Storer Broadcasting Company, Plaintiff-appellant, v. American Federation of Television and Radio Artists,cleveland Local, Afl-cio, and American Federationof Television and Radio Artists,defendants-appellees, 600 F.2d 45 (6th Cir. 1979)

Plaintiff-appellant, Storer Broadcasting Company, appeals from an adverse decision by the district court in this action to vacate an arbitrator's award. The arbitration, initiated by the American Federation of Television and Radio Artists ("the union"),¹  yielded an award in favor of union members in a dispute concerning payments due from Storer's profit sharing plan. Finding no evidence in the record to support the arbitrator's findings, we reverse the district court's refusal to vacate the award.

Storer operates a radio station, WJW-AM, and television station, WJW-TV, in Cleveland. For many years prior to 1973 Storer had made voluntary payments into its profit sharing plan²  on behalf of the employees involved in this dispute. The profit sharing plan was operated as a separate trust administered by an independent trustee who was not a party to the arbitration or this action. In 1973 Storer and the union entered into collective bargaining agreements³  which required Storer instead to make contributions on behalf of these employees into the union's pension and welfare plan. The union agreed that its members would cease to participate in all aspects of the Storer profit sharing plan. This portion of the 1973 agreements concluded: "The Union represents that it has fully disclosed to its members the benefits being given up by its members in consideration for the Company's contribution to the AFTRA P & W fund and indicates that this arrangement is fully acceptable to the Union and its members."⁴ 

In early 1974, the employees covered by these collective bargaining agreements were advised by the Storer profit sharing plan trustee that they would receive the amounts that had "vested" in their favor, as set forth in the profit sharing plan agreement. Thirteen employees accepted checks in these amounts. Seven employees rejected such checks and demanded payment of the full amounts "credited" to their accounts, which was a larger sum. Storer refused to pay such additional amounts.

The union took the matter to an arbitrator,⁵  who initially ruled that the matter was arbitrable between the union and Storer even though Storer claimed it had no control over the profit sharing plan trustee and was not entitled to receive any sums back from the trust when an employee left the plan's coverage. On the merits, the arbitrator construed the language quoted above⁶  as binding Storer to whatever reasonable interpretation the union had made and communicated to its members concerning their rights upon termination of their participation in the Storer profit sharing plan. Pursuant to this construction, the arbitrator made a factual finding that the union had represented to its members that they would receive all amounts credited to their accounts, not just vested amounts. Thus, the arbitrator entered an award in favor of the seven employees who had claimed they were entitled to such credited amounts.⁷ 

Storer filed an application in the district court to vacate the award on the grounds that there was no evidentiary support for the arbitrator's finding that the union had represented to its members that they would receive the credited amounts. The district court noted that "the arbitrator's decision does not clearly indicate the basis upon which (this) finding (was) predicated." The court ordered a limited remand to allow the "arbitrator to state in writing the factual predicate upon which he based his conclusion that the local union had advised its members that they would receive full payment upon termination of participation" in the profit sharing plan.

In response to the remand, the arbitrator informed the court that "since the Union's version of how the affected employees should be paid out upon cessation of participation seemed more logical than the Company's version, the arbitrator concluded that it was the Union's version which was related, or disclosed, to the members of the two bargaining units." The arbitrator also reasoned that the union must have told its members that they would receive the full credited amounts because otherwise the seven members would not have objected to receiving only the vested amounts. The arbitrator cited nothing in the record supporting his factual finding that the union had so informed its members.

The district court then reviewed the case, granted the union's motion for summary judgment, and dismissed Storer's application. The court reasoned that the "arbitrator was entitled to draw reasonable inferences and conclusions from the agreement in evidence before him."

It is very well settled that the courts are generally required to refrain from reviewing the merits of an arbitrator's award due to the policy favoring arbitration as a means of resolving labor disputes. This was established in the Steelworkers Trilogy⁸  and has been applied numerous times by this court.⁹  But there are at least two important exceptions to this general rule.¹⁰  First, "the arbitrator is confined to the interpretation and application of the collective bargaining agreement, and although he may construe ambiguous contract language, he is without authority to disregard or modify plain and unambiguous provisions." Detroit Coil Co. v. Int'l Ass'n of Machinists, 594 F.2d 575, 579 (6th Cir. 1979), Citing cases. Thus, the courts are empowered to set aside an award if the arbitrator exceeds these confines. Second, "although a court is precluded from overturning an award for errors in the determination of factual issues, '(n)evertheless, if an examination of the record before the arbitrator reveals no support whatever for his determinations, his award must be vacated.' " Id. at 580-81, Citing NF & M Corp. v. United Steelworkers of America, 524 F.2d 756, 760 (3d Cir. 1975). See also Timken Co. v. Local Union No. 1123 United Steelworkers of America, 482 F.2d 1012, 1014-15 (6th Cir. 1973).

Storer has not argued that the arbitrator went beyond the plain meaning of the contract in construing it to bind Storer to pay to the union's members whatever amounts the union reasonably represented to them that they would receive.¹¹  Rather, Storer has contested only the arbitrator's factual finding that the union did indeed represent to its members that they would receive the credited amounts in their profit sharing accounts.

