Arbitrator's Award Based On An Interpretation Of The Contract, Even If Wrong, Is Enforced
UNITED FOOD AND COMMERCIAL WORKERS v. ILLINOIS-AMERICAN WATER COMPANY (June 26, 2009)
Glenn Williams was a wastewater treatment operator for Illinois-American Water Company ("IAWC"). IAWC discovered that Williams was operating without a required Illinois EPA license. Because it was Williams' second offense, it was punishable by termination. Instead of firing Williams, however, IAWC offered him a Last Chance Agreement ("LCA"). Under the LCA, Williams was suspended without pay for 30 days, he was required to obtain his license within six months, and he was required to repay the extra compensation he received as a result of IAWC's belief that he was licensed properly. The LCA also provided that failure to comply would result in Williams' immediate termination and any disputes regarding the agreement would be resolved through the collective bargaining agreement’s arbitration procedure. The United Food and Commercial Workers Union, which represented Williams, filed a grievance contesting the LCA's validity. When Williams failed to make repayment arrangements, IAWC terminated his employment. The union filed a second grievance. The grievances were consolidated and brought before an arbitrator. The arbitrator ruled against the union on the validity of the LCA but ordered Williams reinstated. He concluded that the termination was improper because of the pending, good faith challenge to the LCA itself. On review, the district court confirmed the arbitration award. The union appeals.
In their opinion, Judges Posner, Kanne and Wood affirmed. The Court identified its limited role in reviewing arbitrator's awards. As long as an arbitrator bases his decision on an interpretation of the agreement, the court will enforce the award. Here, the arbitrator confronted a situation that he thought was not covered by the agreement. One provision gave IAWC the absolute right to terminate Williams' employment. Another provision gave the union the right to challenge the validity of the LCA. The arbitrator concluded that the agreement contained an implied term – that Williams' employment could not be terminated during the pendency of a good faith grievance over the validity of the agreement itself. Since his award was based on an interpretation of the agreement, the Court affirmed.
