SAFEWAY STORES v. BROTHERHOOD OF TEAMSTERS AND AUTO TRUCK DRIVERS LOCAL NO 70 OF ALAMEDA COUNTY (1978)

Brotherhood of Teamsters and Auto Truck Drivers Local 70 of Alameda County appeals from a judgment^[FN1] vacating an award of a labor arbitrator.

Claudell Roberts, who was employed by respondent Safeway Stores as a driver, failed to complete certain work assigned to him. Safeway suspended Roberts pending an investigation, and appellant union immediately asserted a grievance in behalf of Roberts concerning the suspension. After investigation Safeway nevertheless announced that Roberts would be given a disciplinary suspension of 60 days. Imposition of the suspension was withheld pending further discussions; such discussions resulted in a reduction of the disciplinary suspension to 15 working days.

Safeway accordingly notified Roberts that he was to return to work. The letter of notification was mailed on a Friday and Roberts did not receive it until late Monday morning, May 17, several hours after the start of his shift at 7:30 a. m. Upon receiving the letter, Roberts called the warehouse, and was directed to report to work the following morning, Tuesday, May 18.

Roberts did not, however, appear at work on Tuesday; instead, he called the shop steward in the afternoon and said that he was not coming to work that day. Late Thursday morning, May 20, Roberts called the warehouse dispatcher and informed her that he would report for work the next day. The dispatcher accordingly scheduled a delivery for Roberts on Friday, May 21, but he did not appear at work. Roberts telephoned in the afternoon and said he would not be in, and in response to a question from the dispatcher, said he did not know whether he would be in on Monday. Roberts did not come to work on Monday, May 24, but called in the afternoon to say that he would not be coming in. On Tuesday, May 25, he again failed to appear but called in the afternoon to say that he would not be in that day. During this telephone conversation, Roberts informed the dispatcher that he had been on vacation the previous week.

Safeway then discharged Roberts, stating in its letter of termination that: “A certified letter (# 997448) was sent to you on May 14, 1976, directing you to return to work from disciplinary layoff on Monday, May 17, 1976. (P) As a result of your failure to report within 7 days of such recall, we are terminating your employment as of Tuesday, May 25, 1976.”

The discharge was protested; at a grievance hearing held pursuant to the collective bargaining agreement, Roberts for the first time asserted that he had not reported for work from May 18 through May 26 because he had been ill. The challenge to Roberts' discharge was not resolved informally, and the dispute was submitted to arbitration as provided by the collective bargaining agreement. The parties stipulated that the issues which they were submitting to the arbitrator were as follows: “Whether or not the grievant was discharged for just cause? If not, what is the appropriate remedy?” After a hearing the arbitrator ruled as follows: “The grievant was not discharged for just cause within the meaning of the agreement. The appropriate remedy is reinstatement to his position with backpay from the date he was able to return to work to the date the Company offers him reinstatement.”

On Safeway's petition the court vacated this award, and the present appeal followed.

Every intendment of validity must be given to an arbitration award and doubts must be resolved in favor of the award. (Grunwald-Marx, Inc. v. L. A. Joint Board (1959) 52 Cal.2d 568, 589, 343 P.2d 23; American & Nat. etc. Baseball Clubs v. Major League Baseball Players Assn. (1976) 59 Cal.App.3d 493, 498, 130 Cal.Rptr. 626.) Under the statutory scheme, the arbitrator is given broad powers. The arbitrator may pass upon legal as well as factual issues as long as the legal questions are a part of the “controversy” which is subject to arbitration. (Marcus v. Superior Court (1977) 75 Cal.App.3d 204, 210, 141 Cal.Rptr. 890; see Code Civ.Proc., s 1280, subd. (c).)^[FN2] The arbitrator is authorized to determine all questions which need to be determined in order to resolve the controversy submitted to him, and the arbitrator himself decides which questions need to be determined. (See Code Civ.Proc., s 1283.4;^[FN3] Members Ins. Co. v. Felts (1974) 42 Cal.App.3d 617, 623, 117 Cal.Rptr. 54; Jones v. Kvistad (1971) 19 Cal.App.3d 836, 843, 97 Cal.Rptr. 100; Morris v. Zuckerman (1968) 69 Cal.2d 686, 690, 72 Cal.Rptr. 880, 446 P.2d 1000.) The findings of the arbitrator on questions of law as well as questions of fact are final and conclusive. Neither the merits of the controversy nor the sufficiency of the evidence to support the arbitrator's award are matters for judicial review. (Morris v. Zuckerman, supra, 69 Cal.2d at p. 691, 72 Cal.Rptr. 880, 446 P.2d 1000; Santa Clara-San Benito etc. Elec. Contractors' Assn. v. Local Union No. 332 (1974) 40 Cal.App.3d 431, 437, 114 Cal.Rptr. 909; San Luis Obispo Bay Properties, Inc. v. Pacific Gas & Elec. Co. (1972) 28 Cal.App.3d 556, 562, 104 Cal.Rptr. 733.)

