exercise the

final responsibility for enforcement of Title VII. Thid. at

1023-1025,

The acceptance of the Court's analysis and reasoning in

Gardner-Denver does not solve our problem unless we

equate the wages and hours provisions of FLSA with the

anti-discrimination provisions of Title VII. Strong

national policy ix expressed both in Title VIT, 94 S.Ct. at

1019, and in FLSA, see 29 U.S.C. § 202, and Brooklyn

Savings Bank v. O'Neil, 324 U.S. 697, 706-707, 5 WH Cases

232. These policies, each in its turn, should be balanced

against the federal policy favoring arbitration of labor

disputes,

In a number of respects FLSA is importantly different

from Title VII. Gardner-Denver refers to the significant

role of private individuals in the enforcement of Title VII

6a

rights. 94 S.Ct. at 1018. In Employees ete. v. Depart-

ment of Public Health and sro of Missouri, 411 U.S

279, 286, 20 WH Cases 1254, 1256, the Court said that,

‘<* * * private enforcement of “ [FLSA] was not a para-

mount objective * * *.’? The independent statutory

remedies in Title VII evince an intent to aceord parallel

or overlapping relief apart from contractual processes.

The absence of such procedures in FLSA suggests a

greater reliance on contract remedies and a lesser emphasis

on individual enforcement.

Additionally, the Portal-to-Portal Act of 1947 29 U.S.C.

§ 251 et seq., resulted from congressional dissatisfaction

with judicial interpretation of FLSA. See 29 U.S.C.

$251(a). It established the defense of good faith reliance

on administrative regulations, 29 U.S.C) $259(a), and

declared the congressional policy ‘‘to protect the right of

collective bargaining ana * * * limit the jurisdiction of

the courts.’’ 29 U.S.C. §251(b). The unavailability of

the good faith defense in the ease at bar is not pertinent.

The point is that in certain cireumstances good faith is a

defense to an FLSA action. The defense, however, is not

available in Title VII actions. See Griggs v. Duke Power

Co., 401 U.S. 424, 482, 3 FEP Cases 175 and Jones v. Lee

Way Motor Freight, Ine., 10 Cir. 451 F. a 245, 250, 2 FEP

Cases 895, cert. denied 401 U.S. 954, 3 FEP Cases 193.

The Portal-to-Portal Act speaks to the ikl ction of collee-

tive bargaining. Gardner-Denver says that, 94 S.Ct. at

1019, **Title VIT does not speak expressly to the relation-

ship between federal courts and the grievance-arbit ration

machinery of collective-bargaining agreements.’’ The

different approach to the defense of good faith and the

different emphasis on collective bargaining indieates that

Congress intended that wage disputes and racial disputes

should not receive the same treatment.

Wages and hours are at the heart of the collective-

bargaining process. They are more akin to collective

7a

rights than to individual rights, and are more suitable to

the arbitral process than Title VII rights. Gardner-

Denver says, 94 S.Ct. at 1024, that ‘‘the specialized com-

petence of arbitrators pertains primarily to the law of the

shop, not the law of the land,’’ and that ‘judicial con-

struction has proven expecially necessary with respect to

Title VIT, whose broad language frequently can be given

meaning only by reference to public law concepts.”? We

are concerned with rate of pay, an issue which does not

require, or lend itself to, publie law considerations, The

added fear expressed in Gardner-Denver that harmony

between a union and an individual cannot be presumed

“‘where a ciaim of racial discrimination is made,’’ 94 S.Ct.

at 1024 n. 19, hes no pertinence here. One of the highest

objectives of any union is to get all the money possible

for all of its members. Significantly, 58 other employees

have joined as plaintiffs.

In Gardner-Denver the Court reasserted the federal

policy favoring arbitration of labor disputes. 94 S.Ct.

at 1018-1019 and particularly n. 6. This policy was offset

against that established by the Civil Rights Act of 1964.

Citing Newman vy. Piggie Park Mnterprises, Ine., 390 U.S.

4110, 402, the Court said that in the Civil Rights Act ‘‘Con-

gress indicated that it considered the policy against dis-

crimination to be of the ‘highest priority.’ ’’ The con-

clusion that the anti-diserimination policy rated higher

than that favoring arbitration of labor disputes was

determinative. We find nothing in any pertinent legisla-

tive history or court decision to indicate that Congress, by

the grant of a right to private suit under FLSA $ 16(b),

intended to establish a policy preference for the determina-

tion of a wage dispute in judicial rather than arbitral

proceedings. Indeed, the only policy expression of which

we are aware, that contained in the Portal-to-Portal Act, 29

U.S.C. § 251(b), is to the contrary.

8a

Industrial peace is important not only to employees and

employers but also to the public. The delineation of the

respective rights of employees and employers in collective-

bargaining contracts has helped to secure industrial peace.

Many of those contracts contain provisions which define as

contract rights the same rights as are granted by federal

statutes. Indeed, the wage provisions of FLSA may not

be waived by agreement. Brooklyn Savings Bank v.

O'Neil, 324 U.S. 697, 707, 5 WH Cases 232. In many

contracts the unions have foregone the right to strike and

management has accepted compulsory arbitration. See

Boys Markets, Ine. v. Retail Clerks Union, 398 U.S. 235,

247-248, 74 LRRM 2257. The ever-present disputes over

wages and hours are readily adaptable to arbitration. Re-

sort to judicial process after arbitration prolongs the con-

troversy and serves no good purpose when the arbitral and

judicial proecedings arise out of, and must be decided, on

the same factual background.

We hold that when a wage dispute is submitted to

arbitration in aceordance with a collective-bargaining

greement, the employees may not thereafter maintain an

FLSA §16(b) suit for recovery on the basis of the same

factual occurrence as that presented to the arbitrator:

We are convinced that the policy of Congress, recognized

by the Courts, favors the arbitration of disputes over wages

and hours in accordance with a collective-bargaining agree-

ment. The high priority which Congress has given to

protection against racial disermination has no application

to a dispute over rate of pay. The reassertion in a judicial

forum of the same wage claim determined in an appropriate

arbitration hinders rather than promotes industrial peace,

and should not be permitted.

Affirmed. Each party shall bear his own costs.

9a

APPENDIX B

Marcu Term—May 3, 1974

Before Tue Honoraste Jean S, Breirensters, Tur Hon-

ORABLE STANLEY N. Barnes,* and Ture HonoraBie James

KE. Barrerr, Circuit Judges.

