In the
United States Court of Appeals
For the Seventh Circuit

Nos. 99-1640 and 99-1641

Consolidation Coal Company,

Plaintiff-Appellee, Defendant-Appellee,

v.

United Mine Workers of America, District 12,
Local Union 1545,

Defendant-Appellant, Plaintiff-Appellant.



Appeals from the United States District Court
for the Southern District of Illinois, Benton Division.
Nos. 98 C 4176 & 96 C 4267--James L. Foreman, Judge.


Argued January 13, 2000--Decided May 17, 2000



 Before Posner, Chief Judge, and Bauer and Rovner,
Circuit Judges.

 Posner, Chief Judge. The parties to these
consolidated appeals, an employer and a union,
have a collective bargaining agreement that
provides for arbitration of disputes arising
under it. The employer changed certain of its
staffing practices in an effort to avoid paying
overtime wages. The change precipitated a slew of
grievances by the union, of which seven resulted
in arbitration proceedings (all before different
arbitrators) that are relevant to the appeal. The
issue in all the arbitrations was the same:
whether the change in staffing practices violated
the collective bargaining agreement. The employer
won all but the fourth of the arbitrations. The
fourth differs from the other six in not
involving claims for compensation for individual
workers adversely affected by the challenged
staffing practice. The award in the fourth is a
general declaration that the staffing practice
violates the collective bargaining agreement. The
other six sought compensation for individual
workers. The union sought enforcement of the
award in its favor in a federal district court
under the Taft-Hartley Act, which in section 301
(29 U.S.C. sec. 185) makes collective bargaining
agreements enforceable. The court enforced the
award, and the employer did not appeal.
 The company had won the first three arbitrations
after the hearing before the fourth arbitrator
but before he rendered his award in favor of the
union. But neither party told the fourth
arbitrator about the outcome of those
arbitrations. In the case under review--the
second round in the district court, the first
having ended with the court’s confirmation of the
fourth award, the one in favor of the union--the
district court confirmed the six arbitration
awards that the company had won, all of which
were rendered before the district court confirmed
the fourth award. The union appeals.

 The upshot of the two district court decisions,
one enforcing the award in favor of the union and
the other enforcing the awards in favor of the
company, is not a happy one, since the decisions
are inconsistent, with six of them rejecting the
premise of the seventh (that is, of number 4).
Yet it is not quite the recipe for anarchy that
it may appear to be. The first district court
decision, in confirming the fourth arbitrator’s
award, did not order the employer to rescind the
change in its staffing practices (courts are
reluctant to issue labor injunctions, though they
will enforce an arbitrator’s injunction, e.g.,
Local 1545 v. Inland Steel Coal Co., 876 F.2d
1288, 1292-96 (7th Cir. 1989); United Electrical,
Radio & Machine Workers v. Honeywell Inc., 522
F.2d 1221, 1225-28 (7th Cir. 1975); Derwin v.
General Dynamics Corp., 719 F.2d 484, 491 (1st
Cir. 1983), which however the fourth arbitrator’s
award was not), while the second decision,
confirming a bunch of awards in favor of the
employer, authorizes the employer to continue in
its changed course with respect to the workers
involved in those arbitrations but does not
rescind the order of the fourth arbitrator, which
would be flatly contrary to the district court’s
first decision. (Hence the district court was
correct to reject the union’s argument that by
continuing to arbitrate the issue resolved in the
union’s favor by the fourth arbitrator, the
company was in contempt of the district court’s
order confirming the fourth arbitrator’s award.)
Any subsequent disputes are likely to be resolved
in the company’s favor as well, as we shall see;
and the company points out that in any event,
since judicial review of an arbitration award is
so limited as to be little better than a rubber
stamp, arbitral awards based on diametrically
opposed interpretations of the identical contract
can all withstand judicial review. E.g., American
Nat’l Can Co. v. United Steelworkers of America,
120 F.3d 886, 891-93 (8th Cir. 1997); Connecticut
Light & Power Co. v. Local 420, 718 F.2d 14, 20-
21 (2d Cir. 1983); Westinghouse Elevators of
Puerto Rico, Inc. v. S.I.U. de Puerto Rico, 583
F.2d 1184 (1st Cir. 1978). This is provided that
the inconsistent interpretations do not result in
the kind of impasse that would be presented if
the employer were simultaneously enjoined by a
court from continuing, and authorized by the
court to continue, the identical practice. But,
as we have seen, that is not a problem here.

