Full Opinion (html_with_citations)

                                       PRECEDENTIAL

     UNITED STATES COURT OF APPEALS
          FOR THE THIRD CIRCUIT
             ________________

                    No. 19-2182
                 ________________


     MONONGAHELA VALLEY HOSPITAL
           INCORPORATED

                          v.

    UNITED STEEL PAPER AND FORESTRY
         RUBBER MANUFACTURING
 ALLIED INDUSTRIAL AND SERVICE WORKERS
    INTERNATIONAL UNION AFL-CIO CLC,

                                           Appellant

                ________________

     Appeal from the United States District Court
      for the Western District of Pennsylvania
               (D.C. No. 2:18-cv-00371)
     District Judge: Honorable David S. Cercone
                  ________________

             Argued November 13, 2019

Before: AMBRO, KRAUSE, and BIBAS, Circuit Judges
            (Opinion filed: December 30, 2019)

Anthony P. Resnick (Argued)
United Steelworkers International Union
60 Boulevard of the Allies, Room 807
Pittsburgh, PA 15222

      Counsel for Appellant

Hayes C. Stover (Argued)
K&L Gates
210 Sixth Avenue
Pittsburgh, PA 15222

      Counsel for Appellee

                     ________________

               OPINION OF THE COURT
                   ________________

AMBRO, Circuit Judge
       We have the rare situation where not even our heavy
degree of deference to arbitrators can save an arbitration
decision and award. Monongahela Valley Hospital, Inc.
sought to vacate an arbitration decision and award in favor of
United Steel, Paper and Forestry, Rubber, Manufacturing,
Energy, Allied Industrial and Service Workers International
Union, AFL-CIO, CLC. The District Court granted the
Hospital’s motion for summary judgment and vacated the
award. The Union now appeals, arguing that the District Court
erred by exceeding its very limited scope of review and should




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have confirmed the award because it rationally derived from
the parties’ collective bargaining agreement (the “CBA”). We
agree with our District Court colleague, and thus we will
affirm.
I.     BACKGROUND

        The Hospital has approximately 1,100 employees, just
under half of whom are in a bargaining unit represented by the
Union. Working supervisors are not included in the bargaining
unit. The CBA, in effect from July 1, 2014 to June 30, 2017
(thus at all times relevant to this dispute), governed the
relationship between the Hospital and the bargaining unit
employees. It included a dispute resolution process whereby
an aggrieved employee could submit a grievance that if
unresolved through the grievance procedure, could be appealed
to arbitration.
       Under § 8(F)(3) of the CBA, an arbitrator’s authority is
limited “only to interpret[ing], apply[ing] or determin[ing]
compliance with [its] provisions.” The arbitrator specifically
lacks the “authority to add to, detract from or alter in any way
the provisions of this [CBA].” Id.

       The CBA provision before us—§ 13(B)(6)—concerns
the scheduling of vacation. It provides that
              [v]acation will, so far as possible,
              be granted at times most desired by
              employees; but the final right to
              allow vacation periods, and the
              right to change vacation periods[,]
              is exclusively reserved to the
              Hospital. Any changes in vacation
              schedules may be realized by
              mutual consent. In the event the




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              Hospital unilaterally changes a
              schedule causing the employee to
              suffer financial loss, the Hospital
              agrees to reimburse the employee
              for provable loss.

(Emphases added.)
       Conflicts over vacation scheduling occurred only when
there was a limited number of bargaining and non-bargaining
unit employees that performed the same or similar functions
such that only one employee could be away at a time. There
were only three instances in the record before late 2016 when
a bargaining unit employee did not receive her desired vacation
because a supervisor (not a bargaining unit member) chose the
same days (and in one of those instances the issue went away).
       To avoid vacation scheduling conflicts, the Hospital, in
apparent agreement with the Union, experimented with using
“blackout” periods for scheduling 2017 vacation whereby
certain weeks were blocked off for vacation. The Hospital,
however, found that the experiment was unsuccessful in
eliminating scheduling conflicts and discontinued it after that
year.
       Our case stems from a dispute over vacation days
between bargaining unit employee Carol Konsugar and her
working supervisor, a non-bargaining unit employee. At the
end of 2016, Ms. Konsugar requested vacation for the
following year during the week of December 25, 2017. The
Hospital denied her request because her working supervisor
had requested that same week off and both could not be away