No. 73-1166

Ricuarp R. Satrerwuirte, Jr., for himself and in behalf of

all other persons similarly situated, Plaintiff-A ppellant,

Vv.

Unitep Parcex Service, Ixc., an Ohio Corporation,

Defendant-A ppellee.

This cause came on to be heard on the record on appeal

from the United States District Court for the District of

Colorado, and was argued by counsel.

On consideration whereof, it is ordered that the judgment

of said court is Arrirmep. Kach Party Shall Bear His Own

Costs,

/s/ Howarp K. Puiuips

Howard K. Phillips

Clerk

* Of The Ninth Circuit, Sitting by Designation.

10a

APPENDIX C

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLORADO

Civil Action No. C-3070

Ricuarp R. Satrerwuitet, JRr., for himself and in behalf of

all other persons similarly situated, Plaintiffs

Vv.

Unirep Parcet Service, Ixc., an Ohio Corporation,

Defendant

MEMORANDUM OPINION

Wixxer, Judge

This case has been submitted on an agreed factual rec-

ord. The present action was preceded by Delivery Drivers,

Warehousemen and Helpers, Loeal Union No. 435 v. United

Parcel Service, Inc., Civil Action No. C-3070 in this Court.

The complaint in that ease charged that United Parcel:

**.. reduced the compensation of its employees by the

device of charging against their wages the time spent dur-

ing their daily rest periods or ‘coffee breaks,’ contrary

to the long established practice and custom, and by such ae-

tion the defendant has deprived its employees of the com-

pensation to which they are entitled by virtue of the said

contract.”’

That complaint additionally pleaded an arbitration agree-

ment, and the union asked that defendant be ordered to ar-

bitrate the dispute. Cross motions for summary judgment

were filed, and on September 17, 1971, Judge Chilson

granted the Union’s motion for summary judgment and

ordered United to arbitrate. An arbitration was held be-

lla

fore Prof. George E. Bardwell, and in the arbitration pro-

ceeding the parties stipulated that one issue to be decided

by him was, ‘If the decision of the Arbitrator is in favor

of the Union, to what relief, if any, are the employees en-

titled.’’

Following a hearing, the arbitrator handed down a 28-

page award on February 18, 1972. He quoted the stipu-

lated issues, and he quoted from the overtime provisions

of the labor contract. He discussed the evidence, the con-

tentions of the parties and the briefs, and his award was:

‘* All employees in the bargaining unit as of the date of

this award are entitled to one-half hour pay for each day

worked from December 29, 1970 through September 15,

1971.”’

Thereafter, counsel for the parties filed a ‘‘Joint re-

quest for Supplemental Decision.’’ It asked that the arbi-

trator decide, inter~alia, the question:

‘*(a) Is the back pay award in the Arbitrator’s decision

of one-half (14) hour’s pay for the days actually worked

to be paid at straight time or at time and one-half (112) ?”’

Onee more, briefs were filed, and a hearing was held

which was followed by a 14-page supplemental award in

which it was held:

‘*Kach employee eligible to receive pay under this award

is entitled to one-half (4%) hour’s pay at straight time

rates for each day worked from Deeember 29, 1970 through

September 15, 1971.’

Being dissatisfied with the supplemental award, plain-

tiffs [whose rights were decided by the arbitrator in Civil

Action No. C-3070] filed this case, and they argue that the

arbitrator had no right or power to decide plaintiffs’ en-

pee eerie

12a

: titlement to overtime pay, and that under the Fair Labor

Standards Act, only a court of competent jurisdiction can

decide this question.

It is true that the arbitration had to do with interpreta-

tion of the contract in question, but, nevertheless, present

plaintiffs expressly requested the arbitrator to decide the

exact question they now want to litigate again in this court.

Plaintiffs say that the claims’ are different because one

claim is for contract interpretation while the other is for

statutory interpretation. An examination of the contract

shows that its provisions:are but a paraphrase of the Fair

Labor Standards Act on the requirement for overtime.

Under plaintiffs’ position, they could ask for an award

from the arbitrator which would be binding on the em-

ployer, but, say plaintiffs, it was a heads I win, tails you

lose situation. They say that they can secretly conceal

part of their case to insure a second chance if they lose.

We disagree. The issue submitted to the arbitrator was

not limited by its terms to contract interpretation. It

asked the direct question of the arbitrator as to whether the

employees were entitled to straight time or time and one-

half. He answered that they were entitled to straight time

only. Plaintiffs say that he was wrong as a matter of law,

but errors in law on the part of an arbitrator was not

grounds for voiding the award. In Western Oil Fields v.

Rathbun (1957) 10 Cir. 250 F.2d 69, it was said:

‘‘ Arbitrators are the final judges of both law and fact,

and an award will not be reviewed or set aside because of

a mistake of the arbitrator in either.”’

See, also, Raytheon Co. v. Rheem Mfg. Co. (1963) 9 Cir.

322 F.2d 173, Trailways of New England, Ine. v. Amalga-

mated Association ete, AFL-CIO Division (1965) 1 Cir.

393 F.2d 180, Marey Lee Mfg. Co. y. Cortley Fabries (1965)

2 Cir. 354 F.2d 42,

13a

As was said in Trailways of New England, supra, ‘‘ Ar-

bitrators, however, even as courts .. . have ‘jurisdiction’

to decide erroneously.’’

In Alexander v. Gardner-Denver (1971) D.C. Colo. 346

F. Supp. 1012, aff’d (1972) 466 F.2d 1209, this Court dis-

cussed its thinking concerning the finality of arbitration

awards. Much of what is there said is here applicable and

it need not be repeated, although that discussion and the

cases there quoted and cited are adopted by reference. One

question there decided by the arbitrator had to do with an

alleged violation of Alexander’s civil rights—a matter over

which federal district courts are given jurisdiction. This

Court held that the decision of the arbitrator was final.

The Tenth Cireuit affirmed. We believe this to be the law

in this Circuit.

ilere, the union was the party which sought the aid of

this Court in forcing arbitration. It participated in the

arbitration and it joined in a request that the arbitrator

decide whether the employees should receive straight time

pay or time and one-half. Whether the arbitrator was

right or whether he was wrong is not the question before

us. The question is, ‘‘Did the arbitrator have jurisdiction

to decide either rightly or wrongly?’’ He did.

It Is Orvenep that judgment enter in favor of defendant

and against the plaintiffs.

Dated at Denver, Colorado, this 22nd day of January,

1972.

