Opposition Brief — Creo Products Inc. v. Dainippon Screen Manufacturing Co., Ltd.

ae ee

Supram: Cr urt uS j

~ i ha iE ED |

No. 01-239 | AUG 2 2001 |

In The | CLERK

Supreme Court of the United States —

¢

UNITED STEELWORKERS OF AMERICA,

AFL-CIO-CLC, and UNITED STEELWORKERS

OF AMERICA, LOCAL 14398,

Petitioners,

V.

APPALACHIAN REGIONAL HEALTHCARE, INC.,

Respondent.

*

On Petition For A Writ Of Certiorari

To The United States Court Of Appeals

For The Sixth Circuit

¢

‘BRIEF IN OPPOSITION TO PETITION

FOR A WRIT OF CERTIORARI

*

MicHaeL W. Hawkins

Counsel of Record

MicHaAet A. MANZLER

Dinsmore & SHOHL LLP

1900 Chemed Center —

255 East Fifth Street

Cincinnati, Ohio 45202

(513) 977-8200

Counsel for Respondent

Appalachian Regional Healthcare, Inc.

COCKLE LAW BRIEF PRINTING CO, (800) 225-6964

OR CALL COLLECT (402) 342-2831

QUESTION PRESENTED

Should a petition for a writ of certiorari be denied

when the decision of the Court of Appeals below,

following well-established law upon which there is no

circuit split, merely affirmed the vacatur of a labor

arbitration award because the arbitrator ignored the

plain language of the governing collective bargaining

agreement and instead imported the arbitrator’s own

notions of industrial justice, thereby failing to draw

the essence of the arbitration award from the collec-

tive bargaining agreement?

ii

CORPORATE DISCLOSURE STATEMENT

Appalachian Regional Healthcare, Inc. has no parent

corporation, nor do any publicly-held companies own ten

percent or more of the stock of Appalachian Regional

Healthcare, Inc.

ill

TABLE OF CONTENTS

Page

QUESTION PRESENTED......................0005. i

CORPORATE DISCLOSURE STATEMENT .......... ii

ee Bes oe. I ee iii

TABLE OF AUTHORITIES.................. Perey Vv

STATEMENT OF THE CASE....................... 1

A. THE GRIEVANTS WERE DISCHARGED AFTER

THEY REPEATEDLY REFUSED DIRECT

ORDERS TO CONTINUE WORKING PAST THE

END OF THEIR REGULAR SHIFT............. 1

B. THE RELEVANT PROVISIONS OF THE COL-

LECTIVE BARGAINING AGREEMENT......... 3

C. THE ARBITRATION AWARD IGNORED

EXPLICIT CONTRACT PROVISIONS AND

IMPOSED LIMITATIONS UPON THE HOSPI-

TAL WHICH WERE NOT AGREED UPON BY

THE PARTIES TO THE AGREEMENT. THE DIS-

TRICT COURT AND THE SIXTH CIRCUIT

COURT OF APPEALS PROPERLY VACATED

THE AWARD BECAUSE IT IMPOSED THE

ARBITRATOR’S “OWN BRAND OF INDUS-

TRIAL JUSTICE” RATHER THAN INTERPRET-

ING THE PARTIES’ AGREEMENT............. 5

A. THE ARBITRATION AWARD WAS PROPERLY

VACATED IN ACCORDANCE -WITH CLEAR

LEGAL PRECEDENT ESTABLISHED BY THIS

COURT. RATHER THAN INTERPRETING THE

TERMS OF THE GOVERNING COLLECTIVE

BARGAINING AGREEMENT, THE ARBITRA-

TOR IGNORED ITS PLAIN LANGUAGE AND

INSTEAD IMPOSED HIS OWN BRAND OF

INDUSTRIAL JUSTICE, THEREBY FAILING TO

DRAW THE ESSENCE OF THE AWARD FROM

BRO PAGIRMEOMIUE 65 occ sccccecsccoscccccsucece 8

iv

TABLE OF CONTENTS - Continued

Page

B. REMAND TO THE ARBITRATOR FOR FUR-

THER PROCEEDINGS IS UNNECESSARY

BECAUSE THE COURT BELOW DID NOT

REPLACE THE ARBITRATOR’S FACTUAL

DETERMINATIONS WITH ITS OWN OR

DIRECT JUDGMENT FOR THE HOSPITAL, BUT

RATHER SIMPLY VACATED THE ARBITRA-

po oe Ferrer rey err rerrr es eee rere 16

C. NO PURPOSE WOULD BE SERVED BY THE

COURT GRANTING THE PETITION ON THE

INHERENT MANAGEMENT RIGHTS QUES-

TION PRESENTED BY THE UNION BECAUSE

THE COLLECTIVE BARGAINING AGREEMENT

ITSELF EXPRESSLY RESERVED ALL MANAGE-

MENT RIGHTS TO THE HOSPITAL EXCEPT AS

OTHERWISE LIMITED BY A SPECIFIC TERM

ee | te ere rrr rrr er rrr re 18

D. THIS ACTION WAS BROUGHT AND HAS

BEEN RESOLVED EXCLUSIVELY UNDER SEC-

TION 301 OF THE LABOR MANAGEMENT

RELATIONS ACT GOVERNING LABOR ARBI-

TRATIONS. THE UNION’S ATTEMPT TO

INJECT THE NEW, UNRELATED ISSUE OF THE

STANDARD FOR VACATUR UNDER THE FED-

ERAL ARBITRATION ACT, 9 U.S.C. § 10(a),

GOVERNING COMMERCIAL ARBITRATIONS,

SOO We PU RIP cs Si cdc kcncenesssusaes 22

ee 8 eT eer Perret TT OPrercryT ere 26

Vv

TABLE OF AUTHORITIES

Page

Cases

Anderman/Smith Operating Co. v. Tennessee Gas

Pipeline Co., 918 F.2d 1215 (5th Cir. 1990) ......... 25

Appalachian Regional Healthcare, Inc. v. United Steel-

workers of America, 245 F.3d 601 (6th Cir. 2001).... 22

Cardinale v. Louisiana, 394 U.S. 437 (1969) ........... 23

Delta Air Lines, Inc. v. August, 450 U.S. 346 (1981) .... 23

Dobbs, Inc. v. Local 614, Internat’! Bhd of Teamsters,

ee ee ke. ee er re 9

Dreis & Krump Mfg. Co. v. Internat’l Ass’n of Machi-

nists & Aerospace Workers, 802 F.2d 247 (7th Cir.