We agree with Storer that there is absolutely no evidentiary support in the record before the arbitrator for this factual finding. Our search of the record revealed no testimony or documentary evidence to this effect. The union's brief to this court has pointed to no such evidence in the record.

The arbitrator himself, in the face of a specific request from the district court, could cite no factual support for his finding. Instead, the arbitrator was reduced to arguing that the union must have disclosed to its members that they would receive the credited amounts because that was "more logical." While logic can be helpful to supplement evidence or to draw inferences from evidence, it cannot substitute for evidence.¹² 

The arbitrator also reasoned that the union must have disclosed that its members would receive the credited amounts because otherwise the seven union members would not have objected when offered only the vested amounts. Putting aside the fact that almost twice as many union members accepted the vested amounts, we think this reasoning by the arbitrator proves too much. Initially, common sense teaches that the mere fact that a dispute has arisen does not weigh in favor of either party in resolving the dispute. More importantly, the mere fact that a dispute has arisen cannot substitute for evidence on the issues involved in the dispute.¹³ 

It is apparent that rather than base his award on evidence in the record, the arbitrator "dispense(d) his own brand of industrial justice."¹⁴  This he cannot do.

Since the union's and its members' real dispute is with the profit sharing plan trustee, who was not a party to the arbitration or this action, our disposition is without prejudice to whatever legal rights they may be able to assert against the trustee or the plan's administrative committee pursuant to the dispute resolution mechanism set forth in the profit sharing plan.

The judgment of the district court is reversed and the cause is remanded to that court with directions to vacate the award of the arbitrator and for further proceedings consistent with this opinion.¹⁵ 

PECK, Senior Circuit Judge, dissenting.

As noted by the majority opinion, federal courts set aside the awards of labor arbitrators only in a limited number of circumstances. One such circumstance, and the one appellant argues is now before this Court, occurs when an arbitrator renders a decision that is not based on the evidence presented. The majority opinion concludes that there was "absolutely no evidentiary support" for the arbitration award in dispute. I can not agree.

The substance of the present appeal resolves into a single issue.¹  The arbitrator found that appellee union had disclosed to its members that they would receive all amounts credited to their pension accounts, not merely vested amounts,²  pursuant to the 1973 collective bargaining agreements with Storer Broadcasting. Was there evidence before the arbitrator to support this finding? In response to an inquiry by the district court, the arbitrator stated that he had based his finding on two grounds. First, the fact that seven of the twenty union members had refused to settle for the lesser vested amounts suggested to the arbitrator that the union had informed its members that they would receive the larger credited amounts. Admittedly, this evidence is of marginal weight; however, it is not totally specious, as suggested by appellant. Second, the arbitrator reasoned that it was "logical" that the union had informed its members that the 1973 collective bargaining agreements required disbursement of all credited pension benefits. On this second ground, and contrary to the suggestion made by the majority opinion, the arbitrator was applying more than simple, abstract logic. In the pension plan agreement whose benefits are the subject of this appeal, it was provided that an employee would receive only a vested amount of his pension benefits, less than 100%, if he terminated his employment prior to the completion of his ninth year.³  This type of vesting schedule can be viewed either as a "penalty" for an employee who terminates his employment "early," or as an incentive for an employee to extend his years of service. In addition, the same pension plan agreement provided that if the pension plan itself was dissolved, all employees would receive their full credited amounts, not merely their vested shares.⁴  In light of the fact that the pension plan was discontinued and superceded by another pension plan, and in light of the fact that all employees involved were continuing in their employment at Storer, the arbitrator resolved the dispute between the union and Storer, by drawing an analogy to the provision in the pension plan agreement relating to plan termination. He stated:

"Although there are no specific provisions in the profit sharing plan which would govern a distribution of funds under the circumstances present in this case, Section 6.9, Vesting on Termination of the Plan, is the one section which comes nearest to providing a solution of this issue. Specifically, sub-paragraph 2, provides for termination of participation in the plan by a subsidiary. Each of the two bargaining units with which we are involved here, may, in the opinion of the arbitrator, be considered to be analogous to a subsidiary within the Company and therefore, when the members of the two bargaining units ceased to participate in the Company's profit sharing plan, on the basis of the entirety of each bargaining unit, each bargaining unit could be compared to a subsidiary of the Company. The type of termination in such instance, is most closely aligned to the termination of participation which is involved in this case, and such similarly would seem to be reasonable."

Accordingly, the arbitrator found it "logical" that Storer had agreed to pay the full credited amounts, as it would have done under the plan termination provision, and that the union had so advised its members. In my mind, the arbitrator's logic amounted to a reasonable inference. Not only Should the parties have agreed to a disbursement of the full credited amounts, but, based on their previous dealings under the discontinued pension plan, it was reasonable for the arbitrator to find that the parties Had in fact agreed to such terms. As did the district court, I conclude that, from adequate evidence, the arbitrator drew acceptable inferences and made proper factual findings.