Fred M. Winner

United States District Judge

Filed January 24, 1973.

l4a

JUDGMENT

Pursuant to and in accordance with the Mem

Opinion filed January 24, 1973, signed by The E

Fred M. Winner; it is

Orverep that the action and complaint hereir

hereby is dismissed, and that the Defendant shall

costs upon the filing of a bill of costs with the (

this Court.

Datep at Denver, Colorado, this 30th day of

1973.

For tre Court:

James R. Manspeaker, Clerk

United States District Court

Filed January 30, 1973.

|

RESPONDENTS |

BRIEF ,

LIBRARY. ¥ FILED

COURT, U. &

32UPREME . NOV 22 1974

iN THE

October Term, 1974.

No. 74-332.

RICHARD R. SATTERWHITE, JR., for Himself and on

Behalf of All Other Persons Similarly Situated,

Petitioner,

UNITED PARCEL SERVICE, INC.,

Respondent.

On Petition for a Writ of Certiorari to the United States

Court of Appeals for the Tenth Circuit.

BRIEF OF RESPONDENT IN OPPOSITION.

Bernarp G. Secau

JAMES D. Crawrorp

1719 Packard Building

Philadelphia, Pa. 19102

Attorneys for Respondent.

Brenna C. Kinney

Scunaper, Harrison, Secat & Lewis

Philadelphia, Pa. 19102

Peter H. Howie, Jr.

Houme Roserts & Owen

Denver, Colorado 80202

Of Counsel.

International Printing Co., 711 So. 50th St., Phila., Pa. 19143 — Tel. (215) 727-8711

Supreme Court of the Unitéd“States: <*

INDEX.

Page

SN HEU, pccbcciceneveceeecsavihenseerseces 1

EE SVs Sd asda sdb dS Sse s cds Seadcarbnscnscsnvanes 2

NE cob pce kerb esse venseecsenenccencndscesesoucs 6

SE ee ccccsthvckeavhaeensevenseeeacn 6

II. The Decision of the Court of Appeals Merely Affirms

the Strong Federal Policy Favoring Arbitration of

Labor Disputes and Therefore Is of No Great Sig-

PE Fai ce an eV ease CRS Ess chi adheGereetenn 8

A. Neither This Court's Decision in Alexander v.

Gardner-Denver Co. Nor the Language or Pur-

poses of the Fair Labor Standards Act Require an

Exception to the Policy Favoring Arbitration ... 10

B. The Award of the Arbitrator Contained No Find-

ing That Petitioner and His Class Had Performed

Work Subject to Compensation as Overtime Under

the Fair Labor Standards Act ................ 13

C. Where, as Here, the Union Demanded Arbitration

of the Overtime Pay Issue on Petitioner’s Behalf,

Petitioner Cannot Now Disclaim a Part of the

Arbitrator’s Award and Relitigate the Issue as an

PT Vcc ones teaceenabhesaeccekeas 17

SM EE a a ca EC os ay bs ke SGA Ses bbb ee bal 20

i TABLE OF CITATIONS.

Federal Cases: Page

Alexander vy. Gardner-Denver Co., 415 U. S. 36 (1974)

6, 7, 10, 11, 12, 13, 17, 19

Boys Markets, Inc. v. Retail Clerks Union, 398 U. S. 235

ERED ebnedoceuvbvaakcdocennsstakaghseovcteseans 9, 10

Bracey v. Luray, 161 F. 2d 128 (4th Cir. 1947) ............ 14

Dallas Typographical Union No. 173 v. A. H. Belo Corp., 372

Pe 8 wt ee | errr Try ore rrr 19

Employees of the Dept. of Public Health & Welfare v. Dept. of

Public Health & Welfare, 411 U. S. 279 (1973) ........ 11

Gateway Coal Co. v. United Mine Workers, 414 U. S. 368

CE Cidsvevectibersebecdunsbewtsedcrweraneesdrs 10

Gulf States Telephone Co. v. Local 1692, Intl. Brotherhood of

Electrical Workers, 416 F. 2d 198 (5th Cir. 1969) ..... 19

Jarrard vy. Southeastern Shipbuilding Corporation, 163 F. 2d

de Oe Ser one ny ere 14

Keith v. Bensch d.b.a. Lake Shore Platers, 40 L. C. § 66,621

Ces ee Cc EE Reco cebiveseaveussscebacssevaeschs 14

Newman v. Piggie Park Enterprises, Inc., 390 U. S. 400

EN aha ke CUE SGLs REEE NER ER CLARE RIED OrE EEL as Okee 12

Office of Supply, Govt. of Republic of South Korea v. New

York Navigation Co., 469 F. 2d 377 (2d Cir. 1972) .... 19

San Martine Compania de Navegazian v. Saquenay Terminal

ASG, Gee FU. BE: 7oe CO Ge. TORE) occicccnsccvcccees 19

Schulte v. Gangi, 328 U. S. 108 (1946) ................0.. 14

Textile Workers Union v. Lincoln Mills, 353 U. S. 448 (1957) 8

Truck Drivers Union vy. Ries & Co., 372 U. S. 517 (1963) .. 9

United Steelworkers of America v. American Manufacturing

ek PU © FON CII oc cs csiipecseccscsccssccas 8

United Steelworkers of America v. Enterprise Wheel & Car

Cs St Ble Os SP CUSED Sv ccnvevaccteccicarcans 8,9, 14

TABLE OF CITATIONS (Continued).

Federal Cases (Continued): Page

United Steelworkers of America v. Warrior & Gulf Co., 363

Sy ROE ak eaWensbeesauscbsencisaecencuned 8, 9, 18

Urbino v. Puerto Rico Ry. Light & Power Co., 164 F. 2d 12

CRee Ml PER: oe neduncUsdeupcerasbhsekeuetaseaseas 14

U. S. Bulk Carriers Inc. v. Arguelles, 400 U. S. 351 (1971) .. 17

Washington-Baltimore Newspaper Guild, Local 35 v. Washing-

ton Post Co., 442 F. 2d 1234 (D. C. Cir. 1971) ........ 19

Statutes: Page

Fair Labor Standards Act:

NE, FURSC ER ae Ge Ge Ge BUMPED cc ctcascscversss 2,6

a es ae Ge Os Ss ED es dnkbbeesreondeses 2,7, 11

Labor Management Relations Act, Sec. 203(d), 29 U. S. C.

BE SAGAN eVded seehiensbuabsasecsenbpedasivneceens 9

BRIEF FOR RESPONDENTS IN OPPOSITION.

QUESTION PRESENTED.