1986) Liki NAL ARAM. a Aan bk hoe aT new Ae 20, 21

Folger Coffee Co. v. United Auto Workers, Local 1805,

ie eT Be Be ee.) re 20, 21

Eastern Associated Coal Corp. v. United Mine

Workers of America, District 17, 531 U.S. 57 (2000) ..... 9

Edward Hines Lumber Co. v. Lumber & Sawmill

Workers, 764 F.2d 631 (9th Cir. 1985) ........... 20, 21

Inter-City Gas Corp. v. Boise Cascade Corp., 845 F.2d

oe BS | ee rer re ee err 24, 25

Jenkins v. Prudential-Bache Securities, Inc., 847 F.2d

ee ge ey Pree re ere. reer nro oe 25

Major League Baseball Players Association v. Garvey,

532 U.S. __, 149 L.Ed.2d 740, 121 S.Ct. 1724

2s Pre Seer eee ves Pree re er ma re een 16, 17, 18

Michigan Mutual Ins. Co. v. Unigard Security Ins.

0. 46 FOG GAG (90 Cie, 1995) oo isc ctcas 25

vi

TABLE OF AUTHORITIES - Continued

Page

Mitsubishi Motor Corp. v. Soler Chrysler-Plymouth,

RTD Tie: Ce Cee nc ae san bad cnepdedsbbettxidsvecs 10

Moses H. Cone Memorial Hospital v. Mercury Con-

I, ee Sees Bs 3 A knb.0550ctkeesteccesye 10

National Gypsum Co. v. Chemical Workers, 147 F.3d

Oe Ge Gs NOR cacdan inden cencccdccdnsvencens 19, 20

NCR Corp., E&M-Wichita v. Internat’l Ass'n of

Machinists & Aerospace Workers, 906 F.2d 1499

CRE Ce Re esd btncxosedvddasensdecnctouces 20, 21

Sisson v. Ruby, 497 U.S. 358 (1990) .............4-4.. 23

Southland Corp. v. Keating, 465 U.S. 1 (1984)......... 10

Textile Workers Union of America v. Lincoln Mills,

Be Oe UE COMO D host ocinsecedksscccccdsctecesass 23

United Paperworkers Internat’! Union v. Misco, Inc.,

ee OND Ns cdtcrwencedshescdacses 8, 9, 17, 24

United States Steel Corp. v. Nichols, 229 F.2d 396

Se Ge SON cs dceccsnew sep eccncdtedeccuencsacees 11

United Steelworkers v. Enterprise Wheel & Car Corp.,

Be We BO CRON oe ccc dickies ecicisesesuees 7, 8, 9, 24

United Steelworkers v. Warrior & Gulf Navigation

Cah, BED CB. SIS CEG es cc cicccscccsscacsces 10, 11, 12

Yusuf Ahmed Alghanim & Sons v. Toys “R” Us, Inc.,

See Pee OO GH GS BP OED a ccs pcsdcicsicacsseena 25

STATUTES

PS MOOD Fs dn anaddccccccssencevess 22, 24, 25, 26

Be Tes Ae BUD £500. 0h 6 0400600 ceuddasineensesceas 20

Bk Sd ef! Pe PorPrerr rc rey ee Ter 1, 6, 8, 22

eT

STATEMENT OF THE CASE

This matter was a routine case involving a labor

arbitration award (the “Award”) that was vacated

because it patently failed to “draw its essence” from the

governing collective bargaining agreement. Applying

long-established, consistently-followed law as set forth

by this Court, the district court and the court of appeals

below properly vacated the Award pursuant to Section

301 of the Labor Management Relations Act, 29 U.S.C.

§ 185(a) (“Section 301”), because the arbitrator ignored

the plain language of the collective bargaining agreement

between the parties (the “ Agreement”) and instead

imported the arbitrator’s own notions of industrial jus-

tice, thereby failing to draw the essence of the Award

from the Agreement. The Union’s attempt in its Petition

for a Writ of Certiorari to inject new and irrelevant issues

into what has been a relatively simple and straightfor-

ward proceeding should be rejected.

A. THE GRIEVANTS WERE DISCHARGED

AFTER THEY REPEATEDLY REFUSED

DIRECT ORDERS TO CONTINUE WORKING

PAST THE END OF THEIR REGULAR SHIFT.

The relevant facts were uncomplicated and undis-

puted. Respondent Appalachian Regional Healthcare,

Inc. (“ARH” or “the Hospital”), a not-for-profit charitable

- corporation under the laws of the Commonwealth of

Kentucky, operates several hospitals and health care facil-

ities in eastern Kentucky and West Virginia, including a

hospital located in South Williamson, Kentucky, where

the relevant events transpired. (Pet. App. at 1a) Peti-

tioners, the United Steelworkers of America, AFL-CIO-

CLC, and its Local 14398 (collectively, the “Union”), rep-

resent certain ARH employees at the South Williamson

hospital pursuant to a collective bargaining agreement

(the “Agreement”) governing the terms and conditions of

employment for employees in the bargaining unit. (Id. at

la-2a, 26a-30a)

On December 30, 1997, three bargaining unit

employees, Chris Adkins, Steven Mahon and Lamar

Thomas (the “Grievants”), who had been scheduled to

work their usual part-time shift from 4:30 p.m. to 8:30

p-m., refused a supervisor’s direct order to “stay on their

machines” beyond 8:30 p.m. (Pet. App. at 2a) Without

offering a reason as to why they would not remain, the

Grievants refused and walked off the job. (Id.) The Griev-

ants received a “Written Record of Verbal Warning” the

next day for insubordination and violation of ARH’s

Code of Ethics. The Grievants did not challenge this

discipline. (Id.)

