Opinion
Civil No. 02-2911 ADM/AJB
November 22, 2002
Steven C. Miller, Esq., Law Offices of Martin L. Garden, Minneapolis, MN, appeared for and on behalf of Plaintiff.
Martin J. Costello, Esq., Hughes Costello, St. Paul, MN, appeared for and on behalf of Defendant.
MEMORANDUM OPINION AND ORDER
I. INTRODUCTION
This matter is before the Court on Plaintiff Wholesale Produce Supply Co. ("Wholesale") and Defendant Teamsters Local Union No. 120's ("the Union") Cross Motions for Summary Judgment [Docket Nos. 15, 10]. The parties presented their oral arguments before the undersigned United States District Judge on October 30, 2002. Wholesale moves to vacate an arbitration award of July 26, 2002, pursuant to the Federal Arbitration Act, 9 U.S.C. § 10 et seq. and Section 301 of the Labor Management Relations Act, 29 U.S.C. § 185 et seq. The Union moves for enforcement of the award. For the reasons set forth below, Wholesale's Motion is denied, the Union's Motion is granted, and the arbitration award is enforced.
II. BACKGROUND
The instant litigation stems from the discharge of Robert Knox ("Knox" or "Grievant"), a warehouse employee and truck driver for Wholesale. Wholesale is a distributor of grocery produce and the Union is a Teamsters union that represents Wholesale's truck drivers and warehouse workers. On July 18, 2001, the day after Knox's termination, the Union filed a grievance contesting Wholesale's action, which eventually led to the arbitration in question.
A. The Agreement
Wholesale and the Union are parties to a collective bargaining agreement ("CBA"), which contains several relevant provisions. Article 14 deals with discharge and reads as follows:
The Employer shall not discharge any employee without just cause and shall give at least one warning notice of the complaint against such employee, except that no warning notice need be given to an employee before he/she is discharged if the cause of such discharge is dishonesty, drunkenness, drug addiction . . ., or repeated negligence in the performance of duty while on the job. Within one week after such discharge, any employee may request an investigation by the Union as to such discharge. Should such investigation show that such discharge is unwarranted, he/she shall be reinstated and compensated at the usual rate of pay while he/she was out of work. However, in the event that either party is dissatisfied with such determination, arbitration (as provided in Article 16) may be had as to the justification of such discharge and pay to be awarded, if any.
CBA art. 14 (Olson Aff. Ex. 2).
Article 16 sets forth the arbitration principles and procedures, stating that "[a]ny controversy arising over the interpretation of and/or adherence to the terms and provisions of this Agreement which cannot be settled between the Union and the Employer shall be referred . . . to an arbitrator of mutual choice." Id. art. 16.02. This section further recites that "[t]he Arbitrator shall be limited to determination of the facts based upon the provisions of this Agreement, and he shall have no power to change such provisions." Id. art. 16.03.
B. The Award
The selected arbitrator, James L. Reynolds ("the Arbitrator"), held an evidentiary hearing at which both parties were represented by counsel. Prior to the commencement of the proceeding, Wholesale and the Union stipulated to the issue for the Arbitrator's decision: whether the employer had just cause to terminate Knox and if not, what was the appropriate remedy. See Arbitration Transcript at 8-9 (Costello Aff. Ex. 12). On July 26, 2002, the Arbitrator issued the Opinion and Award ("Award"), determining there was no just cause for termination and that reinstatement with full benefits but without back pay was the appropriate remedy. See Award at 11, 16. Specifically, the Arbitrator found that Knox deliberately took a long lunch period on June 7, 2001, attempted to mislead his supervisor on June 14, 2001, and arrived to work late on several occasions. Id. at 13-14. He concluded, however, that discharge was too severe a sanction and converted Knox's dismissal to a suspension beginning from the time of termination and ending with the Award. Id. at 15.