Was not the court of appeals correct in holding that

when a wage dispute has been submitted to union-demanded

binding arbitration in accordance with a collective bargain-

ing agreement, and, pursuant to the arbitrator’s award,

back pay has been paid by the employer and accepted by

the employees, the employees may not thereafter maintain a

Fair Labor Standards Act § 16(b) suit to recover additional

back pay arising from the same factual occurrence as that

presented to the arbitrator?

2 Stat« ment

STATEMENT.

Petitioner seeks certiorari to have this Court review

the decision of the United States Court of Appeals for the

Tenth Circuit affirming the order of the United States Dis-

trict Court for the District of Colorado which granted

judgment for the employer, ‘respondent United Parcel

Service, cn a claim under Section 16(b) of the Fair Labor

Standards Act of 1938 (‘‘Wage and Hour Law’’ or

‘‘FLSA’’), 52 Stat. 1060, 29 U. S. C. $4 201-19, to recover

overtime compensation allegedly due under Section 7(a) (1)

, of that Act. The action was brought by petitioner Satter-

white, an employee of respondent, on behalf of himself and

58 other employees who filed consents to become parties

plaintiff pursuant to Section 16( " of the Wage-Hour Law

(R. 22a-24a).?

Petitioner’s complaint was ititiael by the district

court on January 30, 1973, pursuant to respondent’s motion

_ for summary judgment (R. 24a-26a), on the ground that the

. suit was foreclosed by prior submission by joint request of

the parties of the same claim to final and binding arbitra-

, tion under the grievance procedure of a collective bargain-

4 ing agreement (App. 10a-14a; R. 108a-11la). The court of

_ appeals affirmed, holding that ‘‘when a wage dispute is

_ submitted to arbitration in accordance with a collective

_| bargaining agreement, the employees may not thereafter

} maintain an FLSA § 16(b) suit for recovery on the basis of

| the same factual occurrence as that presented to the arbi-

trator.’’ (App. 8a).

; This case arises out of a dispute between an employer

H and a union over the rearrangement of employees’ daily

;

Pr coment GP al SR

whe yak A ee

work schedule. Petitioner and his class are members of the

Delivery Drivers, Warehousemen and Helpers Local Union

1. “R” references are to the Joint Appendix in the court of

appeals: “App.” to the appendices to the Petition for Certiorari.

Statement 3

No. 435 which at all relevant times herein had a valid col-

lective bargaining agreement with respondent (App. 2a).

Before December 29, 1970, employees reported to work at

8:00 a.m., received a thirty-minute unpaid lunch break and

worked until 4:30 p.m., for which services they were paid

eight hours pay per day or forty hours per week. They

were permitted two paid fifteen minute coffee breaks (R.

35a).

After December 29, 1970, respondent restructured the

work day by increasing the unpaid lunch break to one hour,

eliminating the two coffee breaks and making the hours

8:00 a.m. to 5:00 p.m. Employees who were truck drivers

did not have a scheduled lunch period, but rather one hour

of unpaid ‘‘personal time’’ which they could take in one or

more segments at each employee’s discretion as circum-

stances permitted. The employees continued to be paid

eight hours pay per day or forty hours per week (R. 35a).

Thus, the crux of the dispute was the change from a prac-

tice under which employees received eight hours pay but

actually worked 714 hours to one under which the same em-

ployees were required to spend the full eight paid hours

working.

After this change, several employees, including peti-

tioner (R. 43a), filed grievances against respondent, alleg-

ing that the elimination of the coffee break as paid time was

a violation of the labor agreement which was in effect

throughout the period in question (R. 39a-43a). Respond-

ent’s action to reschedule the work day to provide for

a full eight hours of work during the day and to increase

the unpaid lunch time was based on the fact that the contract

was silent on the subject of coffee breaks and contained an

‘entire agreement’’ clause which provided that the union

‘‘agrees that this Agreement is intended to cover all matters

affecting wages, bours and other terms and all conditions of

SCPE MANN MEP! on!

4 Stat« ment

employment’’ (R. 99a) and a limited arbitration clause

(R. 95a-97a). Therefore, respondent took the position that

the elimination of paid coffee breaks was not a proper sub-

ject for grievance or arbitration because the right to coffee

breaks was not set forth in the contract.

The union then filed suit in the United States District

Court for the District of Colorado to compel arbitration of

the matter, alleging that it had pursued to exhaustion the

grievance filed by petitioner and his fellow employees and

that respondent had refused to arbitrate the dispute (R.

27a-28a). The parties filed cross motions for summary

judgments (R. 30a-33a), and the district court per the

Honorable Olin Hatfield Chilson ordered respondent to

arbitrate the issue in September, 1971 (R. 34a); Delivery

Drivers, Warehousemen and Helpers, Local Union No. 435

v. United Parcel Service, Inc., No. 3070, in the United States

District Court for the Distriet of Colorado.

Pursuant to the order, arbitration was held before

Professor George E. Bardwell on November 23, 1971, at

which petitioner Satterwhite and five of the other plaintiffs

in the district court appeared as witnesses for the union

(R. 45a). The parties stipulated to the arbitrator the issues

involved in the dispute. Among these were: (1) ‘‘If the

Union did not acquiesce in the Company’s action [modify-

ing the work schedule], did the Company have the right to

take such action?’’ and (2) ‘‘If the decision of the Arbi-

trator is in favor of the union, to what relief, if any, are

the employees entitled?’’ (R. 45a-46a). The arbitrator

issued a comprehensive 28-page written opinion which held

that respondent could not unilaterally eliminate the paid

coffee breaks, and ruled that the employees were entitled to

back pay equal to one-half hour pay for each day worked

during the pertinent period from December 29, 1970, when

the schedule change took effect, to September 15, 1971, the

date of expiration of the labor contract (R. 45a-68a).

Statement 5

Because the labor contract between the union and re-

spondent provided for compensation at one and one-half

times the straight hourly rate for work in excess of forty

hours per week or eight hours per day, each exclusive of

lunch periods (R. 89a), the union contended that the back

pay awarded should be computed on a time and one-half

basis rather than as straight time. To resolve this second

dispute the parties agreed to submit to the arbitrator a

written joint request for a supplemental decision on

whether the award should be paid at straight time or at

time and one-half (R. 69a-70a). Briefs were again filed and

a hearing was held. In a second, carefully considered 14-

page written opinion (R. 70a-81a), the arbitrator ruled that

‘‘(E]Jach employee eligible to receive pay under this award

is entitled to one-half hour’s pay at straight time rates for

each day worked from December 29, 1970 through Septem-

ber 15, 1971’’ (R 76a).