Less than a week later, on January 2, 1998, a Hospital

supervisor again instructed the Grievants to continue

working past 8:30 p.m. based on the supervisor’s deter-

mination that “additional work was required.” (Pet. App.

at 2a, 21a) The Grievants again refused their supervisor’s

instruction and walked off the job without offering any

excuse or reason as to why they did not wish to work

past the end of their regularly-scheduled shift. (Id.) The

Hospital subsequently suspended and, on January 8,

1998, terminated the Grievants for insubordination and

violation of ARH’s “Code of Ethics” for abandoning their

———— ee

jobs in disregard of a direct order from their supervisor.

(Id.)

Each of the three Grievants subsequently filed a

grievance over his discharge and, pursuant to the griev-

ance and arbitration procedures of the Agreement, the

matters jointly proceeded to arbitration on October 13,

1998. (Pet. App. at 2a-3a)

B. THE RELEVANT PROVISIONS OF THE COL-

LECTIVE BARGAINING AGREEMENT.

Article XLII of the Agreement, entitled “Management

Rights,” states that “Management of the Hospital

includes the rights, among others, of hiring, discharging,

and directing the working force, and of establishing

reasonable policies in connection therewith, and all man-

agement rights are vested exclusively in the Hospital

and shall not be abridged by the Union. However, .. . any

[management] policy shall not abridge any term, provi-

sion or condition of this contract.” (Pet. App. at 29a)

(emphasis added). Thus, by the plain language of the

Agreement, ARH reserved all management rights except

as specifically limited by a particular term of the Agree-

ment.

Article XV of the Agreement, “Hours of Work and

Work Week,” which sets forth bargaining unit employees’

entitlement to overtime pay, establishes in Section A that

the “basic work day” for all employees shall be eight

hours per day and the “basic work week” shall be 40

hours per week, and continues in Section B that “[h]ours

worked in excess of the basic work day (8 hours) or the

basic work week (40 hours) shall be paid at the rate of

time and one-half the regular straight time rate.” (Pet.

App. at 26a-27a) Settion E of Article XV reinforces the

management rights provision cited above by emphasizing

the parties’ understanding that: “The provisions of this

Article are intended only to provide a basis for determin-

ing the number of hours of work for which an Employee

shall be entitled to be paid at overtime rates and shall not

be construed as a guarantee to such Employee of any

specific number of hours of work either per day or per

pay period or as limiting the right of the Hospital to fix

the number of hours of work, including overtime, either

per day or per pay period, for such Employee.” (Id. at

27a) Section D of Article XV further plainly states that

“Employees shall be expected to work overtime when

requested .... ” (Id.)

Article XXXIII of the Agreement provides a grievance

and arbitration procedure to address disputes or com-

plaints concerning the interpretation or application of the

contract’s provisions. (Pet. App. at 28a) Article XXXIII,

Section K of the Agreement specifically states that an

arbitrator selected by the parties to hear a grievance

“shall have no power to add to, subtract from, or modify

in any way, any terms of the Agreement, nor shall

he exercise any responsibility or function of the Hospital

iva

C. THE ARBITRATION AWARD IGNORED

EXPLICIT CONTRACT PROVISIONS AND

IMPOSED LIMITATIONS UPON THE HOSPI-

TAL WHICH WERE NOT AGREED UPON BY

THE PARTIES TO THE AGREEMENT. THE

DiSTRICT COURT AND THE SIXTH CIRCUIT

COURT OF APPEALS PROPERLY VACATED

THE AWARD BECAUSE IT IMPOSED THE

ARBITRATOR’S “OWN BRAND OF INDUS-

TRIAL JUSTICE” RATHER THAN INTER-

PRETING THE PARTIES’ AGREEMENT.

The arbitration hearing primarily revolved around

the factual dispute of whether or not the Grievants had

been given a direct order to continue working past the

end of their shift. In the Award, issued on December 11,

1998, the arbitrator explicitly rejected the Union’s conten-

tion that the Grievants had been confused about whether

they were to stay on the job or could go home, finding

that “[a] direct order to continue [to] work was issued on

both occasions.” (Pet. App. at 2a, n. 1, 22a) Neither this

nor any other factual determination by the arbitrator has

ever been challenged by either party. The arbitrator none-

theless ignored the express, unambiguous provisions of

the Agreement set forth above, which recognize that ARH

retained all management rights to “direct[] the work

force” and “fix the number of hours of work,” and sus-

tained the grievances, ordering the Hospital to reinstate

the three Grievants with back pay on the sole basis that

“[t]here is no provision permitting the Employer to

require an employee to work more than their [sic] regular

scheduled part-time hours.” (Jd. at 24a)

On February 4, 1999, the Hospital filed a complaint to

vacate the arbitrator’s decision pursuant to Section 301 of

the Labor Management Relations Act, 29 U.S.C. § 185(a),

in the United States District Court for the Eastern District

of Kentucky. (Pet. App. at 4a) The Union counterclaimed

for enforcement of the Award. Following briefing on

cross motions for summary judgment, the district court

granted the Hospital’s motion on November 2, 1999, find-

ing that the Award failed to draw its essence from the

Agreement because:

The collective bargaining agreement clearly

establishes Appalachjan’s right to require

employees to work overtime. This insures that

patients are not put at risk when a particular

shift is understaffed. The rights to management

of employees’ work schedules is unambiguously

vested in Appalachian under this Agreement.

The arbitrator’s decision to reinstate the dis-

charged employees, after Appalachian exercised

its rights under the agreement, must be

reversed.

