on the basis that the events which triggered the arbitration issues in International Union "were the employer's announcements that certain allegedly accrued rights would not be awarded." 904 F.2d at 10 (citation omitted). Similarly, the event which triggered the arbitration herein was the Company's denial of plaintiff's pension application, which right had accrued under the terminated Agreements.
An additional reason for finding that defendant Smith's request for arbitration was timely, even though it was made after termination of the Agreements, is that this claimed delay was not unreasonable. The Union sought arbitration only six days after being advised that under step three of the grievance procedure the Company was denying Smith's grievance. See Roberts Aff., exhs. G and H thereto. Thus, under the particular facts of this case, the court cannot find that the Union unreasonably delayed in seeking arbitration of Smith's grievance. See Federated Metals, 648 F. Supp. at 862. ("The proper inquiry is whether the union delayed unreasonably in asserting the disputed claims."). Finally, the court's holding today that defendants did not unreasonably delay in seeking arbitration is consistent with the court's recognition in T&G Const., that "courts certainly should not routinely hold that requests for arbitration have been unreasonably delayed[.]" 791 F. Supp. at 133.
E. Terminated Operations Plan
The final ground urged by the Company as to why Smith's grievance is not arbitrable, and thus must be vacated, is that he was a participant in the Terminated Operations Plan. Unlike the Pension Plan, the Terminated Operations Plan contains no grievance and arbitration procedure. Effective December 31, 1984, inactive participants of the prior Pension Plan, such as defendant Smith, along with other of the Company's pension plans, "were 'spun off' or transferred into The Terminated Operations Plan . . . ." Moore Aff. at P 2. Thus, according to the Company, this is even a stronger case for non-arbitrability than Nolde, Litton and their progeny because, in contrast to those cases, after the Agreements terminated here, that void was filled by the Terminated Operations Plan, which did not provide for arbitration of any type of dispute.
Defendant Smith responds in several ways to this argument. First, even if he is a member of the Terminated Operations Plan, his entitlement to a pension benefit is not defined by that Plan, but rather is defined under the original Pension Plan, which expressly provides for arbitration of disputes regarding an applicant's right to a pension. Defendant Smith also points out that the Terminated Operations Plan allegedly is not in compliance with ERISA in that it does not afford a reasonable opportunity for a full and fair review of denial of a party's claim.
Therefore, according to Smith "to be in compliance with the provisions of ERISA, . . . , the Retirement Board must be considered to have adopted the grievance and arbitration procedure contained in the [Pension] Plan." Defendants' Reply at 15 (footnote omitted). Lastly, defendant Smith asserts that the Company's actions in the handling of his grievance and arbitration belie its claim that Smith is not covered by the Pension Plan. In particular, Smith points out that his pension application was submitted on a form entitled "Retirement Plan for IAM, Employees of Chicago Pneumatic Tool Company," listing retirement options under the Pension Plan; and the Company's initial denial was signed by James E. Hoover, a member of the Board responsible for administration of the Pension Plan. It was not signed by the Company's Retirement Plan Committee. Furthermore, neither on the denial of Smith's initial application, nor on the subsequent grievance denials did the Company ever suggest that it was denying his grievance because the Terminated Operations Plan contained no disability pension provision. This combination of factors, in Smith's view, leads to the inescapable conclusion that even the Company believed that the Pension Plan governed Smith's entitlement to a pension; and thus his pension dispute is arbitrable.
The Company devotes much of its argument to explaining why the Terminated Operations Plan contains no arbitration provision. As sound as those reasons may be, this argument is not particularly germane to the issue of whether Smith's pension dispute, which arose under the earlier Pension Plan, is arbitrable. Assuming arguendo that Smith is a member of the Terminated Operations Plan, the fact remains, as already discussed at length, that his right to a pension arose under the Prior Plan. This conclusion is buttressed by the fact that except section four,
the Terminated Operations Plan makes no mention of when a member may receive such benefit; nor does it mention the amount a member may receive. Thus, the court agrees with Smith that "notwithstanding the fact that [he] may be a member of the Terminated Operation Plan, the dispute concerning this entitlement to a pension is subject to arbitration."
