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SIXTH DIVISION
July 3, 2003

No. 1-02-2725

PRESIDING JUSTICE O'BRIEN delivered the opinion of thecourt:

Local 241 and Local 308 of the Amalgamated TransitUnion (the Unions) brought an action to vacate anarbitration award interpreting a provision in theircollective bargaining agreement with the Chicago TransitAuthority (CTA) pertaining to the formula for calculatingpension contributions for CTA employees serving as part-timeofficers of the Unions. Finding that the arbitrator hadexceeded his authority under the collective bargainingagreement, the circuit court granted summary judgment forthe Unions and vacated the arbitration award. The CTAappeals. We affirm.

Local 241 is the exclusive representative of a group ofemployees including, but not limited to, bus driversemployed by the CTA. Local 308 is the exclusive representativeof a group of employees including, but not limited to, rapidtransit operators employed by the CTA.

The Unions and the CTA are parties to a collectivebargaining agreement for the term January 1, 1996, throughDecember 31, 1999. The collective bargaining agreementincorporates a retirement plan for CTA employees that isfunded by contributions from both the CTA andparticipating employees. The CTA and the participatingemployees contribute to the retirement plan at ratescalculated by a percentage of each employee's"compensation."

Prior to 1990, a fixed cap formula, known as Rule 14,provided that "compensation" for pension contributionpurposes would be calculated as basically CTA pay plus 5%. Since 1990, the retirement plan eliminated references to theRule 14 fixed cap formula and provided that "compensation"for full-time and part-time Union officers would consist ofthe individual's combined "total earnings" from the CTA andthe Unions. The retirement plan also now provides that, forpension purposes, the "compensation" of a union memberoccupying a position with an International office shall notexceed the compensation of the highest paid officer of theLocal.

In July 1996, a dispute arose between the Unions and theCTA over the interpretation of the term "total earnings" inthe retirement plan as applied to part-time Union officers. The CTA claimed that a certain part-time Local 241 officer hadretired with an excessively large pension allowance. The CTAcontended that it requested certain documentation fromthe Union to investigate the matter, and when none wasforthcoming, the CTA ceased making contributions to the retirement fund on the reported earnings of full-time andpart-time officers of Local 241. When the parties were unableto settle the dispute, they agreed to arbitration.

The arbitrator ruled in relevant part as follows:

"[A] reasonable limit on 'total earnings' paid toindividuals in part-time Union positions is required andwill be imposed. However, no limit will be imposed onearnings prior to July 1, 1996.

*** Effective July 1, 1996, earnings for pension benefitpurposes for individuals in part-time positions with thelocal Unions will be limited to the following, using thetwo options in Rule 14 as amended on April 21, 1980:

(a) For the period July 1, 1996, through April 30, 1998,the basic pay as computed under Rule 14, including the5% adjustment representing average overtime and otherpay credits plus up to an additional 20% over and abovesuch base pay.

(b) Effective May 1, 1998, the basic pay as computedunder Rule 14, including the 5% adjustment representingaverage overtime and other pay credits plus up toadditional 10% over and above such base pay.

The 20% and 10% additional adjustments are notautomatic entitlements. Any additional compensationover and above the basic pay, as defined above, up to the20% and 10% additional limits, must be justified byadequate documentation showing payments by theLocal Unions for CTA-related work performed for theUnion. What constitutes 'adequate documentation'and 'CTA-related' work is referred to the parties forfinal determination."

The parties were unable to agree about what constitutes"CTA-related work" and "adequate documentation" and askedthe arbitrator for clarification. On January 12, 2001, thearbitrator answered that with respect to CTA-related work,the Unions had the burden of demonstrating that theactivity for which retirement credit was sought wasrelevant to the CTA's interests and concerns. With respectto the question concerning adequate documentation, thearbitrator ruled that the CTA was entitled to "reasonablysubstantive evidence as to the duration and nature of theUnion work performed."

The Unions subsequently filed an action to vacate thearbitration award. The circuit court found that thearbitrator had exceeded his authority and granted theUnions' motion for summary judgment and vacated thearbitration award. The CTA brought a motion forreconsideration, which the court denied. The CTA filed thistimely appeal.

Summary judgment is appropriate when, viewed in thelight most favorable to the nonmoving party, the pleadings,depositions, and admissions on file reveal that no genuineissues of material fact exist and that the moving party isentitled to judgment as a matter of law. Ragan v. ColumbiaMutual Insurance Co., 183 Ill. 2d 342, 349 (1998). The standard ofreview in cases involving summary judgment is de novo. Ragan, 183 Ill. 2d at 349.