(Pet. App. at 16a) Noting the basic principles, long-ago

articulated by this Court, that arbitrators are without

authority to disregard or modify plain and unambiguous

contract provisions (both as a matter of law and under

the specific language of Article XXXIII, Section K of the

Agreement here), and that a collective bargaining agree-

ment need not lay out specific guidelines that indicate

what an employer is “permitted” to do to manage its

business or direct its workforce, but rather an employer is

free to manage except as specifically prohibited by a

collective bargaining agreement (again, both as a general

proposition and pursuant to the specific language of Arti-

cle XLII of the Agreement), the district court ruled that

ARH “should not be subject to an arbitrator’s award

altering the collective bargaining agreement.” (Id. at 17a;

see also, Pet. App. at 28a-29a)

The United States Court of Appeals for the Sixth

Circuit affirmed. Properly noting that “[rJeview of an

arbitrator’s award is necessarily limited” and that a

“reviewing court will not replace an arbitrator’s construc-

tion of the Agreement with its own interpretation,” the

Sixth Circuit found that the Award was properly vacated

because rather than interpreting the terms of the Agree-

ment, the arbitrator ignored them. (Pet. App. at 5a-7a)

While heeding this Court’s admonition that “courts must

accord an arbitrator’s decision substantial deference

because it is the arbitrator’s construction of the agree-

ment, not the court’s construction, to which the parties

have agreed,” the Sixth Circuit found that the Award

failed to “draw/[ ] its essence from the collective bargain-

ing agreement” and rather “serve[d] the arbitrator’s ‘own

brand of industrial justice’ ” because it “conflict[ed] with

express terms of the collective bargaining agreement”

and “impose[d] additional requirements that are not

expressly provided in the agreement.” (Id., citing United

Steelworkers of America v. Enterprise Wheel & Car Corp., 363

U.S. 593, 597 (1960). In summary:

The arbitrator created a limitation on ARH’s

management rights that is not found in the

Agreement. In doing so, the arbitrator’s decision

failed to draw its essence from the Agreement.

(Id. at 9a) The Sixth Circuit subsequently denied the

Union’s petition for a rehearing en banc on May 10. 2001.

(Id. at 25a)

REASONS FOR DENYING THE PETITION

A. THE ARBITRATION AWARD WAS PROPERLY

VACATED IN ACCORDANCE WITH CLEAR

LEGAL PRECEDENT ESTABLISHED BY THIS

COURT. RATHER THAN INTERPRETING

THE TERMS OF THE GOVERNING COLLEC-

TIVE BARGAINING AGREEMENT, THE

ARBITRATOR IGNORED ITS PLAIN LAN-

GUAGE AND INSTEAD IMPOSED HIS OWN

BRAND OF INDUSTRIAL JUSTICE, THEREBY

FAILING TO DRAW THE ESSENCE OF THE

AWARD FROM THE AGREEMENT.

Vacatur of the arbitrator’s Award in this matter was

proper and correct under the well-established, undisputa-

ble legal principles articulated by this Court. A labor

arbitration award must be vacated under Section 301 of

the Labor Management Relations Act, 29 U.S.C. § 185(a),

when the award fails to “draw its essence” from the

controlling collective bargaining agreement but instead

dispenses the arbitrator’s “own brand of industrial jus-

tice.” Enterprise Wheel, supra, 363 U.S. at 596-97. An award

fails to draw its essence from the labor agreement when

the arbitrator “ignore[s] the plain language of the con-

tract.” United Paperworkers Internat’! Union v. Misco, Inc.,

484 U.S. 29, 38 (1987). There is no conflict among the

circuit courts of appeals on this universally recognized

standard. Because the lower courts merely applied these

long established principles to the Award at issue, no

important purpose would be served by this Court grant-

ing the Union’s Petition here.

Judicial review of an arbitrator’s award is of course

limited. “As long as the arbitrator’s award ‘draws its

essence from the collective bargaining agreement,’ and is

not merely ‘his own brand of industrial justice,’ the

award is legitimate.” Misco, supra, 484 U.S. at 36, citing

Enterprise Wheel, supra, 363 U.S. at 597; see also, Eastern

Associated Coal Corp. v. United Mine Workers of America,

District 17, 531 U.S. 57, 62 (2000). Accordingly, the Sixth

Circuit in its decision below correctly recognized that:

“Review of an arbitrator’s award_is necessarily limited. A

reviewing court will not replace an arbitrator’s construc-

tion of the Agreement with its own interpretation.” (Pet.

App. at 5a)

Nevertheless, it is the arbitrator’s interpretation of the

agreement for which the parties have bargained, and thus,

“[t]he arbitrator may not ignore the plain language of the

contract.” Misco, supra, 484 U.S. at 36, citing Enterprise

Wheel, supra, 363 U.S. at 599. See also, Dobbs, Inc. v. Local

614, Internat’! Bhd of Teamsters, 813 F.2d 85, 86 (6th Cir.

1987) (“the arbitrator is confined to the interpretation and

application of the collective bargaining agreement, and

although he may construe ambiguous contract language,

he is without authority to disregard or modify plain and

unambiguous provisions.”) (citations omitted). Moreover,

the governing Agreement itself specifically provides that

an arbitrator selected by the parties to hear a grievance

“shall have no power to add to, subtract from, or modify

in any way, any terms of the Agreernent, nor shall

he exercise any responsibility or function of the Hospital

.... ” See Article XXXIII, Section K (Pet. App. at 28a).}

1 The Union has emphasized in its Petition that judicial

inquiry under Section 301 must be strictly confined to the

question of whether the parties “agree[d] to give the arbitrator

10

In the instant matter, the Award was properly

vacated because, first, the arbitrator imported a new lim-

itation which is nowhere contained in the Agreement for

which the parties had bargained. The Agreement explic-

itly preserves to the Hospital all management rights

except as limited by another term of the Agreement. See

Article XLII, Section A (Pet. App. at 29a) Neither the

arbitrator nor the Union ever pointed to any provision

anywhere in the Agreement limiting the Hospital’s other-

wise exclusive management rights with respect to part-

time employees.? In fact, there is_no such limitation.

Therefore, the Award was properly vacated because |

instead of following the plain language of the Agreement, |

it invented a new, conflicting provision.

The arbitrator’s failure to follow the plain language

of the Agreement is highlighted by his clearly fallacious

reasoning that because “there is no provision permitting

the power to make the award he made.” (Petition at 13, 14,

quoting United Steelworkers v. Warrior & Gulf Navigation Co., 363

U.S. 574, 582 (1960)). The Hospital heartily agrees and, as

discussed herein, it is patent that the arbitrator here exceeded

his powers because he ignored the plain language of the

Agreement. The series of cases that the Union went on to cite,

however, such as Moses H. Cone Memorial Hospital v. Mercury

Construction, 460 U.S. 1 (1983), Southland Corp. v. Keating, 465

WX _U.S. 1 (1984), and Mitsubishi Motor Corp. v. Soler Chrysler-

Plymouth, 473 U.S. 614 (1985), all dealt with the issue of

arbitrability, i.e., whether a particular grievance fell within the

scope of an arbitration provision. Because arbitrability has

never been an issue in the instant proceedings, such cases are

wholly inapposite here

2 Nor did the arbitrator or the Union identify any past

practice, custom, or external law creating any such limitation.