Defendants' Memorandum at 12.
Because of the obvious factual distinctions between Maxwell Macmillian Co., Inc. v. District 65, UAW, 790 F. Supp. 484 (S.D.N.Y. 1992), the only case cited by the Company in support of this argument, and the present case, the court does not read that case as mandating a different result here. The Court in Maxwell found that the employer and union had created an interim agreement, which Macmillian, the employer's successor, was bound to follow, including the arbitration clause. Id. at 486. Having reached that conclusion, the court declined to discuss the parties' arguments as to their obligations under the expired CBA. Id. In all likelihood, the court did not address the issue of a post-expiration duty to arbitrate because, in keeping with the national policy favoring arbitration in the field of labor relations, the court was able to find such duty under the successor agreement.
There is one additional reason which cannot be ignored as to why Smith's grievance is arbitrable even if he is a member of the Terminated Operations Plan; and that is the fact, as Smith steadfastly maintains, that the Company's consent to arbitrate may be implied from its conduct. See Wall Street Associates, L.P. v. Becker Paribas Inc., 27 F.3d 845, 850 (2d Cir. 1994) (citation omitted). As already described, the Company's assertion that Smith's grievance is not arbitrable because he is a member of the Terminated Operations Plan is relatively recent, in that the Company processed Smith's grievance right along without seeking to avoid the same based upon his asserted status as a member of such Plan.
For all of these reasons, the court rejects the Company's argument that Smith's grievance is not arbitrable because he was a participant in the Terminated Operations Plan.
To summarize with respect to the issue of arbitrability, which despite what the Company says is anything but simple,
defendant Smith's right to a pension was arbitrable. That grievance was arbitrable even though the CBA and Pension Plan terminated because such grievance arose under those Agreements in that the disputed pension right accrued or vested thereunder. Consequently, there is no basis for vacating the arbitration award, as the Company would like, because the Agreements which provided for arbitration had been terminated.
II. Review of Arbitration Award
The court's analysis cannot end here, however, because in the alternative the Company is arguing that the arbitration award must be vacated because it does not "draw its essence" from the Terminated Operations Plan and because the arbitrator exceeded the scope of his authority. Defendant Smith tersely responds that the award did draw its essence from the Pension Plan in that the arbitrator found that the language of the 75/80 Plan provisions entitled Smith to an unreduced pension, and such interpretation is reasonable. Furthermore, the arbitrator did not exceed the scope of his authority according to Smith because the issue of Smith's entitlement to a pension is subject to arbitration under the plain language of the Pension Plan. Defendant Smith thus believes that the award must be confirmed.
A. Standard of Review
The parties to this action do not dispute that the court's review of an arbitration award is "quite limited." See Brooks Drug Co., supra, 956 F.2d at 24 (citations omitted). As the Supreme Court plainly stated in United Paperworkers Int'l Union v. Misco, Inc., 484 U.S. 29, 108 S. Ct. 364, 98 L. Ed. 2d 286 (1987), "as long as the arbitrator is even arguably construing or applying the contract and acting within the scope of his authority, that a court is convinced he committed serious error does not suffice to overturn his decision." Id. at 38, 108 S. Ct. at 371. Elaborating upon this standard, the Misco Court further explained:
Because the parties have contracted to have disputes settled by an arbitrator chosen by them rather than by a judge, it is the arbitrator's view of the facts and of the meaning of the contract that they have agreed to accept. Courts thus do not sit to hear claims of factual or legal error by an arbitrator as an appellate court does in reviewing decisions of lower courts. To resolve disputes about the application of a collective-bargaining agreement, an arbitrator must find facts and a court may not reject those findings simply because it disagrees with them. The same is true of the arbitrator's interpretation of the contract. The arbitrator may not ignore the plain language of the contract; but the parties having authorized the arbitrator to give meaning to the language of the agreement, a court should not reject an award on the ground that the arbitrator misread the contract. . . .
