The opinion of the court was delivered by: GOETTEL
Before the Court is the defendant's motion to confirm the findings of an arbitrator in a labor dispute and the plaintiff's motion to vacate the arbitrator's findings.
For the following reasons, the Court grants the defendant's motion to confirm and denies the plaintiff's motion to vacate.
The dispute in this case involves the amount of wages paid to workers who install and maintain elevators. The wages are governed by a collective bargaining agreement between the plaintiff, International Union of Elevator Constructors ("IUEC"), of which the workers are members, and the defendant, National Elevator Industry, Inc. ("NEI"), an organization of employers in the elevator industry.
The current contract became effective on July 9, 1982, and expires on July 8, 1987. This contrtact uses a formula, developed in Atlantic City, New Jersey, (the "Atlantic City Plan"), under which wages for employees in the elevator industry are set by averaging the wages of other workers in the principal construction trades.
In the past, the waages of other construction workers have risen steadily, and, as a result, the wages of the IUEC workers have gone up as well. Then, there was trouble in CedarRapids, Iowa, home of the IUEC's Local 129. Apparently fearing that high union wage rates would lead more employers in the construction business to employ non-union labor, all of the unions upon whose contracts the Atlantic City Plan is based agreed to accept pay cuts in an attempt to prevent non-union workers from taking jobs then held by union members.
The effect of these cuts was that, based on the Atlantic City Plan, the IUEC members were earning $2.54 per hour more than the formula would allow. Following the wage-reducint agreements between the other construction unions and their employers, the NEI unilaterally reduced the wages of IUEC members, in accordance with the Atlantic City Plan.
The IUEC sought a preliminary injunction to bar these decreases, which was denied. The IUEC then instituted this action, seeking a permanent injunction barring the NEI and its member employers from reducing the wages of their employees in Cedar Rapids or in any other location, and for monetary damages suffered as a result of the pay reductions. After the action was filed, the case was moved to the suspense docket pending the outcome of arbitration proceedings before Arbitrator Stephen B. Goldberg ("Goldberg"). The arbitrator has now issued his report, finding that, under the terms of the current agreement between the IUEC and the NEI, the Atlantic City Plan allows the wages of elevator workers to be adjusted downward when the wages of the construction workers to which they are pegged are reduced.
The NEI now moves to confirm those findings and the IUEC moves to vacate them.
DISCUSSION The IUEC is disturbed by the findings of arbitrator Goldberg, not only because of their impact on the Cedar Rapids workers, but also because of the implications for its members in other locals across the country. The IUEC, in seeking to have the arbitrator's holdings set aside, argues that the wage formula is an "up" escalator only. The NEI argues that, like the elevators they install, the wages of the employees, because they are pegged to the wages of other construction workers, must be allowed to come down as well as go up.
A. The Legal Standard the Court Must Apply in Reviewing the Arbitrator's Findings
While the parties disagree as to the propriety of the arbitrator's holdings, they agree on two things: first, that arbitration is critical to the smooth functioning of labor-management relations; and second, that an arbitrator's findings should not be casually set aside by the courts unless the arbitrator has exceeded the scope of the collective bargaining agreement from which he draws his authority.
In United Steelworkers of America v. Enterprise Wheel & Car Corp., 363 U.S. 593, 4 L. Ed. 2d 1424, 80 S. Ct. 1358 (1960), Justice Douglas explained that courts should not make haste to re-examine the merits of an arbitration award because "[t]he federal policy of settling labor disputes by arbitration would be undermined if courts had the final say on the merits of the awards." Id. at 596. However, Justice Douglas added, this did not mean that courts could never review the merits of an arbitration award.
[A]n arbitrator is confined to interpretation and application of the collective bargaining agreement; he does not sit to dispense his own brand of industrial justice. He may of course look for guidance from many sources, yet his award is legitimate only so long as it draws its essence from the collective bargaining agreement. When the arbitrator's words manifest an infidelity to this obligation, courts have no choice but to refuse enforcement of the award.
Id. at 597 (emphasis added). See Wire Service Guild, Local 222 v. United Press International, Inc., 623 F.2d 257 (2d Cir. 1980); Andros Compania Maritima, S.A. v. Marc Rich & Co., 579 F.2d 691 (2d Cir. 1978); Local 771, I.A.T.S.E. v. R.K.O. General, Inc., 546 F.2d 1107 (2d Cir. 1977); Torrington ...