11

the employer to require an employee to work more than

their regular[ly] scheduled part-time hours,” the Hospital

is therefore prohibited from doing so. (Pet. App. at 23a)

This backwards conclusion failed to draw its essence

from the Agreement for at least two independent reasons.

First, this conclusion was premised upon a funda-

mentally flawed notion - that an employer must be

expressly “given” the power, through a provision of a

collective bargaining agreement, to direct its employees

when to work. It is a bedrock principle of labor law that

an employer inherently begins with all rights of manage-

ment and is free to operate its business and manage,

direct and schedule its employees except as otherwise lim-

ited by the governing collective bargaining agreement,

past practice or external law. Warrior & Gulf, supra, 363

U.S. at 583; see also, United States Steel Corp. v. Nichols, 229

F.2d 396, 399 (6th Cir. 1956). In Warrior & Gulf, this Court

recognized that:

Collective bargaining agreements regulate or

restrict the exercise of management functions;

they do not oust management from the perfor-

mance of them. Management hires and fires,

pays and promotes, supervises and plans. All of

these are part of its function, and absent a col-

lective bargaining agreement, it may be exer-

cised freely except as limited by public law and

by the willingness of employees to work under

the particular unilaterally imposed conditions.

Id., 363 U.S. at 583 (emphasis added).3

3 In the proceedings before the lower courts, the Union

disputed this long-established principle that employers begin

12

Second — and more importantly, for purposes of the

instant proceeding - even assuming, arguendo, that an

employer does not have any inherent ownership right to

manage its business and direct its employees, as the

Union illogically continues to argue, there is in this case

an explicit provision of the Agreement - Article XLII,

Section A - which unequivocally confirms that “all man-

agement rights are vested exclusively in the Hospital,”

specifically stating that such rights include “directing the

working force.” (Pet. App. at 29a)

Faced with this explicit contractual reservation of all

management rights to the Hospital, the Union below

sought to justify the arbitrator’s award as “contract inter-

pretation” by relying upon the qualifying limitation in

the same provision which states that “any [management]

policy shall not abridge any term, provisions or condition

of this contract.” (Id.) The fatal flaw in this argument is

that the Agreement contains no limiting “term, provision

with all rights to direct and manage their business — basically

just the inherent rights of ownership - and the corollary that,

upon recognition of a labor union, all such rights remain with

the employer except as specifically limited or delegated in the

collective bargaining agreement. Not surprisingly, the Union

cited no authority in support of its argument. The Union did

quote, out of context, language from Warrior & Gulf that simply

recognized that the “past practice” of the workplace may also,

in addition to the specific provisions of the contract, create

limitations on an employer’s pre-existing management rights,

and therefore the grievance at issue in Warrior & Gulf, involving

contracting out, was considered arbitrable. Id., 363 U.S. at 581-83.

That principle, with which the Hospital has no quarrel, is

irrelevant here because the Award did not purport to rest its

conclusion that the Hospital lacked the right to set its

employees’ hours upon any past practice.)

ia ad

13

or condition” stating that the Hospital may not direct

part-time employees to continue working beyond the

conclusion of their regularly-scheduled shift. In the

absence of such a provision, the arbitrator acted beyond

his authority in unilaterally creating one in derogation of

plain contract language prohibiting him from doing so.

Tellingly, the Award did not purport to cite any existing

provision of the Agreement (nor any “past practice”) as

the source of the supposed limit on the Hospital's right to

set the hours its employees work and otherwise direct its

workforce. To the contrary, the arbitrator imported his

assumption that such a limitation existed unless the

Agreement affirmatively stated otherwise. The Award

therefore created an extra-contractual limitation in viola-

tion of the plain language of the Agreement, which is

exactly what an arbitrator may not do both under govern-

ing Section 301 law and under Article XXXIII, Section K

of this particular Agreement.

The Award also disregarded and directly contra-

dicted several other express terms included by the parties

in the Agreement. Specifically, Article XV, Section D of

the Agreement plainly recognizes that “Employees shall

be expected to work overtime when requested,” and Sec-

tion E of that same Article provides that:

The provisions of this Article are intended

only to provide a basis for determining the

number of hours of work for which an

Employee shall be entitled to be paid at over-

time rates and shall not be construed as a guar-

antee to such Employee of any specified number

of hours of work either per day or per pay

period or as limiting the right of the Hospital

to fix the number of hours of work, including

14

overtime, either per day or per pay period, for

such Employee.

(Pet. App. at 27a) (emphasis added). The arbitrator pro-

vided no “interpretation” of these unambiguous provi-

sions, but rather simply ignored their clear commands.

Thus, it was the exact words of Article XV — not the lower

courts’ substitution of their own “contract interpretation”

for that of the arbitrator, as the Union mistakenly con-

tends - which squarely prohibited the arbitrator's

implicit finding (and the Union’s explicit argument

below) that the “purpose” of Article XV was to “autho-

rize” the Hospital to require “overtime” work, but only

for full-time employees. Although Article XV twice

explicitly acknowledges the Hospital’s existing right to

require overtime, that right plainly originates not from

Article XV itself (as Section E makes clear) but rather

from (a) all employers’ inherent management rights and /

or (b) Article XLII’s specific reservation of same.*

* To the extent that the Award was, as the Union argued

below, purportedly based on Article XV’s overtime (pay)

provisions, it also failed to draw its essence from the Agreement

because it directly conflicted with terms that are expressly

contained therein. In addition to the Hospital’s inherent and

contractual exclusive right to direct the workforce discussed

above, Article XV, Section E of the Agreement explicitly

references “the right of the Hospital to fix the number of hours

of work ... either per day or per pay period ....” (Pet. App. at

27a) The provision does nst state that such right is limited in

any way. Had the Hospital ever agreed to exclude part-time

employees from the reach of its expansive right to direct and

schedule its employees, it seems safe to assume that the Union

certainly would have insisted on including that limitation in

this provision.