Respondent then paid the award and the eligible em-

ployees, including petitioner and the other named plaintiffs

in the class action, received the back pay (App. 3a). How-

ever, having failed to achieve all of the desired award from

the arbitrator, petitioner Satterwhite and the other named

members of the class then turned to federal district court

and began the instant lawsuit, with the results set forth

above.

4

}

i

6 Argument

ARGUMENT.

I. Introduction.

Petitioner would have this Court believe that the de-

cision of the court of appeals raises questions of paramount

importance involving the denial of employees’ Fair Labor

Standards Act rights and directly contradicts the Court’s

decision in Alexander v. Gardner-Denver Co., 415 U.S. 36

(1974). This is not so. Despite petitioner’s attempt to

posture this case as an infringement on employees’ stat-

utorily guaranteed right to time and one-half for overtime

in excess of forty hours,’ it is merely a standard labor-

management dispute over the method in which employees’

work schedules were rearranged. What is not standard is

the attempt of petitioner and other employees on whose

behalf the union had successfully prosecuted grievances

through arbitration to invoke the FLSA to supplement an

arbitrator’s generous back pay award. And petitioner and

his class seek to avoid the policy favoring finality of arbi-

tration awards by equating this essentially collective de-

mand for more money with an individual employee’s right

to protection from discrimination under Title VII of the

Civil Rights Act of 1964.

The union objected—through grievances of petitioner

and others—to respondent’s unilateral changes in em-

ployees’ working hours and went to court to force arbitra-

tion of the dispute. The union suceceded in compelling

arbitration and thereafter obtained a favorable decision and

a generous back pay award for employees in the bargaining

unit. However, the union wanted still more and returned

to the arbitrator with the request, inter alia, that back pay

be computed at time and one-half rather than straight time.

The union lost on that issue—not surprisingly, since the

2. Fair Labor Standards Act, Section 7(a)(1), 29 U. S. C.

§ 207(a) (1).

Argument 7

actual work day never exceeded eight hours—and now,

through the device of an employee’s Section 16(b) suit

under the FLSA brought by an original grievant asks the

federal courts to increase the arbitrator’s award.

Both courts below properly refused to tamper with

the arbitrator’s award on the pretext of an alleged wage

and hour law violation, and their decisions fully comport

with the strong federal policy favoring final and binding

arbitration of labor disputes. The court of appeals care-

fully considered and properly distinguished this Court’s

decision in Alexander v. Gardner-Denver Co., 415 U. S. 36

(1974).

Moreover, petitioner's basic contention that he and his

class should be entitled to ‘‘another bite at the apple’’ when-

ever an arbitrator’s award arguably conflicts with or could

be supplemented by a federal statute would enmesh the

federal judiciary in review of large numbers of arbitration

awards ordered by skilled arbitrators within the areas of

their expertise. This disrespect for the finality of arbi-

trators’ awards (except in the unique area of discrimina-

tion in violation of Title VII where the Congress plainly

recognized the danger that unions would not protect indi-

vidual members from discriminatory actions of employers—

or, indeed, of the unions themselves) would, under any cir-

cumstances, violate the basic principles favoring labor arbi-

tration set down by this Court. This is even clearer

here, where (1) petitioner’s union had demanded arbi-

tration of the grievance filed by petitioner and his fellow

grievants to the extent of obtaining a court order to compel

it, (2) the very issue of whether back pay for petitioner and

his fellow grievants should be at straight time or time and

one-half rates had been submitted to the arbitrator by

agreement of the union which was prosecuting petitioner's

claim and (3) the right of petitioner and his fellow griev-

ants to recover depended upon the willingness of the federal

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8 Argument

courts to hold that they must follow so much of the

arbitrator’s award as held that each employee was entitled

to one-half hour back pay for each day worked (under the

union interpretation, a finding that the additional half

hour was within the working day for FLSA purposes) and

might disregard the remainder of the same award which

set the rate at which this additional half hour per work day

should be paid.

In fact, the arbitrator here, like a jury, weighed the

relative merits of the union’s claim on behalf of petitioner

and his fellow grievants against the defense presented by

respondent and determined that petitioner and each of his

fellow employees was entitled to damages equal to one-half

hours’ pay for each day worked after respondent had

altered the work schedule. But the fact that the arbitrator

determined that each employee was entitled to the damages

he thought appropriate is simply not the equivalent of a

finding that each employee had worked additional hours

beyond the eight-hour day for Fair Labor Standards Act

purposes.

II. The Decision of the Court of Appeals Merely Reaffirms

the Strong Federal Policy Favoring Arbitration of

Labor Disputes and Therefore Is of No Great Signifi-

cance.

In affirming the district court’s dismissal of petitioner’s

complaint, the court of appeals properly applied the estab-

lished doctrine of federal labor relations law favoring

arbitration of labor disputes, as enunciated by this Court

in Textile Workers Union v. Lincoln Mills, 353 U. S. 448

(1957) and the Steelworkers trilogy.* As the Court stated

3. United Steelworkers of America v. American Manufac-

turing Co., 363 U. S. 564 (1960) ; United Steelworkers of America

v. Warrior & Gulf Co., 363 U. S. 574 (1960); United Steel-

workers of America v. Enterprise Wheel & Car Corp., 363 U. S.

593 (1960).

Argument 9

in Boys Markets, Inc. v. Retail Clerks Union, 398 U. S. 235, —

243 (1970), the Steelworkers cases “emphasized the impor-

tance of arbitration as an instrument of federal policy for

resolving disputes between labor and management and

cautioned the lower courts against usurping the functions

of the arbitrator.”

Repeatedly, this Court has warned against judicial re-

view of arbitration awards and has advised lower courts

to view with suspicion attempts to entangle them in re- —

weighing the merits of a grievance.* In addition to this

established judicial policy, Congress has also indicated its

preference for final adjustment of labor-management dis-

putes through voluntary arbitration: ‘‘Final adjustment by

a method agreed upon by the parties is hereby declared to

be the desirable method for settlement of grievance dis-

putes arising over the application or interpretation of an

existing collective bargaining agreement.’’ Section 203(d),

Taft-Hartley Act.

