                                                                                                                           Opinions of the United
2008 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


11-10-2008

United Steel Paper v. Neville Chem Co
Precedential or Non-Precedential: Non-Precedential

Docket No. 07-3554




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                                                       NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT


                             No.07-3554




        UNITED STEEL, PAPER AND FORESTRY,
         RUBBER, MANUFACTURING, ENERGY,
      ALLIED INDUSTRIAL AND SERVICE WORKERS
               INTERNATIONAL UNION

                                   v.

                 NEVILLE CHEMICAL COMPANY,
                                      Appellant




            On Appeal from the United States District Court
               for the Western District of Pennsylvania
                        (D.C. No. 06-cv-00640)
            District Judge: Honorable Terrence F. McVerry


              Submitted Under Third Circuit LAR 34.1(a)
                          October 30, 2008

 Before: SLOVITER, STAPLETON, and TASHIMA,* Circuit Judges

                     (Filed November 10, 2008 )


                              OPINION



        *
           Honorable A. Wallace Tashima, Senior Judge of the
  United States Court of Appeals for the Ninth Circuit, sitting by
  designation.
SLOVITER, Circuit Judge.

       United Steel, Paper & Forestry, Rubber, Manufacturing, Energy, Allied Industrial

& Service Workers International Union (the “Union”), brought this action to enforce an

arbitration award which directed Neville Chemical Company (“Neville”), the employer,

to reinstate Gregory McCann, a Union member, and make him whole. Neville appeals

the District Court’s Orders granting the Union’s motion for summary judgment and

ordering Neville to pay damages consisting of back pay from the date of McCann’s

discharge and unemployment compensation.

                                             I.

       The parties agree on the facts. McCann, a longtime employee of Neville, became a

Packager in 2003, a position requiring repetitive lifting of fifty pound bags. From July

2004 until his discharge, McCann was working in a light duty capacity as a result of a

back injury he sustained in May 2004. McCann’s physician reported that McCann’s

condition was improving; thus he remained eligible for light duty work under Neville’s

Return to Work Procedure because his injury was deemed temporary and he was making

progress toward a return to full duty.

       In February 2005, McCann was disciplined for his involvement in two work

incidents. The first incident, which occurred on February 15, 2005, resulted in McCann

being suspended for three days without pay. The second, which occurred on February 20,

2005, resulted in McCann being suspended without pay for five days and subject to



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discharge. McCann last worked on March 14, 2005. On March 15, 2005, the Union filed

grievances relating to the two incidents pursuant to the collective bargaining agreement,

which were submitted to arbitration. On January 19, 2006, the arbitrator issued Awards

deciding each grievance. The arbitrator decided that Neville had proper cause to

discipline McCann for the second incident only. Therefore, the arbitrator rescinded the

first suspension and reduced the discharge to a three-day suspension without pay from

March 20 through March 22 as the next step in progressive discipline. The arbitrator

directed Neville to reinstate McCann and make him whole from March 23, 2005 until his

reinstatement.

       The parties agree that Neville subsequently reimbursed McCann for the reduction

in his suspensions, reinstated his health insurance benefits and seniority, and paid him the

balance due for his 2005 vacation and holiday pay. Neville did not, however, reinstate

McCann or pay him back pay from March 23, 2005. Neville contended that it could not

reinstate McCann because he was physically unable to perform his former job and,

because his condition was permanent, he was no longer eligible for light duty work under

the Return to Work Procedure.

       The District Court, in granting summary judgment in favor of the Union, held that

Neville waived the right to raise McCann’s physical limitations as a defense to the

enforcement of the award because it failed to raise the issue before the arbitrator.

Furthermore, Neville failed to make a timely motion to vacate or modify the arbitration



                                              3
award. The District Court’s damages award included back pay from the date the

arbitration award ordered reinstatement, and the amount of unemployment compensation

McCann would have received during a lockout at Neville’s facility had he been

reinstated. In ordering back pay, the District Court rejected Neville’s argument that back

pay cannot be awarded during a period of disability, once again because Neville failed to

raise McCann’s physical limitations before the arbitrator or in a motion to vacate the

arbitration award.