The grounds upon which a court may vacate an arbitration award are severely limited by statute. (See Code Civ.Proc., s 1286.2;^[FN4] American & Nat. etc. Baseball Clubs v. Major League Baseball Players Assn., supra, 59 Cal.App.3d 493, 498, 130 Cal.Rptr. 626.) The award may not be set aside because of an error of law or of fact. (Marcus v. Superior Court, supra, 75 Cal.App.3d 204, 210, 141 Cal.Rptr. 890; Santa Clara-San Benito etc. Elec. Contractors' Assn. v. Local Union No. 332, supra, 40 Cal.App.3d 431, 437, 114 Cal.Rptr. 909; State Farm Mut. Auto. Ins. Co. v. Guleserian (1972)28 Cal.App.3d 397, 402, 104 Cal.Rptr. 683.) Erroneous reasoning by the arbitrator will not invalidate an otherwise proper award. (American & Nat. etc. Baseball Clubs v. Major League Baseball Players Assn., supra, 59 Cal.App.3d 493, 498, 130 Cal.Rptr. 626; Grunwald-Marx, Inc. v. L. A. Joint Board, supra, 52 Cal.2d 568, 589, 343 P.2d 23.) The court may not substitute its judgment for that of the arbitrator. (Morris v. Zuckerman, supra, 69 Cal.2d 686, 691, 72 Cal.Rptr. 880, 446 P.2d 1000; see also O'Malley v. Petroleum Maintenance Co. (1957) 48 Cal.2d 107, 111, 308 P.2d 9; DeMello v. Souza (1973) 36 Cal.App.3d 79, 86-87, 111 Cal.Rptr. 274.) However, the powers of an arbitrator are limited by the agreement or the stipulation of submission, and the court will vacate an arbitration award where the arbitrator exceeded his powers and the award cannot be corrected without affecting the merits. (See Code Civ.Proc., s 1286.2, subd. (d); San Luis Obispo Bay Properties, Inc. v. Pacific Gas & Elec. Co., supra, 28 Cal.App.3d 556, 564, 104 Cal.Rptr. 733.) The arbitrator has no power to determine issues not submitted to him and he must decide all issues which are submitted. (Ulene v. Murray Millman of California (1959) 175 Cal.App.2d 655, 661, 346 P.2d 494.)

Here, the court concluded that the arbitrator had exceeded his powers in determining that section 3(C) of the collective bargaining agreement did not apply. Section 3(C) provides in pertinent part that: “Any employee who has been laid off and recalled to work and who fails to report for work within seven (7) calendar days after the mailing of notice to report . . . shall be considered to have voluntarily quit unless unable to so report because of proven illness or injury or because of unforeseen emergencies.” (Emphasis added.) The arbitrator reasoned that the language of section 3(C), (“Any employee who has been laid off and recalled to work and who fails to report for work within seven (7) calendar days”), refers to “an employee laid off indefinitely for lack of work who is eventually recalled when the volume of available work and his seniority warrant. In contrast, a disciplinary layoff is for a definite period, fixed in advance, and ordinarily it makes no more sense to speak of ‘recalling’ an employee from a disciplinary layoff than to say that he is recalled from vacation. In both cases he is to be absent for a certain time, at the end of which he is obliged to report for work.”

The construction of the subject provision was a question of law for the arbitrator; and the fact that a different construction was possible does not empower a court to vacate the award. (Jones v. Kvistad, supra, 19 Cal.App.3d 836, 843, 97 Cal.Rptr. 100; Lesser Towers, Inc. v. Roscoe-Ajax Constr. Co. (1969) 271 Cal.App.2d 675, 701, 77 Cal.Rptr. 100.) The arbitrator may be said to have exceeded his powers only if he gives a completely irrational construction to the provision in dispute. (Jones v. Kvistad, supra, 19 Cal.App.3d at p. 843.) The construction given section 3(C) is not a completely irrational one; we conclude that the arbitrator did not act beyond his authority in determining that the section did not apply here.