15

The Union argues in its Petition that the court of

appeals’ decision below is “pernicious” because it

“removies] from the arbitrator’s consideration whether a

labor agreement contains implied, as well as express|[,]

obligations.” (Petition at 15) This is simply wrong. The

point is, the arbitrator here never identified any restric-

tions, express or implied, on the Hospital's management

rights to direct and schedule its workforce (be those

rights inherent or as reserved by the express provisions

of the Agreement). Furthermore, even supposing,

arguendo, that the arbitrator had relied on some sort of

unidentified “implied” obligation, the Award still was

properly vacated because this hypothetical “implied”

provision would squarely conflict with the express,

unambiguous terms actually set forth in the Agreement

as discussed above. The arbitrator’s decision to ignore

these unambiguous provisions of the Agreement

exceeded the express limits placed on his authority in

Article XXXIII, Section K of the Agreement, which states

that an arbitrator selected by the parties to hear a griev-

ance “shall have no power to add to, subtract from, or

modify in any way, any terms of the Agreement, nor shall

he exercise any responsibility or function of the Hospital

.... ” (Pet. App. at 28a) The Award therefore was

correctly vacated in accordance with the undisputed gov-

erning legal principles.

16

B. REMAND TO THE ARBITRATOR FOR FUR-

THER PROCEEDINGS IS UNNECESSARY

BECAUSE THE COURT BELOW DID NOT

REPLACE THE ARBITRATOR’S FACTUAL

DETERMINATIONS WITH ITS OWN OR

DIRECT JUDGMENT FOR THE HOSPITAL,

BUT RATHER SIMPLY VACATED THE ARBI-

TRATOR’S AWARD.

In addition to the legal correctness of the lower

courts’ decisions based on well-established and non-con-

troversial legal principles, the Petition for a Writ of Cer-

tiorari should also be denied because none of the three

questions the Union purports to present has any bearing

on the issues that actually have been involved in this

matter. The questions the Union has presented in its

Petition are red herrings having little or nothing to do

with the mundane issues actually decided below. None of

the questions the Union presents is pertinent to, let alone

determinative of, the challenged decisions.

First, the Union urges the Court to reverse and

-remand the lower court’s decision based on the Court’s

recent per curiam decision in Major League Baseball Players

Association v. Garvey, 532 U.S. __, 149 L.Ed.2d 740, 121

S.Ct. 1724 (2001). ARH respectfully submits that Garvey

does not require such action, which would be a pointless

waste of judicial resources. In Garvey, unlike here, the

court of appeals rejected a labor arbitrator’s factual find-

ings, particularly those with respect to credibility, and

improperly substituted its own resolution of those dis-

puted factual issues for the arbitrator’s:

The substance of the Court’s discussion reveals

that it overturned the arbitrator's decision

17

because it disagreed with the arbitrator’s factual

findings, particularly those with respect to cred-

ibility. The Court of Appeals, it appears, would

have credited Smith’s 1996 letter, and found the

arbitrator’s refusal to do so at worst “irrational”

and at best “bizarre.” But even “serious error”

on the arbitrator’s part does not justify over-

turning his decision, where, as here, he is con-

struing a contract and acting within the scope of

his authority.

Id., 121 S.Ct. at 1728, quoting Misco, supra, 484 U.S. at 38.

Again referencing Misco, the Court emphasized that “the

arbitrator's ‘improvident, even silly, factfinding’ does not

provide a basis for a reviewing court to refuse to enforce

the award.” Id. The Court therefore found the Ninth

Circuit’s substitution of its own factual conclusions, and

direction of judgment in favor of Garvey rather than

remanding to the arbitrator for further factfinding,

improper under controlling Supreme Court precedent. Id.

at 1729, quoting Misco, supra, 484 U.S. at 40-41, n. 10.

In the instant matter, by contrast, the arbitrator nei-

ther construed the Agreement nor acted within the scope

of his limited authority under the Agreement’s plain lan-

guage. Nor did the lower courts merely substitute their

judgment for that of the arbitrator. Moreover, the court of

appeals neither displaced the arbitrator’s factual findings

nor directed judgment in favor of ARH; rather, it merely

vacated the Award, precisely as the Garvey Court

directed. Id. at 1728 (“the court should ‘simply vacate the

award, thus leaving open the possibility of further pro-

ceedings if they are permitted under the terms of the

agreement.’”) (citing Misco, supra, 484 U.S. at 40-41, n.

10). The Union here never sought “further proceedings,”

TF

18

nor has it identified any contractual basis for permitting

such proceedings. In fact, there was and is no use for

such proceedings because, unlike in Garvey, the court of

appeals did not dispute the arbitrator’s findings of fact

but rather vacated the Award for ignoring the plain lan-

guage of the Agreement and exceeding the arbitrator’s

expressly limited powers thereunder. ARH thus respect-

fully submits that Garvey does not require reversal or

remand here.

C. NO PURPOSE WOULD BE SERVED BY THE

COURT GRANTING THE PETITION ON THE

INHERENT MANAGEMENT RIGHTS QUES-

TION PRESENTED BY THE UNION BECAUSE

THE COLLECTIVE BARGAINING AGREE-

MENT ITSELF EXPRESSLY RESERVED ALL

MANAGEMENT RIGHTS TO THE HOSPITAL

EXCEPT AS OTHERWISE LIMITED BY A

SPECIFIC TERM OF THE CONTRACT. :

The Union next argues that “the circuit courts are

now split on the issue of whether the principle of

reserved management rights is, as a matter of law, part of

every collective bargaining agreement.” (Petition at 8)

The five cases cited by the Union (Petition at 9-12) pro-

vide no support for this assertion. In the first place, none

of the decisions cited truly involved the issue of “inher-

ent” management rights. Rather, as here, the cited deci-

sions all involved an arbitrator’s interpretation of an

express management rights clause contained in a collec-

tive bargaining agreement. Unlike in the case at bar,

however, in each of the cases cited, the arbitrator found

19

either (a) an explicit written provision of the labor con-

tract or (b) a past practice of sufficient consistency and

longevity, that limited the employer’s management rights

as set forth in the particular contractual clause.5 Here, on

the other hand, the arbitrator never identified any con-

tract provision (or past practice or external legal require-

ment) that limited the Hospital’s express contractual right

to direct the work force and schedule its employees as it

determined necessary on a day to day basis.

