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The First Circuit held that when a party fails to challenge clarification of an adverse arbitration award, the party forfeits its defense that the clarification was a prohibited “alteration” of the final award.
In Local 2322, International Brotherhood of Electrical Workers v. Verizon New England, Inc., Nos. 06-1170, 06-1169, 2006 WL 2773485 (1st Cir. Sept. 28, 2006), an arbitrator decided the merits of a dispute between Verizon and Ouellette, a Verizon employee represented by union Local 2322. The union demanded arbitration on Ouellette’s behalf when Verizon deemed Oullette’s absence to attend a funeral an unauthorized absence, resulting in a one-day work suspension.
In June 2004, the arbitrator issued an award finding that Verizon’s suspension of Ouellette was “not for just cause.” The award required that “the day” be converted to leave without pay. Verizon changed its record and marked the funeral day as an “unpaid absence,” but refused to pay Ouellette for the one-day suspension, marking it as an “unauthorized absence.”
When Verizon refused to pay Ouellette for the suspended day, interpreting “the day” to mean only the day Ouellette left for the funeral, the union requested clarification from the arbitrator. The arbitrator responded by letter that he intended to award Ouellette back pay for the suspended day. Verizon never complied, nor did it seek judicial review of the clarifying letter.
The union sued Verizon under the Labor Management Relations Act to enforce the back pay authorized by the clarification letter. Verizon argued that the letter was an “illegitimate alteration of the original June award.” In response, the union claimed that Verizon had forfeited its “alteration” defense because it never challenged the letter in court. The district court granted summary judgment in favor of the union, and Verizon appealed.
On appeal, the Court held that Verizon was required to seek judicial review of the adverse “clarification” by the arbitrator in order to preserve the “alteration” defense. The Court explained: “In arbitration, and not just labor arbitration, it is common to require the losing party to seek review or be foreclosed from objecting to an award.” Verizon forfeited its defense by not challenging the clarification letter.
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