Respondent contends that the arbitrator exceeded his powers when he determined that Roberts should have been given a 72-hour notice to return to work before he was discharged. The collective bargaining agreement covering Roberts contains no provision for any such notice and it appears that the practice of giving 72-hour notices related to other collective bargaining agreements not involved in this proceeding. Respondent argues that imposing a practice not provided for in the agreement violated section 13, which precludes resorting to “preceding verbal and written agreements” not set forth in the agreement, and therefore the arbitrator exceeded his powers within the meaning of Code of Civil Procedure section 1286.2, subdivision (d).

In our view, this contention fails to recognize what the arbitrator actually decided. The controversy which he was called upon to resolve concerned the discharge of an employee covered by a collective bargaining agreement. Under Code of Civil Procedure section 1283.4, the arbitrator is required to determine all questions “the decision of which is necessary in order to determine the controversy.” As pointed out above, the arbitrator himself decides what questions need to be determined. (Morris v. Zuckerman, supra, 69 Cal.2d 686, 690, 72 Cal.Rptr. 880, 446 P.2d 1000.)

In this case, the arbitrator determined that the questions to be decided were (1) “Whether or not the grievant was discharged for just cause,” and (2) “If not, what is the appropriate remedy.” As we have seen, he correctly concluded that section 3(C) could not be applied to provide just cause for the discharge in this situation. He then went on to review all of the circumstances surrounding the discharge and concluded that just cause did not exist. The arbitrator could not be said to have exceeded his powers in thus determining a question which he was required to decide in order to resolve the controversy.

The collective bargaining agreement does not define “just cause.” Therefore, what constitutes just cause is left to the judgment of the arbitrator. Here the arbitrator found (1) that there was a rather loose practice at the plant regarding notifying the company concerning intended absences, (2) that the employee stayed away from work because of a “good faith estimate of his own lack of fitness to report,” and (3) that he could reasonably, although probably erroneously, believe that he was not required to furnish proof of illness to preserve his job. The arbitrator concluded that before just cause would exist for firing an employee, he should be made aware, by a 72-hour notice (such as that provided for in the other agreements) or some other appropriate means, that he was placing his job in peril by remaining away from work. Under these circumstances, the contention that the arbitrator placed crucial significance upon the 72-hour notice provision is contrary to the plain import of his decision.

The reference to a company practice of giving a 72-hour notice at the most creates an ambiguity. In this connection, the following language from United Steelworkers v. Enterprise Corp. (1960) 363 U.S. 593, at page 598, 80 S.Ct. 1358, 1361, 4 L.Ed.2d 1424, 1428, is particularly appropriate: “A mere ambiguity in the opinion accompanying an award, which permits the inference that the arbitrator may have exceeded his authority, is not a reason for refusing to enforce the award. Arbitrators have no obligation to the court to give their reasons for an award.” In light of the strong policy in favor of upholding arbitration awards, which we have discussed above, we can find no basis here for concluding that the arbitrator exceeded his powers in determining that there was no just cause for Roberts' discharge.

The award, however, is defective in that it does not completely decide one of the questions necessary to determine the controversy, namely, the question of the appropriate remedy. While the arbitrator did hold that the employee should receive back pay from the date he was able to return to work, he did not determine what that date was, stating that there was insufficient evidence to make this determination. Failure to find on all issues submitted to the arbitrator is a ground for vacating the award. (Code Civ.Proc., ss 1283.4, 1286.2, subd. (e); Jones v. Kvistad, supra, 19 Cal.App.3d 836, 841, 97 Cal.Rptr. 100; Banks v. Milwaukee Ins. Co. (1966) 247 Cal.App.2d 34, 38, 55 Cal.Rptr. 139.)