An arbitrator's award is presumptively valid (HollisterInc. v. Abbott Laboratories, 170 Ill. App. 3d 1051, 1062 (1988)) andmust be enforced if the arbitrator acted within the scope ofhis authority. American Federation of State, County &Municipal Employees v. State of Illinois, 124 Ill. 2d 246, 254 (1988). The United States Supreme Court has stated:

"[A]n arbitrator is confined to interpretationand application of the collective bargainingagreement; he does not sit to dispense his ownbrand of industrial justice. He may of course lookfor guidance from many sources, yet his award islegitimate only so long as it draws its essence fromthe collective bargaining agreement. When thearbitrator's words manifest an infidelity to thisobligation, courts have no choice but to refuseenforcement of the award." (Emphasis added.)United Steelworkers v. Enterprise Wheel & Car Corp.,363 U.S. 593, 597, 4 L. Ed. 2d 1424, 1428, 80 S. Ct. 1358, 1361(1960).

In deciding whether an award draws its essence fromthe collective bargaining agreement, the court determineswhether the arbitrator limited himself to interpreting thecollective bargaining agreement (Board of Education ofCommunity High School District No. 155 v. IllinoisEducational Labor Relations Board, 247 Ill. App. 3d 337, 345 (1993));even where the award is based upon the arbitrator'smisreading of the contract, the court must uphold theaward so long as the arbitrator's interpretation is derivedfrom the language of the contract. Polk Brothers, Inc. v.Chicago Truck Drivers, Helpers, & Warehouse Workers Union(Independent), 754 F. Supp. 608, 613 (N.D. Ill. 1990), aff'd, 973 F.2d 593(7th Cir. 1992). However, the award will be overturned as notdrawing its essence from the collective bargainingagreement where the arbitrator based his award on a bodyof thought, feeling, policy, or law outside of the contract. Anheuser-Busch, Inc. v. Beer, Soft Drink, Water, Fruit Juice,Carbonic Gas, Liquor Sales Drivers, Helpers, Inside Workers,Bottlers, Warehousemen, School, Sightseeing, Charter BusDrivers, General Promotions Employees, and Employees ofAffiliated Industries, Maltster, Laborers, Syrup, Yeast, Food,Vinegar, Brewery, Recycling and Miscellaneous Workers ofChicago and Vicinity, Illinois, Local Union No. 744, 280 F.3d 1133,1137 (7th Cir. 2002).

In the present case, the arbitrator acknowledged thatunder the Rule 14 formula in place prior to 1990, a cap wasplaced on the compensation of full-time and part-timeUnion officers for pension contribution purposes, i.e., theircompensation could not exceed their CTA pay plus 5%. In 1990,the Rule 14 cap was eliminated; the retirement plan nowprovides that compensation of full-time and part-time Unionofficers consists of the individual's "total earnings" fromthe CTA and the Unions. The arbitrator furtheracknowledged that the parties never considered cappingthe "total earnings" of part-time Union officers. Nevertheless, the arbitrator determined that some type ofcap was required and that "the use of a fixed cap of the typeintroduced in 1953 and as amended on April 21, 1980 [i.e., theRule 14 formula] is likely to be the least controversial andthe best understood method for placing a limit on totalearnings." Accordingly, the arbitrator provided thatcompensation for pension contribution purposes will againbe based on the Rule 14 formula, pursuant to which thecompensation of part-time Union officers is capped at CTA payplus an additional percentage of pay.

In resurrecting the Rule 14 fixed-cap formula, which hadclearly been discarded by 1990 under the collectivebargaining agreement's retirement plan, the arbitrator didnot simply interpret or even misinterpret the agreement; thearbitrator improperly disregarded the agreement itself. Accordingly, this portion of the arbitral award cannotstand as it does not draw its essence from the collectivebargaining agreement.

This case is similar to Anheuser-Busch, Inc., 280 F.3d 1133. Anheuser-Busch operates a beer distributorship and employsdrivers to deliver their products. Anheuser-Busch, 280 F.3d at1134. From May 1986 to April 1989, Anheuser-Busch and thedrivers' union operated under a collective bargainingagreement which provided that drivers, whether assisted bya helper or not, received the same commission rate. Anheuser-Busch, 280 F.3d at 1134. In 1990, the parties adopted anew two-tiered commission payment that provides onecommission rate for drivers who work alone and a lowercommission rate for drivers who are assisted by a helper.Anheuser-Busch, 280 F.3d at 1134. This two-tiered commissionpayment arrangement was incorporated into and a made apart of the parties' 1994 and 1998 contracts. Anheuser-Busch,280 F.3d at 1134.

