In a precedential ruling, the U.S. Court of Appeals for the Third Circuit has upheld a lower court's ruling that an arbitrator handling a labor dispute between a union employee and a hospital over vacation time overstepped his authority.

The panel on Monday upheld the trial court's grant of summary judgment in favor of Monongahela Valley Hospital, vacating an arbitration award in favor of United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO, CLC.

Judge Thomas Ambro.

"We have the rare situation where not even our heavy degree of deference to arbitrators can save an arbitration decision and award," Third Circuit Judge Thomas Ambro wrote in the opinion's introduction.

As part of the hospital employees' collective bargaining agreement, union employees' requests for vacation time get precedence over nonunion employees' when scheduling conflicts emerge, according to Ambro's opinion. To head off any potential problems, the hospital instituted "blackout" periods where certain weeks were blocked off for vacation.

The dispute in this case stems from the attempts of Carol Konsugar and her working supervisor, a nonbargaining unit employee, to take off at the same time. The hospital denied Konsugar's request in favor of her supervisor. Konsugar subsequent complaint went to arbitration as part of the collective bargaining agreement.

In interpreting §13(B)(6) of the agreement, "the arbitrator said he could not 'conclude that the subsequent reservation of exclusivity in allocating vacations entirely to the hospital completely negates … "so far as possible"' because of his concern that it could then always deny bargaining unit employees their vacation requests," Ambro said. "Accordingly, the arbitrator sustained the grievance, ruling that, 'notwithstanding the hospital's reservation of exclusive rights contained in Section 13[B](6) of the agreement,' the CBA precluded the hospital from using 'blackout' periods and prevented it from 'deny[ing] senior employees in the bargaining unit their desired vacation[] when there is no operating need.'"

Afterward, the hospital filed a complaint in federal court, and a U.S. District Court judge in Western District of Pennsylvania granted the motion for summary judgment on the basis that the arbitrator exceeded his authority. On appeal, the Third Circuit agreed.

"The union asks us to reverse the district court's order and reinstate the arbitration award. We decline to do so because the award in no rational way draws its essence from the CBA, and the arbitrator, in inserting the 'operating need' restriction, exceeded his authority under the CBA by dispensing his own brand of industrial justice," Ambro said.

The union is represented by Anthony P. Resnick of Pittsburgh, who did not respond to a request for comment.

The hospital is represented by Hayes C. Stover of K&L Gates in Pittsburgh.

"As the court stated, this was one of those cases where not even the normal deference given to labor arbitration awards could save an erroneous award," Hayes said in an email. "The Hospital is, of course, pleased that both the district court and the United States Court Of Appeals agreed with its position. The unfortunate aspect of the case is that the Hospital was required to incur legal expenses to ultimately achieve the correct result."