This raises a difficult question concerning the appropriate disposition to be directed by this court. Code of Civil Procedure section 1287 provides that if the award is vacated, the court may order a rehearing before new arbitrators or if the award is vacated under section 1286.2, subdivision (d) or (e), and the parties consent before the original arbitrators. In this case, the trial court simply vacated the award and took no further action, inferably because of its conclusion that section 3(C) of the agreement justified the discharge and that the arbitrator exceeded his powers in not so holding. However, in view of our conclusion that the arbitrator did not exceed his powers in concluding that there was not just cause for Roberts' discharge, we now face the question whether a rehearing should be ordered with respect to the entire controversy or whether the awards should be confirmed insofar as it orders reinstatement and a rehearing ordered only to fix the amount of back pay.

Federal cases have held that in employer-employee arbitration cases, an arbitration award may be remanded for the limited purpose of determining the amount of back pay to be awarded to an employee improperly suspended or terminated. (Enterprise Wheel & Car Corp. v. United Steelworkers (1959) 269 F.2d 327, rev. on other grds., Steelworkers v. Enterprise Corp., 363 U.S. 593, 80 S.Ct. 1358, 4 L.Ed.2d 1424; see ILWU Local 142 v. Land & Construction Co., Inc. (1974) 498 F.2d 201; International Bro. of Elec. Wkrs., Loc. 369 v. Olin Corp. (1972) 471 F.2d 468; Electrical Specialty Co. v. Loc. 1069, Inter. Bro. of Elec. Wkrs. (1963) 222 F.Supp. 314; International Ass'n of Machinists v. Crown Cork & Seal Co. (1962) 300 F.2d 127; United Furniture Workers of Amer. v. Virco Mfg. Corp. (1962) 257 F.Supp. 138.) Similarly, in In re E. A. Laboratories, Inc. (S.Ct.1944) 50 N.Y.S.2d 222, a case almost identical to the present case, employees were ordered reinstated by an arbitrator but the amount of back pay was not settled. The court noted that an award could be void as to a portion and still be valid as to the rest if the parts are not dependent, and ordered the matter resubmitted to the same arbitrator so that an award of back pay could be made more definite.

However, in the early California case of Muldrow v. Norris (1859) 12 Cal. 331, Justice Stephen J. Field wrote that if arbitrators do not decide all questions submitted to them, the entire award is void. That is because where parties bargain for resolution of an entire controversy, if the award does not accomplish this, the consideration which moved the parties to arbitrate has failed.

Muldrow has been cited three times, and has been followed, disapproved in part and distinguished. Sapp v. Barenfeld (1949) 34 Cal.2d 515, 212 P.2d 233, involved the arbitration of a building contract dispute in which, after making findings relative to nonperformance and offsets, the arbitrators awarded the builder a specific sum of money. The trial court vacated the order on the ground, among others, that it was not final and definite in that the arbitrator failed to consider the owner's claim of damages for delay in completion. The Supreme Court reversed, and in rejecting this contention commented as follows: “The failure to make an express finding in the award on that claim does not invalidate the award. ‘There is no general rule that arbitrators must find facts and give reasons for their awards. In fact, the rule and general practice is to the contrary.’ (Citations.) The dictum to the contrary in Muldrow v. Norris, 12 Cal. 331, 339, relied upon by respondents, is no longer controlling in view of the foregoing decisions and is disapproved. The award is valid if it serves to settle the entire controversy. A decision simply that one of the parties should pay the other a sum of money is sufficiently determinative of all items embraced in the submission.” (34 Cal.2d at pp. 522-523, 212 P.2d at p. 239.)

The “dictum to the contrary” which was disapproved apparently was that portion of the Muldrow opinion which states that an award must show on its face that all matters submitted to the arbitrators have been disposed of, or it is void. However, in the present case, the award shows on its face that one of the submitted questions, namely, the appropriate remedy, was not fully resolved because the amount of back pay was not computed.

In Popcorn Equipment Co. v. Page (1949) 92 Cal.App.2d 448, 451, 207 P.2d 647 dis. on other grds. in Flores v. Arroyo (1961) 56 Cal.2d 492, 497, 15 Cal.Rptr. 87, 364 P.2d 263, the arbitrators awarded a specific sum of money to respondents because of violations of an exclusive license to sell. In holding the Muldrow rule inapplicable, the court pointed out that Muldrow involved three unrelated disputes which had been submitted to the arbitrators, only two of which had been properly resolved, while in Popcorn the award dealt with several items, all of which arose out of sales by appellants in violation of the licensing agreement. Thus the award in Popcorn, which gave the results of the accounts between the parties, sufficiently disposed of all questions before the arbitrators.

