Labor & Employment Law Daily Wrap Up, LABOR—ARBITRATION—10th Cir.: Arbitrator overstepped authority in finding that salaried employees belonged in bargaining unit, (Mar 26, 2025)

By Jason Albright, J.D.

The arbitrator considered and decided the issue without a request from either party.

An arbitrator exceeded his authority in finding that salaried employees must be included in a bargaining unit represented by the United Steelworkers at HollyFrontier Cheyenne Refining, LLC, the Tenth Circuit affirmed, finding that the parties limited the arbitrator’s authority to resolution of whether the employer’s reassignment of work violated a labor contract. That issue, according to the appeals court, did not require the arbitrator to determine, as he did, whether the employer’s chemists were members of the bargaining unit. Judge Phillips, dissenting, argued for deference to the arbitrator’s view of the scope of the issues submitted for arbitration (HollyFrontier Cheyenne Refining, LLC v. United Steelworkers Local 11-574, No. 23-8046 (10th Cir. Mar. 25, 2025)).

Industrial refinery. HollyFrontier operates an industrial refinery in Cheyenne, Wyoming. Before this litigation, HollyFrontier employed hourly workers—called “Lab Technicians” and “Lab Testers”—to assist in the refinement and production of petroleum products, such as gasoline and diesel fuel.

Labor contract and arbitration clause. Together, the facility’s technicians and testers formed a bargaining unit, which was represented by the union. Both HollyFrontier and the union are parties to a labor contract, which requires the arbitration of certain grievances. The contract also places certain limitations on arbitration via its “challenged provisions” clause, which provides that “[t]he sole authority of the arbitrator is to render a decision as to the interpretation and/or application of the challenged provision(s) of [the CBA.]”

Transition and layoffs. In 2021, HollyFrontier transitioned the facility from a petroleum refinery to a renewable diesel production facility, which produces diesel fuel from vegetable products. As part of the transition, the employer laid off many technicians and testers, claiming the facility no longer required their services.

New importance of chemists. HollyFrontier began to rely more heavily on those holding a salaried position—the position of “Chemist”—which was made available only to individuals with degrees in chemistry.

Grievance. The union filed a grievance against HollyFrontier, alleging that the employer had violated the contract by assigning chemists work that was previously performed by testers.

Submission to arbitration. After several failed attempts to resolve the union’s complaint, the parties submitted the issue for arbitration. The union presented the issue as whether HollyFrontier “violate[d] the [CBA] when they replaced bargaining unit employees with salaried personal [sic] to preform [sic] laboratory work[,]” and it asked that HollyFrontier “cease and desist from using salaried employees in the lab.” HollyFrontier wanted the arbitrator to determine whether HollyFrontier had violated the contract “by determining the work, methods, processes, assignment of work, work duties, the qualifications of the employees and the staffing requirements” for the facility.

Arbitrator’s decision. In April 2022, the arbitrator resolved the issue, concluding that the contract did not prohibit HollyFrontier from replacing testers with chemists.

But wait, there’s more… The arbitrator then determined—without a request from either party—that “the parties need[ed] to have discussion to determine whether or not the Chemist position is to be within the bargaining unit or outside the bargaining unit.”

After post-arbitration meetings between HollyFrontier and the union failed, and under HollyFrontier’s protest, the parties returned to arbitration on the issue of whether chemists were members of the bargaining unit. In November 2022, after briefing and argument on this new issue, the arbitrator determined that the bargaining unit represented by the union must include chemists.

Vacated below. HollyFrontier petitioned to the district court to vacate the arbitration award, arguing the arbitrator exceeded his authority by deciding a question the parties did not submit for resolution. The district court agreed, reasoning that the arbitrator’s “sole authority was to render a decision as to the interpretation and/or the application of the challenged provision(s) of the [CBA].” The court noted that the union itself had framed the issue as “whether [HollyFrontier] violated the CBA when they replaced bargaining unit employees with salaried personnel to perform laboratory work.” Because this was the “sole issue” submitted for arbitration, the district court concluded the arbitrator had no authority to decide whether chemists were members of the bargaining unit.

The union timely appealed.

Limited authority of arbitrator. Reviewing the district court’s order de novo, the Tenth Circuit affirmed, finding that the parties agreed to submit only one substantive issue to the arbitrator, and that it did not require the arbitrator to determine whether chemists were members of the unit. The partied, concluded the court, “cabined the issue to the reassignment of work from hourly workers (Lab Testers) to salaried employees (Chemists).” Rejecting the proposition that the court should “defer to the arbitrator’s broad interpretation of the scope of the issues submitted by the parties,” the appeals court found that its deferential standard of review does not apply to cases in which, as here, the parties’ submission of the issues for arbitration is clear.

Here, “[t]he Union asked the arbitrator to determine whether HollyFrontier ‘violate[d] the [CBA] when they replaced bargaining unit employees with salaried personal [sic] to preform [sic]laboratory work,’” and that submission was narrow. And the arbitrator resolved that issue completely before turning to a second, unrelated, and unsubmitted issue: “whether or not the Chemist position is to be within the bargaining unit or outside the bargaining unit.” Because the arbitrator failed to “stay[] within the areas marked out for his consideration,” Tenth Circuit precedent required the district court to vacate the arbitrator’s decision on that issue, as it did.

The district court’s vacatur of the arbitration award was accordingly affirmed.

Dissent. Dissenting, Judge Phillips said he would reverse and reinstate the arbitration award “because we owe the same high level of deference to an arbitrator’s view of the scope of the issues submitted in arbitration as is accorded the merits of an arbitrator’s decision.”

The case is No. 23-8046.

Judge: Eid, A.

Attorneys: John M. Husband (Holland & Hart) for HollyFrontier Cheyenne Refining, LLC. Anthony Paul Resnick (United Steelworkers of America Legal Department) for United Steel Paper and Forestry Rubber Manufacturing Energy Allied Industrial and Service Works International Union Local 11-574.

Companies: HollyFrontier Cheyenne Refining, LLC; United Steel Paper and Forestry Rubber Manufacturing Energy Allied Industrial and Service Works International Union Local 11-574

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