 Yet when multiple suits as closely related as
are these seven arbitrations are filed in court,
they invariably are consolidated. However, the
consolidation of arbitrations, as distinct from
the consolidation of court suits, is a creature
of contract, Connecticut Gen’l Life Ins. Co. v.
Sun Life Assurance Co., No. 99-4085, 2000 WL
490692, *2 (7th Cir. April 27, 2000), and the
collective bargaining agreement in this case
permits consolidation of grievances (the filing
of a grievance being the first stage in the
dispute resolution process that includes, as its
final stage before judicial review, the
proceeding before the arbitrator) only if both
union and employer agree to consolidate them, and
they did not do so here. Nevertheless, when,
before the fourth arbitrator ruled, the first
three arbitrations came out in favor of the
employer, one might have expected the employer to
so advise the fourth arbitrator, and this it
failed to do. It argues that it could not do so
because the collective bargaining agreement
forbids reopening the record after the hearing
before the arbitrator. The argument is unsound.
The decisions of the other three arbitrators were
not evidence--the sort of thing a prohibition
against reopening the record would cover. They
were the arbitral equivalents of judicial
decisions, of which, of course, a court can take
judicial notice; and in just the same way an
arbitrator can take "arbitral notice" of a
previous decision by another arbitrator dealing
with the same or a related issue--especially
since, as we are about to see, the collective
bargaining agreement requires arbitrators to give
prior arbitral decisions preclusive effect, which
they cannot do if no one informs them of those
decisions.

 That effect, like most features of arbitration,
is indeed a matter of contract rather than a
matter of law. E.g., Pierce v. Commonwealth
Edison Co., 112 F.3d 893, 895-96 (7th Cir. 1997);
Brotherhood of Maintenance of Way Employees v.
Burlington Northern R.R., 24 F.3d 937, 940 (7th
Cir. 1994); American Nat’l Can Co. v. United
Steelworkers of America, supra, 120 F.3d at 891-
92; Hotel Ass’n of Washington, D.C., Inc. v.
Hotel & Restaurant Employees Union, 963 F.2d 388
(D.C. Cir. 1992); District 37 v. Lockheed
Engineering & Mgmt. Services Co., 897 F.2d 768,
773 (5th Cir. 1990); G. Richard Shell, "Res
Judicata and Collateral Estoppel Effects of
Commercial Arbitration," 35 UCLA L. Rev. 623,
660-63 (1988). If the parties to the collective
bargaining agreement want the first arbitrator’s
interpretation of a provision of the agreement or
resolution of a dispute arising under the
agreement to have preclusive effect, they can so
provide; and whether they do so or not, the
question of the preclusive force of the first
arbitration is, like any other defense, itself an
issue for a subsequent arbitrator to decide.
E.g., Independent Lift Truck Builders Union v.
NACCO Materials Handling Group, Inc., 202 F.3d
965, 968 (7th Cir. 2000); Brotherhood of
Maintenance of Way Employees v. Burlington
Northern R.R., supra, 24 F.3d at 940; Chiron
Corp. v. Ortho Diagnostic Systems, Inc., 207 F.3d
1126, 1132-33 (9th Cir. 2000); John Hancock
Mutual Life Ins. Co. v. Olick, 151 F.3d 132, 139-
40 (3d Cir. 1998); National Union Fire Ins. Co.
v. Belco Petroleum Corp., 88 F.3d 129, 135-36 (2d
Cir. 1996). Most arbitrators, applying the
arbitral equivalent of common law, would indeed
give preclusive effect to the first arbitration,
even in the absence of contractual guidance,
provided that the usual conditions of res
judicata were fulfilled. See Fairweather’s
Practice & Procedure in Labor Arbitration 525-33
(4th ed., Ray J. Schoonhoven ed. 1999); Timothy
J. Heinsz, "Grieve It Again: Of Stare Decisis,
Res Judicata and Collateral Estoppel in Labor
Arbitration," 38 B.C. L. Rev. 275, 286-93 (1997);
Shell, supra, 35 UCLA L. Rev. at 663-64. Anyway,
here the contract did make clear that res
judicata is a defense in a subsequent
arbitration. See Heinsz, supra, 38 B.C. L. Rev.
at 286-87, describing the contract. So by failing
to argue preclusion to the fourth arbitrator, the
employer forfeited a good defense that would have
headed off the confusion that ensued.