In National Gypsum Co. v. Chemical Workers, 147 F.3d

399 (5th Cir. 1998), for example, which involved the issue

of whether the employer had a contractual duty to bar-

gain with the union over a scheduling change (from

seven day work weeks to a maximum of six days, which

reduced the amounts of overtime earned by bargaining

unit members), neither the arbitrator nor the court even

addressed — let alone denied the existence of — the “inher-

ent” management rights of the company. The arbitrator

merely stated, uncontroversially, that management rights

are not boundless, but may be “expressly limited by the

written terms of [the] Agreement.” Id. at 405.6 The

> Incidentally, the courts of appeals in all of the cases cited

by the Union applied the same standard of review as did the

Sixth Circuit here. See, €.g.,. National Gypsum Co. v. Chemical

Workers, 147 F.3d 399, 403 (Sth Cir. 1998) (“arbitral action

contrary to express contractual provisions will not be

respected;” “If the arbitrator ignores or refuses to apply a

contractual provision that permitted the Company’s action, ‘the

arbitrator exceed[s] the express limitations of his contractual

mandate.’ ”).

© ARH has no quarrel with this Proposition, nor with the

related concept that a past practice, if sufficiently consistent,

agreed upon and long-standing, may be considered part of the

20

arbitrator in National Gypsum then found, however, unlike

here, that there were certain specific sections of the con-

tract, as well certain provisions of the National Labor

Relations Act (“NLRA”), 29 U.S.C. § 158(d), that imposed

upon the employer a duty to bargain with the union over

rules changes substantially affecting the terms and condi-

tions of work. Id. at 403-04. The court affirmed the arbi-

trator’s decision because - again, unlike here - the

arbitrator based his decision on the written terms of the

agreement: “[t]he arbitrator went to considerable lengths

to explain how his conclusion was grounded in the text of

the agreement.” Id. at 404.

All of the other decisions the Union cited involved

the contracting out of bargaining unit work, a discrete

area which directly involves the dictates of the NLRA. See

Folger Coffee'Co. v. United Auto Workers, Local 1805, 905

F.2d 108, 111 (5th Cir. 1990); Dreis & Krump Mfg. Co. v.

Internat’l Ass'n of Machinists & Aerospace Workers, 802 F.2d

247, 253-54 (7th Cir. 1986); NCR Corp., E&M-Wichita v.

Internat’l Ass'n of Machinists & Aerospace Workers, 906 F.2d

1499, 1501-02 (10th Cir. 1980); Edward Hines Lumber Co. v.

Lumber & Sawmill Workers, 764 F.2d 631, 633 (9th Cir.

1985). Like National Gypsum, supra, moreover, none of

these cases involved inherent management rights but

dealt instead with the extent to which either other con-

tract provisions, the NLRA, or established past practice

limited the company’s management rights as reserved by

collective bargaining agreement. As noted above, however,

neither of these principles come into play here because the

arbitrator identified no such contract term or past practice

supporting his decision.

21

a contract provision. See Folger Coffee, supra, 905 F.2d at

111 (because, pursuant to the NLRA, subcontracting can-

not undermine the continued existence or strength of a

recognized bargaining unit, “Article I [the union recogni-

tion clause of the agreement] therefore constitutes a lim-

itation upon the Company’s right to contract out.”); Dreis

& Krump, supra, 802 F.2d at 253-54 (similar; also reviewing

past practice regarding contracting out); NCR Corp.,

supra, 906 F.2d at 1501-02, 1504 n. 11, 1506 (arbitrator

construed recognition clause of contract versus ambig-

uous management functions clause to find, in light of

past practice and NLRA requirements, that recognition

clause prohibited the grieved subcontracting); Edward

Hines Lumber, supra, 764 F.2d at 633 (recognition clause of

contract, as well as past practice that was so well estab-

lished and long-standing as to become part of the con-

tract, barred contracting out all bargaining unit work).

In any event, regardless of the accuracy vel non of the

Union’s assertion of a “circuit split” concerning inherent

management rights, the decisions below in the instant

matter did not depend on this proposition alone because

the Agreement also contained, in Article XLII, Section A,

an express contractual reservation of all management

rights to ARH except as otherwise specifically limited by

a term of the Agreement. (Pet. App. at 29a) The Union

attributes to the court of appeals below the view that,

once the arbitrator found that there was no contract pro-

vision “permitting” the Hospital to require an employee

to work past his regular shift (a conclusion which, as

discussed above, simply ignored the Agreement'’s plain

language), the arbitrator was constrained to hold that the

right to schedule such work was inherently reserved to

22

the Hospital. (Petition at 9) This reasoning is only half

correct, however, because the court of appeals correctly

observed that such management rights were not only

inherently, but also expressly - per Article XLII -

reserved to the Hospital. See Appalachian Regional Health-

care, Inc. v. United Steelworkers of America, 245 F.3d 601,

605-06 (6th Cir. 2001) (Pet. App. at 6a-9a). Accordingly,

even if the inherent management rights principle were to

be taken out of the picture entirely, it would not result in

reversal of the lower courts’ decisions here. Thus, it

would not be a productive use of the Court’s time and

resources to address this nondispositive issue.

D. THIS ACTION WAS BROUGHT AND HAS

BEEN RESOLVED EXCLUSIVELY UNDER

SECTION 301 OF THE LABOR MANAGE-

MENT RELATIONS ACT GOVERNING

LABOR ARBITRATIONS. THE UNION’S

ATTEMPT TO INJECT THE NEW, UNRE-

LATED ISSUE OF THE STANDARD FOR

VACATUR UNDER THE FEDERAL ARBITRA-

TION ACT, 9 U.S.C. § 10(a), GOVERNING

COMMERCIAL ARBITRATIONS, SHOULD BE

REJECTED.

