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SBC Advanced Solutions, Inc. v. Communications Workers of Am.

United States District Court, E.D. Missouri, Eastern Division

September 3, 2014

SBC ADVANCED SOLUTIONS, INC., Plaintiff/Counter Defendant,

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For SBC Advanced Solutions, Inc., Plaintiff, Counter Defendant: Christian A. Bourgeacq, AT& T SERVICES, Austin, TX.

For Communications Workers of America, District 6, Defendant, Counter Claimant: David Van Os, LEAD ATTORNEY, Matthew G. Holder, DAVID VAN OS & ASSOCIATES, P.C., Austin, TX; Christopher N. Grant, Loretta K. Haggard, SCHUCHAT AND COOK, St. Louis, MO.

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This matter is before the Court on the parties' cross motions for summary judgment. The motions are fully briefed and ready for decision. For the following reasons, the Court will grant defendant Communications Workers of America, District 6's (" CWA" or " the union" ) summary judgment motion and deny plaintiff SBC Advanced Solutions, Inc.'s (" ASI" or " the company" ) motion for summary judgment.

I. Background

This is an action to vacate an arbitration award that requires ASI to pay additional compensation to employees at its Earth City, Missouri call center who have been working at a higher-paid job title, service representative, while being paid at a lower-paid job title, customer service representatives. After sustaining the employees' grievance, the arbitrator retained jurisdiction for the specific purpose of resolving any dispute regarding the application of the awarded make-whole remedy. In its motion for summary judgment, ASI asks the Court to vacate the labor arbitration award and the arbitrator's post-award ruling.

Defendant CWA has also moved for summary judgment on its counterclaim to enforce the underlying arbitration award. Alternatively, CWA seeks to have the matter remanded to the arbitrator pursuant to the arbitrator's retained jurisdiction to resolve the dispute regarding the awarded make-whole remedy. CWA also seeks an order requiring ASI to pay its reasonable attorneys' fees because ASI's refusal to comply with the arbitration award and its suit to vacate the award are without substantial justification.

II. Standard of Review of Arbitration Award

Review of a commercial arbitration award is governed by the FAA. The Eighth Circuit has often stated that " judicial review of an arbitration award is extremely limited." Val-U Constr. Co. of S. Dak. v. Rosebud Sioux Tribe, 146 F.3d 573, 578 (8th Cir. 1998). The Supreme Court of the United States has observed that courts will set aside arbitrator's decisions " only in very unusual circumstances."

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First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 942, 115 S.Ct. 1920, 131 L.Ed.2d 985 (1995). " Arbitration awards should be construed, whenever possible, so as to uphold their validity." Delta Mine Holding Co. v. AFC Coal Properties, Inc., 280 F.3d 815, 823 (8th Cir. 2001). Courts do not review the merits of the arbitration award, and where the arbitrator is even arguably construing or applying the contract and acting within his authority, a court cannot overturn the decision even if it is convinced that the arbitrator committed serious error. See Osceola County Rural Water Sys., Inc. v. Subsurfco, Inc., 914 F.2d 1072, 1075 (8th Cir. 1990) (quoting United Paperworkers Int'l Union, AFL-CIO v. Misco, Inc., 484 U.S. 29, 38, 108 S.Ct. 364, 98 L.Ed.2d 286 (1987)).

The FAA lists only four narrow bases for vacating an arbitration award: (1) where the award was procured by corruption, fraud, or undue means; (2) where there was evident partiality or corruption in the arbitrators; (3) where the arbitrators were guilty of misconduct in refusing to hear evidence material to the controversy, or of any other misbehavior; or (4) where the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter was not made. See 9 U.S.C. § 10(a).