 It might seem that once the fourth arbitrator’s
decision came down, res judicata clicked in and
entitled the union to block any subsequent
inconsistent arbitration awards unless and until
that decision was vacated by a reviewing court.
Not so. It was up to the subsequent arbitrators,
5 through 7, to decide what significance to
attach to the employer’s having booted its res
judicata defense before the fourth arbitrator;
and they decided to give it no weight. They
forgave the employer’s waiver, and like other
procedural questions in arbitration not regulated
by law their determination as to whether to
forgive the waiver cannot be second-guessed by a
court. Connecticut Gen’l Life Ins. Co. v. Sun
Life Assurance Co., supra, at *2; Baravati v.
Josephthal, Lyon & Ross, Inc., 28 F.3d 704, 709
(7th Cir. 1994); UHC Management Co. v. Computer
Sciences Corp., 148 F.3d 992, 997 (8th Cir.
1998). They did it, oddly, out of a commitment to
res judicata so profound as not to brook a
forfeiture: they held that they were bound by the
decisions made by the first three arbitrators.

 It doesn’t follow that it was right for the
district court in the second go round to enforce
the other arbitration awards (that is, 1 through
3 and 5 through 7). We must consider the possible
res judicata effect of the first district court
decision, a distinct issue from the res judicata
effect of the arbitral awards. The union argues
that the district court’s judgment in the first
round, when the issue before the court was
whether to enforce the fourth arbitrator’s award,
which was in favor of the union, was res
judicata. The other six awards, the ones in favor
of the employer, all were rendered before the
district court confirmed the fourth award. The
employer’s claim for judicial confirmation of
those awards was, the union argues, a compulsory
counterclaim to the union’s claim for enforcement
of the fourth arbitrator’s award, because both
claims arose out of the same transaction or
occurrence, Fed. R. Civ. P. 13(a), and failure to
plead a compulsory counterclaim bars as a matter
of res judicata its being presented in a
subsequent suit. Baker v. Gold Seal Liquors,
Inc., 417 U.S. 467, 469 n. 1 (1974); Publicis
Communication v. True North Communications Inc.,
132 F.3d 363, 365 (7th Cir. 1997); Olympia Hotels
Corp. v. Johnson Wax Development Corp., 908 F.2d
1363, 1367 (7th Cir. 1990); Driver Music Co. v.
Commercial Union Ins. Cos., 94 F.3d 1428, 1435
(10th Cir. 1996); 6 Charles Alan Wright, Arthur
R. Miller & Mary Kay Kane, Federal Practice &
Procedure sec. 1417, p. 129 (2d ed. 1990).

 But while the seven arbitrations all arose out
of the same transaction or occurrence, namely the
staffing dispute, the two district court
proceedings did not. They arose out of the
arbitrations, which we deem to have been separate
transactions or occurrences. We make this
classification not under the compulsion of the
words of Rule 13(a), but because of the need to
respect the right of the arbitrators to resolve
disputes within the scope of the authority
granted them by the collective bargaining
agreement. The arbitrators who administer this
agreement have, we noted, a fierce commitment to
res judicata. Paradoxically, it would be
nullified were we to display an equal zeal for
the principle of res judicata embedded in Rule
13(a)--if, that is to say, we agreed with the
union that the district court was precluded from
confirming the arbitral awards that were based on
the arbitrators’ commitment to arbitral res
judicata. And, precisely because of their
commitment, we needn’t worry overmuch that the
district court will be asked to confirm
inconsistent awards from now until every single
worker at Consolidation Coal Company’s plant has
gone through arbitration. Given the rule of res
judicata applied by the arbitrators under this
collective bargaining agreement, it is reasonably
certain that all subsequent arbitrations will be
decided in favor of the company and will be
confirmed by the district court if the union
refuses to bow to them. The essential point,
however, is that the res judicata effect of a
judicial decision merely confirming an arbitral
award is extremely limited. All it amounts to is
a determination that there is no basis for
upending that award; the effect on subsequent
awards must be left to the arbitrators who make
them.

 The union has no colorable defense to the
confirmation of the awards in favor of the
company other than res judicata, and so the
district court’s judgment is

Affirmed.