During the term of the 1990 and 1994 contracts,Anheuser-Busch continued to pay all the drivers at the one-person commission (higher) rate. Anheuser-Busch, 280 F.3d at1134. In early April 1998, Anheuser-Busch announced thateffective April 27, 1998, the drivers would henceforth bereimbursed according to the two-tiered commissionpayment arrangement contained in the 1998 contract. Anheuser-Busch, 280 F.3d at 1135.

The drivers' union filed a grievance protestingAnheuser-Busch's decision to follow the terms of thecontract and the dispute proceeded to arbitration. Anheuser-Busch, 280 F.3d at 1135. The arbitrator sustained thegrievance and returned to the terms of the contract ineffect prior to 1990 by ordering Anheuser-Busch to pay thehigher commission to drivers regardless of whether theywere working on one- or two-person routes. Anheuser-Busch, 280 F.3d at 1136.

Anheuser-Busch appealed and the trial court grantedsummary judgment in favor of the drivers' union and upheldthe arbitral award. Anheuser-Busch, 280 F.3d at 1136-37. Theappellate court reversed and remanded with instructions tovacate the arbitral award. Anheuser-Busch, 280 F.3d at 1145. The appellate court noted that the collective bargainingagreement explicitly stated that it constituted the full andcomplete agreement of the parties and that the arbitratorhad no authority to add to, subtract from, modify orchange the terms of the contract. Anheuser-Busch, 280 F.3dat 1135. The appellate court further noted:

"[The arbitrator] saw fit to withdraw the commissionprovision specifically delineated in the 1990, 1994, and1998 contracts and proceeded to add to the agreementwhile ignoring its clear language and intent ***.

The arbitrator took it upon himself to right whathe perceived to be a wrong in the workplace. In doingso, he improperly injected his personal notions offairness into his decision and thus manifested 'aninfidelity to his obligation' to follow the law and thelanguage of the contract and not to 'add to *** modifyor change' any portion of the thoroughly negotiatedagreement." Anheuser-Busch, 280 F.3d at 1141, 1144.

The appellate court concluded that the arbitrator hadintentionally disregarded the clear, specific language ofthe contract and had thereby "created an escape hatchthrough which he could dispense his own brand ofindustrial justice." Anheuser-Busch, 280 F.3d at 1145. Accordingly, as the arbitral award failed to draw its essencefrom the collective bargaining agreement, the appellatecourt reversed and remanded with instructions to vacatethe arbitral award. Anheuser-Busch, 280 F.3d at 1145.

Similarly, in the present case, the collective bargainingagreement provides that the arbitrator has no authority toadd to, subtract from or amend the terms of the agreement;nevertheless, the arbitrator determined that a revision ofthe "total earnings" concept set forth in the collectivebargaining agreement was required to remedy what heviewed as the inequitable pension levels for part-time Unionofficers. Accordingly, the arbitrator reimposed a cap basedon the Rule 14 fixed-cap formula which had been discardedby 1990. In so doing, the arbitrator ignored the clearlanguage and intent of the collective bargaining agreementand improperly injected his notions of fairness into thedecision by adding, modifying, and changing the agreement. As in Anheuser-Busch, the arbitrator disregarded the expressterms of the collective bargaining agreement in an attemptto dispense his own brand of industrial justice. Thus, thearbitral award did not draw its essence from the collectivebargaining agreement as the arbitrator based the award onsome body of thought, feeling, policy or law outside thecontract. Therefore, we vacate the portion of the arbitralaward capping the "total earnings" of part-time Unionofficers.

The CTA argues, though, that the cap on total earningswas properly implied from the collective bargainingagreement. In support, the CTA cites Polk Brothers, Inc. v.Chicago Truck Drivers, Helpers, & Warehouse Workers Union(Independent), 754 F. Supp. 608 (N.D. Ill. 1990). Polk Brothers is inthe business of merchandising and retailing homefurnishings. Polk Brothers, 754 F. Supp. at 610. Polk Brothers'distribution center was completely destroyed by a fire onJune 1, 1987. Polk Brothers, 754 F. Supp. at 610. As a result of thefire, Polk Brothers laid off 163 employees. Polk Brothers, 754F. Supp. at 610.

