Unpublished Disposition, 895 F.2d 1416 (9th Cir. 1990)

MEMORANDUM^* 

American Poultry Company, Inc. ("American) appeals the district court's confirmation of an arbitrator's decision. We affirm.

DISCUSSION

1. Essence from Collective Bargaining Agreement

American Poultry argues that the award does not draw its essence from the collective bargaining agreement because it improperly modified the "clear and unambiguous" language of the agreement. We disagree.

We conclude that the language, " [i]t shall not be a violation of this agreement ..." was sufficiently ambiguous to warrant the arbitrator's interpretation of the picket line clause. We also conclude that the arbitrator's interpretation of the picket line clause was plausible. We reach this conclusion based on our decision in Edna H. Pagel, Inc. v. Teamsters Local Union 595, 667 F.2d 1275 (9th Cir. 1982). In Pagel, we held that an arbitrator could interpret a picket line clause to prohibit permanent replacement when it specifically prohibited discharge. Id. at 1279. We did so because "permanent replacement is a drastic economic action which in many respects is similar in its effect to discharge". Id.

American Poultry also argues that Arbitrator Kagel's award should not be enforced because it violates the public policy announced in Butterworth-Manning-Ashmore Mortuary, 270 N.L.R.B. 1014 (1984), that an employer cannot be deprived of his statutorily guaranteed right to replace sympathy workers unless the employer clearly and unmistakably waives that right. We disagree.

We conclude that the narrow public policy exception to the requirement that courts defer to the awards of arbitrators does not apply in this case. See United Paperworkers Intern. Union v. Misco, Inc., 108 S. Ct. 364 (1987). We recently held that an arbitration award cannot be vacated as being contrary to public policy simply because the award conflicts with NLRB precedent. See Local Joint Exec. Bd. of Las Vegas v. Riverboat Casino, 817 F.2d 524, 528 (9th Cir. 1987). Thus, Butterworth does not represent a "well-defined and dominant" public policy precluding an interpretation that the parties agreed to prohibit permanent replacement of sympathy strikers. See Misco, 108 S. Ct. at 374. Moreover, even if we were to assume that Butterworth supports the existence of such a policy, American Poultry has failed to show that the Arbitrator's award itself violated that policy. See id. Rather than showing how reinstatement and back pay for the sympathy strikers violated public policy, American Poultry argues only that Arbitrator Kagel's interpretation of the CBA violated public policy.

We also conclude that Broadway Cab Co-op. v. Teamsters & Chauf. Local, 710 F.2d 1379 (9th Cir. 1983) is inapplicable to this appeal. The question in Broadway was whether a clause within a CBA was enforceable in light of the "hot cargo" provision of the NLRA (section 8(e)). We refused to enforce the arbitrator's award (employing estoppel principles to decide whether the contract violated the provision), ruling that it violated "law and public policy." Yet, deference to the arbitrator's award in Broadway was unwarranted because the arbitrator ignored Supreme Court precedent foreclosing the use of estoppel principles to defeat a section 8(e) defense. In contrast, the award of Arbitrator Kagel merely applies his interpretation of the contract. Reinstatement violates no laws; indeed, no law would have prevented the parties from explicitly agreeing that sympathy strikers should not be permanently replaced.

AFFIRMED.

O'SCANNLAIN, Circuit Judge, dissenting:

While I agree with the court's observation that the arbitrator made a "plausible" interpretation of the picket line clause in the CBA so far as it goes, I respectfully dissent from the court's application of Butterworth and the result in this case.

In my view, Butterworth indeed expresses well-defined and dominant public policy which should lead us to reverse the award of the arbitrator in this case. This result would not conflict with Pagel, which did not reach the issue of whether the picket line clause violated a public policy. In determining whether an award is contrary to public policy, we must examine "whether the award created any explicit conflict with other 'laws and legal precedents.' " Misco, 108 S. Ct. at 373 (quoting W.R. Grace & Co. v. Rubber Workers, 461 U.S. 757, 766 (1983)); see also Stead Motors v. Automotive Machinists Lodge 1173, 886 F.2d 1200, 1209-10 (9th Cir. 1989) (en banc).

In Butterworth, the NLRB considered a virtually identical picket line clause to the one at issue here. The NLRB concluded that the clause does not constitute a waiver of an employer's right permanently to replace sympathy strikers. Butterworth, 270 NLRB at 1015. The NLRB grounded its conclusion in the strong public policy against implied waivers of statutory rights. Waivers of such rights must be clear and unmistakable. Id.

The Supreme Court endorsed this public policy in Metropolitan Edison Co. v. NLRB, 460 U.S. 693, 707-08 (1983). In Metropolitan Edison, the Court considered whether a labor union waived its officials' bargaining rights where the existing CBA contained a no-strike clause. The Court concluded that it would "not infer from a general contractual provision that the parties intended to waive a statutorily protected right unless the undertaking is 'explicitly stated.' More succinctly, the waiver must be clear and unmistakable." Id. at 708; see also NLRB v. Southern California Edison Co., 646 F.2d 633, 636 (9th Cir. 1981), cert. denied, 454 U.S. 818 (1981).

The arbitrator's decision here infringed upon this well-established public policy against implied waivers of statutory rights. The picket line clause does not contain an express waiver of the employer's right to replace sympathy strikers and therefore the arbitrator's interpretation of the CBA was foreclosed on this point. Accordingly, I would reverse the district court's order confirming the arbitrator's decision.