In Film Technicians v. Color Corp. America (1956) 141 Cal.App.2d 553, 297 P.2d 86, the trial court vacated the award in a dispute involving the right to dismissal pay and remanded the matter to the arbitrator, “with directions for a rehearing so that the award made will specify each and every employee found to be qualified for dismissal pay and the amount thereof with respect to each of such employees.” (141 Cal.App.2d at p. 555, 297 P.2d at p. 87.) Relying on Muldrow, the court held that the effect of this order was to vacate the entire award and remand the entire matter, since this was all the court had the power to do. (141 Cal.App.2d at pp. 555-556, 297 P.2d 86.)

Despite its antiquity and the fact that it has been cited infrequently, has been both disapproved in part and distinguished, and appears to have been actually followed only once, Muldrow is still controlling here. Were we free to reach a different conclusion we would have no hesitancy in doing so. The procedure adopted by the federal courts and also followed in New York appears to us to be an eminently sensible way of dealing with incomplete awards, particularly in cases involving alleged wrongful suspensions or terminations; it is in furtherance of the policy that arbitration should be encouraged as an effective and expeditious process for determining particular types of disputes. In Enterprise Wheel & Car Corp. v. United Steelworkers, supra, 269 F.2d 327, 332, the United States Court of Appeals for the Fourth Circuit recognized the general rule that an award which was not definite and certain must be vacated in its entirety and then went on to comment as follows: “If this rule were given effect in the pending case the award would be set aside, for it is obviously so incomplete that disputes may well arise as to the amounts of back pay which the employer is obliged to make to the discharged workers. We think, however, that the rule forbidding the resubmission of a final award, which was developed when the courts looked with disfavor upon arbitration proceedings, should not be applied today in the settlement of employer-employee disputes.”

Clearly, Muldrow v. Norris, supra, was a case decided at a time when the courts looked with disfavor upon arbitration proceedings. In view of current countervailing policy considerations, we believe its rule should no longer apply, at least where, as here, the resolved and unresolved issues are clearly independent and severable. However, we consider ourselves bound by the Muldrow holding until it is disapproved on this point by the Supreme Court.

The judgment is affirmed insofar as it vacates the award; the trial court is directed to amend its judgment so as to remand the entire matter for a rehearing pursuant to Code of Civil Procedure section 1287.

FOOTNOTES

1.  The trial court's decision is set forth in a “Memorandum of Decision.” Although a trial judge's informal opinion or decision normally does not constitute an appealable judgment or order, the memorandum of decision may be treated as an appealable order or judgment when it is signed and filed and when it constitutes the trial judge's final judicial determination on the merits. (See Martino v. Concord Community Hosp. Dist. (1965) 233 Cal.App.2d 51, 55-56, 43 Cal.Rptr. 255; Maxwell v. Perkins (1953) 116 Cal.App.2d 752, 757, 255 P.2d 10; 4 Witkin, Cal.Procedure (2d ed. 1971) Judgment, s 5, p. 3185.)

2.  Section 1280, subdivision (c), of the Code of Civil Procedure provides that: “ ‘Controversy’ means any questions arising between parties to an agreement whether such question is one of law or of fact or both.” (Emphasis added.)

3.  Section 1283.4 of the Code of Civil Procedure provides in part as follows: “ . . . (The award) shall include a determination of all the questions submitted to the arbitrators the decision of which is necessary in order to determine the controversy.”

4.  Code of Civil Procedure section 1286.2:“Subject to Section 1286.4, the court shall vacate the award if the court determines that:(a) The award was procured by corruption, fraud or other undue means;(b) There was corruption in any of the arbitrators;(c) The rights of such party were substantially prejudiced by misconduct of a neutral arbitrator;(d) The arbitrators exceeded their powers and the award cannot be corrected without affecting the merits of the decision upon the controversy submitted; or(e) The rights of such party were substantially prejudiced by the refusal of the arbitrators to postpone the hearing upon sufficient cause being shown therefor or by the refusal of the arbitrators to hear evidence material to the controversy or by other conduct of the arbitrators contrary to the provisions of this title.“

CHRISTIAN, Associate Justice.

CALDECOTT, P. J., and WILSON, J. (Under assignment by the Chairperson of the Judicial Council), concur.