Van Waters & Rogers, Inc. v. International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America

We must decide whether an arbitrator exceeded his authority or violated public policy by ordering a make-whole remedy that extended beyond the expiration of a collective bargaining agreement.

I

The facts surrounding this controversy were not disputed. Before it ceased operating its Union City, California plant on November 1, 1986, McKesson Chemical Company (“McKesson”), a division of McKesson Corporation, sold and distributed chemicals nationwide. The seven truck drivers employed by McKesson at the Union City facility were represented by the International Brotherhood of Teamsters, Chauffeurs, Warehousemen & Helpers of America, Local Union No. 70 (“Local 70”).

Van Waters & Rogers Inc. (‘Wan Waters”) was a competitor of McKesson, also selling and distributing chemicals nationwide, and it maintained a facility in San Jose, California. Van Waters’ truck drivers are represented by the International Brotherhood of Teamsters, Chauffeurs, Warehousemen & Helpers of America, Local Union No. 287 (“Local 287”).

In September 1986, Van Waters agreed to purchase substantially all of McKesson’s nationwide assets. In the purchase agreement, Van Waters agreed to offer employment to all McKesson…