Arbitrator May Not Provide Relief For Period Of Time When He Has No Authority
PRATE INSTALLATIONS, INC. v. CHICAGO REGIONAL COUNCIL OF CARPENTERS (June 4, 2010)
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Prate Installations, Inc. filed a grievance against its Union, the Chicago Regional Counsel of Carpenters, in 2003. Prate alleged that the Union's requirement that Prate pay hourly wages while allowing competitors to pay on a piece work basis violated the Collective Bargaining Agreement (CBA). The parties selected an arbitrator in accordance with the terms of the 2001 CBA. Arbitrator Martin issued an award in September of 2008. He awarded close to $10 million in damages, injunctive relief and attorney's fees. Meanwhile, the parties entered into a new CBA in 2005 that modified the arbitration procedure. It established a rotating panel of arbitrators -- Martin was not on the panel. Prate brought suit to confirm the award. Judge St. Eve (N.D. IL) confirmed the damages award, as amended to eliminate damages after the revised CBA, and the attorneys’ fees. She also vacated the equitable relief because it applied after the expiration of the earlier CBA. Both parties appeal.
In their opinion, Chief Judge Easterbrook and Judges Cudahy and Manion affirmed. The Court noted that their review of the arbitration award is quite limited. Here, the arbitrator relied on the contract in concluding that the Union was in violation. The district court correctly upheld that conclusion. The Court also found that the district court correctly determined that Arbitrator Martin had no authority under the 2005 CBA. His damages award covering the period after the new CBA was therefore improper. The analysis of the equitable award is slightly different. Martin could have ordered equitable relief if he issued his award prior to the expiration of the earlier agreement. Since he did not, however, the Court concluded that it had to treat the equitable remedy like the damages remedy and vacated it.
