International Brotherhood of Teamsters, Local 959 v. Horizon Lines of Alaska, LLC

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UNITED STATES DISTRICT COURT
DISTRICT OF ALASKA
International Brotherhood of )
Teamsters Local 959, )
)
Petitioner, ) 4:13-CV-00039 JWS
)
vs. ) ORDER AND OPINION
)
Horizon Lines of Alaska, LLC, ) [Re: Motions at docket 9 and 13]
)
)
Respondent. )
)
I. MOTIONS PRESENTED
At docket 9, petitioner International Brotherhood of Teamsters Local 959 (“Local
959”) filed a motion for summary judgment, which respondent Horizon Lines of Alaska,
LLC (“Horizon”) opposed at docket 17. Local 959 filed a reply at docket 20.
At docket 13, Horizon also filed a cross-motion for summary judgment. Local 959
filed an opposition at docket 19. Horizon filed a reply at docket 21.
II. BACKGROUND
Horizon is a maritime shipping company that employs approximately 17 truck
drivers. These drivers own their own trucks and lease them to Horizon. In return,
Case 4:13-cv-00039-JWS Document 22 Filed 05/20/14 Page 1 of 8

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Doc. 3 at 3.	1
Doc. 9-1 at 8.	2
Doc. 9-2 at 23.	3
Doc. 17-3 at 12. Horizon’s repeated assertion that the arbitration record lacks any	4
reference to truck payments is false, as Horizon itself eventually concedes. Compare Doc. 17 at
3 n.2 (“[T]here is absolutely no mention of truck payments anywhere in the arbitration record.”),
and Doc. 17 at 3 (“The Union thus achieved, through stealth, an arbitration award that uses the
words ‘truck payments’ but contains no record of any such thing existing anywhere in the entire
record of the arbitration.”), with Doc. 17 at 6 (conceding that Local 959 requested truck
payments in its closing brief). See also the arbitrator’s award. Doc. 9-1 at 23 (“The Union
requests make-whole relief for wages, benefits, and lost truck payments for the period of the
suspension. That is an appropriate remedy under the circumstances, and I will so order.”)
(emphasis added).
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Horizon pays them a wage for the time they spend driving as well as “truck payments,”
which are based on the number of miles their truck is used for Horizon’s purposes.1
Horizon’s drivers are members of Local 959, a labor organization. Horizon and
Local 959 have entered into a collective bargaining agreement that provides for the
arbitration of grievances. After Horizon suspended one of Local 959’s members, Mike
Dropik, Local 959 filed a grievance asserting that Horizon lacked just cause for the
suspension. The parties proceeded to arbitration, where they presented the following
two questions to the arbitrator: (1) did Horizon have just cause to suspend Dropik?; and
(2) if not, what is the appropriate remedy?2
At the arbitration hearing Dropik testified in pertinent part that he leases his truck
to Horizon and therefore has two separate relationships with Horizon, “one as the
owner of the truck and one as a direct employee.” Local 959’s closing brief asked the3
arbitrator to remove the suspension from Dropik’s file and make Dropik whole for the
wages, benefits, and truck payments he lost in connection with the work he missed.4
The arbitrator issued an Opinion and Award finding that Horizon did not have just
cause to suspend Dropik and sustaining Local 959’s grievance. As to the remedy, the
arbitrator ordered Horizon to make Dropik whole “for lost wages, benefits, and truck
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Doc. 9-1 at 24.	5
Doc. 9-1 at 8.	6
Doc. 9-3 at 8; Doc. 3 at 4–5.	7
29 U.S.C. § 185.	8
Gen. Drivers, Warehousemen & Helpers, Local Union No. 89 v. Riss & Co., 372 U.S.	9
517, 519 (1963); Kemner v. Dist. Council of Painting & Allied Trades No. 36, 768 F.2d 1115,
1118 (9th Cir. 1985).
Gen. Drivers, 372 U.S. at 520 (“Of course, if it should be decided after trial that the	10
grievance award involved here is not final and binding under the collective bargaining
agreement, no action under § 301 to enforce it will lie.”); Kemner, 768 F.2d at 1118 (“[A] court
should refrain from reviewing an arbitrator’s work until a final and binding award is issued.”).