                              4
at the same time.1 Ms. Konsugar then filed a grievance in
January 2017 alleging the denial of her requested vacation as a
CBA violation, and arbitration ensued.2
       The parties selected Gerald Kobell as the arbitrator. The
Union argued before him that § 13(B)(6) of the CBA gave its
employees preference when there were conflicting vacation
requests, while the Hospital contended the “final” and
“exclusive” language in that section conferred on it ultimate
discretion over vacation scheduling. In an attempt to reconcile
the competing positions, the arbitrator framed the issue as
“whether the Hospital violated the [CBA] when it denied

1
  The record is not clear whether Ms. Konsugar’s requested
week of December 25, 2017, was “blacked out.” The
arbitrator, based on Union Exhibits 5 and 6, stated only that the
week of December 18, 2016, was blacked out. It appears the
“2016” was a scrivener’s error considering that the arbitrator
later refers to those same exhibits as blacking out vacation for
2017, see App. 46; 48. In any event, the Hospital represented
at oral argument, and the Union did not dispute, that Ms.
Konsugar was unaffected by the “blackout” policy, See Trans.
of Oral Arg. at 18–19, 23–24. We therefore proceed on the
assumption that Ms. Konsugar’s request for vacation during
the week of December 25, 2017, did not involve a “blackout
period.” To the extent the arbitrator ruled that the Hospital may
no longer use “blackout” periods, we need not weigh in on this
point.

2
  The grievance referenced specifically only Ms. Konsugar’s
violation. Two other disputes over vacation scheduling
allegedly arose during 2017, yet they were not squarely before
the arbitrator, and we do not address them here.




                               5
employee Carol Konsugar the vacation she desired [for 2017]
in December 2016.”

        In interpreting § 13(B)(6), the arbitrator stated he could
not “conclude that the subsequent reservation of exclusivity in
allocating vacations entirely to the Hospital completely
negates . . . ‘so far as possible’” because of his concern that it
could then always deny bargaining unit employees their
vacation requests. Accordingly, the arbitrator sustained the
grievance, ruling that, “notwithstanding the Hospital’s
reservation of exclusive rights contained in Section 13[B](6)
of the Agreement,” the CBA precluded the Hospital from using
“blackout” periods and prevented it from “deny[ing] senior
employees in the bargaining unit their desired vacation[] when
there is no operating need.”
        The Hospital filed a complaint with the United States
District Court for the Western District of Pennsylvania under
§ 301 of the Labor Management Relations Act,
29 U.S.C. § 185
, seeking to vacate the award on the grounds that “[t]he
arbitrator’s decision and award exceeded his authority, ignored
the plain language of the CBA, and . . . failed to draw its
essence from the language of the CBA.” Both parties moved
for summary judgment.            The District Court, after
acknowledging that it owed a “heavy degree of deference to
the arbitrator,” ruled nonetheless that the arbitrator’s
interpretation of § 13(B)(6) “(1) was a manifest disregard of
the plain language of the CBA[,] (2) ignored the clear
intentions of the parties[,] and (3) failed to construe such
provision to give effect to all parts of the provision.”
Accordingly, it granted the Hospital’s motion for summary
judgment and vacated the arbitration award. The Union
appeals to us.