Petitioner seeks to avoid the policy favoring arbitra-

tion by arguing that he has a statutory right under the

Fair Labor Standards Act totally independent of an arbi-

tration award. But no such right to avoid the effect of

final and binding arbitration exists in the law. And the

facts in this case cogently illustrate the reason why the

pelicy exists. For petitioner would have this Court enforce

4. In Steelworkers v. Enterprise Corp., supra, 363 U. S. at

596, the Court stated: “The refusal of courts to review the merits

of an arbitration award is the proper approach to arbitration

under collective bargaining agreements. The federal policy of

settling labor disputes by arbitration would be undermined if

courts had the final say on the merits of the awards.” See also

Truck Drivers Union v. Ries & Co., 372 U. S. 517, 519 (1963).

In Steelworkers v. Warrior & Gulf Co., supra, 363 U. S. at 585,

the Court cautioned: “. . . the court should view with suspicion

an attempt to persuade it to become entangled in the construc-

tion of the substantive provisions of a labor agreement, even

through the back door of interpreting the arbitration clause.

when the alternative is to utilize the services of an arbitrator.”

VAR LATE

10 Argument

a portion of the arbitrator’s award and then, on the basis

of that portion, reverse the remainder of the award. Re-

litigation of issues in this fashion can hardly be a source of

industrial peace.

A. Neither This Court’s Decision in Alexander v.

Gardner-Denver Co. Nor the Language or Pur-

poses of the Fair Labor Standards Act Require an

Exception to the Policy Favoring Arbitration.

In an attempt to circumvent the strong policy against

judicial review of the merits of an arbitration award, peti-

tioner seeks to enter the courthouse through the back door,

by alleging he is entitled to a larger remedy under the

FLSA than was awarded by the arbitrator. He argues

that the arbitrator’s award directly contradicts the Fair

Labor Standards Act; but the real basis of his claim is that

suit under the Act might offer the possibility of a ‘‘ better

deal.’’

This is not the first time a petitioner has sought review

in this Court by contending that federal policy favoring

final and binding arbitration cor‘icts with another federal

statute. This Court, however, has repeatedly resolved

potential statutory conflicts in favor of strengthening the

arbitration process. In Boys Market v. Retail Clerks Union,

supra, for example, the Court concluded that the policy

favoring arbitration is so important that the literal terms

of Section 4 of the Norris-LaGuardia Act must be accom-

modated to it. Most recently, in Gateway Coal Co. v. United

Mine Workers, 414 U.S. 368 (1974), the Court extended the

“presumption of arbitrability” to safety disputes, despite

arguments that federal safety legislation removed such dis-

putes from the arbitration arena.

Petitioner argues, however, that Alexander v. Gardner-

Denver Co., 415 U. S. 36 (1974), creates an exception to the

hasie policy favoring arbitration of disputes and that that

Argument 11

exception applies in the present case. In fact, this Court’s

decision in Gardner-Denver recognized the federal policy

favoring binding arbitration of labor disputes but carved

out a narrow exception to the general rule when individual

employees sought to assert statutory rights under Title VII

of the Civil Rights Act of 1964. Petitioners now seek to

expand that narrow exception to cover private suits over

wage disputes under FLSA 4 16(b).

The decision in Gardner-Denver specifically limited the

exception to Title VII rights and clearly enunciated the

reasons for viewing Title VII rights dific.-ntly from other

contractual or collective bargaining rights. Similarity, the

court of appeals carefully compared the legislative history

and policies behind Title VII as set forth by this Court with

those of the Fair Labor Standards Act, and detailed the

ways individual statutory rights sought to be asserted in

Gardner-Denver are separate and distinct from the rights

arising out of a wage dispute.

The whole tenor of this case is different from Gardner-

Denver. There, an individual employee pursued an indi-

vidual grievance, and the Court recognized that a harmony

of interest between union and grievant cannot always be

presumed in discrimination eases. However, here the issue

is not individual but colleetive—the union sought at arbi-

tration and seeks now through this suit as much money as it

can possibly attain for all members of the bargaining unit.

The union’s interest is inseparable from the interests of em-

ployees in the hargaining unit.

In Gardner-Denver the Court emphasized the signif-

icant role private individuals play in the enforcement of

Title VII rights. By contrast, as the court of appeals prop-

erly pointed out, this Court has said, “private enforcement

of the FLSA was not a paramount objective.”*> In Gardner-

5. Employees of the Dept. of Public Health and Welfare v.

Dept. of Public Health & Welfare, 411 U. S. 279, 226 (1973).

a

4

12 Argument

Denver, the Court referred to the Congressional intention

that the policy against discrimination be of “the highest

priority.”*® Here, the court of appeals reviewed the legis-

lative history of the FLSA and found no congressional

policy preference for the determination of wage disputes in

judicial rather than arbitral proceedings (App. 8a):

We are convinced that the policy of Congress recog-

nized by the Courts, favors the arbitration of disputes

over wages and hours in accordance with a collective

bargaining agreement. The high priority which Con-

gress has given to protection against racial discrim-

ination has no application to a dispute over rate of

pay.

In Gardner-Denver the (‘ourt found a legislative intent

in Title VII to provide non-exclusive access to various

forums—state human relations commissions, EEOC and the

courts, for example. By contrast, arbitration has always

heen favored in true labor cases and the Portal to Portal

Act of 1947, 29 U. S. C. §251(b), is an example of Con-

gressional policy to limit the jurisdiction of the courts in

Fair Labor Standards Act cases.

In Gardner-Denver, the contract provisions which the

arbitrator construed were in no sense the equivalent of the

protections contained in Title VII. Here the agreement

provides for overtime pay as fully as does the Fair Labor

Standards Act. And in Gardner-Denver the rights which

the plaintiff sought to enforce required both extensive fact

finding and the existence of a fact-finder sympathetic to

civil rights, reasons that have frequently caused the Con-

gress to grant access to the federal courts. In this case,

the right to overtime pay requires neither extensive factual

6. Alexander v. Gardner-Denver, 415 U. S. at 47, citing

Newman v. Piggie Park Enterprises, Inc., 390 U. S. 400, 402

(1968).

Argument 13

determinations nor a forum more sympathetic than an im-

partial arbitrator.

In Gardner-Denver, the arbitrator made no reference

to the grievant’s claim of racial discrimination in upholding

the discharge. In the instant case, the arbitrator gave ex-

plicit consideration to the claim for overtime, rejecting it

with full opinion after granting petitioner and his fellow

employees an award which was paid by the employer and

accepted by the employees. And petitioner has not come to

court to seek to have the arbitration award vacated on the

grounds the arbitrator exceeded the scope of his authority.

Rather, he seeks to retain all of the original arbitration

award and supplement it through this action. (Indeed he

depends upon that award as the basis for his action to over-

turn its remedy.)