Id. at 37-38, 108 S. Ct. at 370-371 (citation omitted). The following amply demonstrates just how limited a court's review of an arbitration award is in a case such as this where, inter alia, the arbitrator's interpretation of the CBA is challenged: "'The court is forbidden to substitute its own interpretation even if convinced that the arbitrator's interpretation was not only wrong, but plainly wrong.'" Brooks Drug, 956 F.2d at 25 (quoting Chicago Typographical Union No. 16 v. Chicago Sun-Times, Inc., 935 F.2d 1501, 1505 (7th Cir. 1991) (other citation omitted)) (emphasis added). Based upon these principles, the Second Circuit has indicated that a reviewing court's inquiry is twofold: "[It] must determine first whether the arbitrator acted within the scope of his authority, and second whether the award draws its essence from the agreement or is merely an example of the arbitrator's own brand of justice." Id. (citations omitted).
In the present case, the Company maintains that the arbitrator exceeded the scope of his authority because, in contravention of the CBA's arbitration clause, he did not base his decision "upon the provisions of this Agreement at the time the grievance was initiated. . . ."
Roberts Aff., exh. A thereto at 30. The just quoted language, in the Company's view, required the arbitrator to look only at the Terminated Operations Plan which it claims was in effect on March 21, 1990 - the day Smith initiated his grievance. Because the arbitrator did not look to that Plan, the Company asserts that, necessarily, the award did not "draw its essence" from the Terminated Operations Plan. The second way in which the Company claims that the arbitrator exceeded the scope of his authority is that even if the terms of the Pension Plan were relevant, he dismissed the plain language of such Plan by "substituting" in section three of the Pension Plan the word "pensioner" for the word "employee." See id., exh. J thereto at 19. The effect of this substitution will be more fully explained herein. Suffice it to say for now that according to the Company, by engaging in this substitution, the arbitrator violated the arbitration clause's prohibition against amending or modifying the CBA.
Defendant Smith did not respond to these contentions in any meaningful way, except, as already noted, to baldly assert that the arbitrator reasonably interpreted the Pension Plan provisions.
There is no merit to the Company's first argument that the arbitrator exceeded the scope of his authority by relying upon the terms of the original Pension Plan, rather than relying upon the Terminated Operations Plan. In making this argument, as previously alluded to, the Company relies upon the CBA's arbitration clause. When quoting from article XXIII of that Agreement, however, the Company effectively rewrote the arbitration clause by stating that the arbitrator did not rely "upon the provisions of the Agreement in effect at the time the grievance was initiated. . . ." Plaintiffs' Memorandum at 26 (emphasis added). That section actually states that the arbitrator's decision "must be upon the provisions of this Agreement at the time the grievance was initiated. . . . ." Roberts Aff., exh. A thereto at 30 (emphasis added). Obviously the reference to "this Agreement" refers to only one thing - the CBA; and it is that Agreement to which the arbitrator looked in making his award.
Furthermore, although due to its termination, arguably the CBA was not "in effect" when Smith filed his grievance, that does not obviate the arbitrator's obligation to look to that Agreement because Smith's grievance arose thereunder. Despite the Company's assertion to the contrary, nothing in the CBA, upon which the Company relies to establish the scope of the arbitrator's authority, requires the arbitrator to look to the Terminated Operations Plan. In any event, such requirement, if it existed, would make no sense where, as here, the right subject to arbitration did not arise under the Terminated Operations Plan.
To determine whether, as the Company suggests, the arbitrator impermissibly modified the CBA, it is necessary to contemplate the "substitution" made by the arbitrator. As the Company explains it, albeit it none to clearly, when the arbitrator substituted the word "pensioner" for the word "employee" in section three ("Special Early Retirement Under the 75/80 Formula") of the Pension Plan, it had the following effect:
Under section II(4) of the [Pension] Plan ("Deferred Vesting Amount"), The pensioner may elect to have the benefits commence: . . . (c) at an earlier age [than 60] pursuant to section III, provided that the pensioner satisfies the other criteria of Section III. . . . The other criteria of Section III include the condition that only an employee is eligible for 75/80 retirement. The Arbitrator's rewrite of employee as pensioner not only amends Section III, but reads the provision right out of Section II(4).