                                6
II.    JURISDICTION & STANDARD OF REVIEW
       The District Court had jurisdiction under
29 U.S.C. § 185
, and we have appellate jurisdiction under
28 U.S.C. § 1291
.
        We exercise plenary review over the District Court’s
order granting summary judgment and apply the same standard
as that Court in reviewing an arbitration award. Exxon
Shipping Co. v. Exxon Seamen’s Union,
73 F.3d 1287, 1291
(3d Cir. 1996). No doubt courts are restricted in reviewing the
decision of an arbitrator resolving a labor dispute under a
collective bargaining agreement, as “[t]he sine qua non of
judicial review of an arbitration award is a heavy degree of
deference to the arbitrator.” Akers Nat’l Roll Co. v. United
Steel,
712 F.3d 155
, 164–65 (3d Cir. 2013).
        But that deference is not unlimited. If it were, court
review would be an oxymoron. Hence we will not “rubber
stamp” an arbitrator’s decision. Hamilton Park Health Care
Ctr. Ltd. v. 1199 SEIU United Healthcare Workers E.,
817 F.3d 857, 861
 (3d Cir. 2016) (quoting Matteson v. Ryder Sys.
Inc.,
99 F.3d 108, 113
 (3d Cir. 1996)). Rather, we will vacate
an award “if it is entirely unsupported by the record or if it
reflects a manifest disregard of the agreement.” Citgo Asphalt
Ref. Co. v. Paper, Allied-Indus., Chem. & Energy Workers Int'l
Union Local No. 2-991,
385 F.3d 809, 816
 (3d Cir. 2004)
(citation omitted). The Supreme Court has long made clear
that an award must still “draw[] its essence” from the words of
the collective bargaining agreement and the arbitrator may not
“dispense his own brand of industrial justice.” United
Steelworkers of America v. Enterprise Wheel & Car Corp.,
363 U.S. 593, 597
 (1960). Further, an arbitrator must act within the
scope of authority conferred him by the CBA. See Pa. Power
Co. v. Local Union No. 272 of the Int’l Bhd. of Elec. Workers,




                               7
276 F.3d 174
, 179–80 (3d Cir. 2001) (vacating an award where
arbitrator “exceeded his powers” under the CBA).

III.   DISCUSSION
        The Union asks us to reverse the District Court’s order
and reinstate the arbitration award. We decline to do so
because the award in no rational way draws its essence from
the CBA, and the arbitrator, in inserting the “operating need”
restriction, exceeded his authority under the CBA by
dispensing his own brand of industrial justice.
       A.    The award ignores the CBA’s plain language.
       We begin with the obvious: an arbitrator “may not
ignore the plain language of the contract.”             United
Paperworkers Int’l Union, AFL-CIO v. Misco, Inc.,
484 U.S. 29, 38
 (1987). Here § 13(B)(6) gives the Hospital the “final”
and “exclusive[]” right to deny employees their desired
vacation. That it has the authority “unilaterally” to change a
vacation schedule, even though schedules may also be changed
by “mutual consent,” lends further support to this clear
reservation of rights. These terms “are simply not susceptible
to more than one reasonable interpretation, and they do not
somehow render the CBA[] incomplete or ambiguous.”
U.A.W. Local No. 1697 v. Skinner Engine Company,
188 F.3d 130
, 146 (3d Cir. 1999).
       The arbitrator ignored this plain language, and he ruled
against the Hospital when it “elected to rely upon its
reservation of rights” in § 13(B)(6) in denying Ms. Konsugar
her requested vacation. He justified his decision by reasoning
that the “so far as possible” language must be given some
meaning lest the rights of the bargaining unit employees with
respect to vacations “could always be negated.”