Under these cireumstances, the court of appeals was

plainly correct in concluding that neither the direct lan-

guage of the Fair Labor Standards Act nor the decision of

this Court in Gardner-Denver provided any basis for a

determination that petitioner might relitigate an issue

which had already been presented to and decided by the

impartial arbitrator.

B. The Award of the Arbitrator Contained No Finding

That Petitioner and His Class Had Performed

Work Subject to Compensation as Overtime Under

the Fair Labor Standards Act.

If petitioner’s argument that, as a matter of law, FLSA

overtime pay claims cannot be barred by arbitration is a

tenuous one, his argument that the arbitrator had resolved

the factual issues in his favor is based on even more flimsy

assumptions. He has interpreted the arbitrator’s back pay

award as the equivalent of a finding that each employee

actually worked 8% hours a day or 42% hours a week.

Yet there is nothing in the arbitrator’s decision which in-

POPE we Pos

14 Argument

dicates that he considered half of each lunch hour as work-

ing time. The award merely states that employees were to

be awarded an amount of money which was to be measured

by both the number of days they worked and one-half their

hourly rate of pay.

Many varying factual interpretations can be drawn

from the lump sum back pay award, and this Court has

recognized that “[{a]rbitrators have no obligation to the

Court to give their reasons for an award.” United Steel-

workers of America v. Enterprise Wheel & Car Corp., supra,

363 U.S. at 598. Would the award have been less subject to

collateral attack, for example, if the arbitrator awarded the

same amount but characterized the award as two-thirds of

the added unpaid lunch period at time and one half? An

arbitrator’s award is necessarily a whole remedy, the

product of many factors weighed and evaluated by him.

Yet petitioner has dissected the award and grossly dis-

torted it by accepting part (the number of hours for which

back pay was awarded) while seeking to relitigate the rate

issue.

Petitioner also claims that the award represented a

compromise of coverage under the wage and hour law which

is prohibited by Schulte v. Gangi, 328 U. S. 108 (1946).’

7. In Schulte v. Gangi the court was concerned with com-

promise of controversies over coverage under the Fair Labor

Standards Act. not with a factual question as to the number of

overtime hours worked. Indeed. the Court specifically declined

to rule out the possibility of compromises in such disputes:

“Nor do we need to consider here the possibility of compromises

in other situations which may arise, such as a dispute over the

number of hours worked... .” (328 U. S. at 114. 115). More-

over, although petitioner strongly argues that the arbitrator's

award was somehow impermissibie as a compromise under the

FLSA, courts have upheid compromise settlements of overtime

claims. See Jarrard vy. Southeastern Shipbuilding Corporation,

163 F. 2d 960 (3th Cir. 1947) : Urbino v. Puerto Rico Ry. Light

& Power Co., 164 F. 2d 12 (1st Cir. 1947) ; Keith v. Bersch d.b.a.

Lake Shore Platers, 40 L. C. § 66,621 (N. D. Ill. 1960); Bracey

v. Luray, 161 F. 2d 128 (4th Cir. 1947).

|

? ?

A: yument 15

Again this argument makes the factual assumption that the

number of back pay hours awarded by the arbitrator can

be separated from the rate applied to those hours. The

award was made as a whole, and there is no factual basis

for subsequently severing the award of the arbitrator as to

hours used as a measure of compensation from the rate of

pay for those hours. Neither this’ Court nor the lower

courts can state with any factual certainty what the arbi-

trator’s flexible remedy would have been had the arbitrator

determined that a time and one-half rate should be multi-

plied by the number of hours for which back pay was al-

lowed to arrive at defendant’s total liability—or had the

arbitrator known that a court might make such a deter-

mination.®

In this respect, it is important to note that the arbi-

trator’s decision in this case did not base the back pay

award on the number of hours worked each day by an em-

ployee, but related it only to the total days worked: ‘‘For

purposes of this award ‘day worked’ shall mean any day

on which the eligible employee reported for work and re-

ceived compensation for his services.’’ (R. 76a). Thus, it

cannot be ascertained whether the back pay awarded bore

any relation whatsoever to overtime in the case of individ-

ual employees. .

Most important, the overtime provisions of the Wage

and Hour Law are not violated by a work schedule from

8:00 a.m. to 5:00 p.m. with an unpaid lunch period of one

hour, precisely the schedule established by respondent. If

for example, the union had agreed, in negotiations, to such

a work schedule, there would be no question of an FLSA

violation. However, the company lost at the original arbi-

tration because it unilaterally changed the work schedule.

8. The existence of this factual doubt as to precisely what

the award meant lends further support to the ‘federal policy of

not reviewing the merits of arbitration awards.

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16 Argument

The arbitrator sustained the union objection to the em-

ployer’s method of rescheduling employees’ workdays and

awarded back pay to compensate for this contract violation.

‘Like many back pay awards, the remedy was an attempt

to rectify a contract violation, not to compensate employees

for time actually worked. In this sense, then, the back pay

‘award is a fiction unrelated to actual overtime, for there is

no question that the employees only performed work forty

hours per week during thé relevant period. Respondent

did not pay for having forced its employees to work over-

time, which it did not do; it paid for its error in unilaterally

eliminating’ the coffee breaks and increasing the lunch

period. Only after these damages had been paid’ did peti-

tioner take the fictional back pay hours awarded by the

arbitrator, add them to the forty hours actually worked and

thereby assert a wage and hour law overtime violation.

It is undisputed that the arbitrator found that re-

spondent had violated the labor agreement with petitioner’s

union when it unilaterally eliminated two paid coffee breaks

and substituted an equal amount of unpaid lunch time in

the work schedule (R. 67a). It is equally clear that the

arbitrator had before him the contract provisions which

required time and one-half pay for overtime in excess of

forty hours per week or eight hours per day (R. 46a). The

arbitrator was aware of the fact that the overtime pro-

vision made a specific exception for ‘‘lunch periods.’’ (Id.).

From these facts, it is simply impossible for a court to

determine that the arbitrator’s award allowing back-pay

damages to petitioner and his fellow grievants was based

on a determination by the arbitrator not merely that re-

spondent had violated the agreement in unilaterally rear-

ranging the work schedule, but that employees under the

rearranged schedule had worked an stead seed day or a 421%

hour week.

ait

Argument 17

C. Where, as Here, the Union Demanded Arbitration

of the Overtime Pay Issue on Petitioner’s Behalf,

Petitioner Cannot Now Disclaim a Part of Arbi-

trator’s Award and Relitigate the Issue as an

FLSA Claim.