Finally, the Union hyperbolically claims that this case

involves important issues of federal arbitration law and

dramatically asserts that “[t]he time has come for this

Court to harmonize the ‘draws its essence’ test for labor

arbitration awards under Section 301 [of the Labor Man-

agement Relations Act, 29 U.S.C. § 185(a)] with the [Fed-

eral] Arbitration Act’s grounds for vacating arbitration

awards contained in [9 U.S.C.] Section 10(a).” (Petition at

23

15) This expansive invitation should be declined for a

number of reasons.

First, this issue was never raised, let alone addressed,

at any stage of the proceedings below. It should be

rejected on that ground alone. See, e.g., Delta Air Lines,

Inc. v. August, 450 U.S. 346, 362 (1981) (“Although defen-

dant’s petition for certiorari presented the question of the

District Judge’s abuse of discretion in denying defen-

dant’s costs under Rule 54(d), that question was not

raised in the Court of Appeals and is not properly before

us.”); Sisson v. Ruby, 497 U.S. 358, 359 n. 1 (1990) (declin-

ing to consider argument under different statute that was

not raised below); Cardinale v. Louisiana, 394 U.S. 437, 438

(1969) (dismissing writ of certiorari after discovering in

oral argument that issue had not been raised below). The

instant case was brought, and has been analyzed and

decided, exclusively under Section 301, in accordance

with this Court’s seminal decision in Textile Workers Union

of America v. Lincoln Mills, 353 U.S. 448 (1957). There has

never-been any application or consideration of the Fed-

eral Arbitration Act (“FAA”) in this case, which applies to

commercial, not labor, arbitration. There is no justifica-

tion, other than the Union’s desperation to manufacture

an issue on appeal, to inject this tangential, wholly

unnecessary issue into the case at this late date.

Furthermore, even a cursory review of decisions by

the courts of appeals indicates that the standard applied

in actions to vacate arbitration awards under the two

Statutes is already in substantive harmony. As discussed

above, the standard under Section 301 is that an arbitra-

tor’s award is not to be disturbed unless he has exceeded

24

his powers by failing to draw its essence from the collec-

tive bargaining agreement, ignoring the agreement's

plain language and instead importing his own notions of

industrial justice. Misco, supra, 484 U.S. at 38; Enterprise

Wheel, supra, 363 U.S. at 597. Similarly, Section 10(a) of the

FAA states in relevant part that: “In any of the following

cases the United States court in and for the district

wherein the award was made may make an order vacat-

ing the award upon the application of any party to the

arbitration . . . (4) where the arbitrators exceeded their

powers ....” 9 U.S.C. § 10(a)(4). The arbitrator in this |

case exceeded his authority under either standard by, as

discussed above, violating Article XXXIII, Section K of

the Agreement, which states that the arbitrator “shall

have no power to add to, subtract from, or modify in any

way, any terms of the Agreement, nor shall he exercise

any responsibility or function of the Hospital ....” (Pet.

App. at 28a) - ;

The courts of appeals for many years have consis-

tently interpreted this “exceeded powers” ground for

vacatur under § 10(a) of the FAA as consonant with the

Enterprise Wheel “draws its essence” standard under Sec-

tion 301, and indeed have drawn upon labor arbitration

case law for support. In Inter-City Gas Corp. v. Boise Cas-

cade Corp., 845 F.2d 184 (8th Cir. 1988), for example, the

court observed that:

The arbitrator’s authority, however, is not

unlimited. Although the arbitrator may inter-

pret ambiguous contract language, the arbitrator

may not disregard or modify unambiguous con-

tract provisions. As the Supreme Court has

stated in the labor context, “The arbitrator may

25

not ignore the plain language of the contract.”

More specifically, if the arbitrator “interprets

unambiguous language in any way different

from its plain meaning, [the arbitrator] amends

or alters the agreement and acts without author-

ity.”

Id. at 187 (citations omitted); see also, Yusuf Ahmed Algh-

anim & Sons v. Toys “R” Us, Inc., 126 F.3d 15, 23 (2nd Cir.

1997) (courts are not to “second guess an arbitrator’s

resolution of a contract dispute . . . . However, awards

may be vacated ... in the limited circumstances where

the arbitrator’s award is in manifest disregard of the

terms of the agreement”); Michigan Mutual Ins. Co. v.

Unigard Security Ins. Co., 44 F.3d 826, 830-31 (9th Cir.

1995) (“An arbitration award may be overturned if it does

not ‘draw its essence’ from the contract . . . . To consider

whether an award drew its essence from the . . . agree-

ment, the court must ensure that the arbitrator looked to

the words of the contract... . ”); Anderman/Smith Operat-

ing Co. v. Tennessee Gas Pipeline Co., 918 F.2d 1215, 1218

(Sth Cir. 1990) (“as long as the arbitrator’s decision

‘draws its essence’ from the contract, the award must be

confirmed. To draw its essence from the contract, ‘an

[arbitrator’s] award must have a basis that is at least

rationally inferable, if not obviously drawn, from the

letter or purpose of the . . . agreement. The award must,

in some logical way, be derived from the wording or

purposes of the contract.”); Jenkins v. Prudential-Bache

Securities, Inc., 847 F.2d 631, 634-35 (10th Cir. 1988)

(applying labor arbitration “draws its essence” standard

to its review of commercial arbitration award under

§ 10(a) of FAA, court held that “the sole question for our

26

consideration is whether the arbitration panel ignored the

plain language of the contract”).

Therefore, even if § 10(a) of the FAA were relevant or

had been at issue in this proceeding, there would be no

need for this Court to “harmonize” it with Section 301;

the courts of appeals already have been doing so consis-

tently for well over a decade.

+

CONCLUSION

For each and all of the reasons set forth above,

Respondent Appalachian Regional Healthcare, Inc.

respectfully requests that the Union’s Petition for a Writ

of Certiorari be denied.

Respectfully submitted,

MicHaset W. Hawkins

Counsel of Record

MicHartt A. MANZLER

Dinsmore & SHOHL LLP

1900 Chemed Center

255 East Fifth Street

Cincinnati, Ohio 45202

(513) 977-8200

Counsel for Respondent

Appalachian Regional Healthcare, Inc.