Opinion
Civ. No. 01-CV-738 (WGB).
December 14, 2001
Bruce McMoran, Esq., McMORAN ASSOCIATES, Iselin, New Jersey, Attorney for Plaintiff.
Gail Oxfeld Kanef, Esq., OXFELD COHEN, LLC, Newark, New Jersey, Attorney for Defendant.
O P I N I O N
Plaintiff Coca-Cola Bottling Company of New York, Inc. ("Coke New York") requests that the Court vacate an arbitration Award issued by Arbitrator Tia Schneider Denenberg on November 13, 2000. Defendant Local 125, International Brotherhood of Teamsters ("the Union"), has brought a cross-motion to confirm Arbitrator Denenberg's Award. For the following reasons, Coke New York's motion to vacate arbitration is denied, and the Union's motion to confirm arbitration is granted.
I. BACKGROUND
The underlying dispute that led to Arbitrator Denenberg's contested Award arose when Plaintiff Coke New York discharged the grievant, John Kmec, for drug and alcohol abuse. Pursuant to a collective bargaining agreement ("CBA") between Plaintiff Coke New York and Defendant Union, arbitrator Denenberg was asked to determine whether the grievant was terminated for just cause. The parties do not contest the validity of the CBA; instead they dispute whether the CBA gave Arbitrator Denenberg the authority to re-instate the grievant after his termination.
1. Factual History
The parties substantially agree about the events that gave rise to Mr. Kmec's discharge. During the evening of June 22, 2000 and early morning of June 23, 2000, Mr. Kmec consumed seven or eight beers, and smoked marijuana which he had secured from an unidentified "friend." Approximately 6 hours after smoking the marijuana, and 4 hours after consuming his last beer, Mr. Kmec reported to work as scheduled. Mr. Kmec, who worked as a vending helper for Coke New York, assisted other employees in the loading, transport, and unloading of vending equipment.
Sometime after arriving at work on June 23, Mr. Kmec had an argument with a co-worker. After the argument, it was observed that Mr. Kmec was agitated, his speech was slurred, and his breath reeked of alcohol. Plaintiff requested that Mr. Kmec submit to drug and alcohol testing, pursuant to the company's Drug and Alcohol Policy.
Coke New York's Drug and Alcohol Policy, implemented prior to Mr. Kmec's termination, provides that if there exists a reasonable suspicion that an employee is under the influence of drugs or alcohol, Coke New York may order the employee to submit to drug and alcohol testing. The parties do not contest that prior to June 23, 2000 Mr. Kmec had received, read, and fully understood the Policy. He knew specifically that if he violated the Drug and Alcohol Policy, he could be discharged. Knowing this, Mr. Kmec agreed to the tests, and conceded before they were administered that he would fail the tests. After failing both tests, Mr. Kmec was discharged from his employment with Coke New York.
2. Arbitrator Denenberg's Award
According to Coke New York, Mr. Kmec was discharged pursuant to the terms of the Drug and Alcohol Policy. The Union disagreed, and argued that Mr. Kmec's termination violated the just cause provision of the CBA. Article 22 of the CBA, which is the just cause provision, provides in its entirety that:
The Company may discharge any employee for just cause. If the Union disputes the justice of the discharge, it may refer such dispute to arbitration as provided for [in Article 20 of the CBA].
(CBA Article 22 (CBA attached as Ex. A to Decl. of Stephen Plastek).)
Pursuant to Article 20 of the CBA, the matter was referred to arbitrator Denenberg. In addition to setting forth the procedure for selecting an arbitrator, Article 20 also places limits on the scope of the chosen arbitrator's authority:
Any grievance arising out of interpretation or application of this Agreement which is subject to arbitration and is properly submitted thereto shall be heard before an arbitrator selected by the parties. . . . It is distinctly understood that any such arbitrator . . . shall be limited to interpretation and application of this Agreement in any of its particulars; and any decision rendered within the scope of such limitations shall be final and binding on the parties to this Agreement. The arbitrator shall have no authority to substitute [her] judgment for that of the Company's with respect to the amount of discipline imposed.
(CBA, Article 20.)
Two related questions were submitted for arbitration by the Union. First, "was the grievant, John Kmec, discharged for just cause?" (Denenberg Award, p. 1.) Second, "if not, what shall be the remedy?" (Id.) In order to determine whether Mr. Kmec was discharged for just cause pursuant to the Drug and Alcohol Policy, the arbitrator was required to look to the terms of that policy. The Court has repeated the relevant portions of the Drug and Alcohol Policy below:
The Drug and Alcohol Policy was promulgated unilaterally by Coke New York pursuant to Article 29 of the CBA. Article 29 provides that:
The Company has the right to make such rules and regulations as may be necessary to secure safety and maintain proper order and to conduct its business.
B-2 — Reasonable Suspicion Testing
All current employees will be required to submit to drug testing if the Company has a reasonable suspicion that the employee is under the influence of controlled substances which adversely affects or could adversely affect such employee's job performance.