The union throughout all stages of the initial court

proceedings to compel arbitration, the arbitration itself,

and the supplemental arbitration vigorously espoused the

position that overtime pay is an arbitrable issue. The ecurt

of appeals properly concluded that the strong judicial and

congressional policy favoring final resolution of disputes

through arbitration would be severely weakened if the

union were permitted—through the artifice of a class action

brought by one of its inembers—to disavow a portion of the

results of the arbitration it initiated simply because it now

seeks more than the arbitrator awarded.

In Alexander v. Gardner-Denver, 45 U. S. 36, 49 n. 10-

(1974), this Court indicated it was not primarily concerned

with the labels applied to various traditional legal and

equitable doctrines of estoppel, election of remedies, waiver,

or res judicata, in balancing the statutory right of access

to the courts under Title VII against the policy favoring

binding arbitration. Rath.~, the Court’s concern was with

the basie public policies behind Title VII and with funda-

mental concepts of fairness and due process. Accordingly,

rather than pursue a detailed legalistic discussion of these

procedural concepts we will concentrate on the basic notion

of fairness in the context of this case.

Petiticner contends that the issue here is one of direct

access to the courts to enforce statutory rights, citing U. 8.

Bulk Carriers, Inc. v. Arguelles, 400 U. S. 351 ( 1971), and

other cases in support of his position (Petition for Certi-

orari, p. 13). However, those cases dealt with a very dif-

ferent question, the right of an employee to bypass the

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18 Argument

contractual grievance and arbitration procedure and sue

initially in federal court. The Court’s holding in those

cases afforded the employee the right to choose which path

to follow, either the arbitration or statutory remedy.

Here, petitioner does not seek the right to elect rem-

edies or choose between forums. He chose arbitration and

now asks this Court to overturn the decades of decisions

favoring final and binding arbitration of labor disputes and

to establish a new right applicable only to the employee--

the right of successive remedies.

Moreover, petitioner’s claim of a right of direct accesr

to the courts is belied by the record. Any claim petitioner

has is derived from and based upon the arbitrator's de-

cision.” Only after petitioner and his fellow grievants had

obtained what he interprets as the favorable arbitrator’s

decision on the hours for which back pay should be awarded

could they seriously maintain this additional claim under

the FLSA for overtime rates. They have used the portion

of the arbitrator’s decision favorable to them as a bootstrap

to pull themselves within the purview of the Wage and

Hour Law and thereby obtain federal court jurisdiction.”

9. Petitioner's contention that his rights under the FLSA

“are in ne way dependent upon or derived from a collective

bargaining agreement” (Petition for Certiorari, p. 14) lacks

substance. Certainly, coffee breaks are not granted by law;

they are either granted or withheld, and paid or unpaid pursuant

to specific terms in the labor agreement, or based upon past

pattern and practice in the shop. It is difficult to envision a

subject more closely linked to the “law of the shop” and there-

fore within the specialized competence of arbitrators” than coffee

breaks. See United Steelworkers of America v. Warrior & Gulf

Navigation Co., supra, 363 U. S. at 581, 583.

10. Even if the arbitrator had erred—and it seems clear that

he did not err—that fact alone is not enough to require that the

courts provide an additional forum in which petitioner and his

fellow grievants may relitigate the overtime pay issue. The

judicial scope of review of arbitration awards is extremely nar-

row. Even an error on the part of the arbitrator in his inter-

pretation of the law is not a ground for setting aside an award.

Argument 19

Acceptance of petitioner’s arguments would result in

the fundamentally unfair and untenable position that com-

pulsory labor arbitration would only bind the employer.

If an employee or union has failed to obtain all that was

sought at arbitration, he or it could have a “second bite

at the apple’’ merely by recasting the dispute in terms of

some federal statute. Increasingly, rights afforded by fed-

eral statutes duplicate contractual rights—in wages, hours,

occupational health and safety, discrimination, pension,

health and welfare. If Gardner-Denver applies to this and

every case in which a grievant can find a statutory claim to

parallel his contractual claim, it has rendered the arbitra-

tion clause in labor agreements virtually meaningless, de-

spite the strong federal policy favoring final and binding

arbitration of labor disputes.

Petitioner contends he should have the right to hold

the federal law claim in reserve and force arbitration of

the contractual right. If he had been totally successful at

arbitration, he could have pled finality of an arbitration

award to any subsequent challenge by respondent. Since,

however, he failed to achieve all he asked for, he now claims

the right to disregard so much of the arbitrator’s award as

displeases him and relitigate that part of the case in court.

10. (Cont’d.)

Office of Supply, Govt. of Republic of South Korea v. New York

Navigation Co, 469 F. 2d 377, 379 (2d Cir. 1972): see also San

Martine Compania de Navegazian v. Saquenay Terminal Ltd.,

293 F. 2d 796, 801 (9th Cir. 1961).

Many courts have enunciated the principle that an arbitra-

tion award will not be reviewed on the merits or vacated “even

though the arbitrator may have made, in the eyes of judges,

errors of fact and law unless .. . [the award] compels the

violation of law or conduct contrary to accepted public policy.”

Washington-Baltimore Newspaper Guild, Local 35 v. Washing-

ton Post Co., 442 F. 2d 1234, 1239 (D. C. Cir. 1971): see Gulf

States Telephone Co. v. Local 1692, International Brotherhood

of Electrical Workers, 416 F. 2d 198, 201 (5th Cir. 1969) ; Dallas

Typographical Union No. 173 v. A. H. Belo Corp., 372 F. 24

577, 581 (5th Cir. 1967).

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20 Conclusion

But the arbitrator’s award is a single award which deserves

the respect to which labor arbitration awards are entitled.

Respondent's position is contrary to the well established

principle favoring arbitration of labor disputes. The de-

cision of the court of appeals so clearly sets forth these

long-standing principles rejecting petitioner’s novel conten-

tion, that it does not merit review by this Court.

CONCLUSION.

For the foregoing reasons, the petition for a writ of

certiorari to the United States Court of Appeals for the

Tenth Cireuit should be denied.

Respectfully submitted,

Berxarp G. Secau

James D. Crawrorp

1719 Packard Building

Philadelphia, Pa. 19102

Attorneys for Respondent.

Brenna C. Kinsey

Scunaper, Harrison,

Seca. & Lewis

Philadelphia, Pa. 19102

Peter H. Houme, Jr.

Hoime Roserts & Owen

Denver, Colorado 80202

Of Counsel.