                                              II.

         The District Court had subject matter jurisdiction pursuant to Section 301(a) of the

Labor Management Relations Act, 29 U.S.C. § 185(a) and 28 U.S.C. § 1331. This court

has jurisdiction from the entry of the District Court’s Orders pursuant to 28 U.S.C. §

1291. We have plenary review of the District Court’s Orders. See United Food &

Commercial Workers Union Local 1776 v. Excel Corp., 470 F.3d 143, 145 (3d Cir.

2006).

                                              III.

         Neville argues that the District Court committed legal error in granting summary

judgment in favor of the Union because McCann was physically unable to return to work.

Neville argues that because McCann applied for workers’ compensation claiming total

disability as of March 14, 2005, he admitted he had become totally disabled as of the date

of his discharge. Therefore, Neville complied with the arbitration agreement in that it



                                               4
made McCann whole by restoring him to the state he was in on the date of his discharge

as a totally disabled inactive employee. Neville argues that the District Court’s Orders, in

effect, granted McCann a permanent light duty job, which is an issue the arbitrator did not

decide and a result that is contrary to the terms of the Return to Work Procedure.

       As the District Court concluded, Neville waived these arguments. An employer’s

failure to raise defenses to the enforcement of an arbitration award in a timely motion to

vacate or modify the award bars it from raising them thereafter. See Serv. Employees

Int’l Union Local 36 v. City Cleaning Co., 982 F.2d 89, 93 (3d Cir. 1992). As Neville

failed to bring an action to modify, vacate, or correct the arbitration award within thirty

days as required under Pennsylvania law, it is precluded from arguing that it was unable

to reinstate McCann due to physical inability and that it cannot be ordered to pay back

pay. 42 Pa. Cons. Stat. Ann. § 7314(b); Serv. Employees Int’l Union Local 36, 982 F.2d

at 93. In addition, Neville failed to raise this issue at the arbitration hearings even though

the medical records and testimony in connection with McCann’s workers’ compensation

proceeding, which are the basis of Neville’s argument, were available at the time of the

arbitration hearings. The District Court’s award of back pay from the time McCann was

discharged does not grant a permanent light duty position. It merely enforces the

arbitration award.

       We reject Neville’s argument that the District Court’s holding is in conflict with

our opinion in United Food and Commercial Workers Union Local 1776 v. Excel Corp.,



                                              5
470 F.3d 143 (3d Cir. 2006). In Excel, we held that an employer’s payment of back pay

from the date of an employee’s wrongful suspension to the date of his second termination

for separate conduct acted as effective reinstatement in satisfaction of the arbitration

award and “the employer was free to terminate the employee a second time based on

independent grounds, pending a second arbitration.” Id. at 144. Important to our decision

were the facts that the employer notified the employee that he was being terminated for

the independent grounds and the employer presented the independent reason to the

arbitrator but the arbitrator did not consider it. Id. at 149. Here, in contrast, Neville did

not notify McCann that his alleged disability was a ground for termination until well after

the arbitrator’s award and, most importantly, it failed to present this basis for termination

to the arbitrator. As we noted in Excel, “[t]he long-established federal policy of settling

disputes by arbitration would be seriously undermined if parties kept available

information from the arbitrator and then attempted to use the information as a defense to

compliance with an adverse award.” Id. (quoting Chicago Newspaper Guild v. Field

Enters., Inc., 747 F.2d 1153, 1157 (7th Cir. 1984)).

       Finally, Neville argues that the damages awarded for the unemployment

compensation McCann would have received had he been reinstated allows the Union to

collaterally attack the denial of McCann’s unemployment compensation claim and

violates the Rooker-Feldman doctrine. On the contrary, the District Court did not impose

these damages as a second opportunity to receive unemployment compensation, but rather



                                               6
to satisfy the arbitration award’s direction that McCann be “made whole.” App. at 136a.

                                          IV.

      For the above-stated reasons, we will affirm the District Court’s Orders.




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