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payments that resulted from the suspension.” The arbitrator did not determine any of5
these amounts. Instead, he retained jurisdiction for 90 days following the decision “to
resolve any disputes about the remedy.”6
Such a dispute arose about a month later when Horizon unilaterality decided not
to pay Dropik any lost truck payments, claiming that the arbitrator lacked authority to
order such relief. Neither party submitted this dispute to the arbitrator. Instead, Local7
959 brought this action to confirm the arbitration award pursuant to Section 301 of the
Labor Management Relations Act (“LMRA”).8
III. STANDARD OF REVIEW
Section 301 of the LMRA grants the District Court jurisdiction to review and
enforce labor arbitration awards. However, the arbitrator’s award must normally be9
final and binding before such review is undertaken. “To allow judicial intervention prior10
to the final award would contravene the fundamental federal labor policy of deference to
contractual dispute resolution procedures, and would interfere with the purpose of
arbitration: the speedy resolution of grievances without the time and expense of court
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Millmen Local 550, United Bhd. of Carpenters & Joiners of Am., v. Wells Exterior Trim,	11
828 F.2d 1373, 1375 (9th Cir. 1987) (citing United Steelworkers of Am. v. Am. Mfg. Co., 363
U.S. 564, 566-68 (1960); Kemner, 768 F.2d at 1118; Aerojet-Gen. Corp. v. Am. Arbitration
Ass’n, 478 F.2d 248, 251 (9th Cir. 1973)).
Id. (citing Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 546 (1949); Liberian	12
Vertex Transports, Inc. v. Associated Bulk Carriers, Ltd., 738 F.2d 85, 87 (2d Cir.1984)).
Doc. 1 at 3; Doc. 3 at 5.	13
Doc. 10 at 13; Doc. 13 at 13.	14
Doc. 17 at 17.	15
Millmen, 828 F.2d at 1376 (construing Michaels v. Mariforum Shipping, 624 F.2d 411,	16
413–14 (2d Cir.1980)).
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proceedings.” “Moreover, interlocutory review of non-final arbitration awards would11
defeat the purpose of 28 U.S.C. § 1291 to avoid piecemeal litigation of a claim.”12
IV. DISCUSSION
Both Horizon and Local 959 are asking this court to confirm the arbitration
award. Their dispute centers on what should happen next. On one hand, Local 95913
requests a remand to the arbitrator for determination of Dropik’s truck payment
damages. On the other hand, Horizon opposes this request and seeks confirmation of14
the arbitrator’s incomplete award, rendering it meaningless due to its incompleteness.15
This court lacks jurisdiction to consider these requests, however, because the
arbitrator’s decision is not yet final.
An arbitrator’s decision is final and binding only where it is “intended by the
arbitrator to be a complete determination of the claims, including the issue of
damages.” Where an arbitrator specifically retains jurisdiction to resolve disputes16
regarding damages, that indicates that the arbitrator did not intend the award to be
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Id. at 1376–77.	17
Id. at 1376.	18
Id. at 1374.	19
Id. at 1374–75.	20
Id. at 1374.	21
Id. at 1376 (citing Warehouse Rest., Inc. v. Customs House Rest., Inc., 726 F.2d 480,	22
481 (9th Cir.1984)).
Id. (quoting Liberty Mut. Ins. Co. v. Wetzel, 424 U.S. 737, 740 (1976)).	23
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final. Put simply, “an arbitration award that postpones the determination of a remedy17
should not constitute a ‘final and binding award’ reviewable under section 301.”18
In MiIImen, the Ninth Circuit addressed whether the district court has jurisdiction
to review an arbitrator’s award that determines liability but reserves jurisdiction to
resolve disputes regarding the remedy. The arbitrator in Millmen issued an award that19
remanded the question of remedy to the parties, with the arbitrator “retaining jurisdiction
in the event that the [p]arties cannot agree upon such remedy.” The union filed a20
petition with the district court to confirm the arbitrator’s decision, which the court
granted. The Ninth Circuit reversed, holding that the arbitrator’s award was not final
and therefore not reviewable.21
The Ninth Circuit drew parallels between the finality of an arbitration award and
the finality rule in 28 U.S.C. § 1291, which gives the courts of appeals jurisdiction over
appeals from final district court judgments. The panel noted that a final judgment under
Section 1291 is “one which ends the litigation . . . and leaves nothing for the court to do
but execute the judgment.” A judgment is not final “if it decides only liability and22
leaves open the question of relief.” Applying these principles to the context of23
arbitration, the Ninth Circuit concluded that “an arbitration award that postpones the
determination of a remedy should not constitute a final and binding award reviewable
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Id. (citing Pub. Serv. Elec. & Gas Co. v. Sys. Council U-2, Int’I Bhd. of EIec. Workers,	24
703 F.2d 68, 69–70 (3d Cir.1983)).
Id. at 1376–77.	25
Union Switch & Signal Div. Am. Standard Inc. v. United Elec., Radio & Mach. Workers	26
of Am., Local 610, 900 F.2d 608 (3rd Cir. 1990).