The employees' union filed grievances with PolkBrothers. Polk Brothers, 754 F. Supp. at 611. Pursuant to theparties' three collective bargaining agreements, anarbitrator heard the dispute. Polk Brothers, 754 F. Supp. at 611. Shortly after an arbitration hearing, Polk Brothersnotified the employees' union that it would not enter intoany successor agreements to the three collective bargainingagreements which were scheduled to terminate, by theirown terms, on March 31, 1988. Polk Brothers, 754 F. Supp. at 611-12.

In April 1988, the arbitrator ordered reinstatement andback pay beyond the March 31, 1988, termination date of thecollective bargaining agreements. Polk Brothers, 754 F. Supp.at 612. The trial court ruled that in awarding benefits afterthe expiration date of the contracts, the arbitratorexceeded his authority under the agreements. PolkBrothers, 754 F. Supp. at 612-16. The court rejected theargument that the award was properly based on impliedterms of the collective bargaining agreements. The courtnoted:

"'[C]ontracts have implied as well as express terms,and the authority of an arbitrator to interpret acollective bargaining contract includes the power todiscover such terms. ***

Inferring an implied condition must bedistinguished from creating one, tenuous as thedistinction may be as a practical matter.'" Polk Brothers,754 F. Supp. at 615, quoting Ethyl Corp. v. UnitedSteelworkers of America, 768 F.2d 180, 186 (7th Cir. 1985).

The court further held that where an arbitrator'saward relies on implied terms, "judicial review is limited towhether the arbitrator's solution can rationally be derivedfrom some plausible theory of the general framework orintent of the agreement." Polk Brothers, 754 F. Supp. at 617. Thecourt held that there was no reasonable or rational basiswithin the agreement for the arbitrator's award ofreinstatement and back pay beyond the contract expirationdate. Polk Brothers, 754 F. Supp. at 616. The court thereforevacated that portion of the arbitrator's award. PolkBrothers, 754 F. Supp. at 616.

Similarly, in the present case, there is no reasonable orrational basis within the agreement for the arbitrator'saward capping total earnings of part-time Union officers,especially where the agreement eliminated references to theRule 14 fixed-cap formula upon which the arbitrator basedhis award. Accordingly, we reject the argument that thisportion of the arbitrator's award was properly based onimplied terms of the collective bargaining agreement.

The CTA argues that section 3.9(c) of the retirement plansupports the cap on total earnings for part-time Unionofficers. We disagree. Section 3.9(c) provides that for pensioncontribution purposes, the compensation of a union memberoccupying a position with an International office shall notexceed the compensation of the highest paid officer of theLocal. Thus, section 3.9(c) caps the total earnings ofInternational officers; section 3.9(c) does not cap the totalearnings of the part-time officers of the Local Unions atissue here. Further, nothing in section 3.9(c) supports thereimposition of the Rule 14 fixed-cap formula, which formulawas discarded by 1990. Accordingly, we vacate the portion ofthe arbitral award capping the "total earnings" of part-timeUnion officers.

We also vacate the remainder of the arbitral awardrequiring part-time Union officers to provide adequatedocumentation showing payments by the Union for "CTA-related" work; these "documentation" and "CTA-relatedness"requirements were conditions the arbitrator imposed inorder for the part-time Union officers to reach themaximum caps to base pay and have no meaning now that weare vacating the caps.

Finally, the CTA argues that the trial court erred bydenying its motion for reconsideration. In its motion forreconsideration, the CTA argued that the trial courtviolated public policy by vacating the arbitral award. TheCTA's argument is not well-taken, as the CTA points to nopublic policy requiring the court to uphold an arbitralagreement that does not draw its essence from thecollective bargaining agreement.

The CTA also argued in its motion for reconsiderationthat the trial court should remand to the arbitrator forcorrection or clarification of the award. We disagree. Where, as here, "[t]here is no ambiguity in the award *** it isour duty to resolve the case once and for all now ratherthan to remand to the arbitrator." Automobile MechanicsLocal 701 v. Joe Mitchell Buick, Inc., 930 F.2d 576, 578 (7th Cir. 1991).

For the foregoing reasons, we affirm the circuit court.

Affirmed.

TULLY and GALLAGHER, JJ.'s concur.