                              8
        “So far as possible” cannot hold hostage what follows
here. It is a subordinate phrase clearly qualified by the
superseding “but,” and what follows grants the Hospital the
“final,” “exclusive[]” and “unilateral[]” right to schedule
vacations. “It is . . . well established that contract language
must be read in context and that ‘a subsequent specification
impliedly limits the meaning of a preceding generalization.’”
Affiliated Food Distribs., Inc. v. Local Union No. 229,
483 F.2d 418
, 420 (3d Cir. 1973) (citation omitted). Put in context, “so
far as possible” means the Hospital should consider in good
faith the bargaining unit employees’ preferences when
exercising its final and exclusive right to determine vacation,
but nothing more; and there is certainly no requirement
anywhere in the CBA that the Hospital consider operating
need.
        Thus the Hospital could rely on its reservation of rights
to deny a vacation request. Supporting this is that the Union
failed to introduce evidence that the Hospital did not “so far as
possible” attempt to honor Ms. Konsugar’s request. Indeed, in
reciting the Hospital’s position, the arbitrator stated that Ms.
Konsugar was granted her first three requested vacation dates,
and the Union failed to rebut that evidence.
       Even this is not all that went off the rails. The arbitrator
concluded that if a claim to vacation, absent operating need or
special circumstances, cannot be resolved, the bargaining unit
member’s claim prevails. Rather than acknowledge the CBA’s
rule that the Hospital makes the ultimate determination over
vacation scheduling, this decision flips the CBA on its head
and grants the Union a near-categorical preference.
Accordingly, notwithstanding a standard of review tilted much
in favor of arbitrators, we cannot affirm this award that
manifestly disregards the plain language of the CBA.




                                9
       B.    The arbitrator exceeded the scope of his
       delegated authority when he injected the “operating
       need” restriction into the CBA.
        Manifestly disregarding the Hospital’s “final,”
“exclusive[]” and “unilateral[]” right to schedule vacations, the
arbitrator deviated far beyond the scope of his authority by
force-feeding the “operating need” requirement into the CBA.
        To repeat, an arbitrator’s authority sources from the
CBA itself. Here § 8(F)(3) makes clear that the arbitrator has
no authority to “add to, detract from or alter in any way the
provisions of [the CBA].” Yet that is what the arbitrator did in
inserting the “operating need” restriction. It appears nowhere
in the CBA. Instead, the arbitrator urges what he believes
“should occur in the situation where a bargaining unit
employee and his/her working supervisor . . . both desire the
identical vacation;” the employee should prevail and “the
working supervisor should not have a superior claim to the
desired vacation week.” (Emphases added.) Thus, he
concludes, “the Hospital may not reserve unto itself and the
working supervisor the right to deny senior employees in the
bargaining unit their desired vacation, when there is no
operating need for the employee to be present during the
desired vacation week because of skills, ability, and
responsibilities that cannot also be performed by the working
supervisor.” None of these policy pronouncements, however,
can be found in the text of the CBA.
       Why “operating need” is absent stems from the parties’
bargaining history. The 1974 CBA provided that “each
employee’s vacation period shall be designated by the Hospital
to meet the requirement of operating conditions” (emphasis
added), in effect the “operating need” restriction the arbitrator
added here. In 1977, however, the CBA was modified to
eliminate the operating-conditions restriction and to give the




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final say to the Hospital to schedule vacations. That is the same
language that is in the CBA governing this dispute. Moreover,
in 2009 the Union sought a specific restriction to the CBA that
“[n]on-bargaining unit employees will not be given vacation
scheduling preference over bargaining unit employees,” but
that amendment was rejected and never became a part of the
agreement. App. 99, 43.
        Thus past becomes prologue in discovering the parties’
intent. Where an arbitrator injects a restriction into a contract
to which the Hospital did not agree and to which the bargaining
unit employees are not entitled, he dispenses his own brand of
industrial justice and should be overturned. See Brentwood
Medical Ass’n v. United Mine Workers,
396 F.3d 237, 241
 (3d
Cir. 2005) (noting that “it is within our discretion to vacate [an
arbitration] award” when it is supported only by language the
arbitrator injected into the CBA); Poland Spring Corp. v.
United Food & Commercial Workers Int’l Union, Local 1445,
314 F.3d 29
, 34–37 (1st Cir. 2002) (voiding an arbitration
award for limiting a company’s termination powers with a
made-up term: “mitigating circumstances”).

                        * * * * *
        An arbitration award does not “draw[] its essence” from
a CBA where, as here, an arbitrator not only fails to heed the
plain language of the agreement but also exceeds his authority
by injecting language into it that was already rejected in prior
bargaining. The bar may be low to uphold an arbitration
award, but it still exists. As we are not an amen corner for
arbitrators’ rulings, we affirm the well-reasoned decision of the
District Court vacating the arbitrator’s decision and award.




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