Id. at 609.	27
Id. at 610.	28
Id. at 611.	29
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under section 301.” In so holding, the Ninth Circuit found that the arbitrator’s specific24
retention of jurisdiction to decide the remedy indicated that the arbitrator did not intend
the award to be final.25
The Third Circuit’s decision in Union Switch is also on point. In Union Switch26
the arbitrator found liability and ordered the company to make the adversely-affected
employees whole. The arbitrator did not determine the specific amount of damages that
would make the employees whole; instead, he retained jurisdiction “to make final rulings
and on any remedial disputes that the parties are unable to resolve after full
discussion.” As in the present case, the parties brought the award before the district27
court without first obtaining a ruling from the arbitrator specifying damages. After the
district court confirmed the award, the Third Circuit reversed, holding that there was “no
doubt that the district court committed serious error when it entertained the original
cross-applications to vacate and enforce” the arbitrator’s incomplete award.28
The Third Circuit noted that it was a common and reasonable practice for
arbitrators “to ‘call time out’ during an arbitration in the hope that a partial resolution will
inspire the parties to work out their remaining differences on their own, thereby avoiding
the time and expense of additional arbitration.” Parties may not use these “time outs”29
as “an opportunity to rush to court, either to preserve what they have just won, or (more
often) to forestall a process that is not turning out as they might have wished” because
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Id.	30
In contrast, where all that remains is a mathematical computation of the amount of	31
damages, that is a mere “ministerial act” that does not render the award non-final. See
Bensalem Park Maint., Ltd. v. Metro. Reg. Council of Carpenters, No. 11-2233, 2011 WL
2633154, at *5 (E.D. Pa. July 5, 2011); Millmen, 828 F.2d at 1377 (construing United
Steelworkers, 363 U.S. at 599) (“[T]he arbitrator need not complete the mathematical
computations of the award for the award to be final and reviewable.”)).
See Millmen, 828 F.2d at 1376–77.	32
921 F.2d 218 (9th Cir.1990).	33
Doc. 21 at 5–7.	34
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that would lead to “vastly prolonged and unnecessary litigation, which is of course
precisely what arbitration exists to avoid.”30
Applying these principles, the court concludes that the arbitrator’s award is not
final because it does not completely determine the issues presented to arbitration. The
award orders Horizon to make Dropik whole, but does not specify the amount of lost
truck payments that are necessary to accomplish that objective. The task of
determining this amount is more than a mere ministerial act, such as a mathematical
calculation. As Horizon observes, the unresolved factual issues include how truck31
payments are calculated, how many truck payments Dropik lost due to his suspension,
and whether Dropik mitigated his damages, if necessary. It would contravene federal
labor policy and the purpose of arbitration for the court to intervene at this point. This
conclusion is bolstered by the fact that the arbitrator specifically retained jurisdiction to
resolve disputes about the remedy, which indicates that he did not intend for his award
to be final.32
Horizon cites Teamsters Local Union, No. 760 v. United Parcel Service, Inc.,33
and argues that Local 959 waived the ability to present evidence regarding these
unresolved factual issues because it did not raise these issues before the arbitrator
during his 90-day window of retained jurisdiction. This argument is unconvincing.34
United Parcel Service is distinguishable from the present case because there the issue
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United Parcel Service, 921 F.2d at 220.	35
See United Steel, Paper & Forestry v. Sekisui Specialty Chemicals Am., LLC, No.	36
5:11-CV-43, 2012 WL 692810, at *8 (W.D. Ky. Mar. 1, 2012) (construing United Parcel Service,
921 F.2d at 220).
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of waiver had already been decided by the arbitrator, which led to the Ninth Circuit’s
holding that the “union had no right to relitigate the arbitrator’s decision in federal
court.” Here, in contrast, the parties have not submitted the issue of waiver to the35
arbitrator; the court therefore declines to reach the issue because it is premature.36
V. CONCLUSION
For the reasons set forth above, the parties’ cross-motions for summary
judgment, at docket 9 and 13, are hereby DENIED. This matter is DISMISSED and
REMANDED to the arbitrator for completion of the arbitration award.
DATED this 20 day of May 2014.th
/s/
JOHN W. SEDWICK
UNITED STATES DISTRICT JUDGE
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