Labor & Employment Law Daily Wrap Up, LABOR—ARBITRATION—4th Cir.: Complete arbitration rule bars power company’s suit in dispute over work assignment, (Jul 28, 2025)

By Jason Albright, J.D.

According to the rule, “[i]n order to be ‘final,’ an arbitration award must be intended by the arbitrators to be their complete determination of all claims submitted to them.”

The complete arbitration rule bars a power plant operator’s lawsuit to vacate an arbitration award that found that assigning the plant’s work to employees who were not subject to a union’s labor contract violated the contract, the Fourth Circuit found. Excusing the union’s forfeiture of the issue based on the “policy rationales” that the complete arbitration rule serves, which mirror those of the final judgment rule, the appeals court found that the arbitrator “retain[ed] jurisdiction against the possibility that” the parties could not agree on a remedy, and because the arbitrator did not “believe [his] assignment [wa]s completed, the award is not final” (Wheeling Power Co. v. Utility Workers Local 429, No. 23-1157 (4th Cir. July 25, 2025)).

The Mitchell Plant. American Energy Power, according to the court, operated multiple subsidiaries, including the predecessor entity that owned a power plant called the Mitchell Plant. Another subsidiary of American Energy owned a separate plant called the Cook Coal Terminal, and in 2021, a fire at Cook Coal Terminal temporarily shut it down. Meanwhile, the Mitchell Plant was short-handed, “losing folks through attrition, retirements, [and] health issues.”

Work assignment at issue. Believing “there was no way” it could handle the volume of work internally with the remaining employees it “had available at the time,” Mitchell Plant management temporarily assigned eight Cook Coal Terminal employees to work at the Mitchell Plant.

New assignees not covered by existing labor contract. The newly assigned employees did the “[s]ame work that Local 492 members did,” and “were supervised directly by Mitchell Plant supervisors,” but the Cook Coal Terminal employees were not subject to the labor contract that governed employees who belonged to Utility Workers Local 492 and already working at the Mitchell Plant. Both groups of employees worked “side by side” at the Mitchell Plant until early 2022.

Exclusive representative. The labor contract, however, provides, in Article 2, that company management “recognizes [Local 492] as the exclusive bargaining representative for all the physical employees of the Mitchell Plant.,” and the term “employees” includes “[a]ll production and maintenance employees,” with some exceptions not relevant to the case.

Management right to assign or contract. Article 3(b), on another hand, reserves to management “the right to assign or contract work to persons or organizations not represented by the Union.” This management right is “limited only to the extent that” the assignment or contracting of such work cannot “directly result in the layoff or discharge of any employee covered by [the bargaining agreement].”

Arbitration of grievances. Finally, the contract’s grievance procedure prescribes several levels of internal dispute resolution, after which a failure to resolve “any grievance involving the interpretation and application of a specific term or provision” of the agreement allows the parties to go to arbitration. However, the contract also limits the arbitrator’s authority in several ways. Most pertinent, if the parties dispute the company’s “exercise” of its right to assign work to non-union members under Article 3(b), “the sole question for the arbitrator shall be whether” an employee was laid off or discharged because of the assignment of work. And it was undisputed that no Local 492 employees were laid off or terminated following the predecessor entity’s decision to temporarily assign Cook Coal Terminal employees to the Mitchell Plant.

Grievance. After Cook Coal Terminal employees were assigned to the Mitchell Plant, Local 492 filed a grievance invoking Article 2’s recognition provision “and virtually every other provision of the contract.” It requested that Wheeling Power’s predecessor “cease and desist from employing the [Cook Coal Terminal] workers at the Mitchel[l] Power Plant until they” joined Local 492 and became “covered by the collective bargaining agreement.” The predecessor employer denied the grievance, relying on its right to assign work under Article 3(b), and the union then demanded arbitration.

Arbitrator’s decision. The arbitrator sided with the union. He concluded that Cook Coal Terminal employees “were indistinguishable from the Mitchell bargaining unit employees” and therefore “fit squarely within” the bargaining unit defined in Article 2. The arbitrator reasoned that the company’s right to “assign or contract work,” applied to “independent contractors” and their employees, who were readily distinguishable from “individuals in the bargaining unit.” So, he concluded “that the Company violated the [collective bargaining] agreement by failing to apply it to the individuals brought in from [Cook Coal Terminal] to work at the Mitchell Power Plant.”

A punt concerning remedies. Viewing the liability question as “the easy part,” the arbitrator found it “impossible” to fashion an appropriate remedy, and so he “return[ed] the case to the Parties for their informed discussion on the matter of remedy,” encouraging them to strive “for compromise and rough justice.” However, the arbitrator “retain[ed] jurisdiction against the possibility that they may be unable to agree.”

Lawsuit. Rather than heed the arbitrator’s direction, Wheeling Power sued to vacate the arbitrator’s award under the LMRA and the FAA. It also filed a separate motion to vacate the award under the FAA. The union, in turn, answered and counterclaimed to confirm the arbitration award. The union then filed a combined motion for summary judgment and memorandum in opposition to the company’s motion to vacate the award. The company opposed the union’s motion, but neither party asked the district court to consider whether the arbitration award was final.

Decision below and appeal. The district court found for the union and also did not address whether the arbitration award was final. Applying the highly deferential standard of review applicable to federal courts’ consideration of arbitration awards, however, the district court concluded that the arbitrator performed his job by issuing a decision that “draws its essence from the contract” and did not “impose his own ideas of fairness.”

Wheeling Power appealed, and in its opening brief, the company for the first time acknowledged that its lawsuit may have been premature under the complete arbitration rule.

Complete arbitration rule. Excusing the union’s forfeiture of the issue by not alerting the district court that it had a complete defense to the company’s lawsuit, the appeals court noted that federal courts “have discretion to forgive any forfeiture.” And that the court did based on the “policy rationales” that the complete arbitration rule serves, which “mirror those of the final judgment rule applicable to appeals taken from district court rulings.”

Applying the complete arbitration rule itself, the Fourth Circuit found that the arbitrator “retain[ed] jurisdiction against the possibility that” the parties could not agree on a remedy. And because the arbitrator did not “believe [his] assignment [wa]s completed, the award is not final.”

The district court’s judgment was accordingly vacated and remanded with instructions to dismiss this case without prejudice.

The case is No. 23-1157.

Judge: Diaz, A.

Attorneys: Bryan Rex Cokeley (Steptoe & Johnson) for Wheeling Power Co. - Mitchell Plant. John R. Doll (Doll, Jansen & Ford) for Local 492, Utility Workers Union of America, AFL-CIO.

Companies: Wheeling Power Co. - Mitchell Plant; Local 492, Utility Workers Union of America, AFL-CIO

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