In addition to the statutory grounds for vacatur, the Eighth Circuit has recognized two non-statutory bases for vacating an arbitration award: where the award " is completely irrational or evidences a manifest disregard for the law." Hoffman v. Cargill Inc., 236 F.3d 458, 461 (8th Cir. 2001) (quoting Val-U Constr. Co., 146 F.3d at 578 (internal quotations and citations omitted)). " These extra-statutory standards are extremely narrow: An arbitration decision may only be said to be irrational where it fails to draw its essence from the agreement, and an arbitration decision only manifests disregard for the law where the arbitrators clearly identify the applicable, governing law and then proceed to ignore it." Id. at 461-62 (citation omitted). A court " may not set aside an award simply because [it] might have interpreted the agreement differently or because the arbitrators erred in interpreting the law or in determining the facts." Id. (internal quotation and citation omitted). " Rather, the contract must not be susceptible of the arbitrator's interpretation." Id.

III. Facts

In the late 1990s, for regulatory reasons Southwestern Bell's parent company SBC Communications created a new affiliate company to handle DSL internet service. That company became ASI, and its union-represented employees were covered by the same collective bargaining agreement (" CBA" ) as those in Southwestern Bell.

ASI opened a call center in Earth City, Missouri in 1999. It staffed this center with several different job titles under the CBA, including customer service representatives (" CSRs" ) and service representatives (" SRs" ). SRs are paid more than CSRs under the CBA. The CSRs worked primarily on " trouble tickets" or work orders. The CSRs' job description states, in relevant part, that a CSR " [p]rimarily receives, screens, tests, analyzes, and dispatches trouble reports; explains and suggests various services and/or products to customers; performs other generally related functions." (JR 256).[1] The SRs' job

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description states, in relevant part, that a SR " [h]andles the business transactions in connection with customers' accounts, including telephone and correspondence contacts and collection and order work." (JR 254).

In November 2008, approximately twenty CSRs at the Earth City facility filed a grievance through their union, defendant CWA, alleging they were performing higher-paid SR work and were entitled to a pay differential when working on service orders. CWA alleged a violation of Article XV, Section 7, which states in relevant part:

Section 7. All Other Temporary Work in a Higher Position
a. A qualified employee not otherwise covered by the provisions of Sections 1 through 5. above, who is temporarily scheduled or assigned and does work in a position with a higher established maximum rate of pay throughout a period of two (2) or more full tours in a work week, except for the purposes of training, shall receive for each full tour worked in such position a Classification Differential equal to one-fifth (1/5) of the amount of the weekly wage progression increase to which the employee would at the time be entitled if the employee were actually changed to the higher applicable classification at the employee's regular location.

CWA demanded arbitration of its grievance, and the parties proceeded to arbitration under the labor arbitration rules of the American Arbitration Association (" AAA" ), which rules are expressly a part of the parties' arbitration provisions in their CBA.

The parties' arbitration provisions state in part:

Section 2. In the event that either party hereto, within sixty (60) days after completion of the Formal Grievance procedure aforesaid, elects to submit a matter described in the preceding section to arbitration, the parties agree that the matter shall be so submitted and agree that such submission shall be to one (1) arbitrator . . . . [T]he arbitration shall be conducted under the then obtaining rules of the Voluntary Labor Arbitration Tribunal of the American Arbitration Association . . . .
Section 3. The arbitrator shall be confined to the subjects submitted for decision, and may in no event, as part of any such decision impose upon either party any obligation to arbitrate on any subjects which have not herein been agreed upon as subjects for arbitration; nor may the arbitrator, as a part of any such decision, effect reformation of the contract, or of any of the provisions thereof.
Section 4. The decision of the arbitrator, selected in accordance with Section 2. hereof, shall be final, and the parties agree to be bound and to abide by such decision.

As to the union's claim under Article XV, Section 7, the parties agreed that the union had the burden of proving all of the four following elements, showing that all the CSR grievants:

1. Were " qualified" for the higher title whose work the union claims the grievants are performing;
2. Were " temporarily scheduled or assigned" to the allegedly higher work;
3. Performed the allegedly higher work " throughout two or more full tours in a work ...

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