B-4 — Discipline for Illegal Drug Use
a. Employees required to submit to drug testing pursuant to the Reasonable Suspicion Testing outlined in Section B-2, or under any of the Driver Testing requirements outlined in Appendix B who test positive for the use of illegal drugs or controlled substances, confirmed by the procedures below, will be terminated.
2. An employee referred to the EAP by management as a condition of continued employment, and determined to be chemically dependent, that is not otherwise terminated for the incident that led to the drug test, will be required to [undergo rehabilitation].
The testing and discipline policy for alcohol abuse is embodied in provisions virtually identical to sections B-2 and B-4; because the limited differences between the drug and alcohol provisions have no bearing on this dispute, the Court need not restate the alcohol provisions here.
(Drug and Alcohol Policy attached as Ex. C to Plastek Decl.)
Prior to issuing her Award, arbitrator Denenberg considered the undisputed facts surrounding Mr. Kmec's discharge and the provisions set forth above. Arbitrator Denenberg also considered the testimony of Mr. Gary DeStefano, the Union's Business Agent, who suggested that in the past Coke New York, armed with reasonable suspicion of drug and alcohol use, had given two other employees the option of undergoing rehabilitation rather than testing and being terminated. (Plastek Decl. ¶ 10). Although provided the opportunity to do so, Coke New York did not provide any evidence to refute Mr. DeStefano's testimony.
Coke New York contends that this hearsay testimony was false, and that both employees to whom Mr. DeStefano was referring volunteered to Coke New York that they had a problem with drugs or alcohol before Coke New York had reasonable cause to test them. (Plastek Decl. ¶ 10). Defendant denies this.
On November 13, 2000, arbitrator Denenberg issued her Award. She concluded that Mr. Kmec had not been discharged for just cause, and that he should be reinstated without back pay. Although she found that Mr. Kmec had engaged in the charged conduct, and that the Drug and Alcohol Policy required the discharge of all those who tested positive for drugs or alcohol, she concluded that the decision to refer Mr. Kmec to testing had not been properly reached, in light of section B-4(b)'s suggestion that some employees could be referred to rehabilitation instead of submitted to testing and termination.
In reaching the conclusion that some employees who were reasonably believed to be intoxicated were not referred to testing, arbitrator Denenberg relied entirely on the unrefuted testimony of Mr. DeStefano. Arbitrator Denenberg concluded that:
Since Mr. DeStefano's testimony was not rebutted, it must be accepted that at least two previous employees who had violated the rule against intoxication had been allowed to undergo a treatment and rehabilitation program. In light of the incidents described by Mr. DeStefano, the referral provision of the drug and alcohol abuse policies represent an option to resort to the EAP instead of testing and termination even when the company has reasonable suspicion to test.
(Denenberg Award, p. 7 (Award attached as Ex. B to Plastek Decl.).) Having found that the company had in the past exercised discretion to refer some employees to rehabilitation instead of to the testing that would have invariably led to their termination, the arbitrator concluded that in regards to Mr. Kmec:
Under these circumstances, invoking the mandatory testing/mandatory discharge mechanism instead of offering an opportunity for rehabilitation, as it had to other employees, amounts to disparate treatment, which is a violation of the just cause standard, the criterion for discharge specified in Article 22.
(Denenberg Award, p. 7, Plastek Decl. Ex. B.)
Noting that she was bound by Article 20 of the CBA which directed that her judgment concerning the degree of discipline could not be substituted for that of the company, arbitrator Denenberg nevertheless held that:
the question of whether the grievant was treated fairly compared to similarly situated employees must be considered in decided whether discipline is warranted under the just cause standard.
(Denenberg Award, p. 7.) Having concluded that the grievant was not treated fairly, but was instead subjected to disparate treatment, arbitrator Denenberg concluded that Article 22's just cause provision had been violated. Accordingly, her Award directed that:
As a remedy, the grievant shall be evaluated by the EAP and offered an opportunity for treatment, rehabilitation and reinstatement in accordance with the employer's drug and alcohol program. Since the grievant, in suffering a relapse, placed in doubt his ability to work, no back pay is awarded. However, he shall be made whole with respects to benefits and seniority.
(Denenberg Award, p. 8.)
II. DISCUSSION
Plaintiff commenced this action to vacate arbitrator Denenberg's Award, on the grounds that she had substituted her judgment for that of the employer with regard to the degree of discipline imposed on Mr. Kmec, and that as a result the Award exceeded the bounds of her authority. Plaintiff has consistently argued both before arbitrator Denenberg and this Court that Coke New York's Drug and Alcohol Policy is absolute in both its terms and its application. Because the Policy provides that all employees who are suspected of being under the influence are required to submit to testing and provides that all who test positive for illegal drugs or alcohol will be terminated, Plaintiff argues that it was certainly entitled (if not obligated) to terminate Mr. Kmec for his un-denied violation of the Drug and Alcohol Policy.
Defendant has consistently disagreed, and contends that because the Drug and Alcohol Policy provides for either termination or referral to counseling and rehabilitation, under the factual circumstances of Mr. Kmec's case Coke New York acted too harshly by referring grievant to the testing that necessarily led to his termination. Defendant contends that arbitrator Denenberg did not exceed her authority and that her award should be confirmed, because in concluding that Coke New York's decision violated Article 22 of the CBA, the Award drew its essence from the CBA.
1. Standard of Review for Arbitration Awards
Courts may only review a labor arbitrator's award in limited circumstances. United Parcel Service, Inc. v. International Brotherhood of Teamsters, 55 F.3d 138, 141 (3d Cir. 1995). Under facts such as these, when the parties' CBA provides for binding arbitration to resolve grievance proceedings, courts are not permitted to review the merits of an arbitrator's award. Id. at 141. Otherwise, the federal policy favoring the settlement of labor disputes through arbitration would be frustrated. See United Paperworkers Int'l Union v. Misco, Inc., 484 U.S. 29, 36, 108 S.Ct. 364-369-70 (1987); United Steelworkers of America v. Enterprise Wheel Car Corp., 363 U.S. 593, 596, 80 S.Ct. 1358, 1360 (1960). Consequently, an arbitrator's award may not be disturbed provided that it "draws its essence from the collective bargaining agreement . . . unless the award is tainted by fraud or bias or addresses matters outside the arbitrator's authority." United Parcel Service, 55 F.3d at 141 (citations omitted).
2. Did Arbitrator Denenberg's Award Exceed Her Authority?
Plaintiff has not alleged that Arbitrator Denenberg's decision was tainted by fraud or bias. Instead, Plaintiff contends that Arbitrator Denenberg exceeded her authority by issuing an Award that substituted her judgment for that of the company regarding the amount of discipline properly imposed. In exercising discretion where she had none, Plaintiff contends that the arbitrator ignored the plain language of the Drug and Alcohol Policy, and reached a result that failed to draw its essence from the CBA.
Contrary to Plaintiff's contentions, however, the Court concludes that Arbitrator Denenberg did not substitute her judgment for that of the Company with respect to the amount of discipline imposed, but instead determined based on the facts before her that the Company's conduct had violated the terms of Article 22 of the CBA. Rather than concluding that the discipline was too harsh on some equitable basis, she instead found that faithful application of the CBA's just cause provision mandated a different result than that reached by Coke New York in disciplining Mr. Kmec. Such a ruling (that a decision by the employer ran contrary to the terms of the CBA as she interpreted them), was precisely what the parties bargained for when they submitted the matter to arbitration.
Although it is apparent that arbitrator Denenberg relied heavily upon the testimony of Mr. DeStefano that was likely erroneous, at the time she considered the testimony it was undisputed, and would have necessarily shaped her interpretation of the CBA. Because Mr. DeStefano's testimony highlighted what arbitrator Denenberg interpreted to be a conflict in the way in which the Drug and Alcohol Policy was applied, namely that for no apparent reason some employees were referred to Reasonable Suspicion Testing while others were referred to counseling and given a second chance, the Court concludes that arbitrator Denenberg made a good faith effort to reconcile the conflict. As a part of that good faith effort, she concluded that what had been described to her as the disparate treatment of Mr. Kmec violated the CBA's just cause provision, and therefore had to be remedied. When fashioning that remedy she did not create some new punishment that suited her, but instead applied section B-4(c) of the Drug and Alcohol Policy which directed that Mr. Kmec be referred to counseling.
The Supreme Court has repeatedly directed that "as long as an honest arbitrator is even arguably construing or applying the contract and acting within the scope of [her] authority, the fact that a court is convinced [she] committed serious error does not suffice to overturn [her] decision." Eastern Associated Coal Corp. v. United Mine Workers of America, District 17, 531 U.S. 57, 62 (2000) (quotations omitted). Although the suspect testimony of Mr. DeStefano makes it plain that arbitrator Denenberg likely erred in concluding that the Drug and Alcohol Policy had been disparately applied, and as a result erred in concluding that Mr. Kmec should have been referred to the EAP instead of to drug testing, this error is not sufficient to justify vacating her award.
Even though arbitrator Denenberg may have reached an erroneous result, she did so by making a good faith effort within the scope of her authority to construe and apply Article 22 of the CBA. Given the Third Circuit's "longstanding disinclination to allow district courts to overturn arbitration awards," United Transportation Union Local 1589 v. Suburban Transit Corp., 51 F.3d 376, 379 (3d Cir. 1995), and its commentary that "even when the award was dubious, and the result one that we would not have reached had the matter been submitted to the court originally, we have upheld the arbitrator's decision," Id., the Court concludes that this is not one of those circumstances where "an arbitrator `acted in manifest disregard of the law, or [where] the record before the arbitrator reveal[ed] no support whatsoever for the arbitrator's determination.'" Id., at 380 (quotations omitted). Accordingly, given the rule articulated by the Supreme Court in Eastern Associated Coal, the Court finds that it has no basis to vacate arbitrator Denenberg's award, even though it would have upheld the decision to terminate Mr. Kmec had it been presented with that grievance initially.
III. CONCLUSION
For the foregoing reasons, Coke New York's motion to vacate arbitration is denied, and the Union's motion to confirm arbitration is granted.
An appropriate Order follows.