III. DISCUSSION A. Standard of Review
The Court must uphold an Arbitrator's award if it "draws its essence from the collective bargaining agreement" at issue. United Steelworkers v. Enterprise Wheel Car Corp., 363 U.S. 593, 597 (1960); Titan Wheel Corp. v. Local 2048, Int'l Ass'n of Machinists, 253 F.3d 1118, 1119 (8th Cir. 2001). A decision draws its essence from the collective bargaining contract "if the arbitrator is even arguably construing or applying the contract and acting within the scope of his authority." United Paperworkers Int'l Union v. Misco, Inc., 484 U.S. 29, 38 (1987). However, the arbitrator may not unilaterally modify the terms of the collective bargaining agreement by disregarding its plain language. Amalgamated Transit Union, Local No. 1498 v. Jefferson Partners, 229 F.2d 1198, 1200 (8th Cir. 2000). In determining whether an award "draws its essence" from the contract, "the agreement must be broadly construed with all doubts being resolved in favor of the arbitrator's authority." Id.
Arbitration awards are thus accorded great deference and will only be vacated if based not on the contract, but on the arbitrator's "own brand of industrial justice." Enterprise, 363 U.S. at 597. The Court may not assess the underlying merits of the case even if the parties assert erroneous finding of facts or misinterpretation of the contract. Misco, 484 U.S. at 36.
Wholesale does not contest the findings of fact by the Arbitrator, but disputes his authority under the CBA to determine that Wholesale did not have just cause to terminate the Grievant. At the core of the dispute is Wholesale's contention that Article 16 of the CBA specifically defines "just cause," such that when the arbitrator established that certain alleged facts had transpired, he had thereby found just cause and was prohibited from further analyzing the issue. Wholesale argues that the arbitrator's findings of tardiness and intentional misleading by the Grievant automatically established just cause for the termination and that the Award, therefore, does not draw its essence from the CBA but goes beyond the terms of contract. The Union counters that the relevant portion of the agreement does not list any behaviors that per se constitute just cause and therefore the arbitrator was properly performing his duty to interpret and apply the CBA provisions at issue.
Wholesale does challenge the Arbitrator's review of prior warnings issued to Knox by Wholesale, claiming such factual assessment was barred by the CBA's provisions regarding time limitations for filing grievances and finalization of uncontested warnings. Because Wholesale submitted, argued and made no objection to the Union's contestation of these matters during arbitration, its assertion that the Arbitrator impermissibly considered this evidence will not now be considered.
Article 14 of the CBA does not explicitly define "just cause," but implies that the listed behaviors permitting discharge without warning constitute just cause for termination. See CBA art. 14. The provision begins by stating that there shall be no discharge absent just cause and specifies dishonesty and repeated negligence, among other things, as causes of discharge requiring no prior notification. Id. (emphasis added). However, notwithstanding such implication, there remain two substantial problems with Wholesale's argument.
First, the express stipulation as to the scope of arbitration appears to confer on the Arbitrator the precise authority under which he rendered his decision, specifically stating that he found no just cause and fashioning the proper remedy: reinstatement after a one-year suspension without pay. See Local 238 Int'l Bhd of Teamsters v. Cargill, Inc., 66 F.3d 988, 990-91 (8th Cir. 1995) ("When two parties submit an issue to arbitration, it confers authority upon the arbitrator to decide that issue.") (emphasis in original). Wholesale specifically stipulated to the question directly answered by the Arbitrator: Did Wholesale, the employer, have just cause to discharge Knox? Significantly, Wholesale did not propose as the issue for resolution, "was Knox guilty of dishonesty or repeated negligence?" or "do the facts support the Employer's determination that Knox committed dishonesty and repeated negligence in the performance of his duties?" It is highly relevant "that both parties explicitly asked the arbitrator to find whether [Knox] was discharged for sufficient just cause and to determine the appropriate remedy if he was not." Cargill, 66 F.3d at 990.
Notably, though the Arbitrator did find intentional misleading and repeated tardiness by Knox, he did not explicitly determine "dishonesty" or "repeated negligence" as used in the CBA, and Wholesale did not so request. Accordingly, the Arbitrator may have found that although the facts submitted by the parties established bad behavior by Knox, the conduct was not sufficiently blameworthy to constitute "dishonesty" or "repeated negligence" that would meet the standard of just cause for discharge. The parties asked the arbitrator to determine whether or not there was just cause for Wholesale's termination of Knox and the arbitrator found that there was not. See Award at 3, 11. Such stipulation granted the Arbitrator the authority to resolve this issue. See Homestake Mining Co. v. United Steelworkers of Am., Local 7044, 153 F.3d 678 (8th Cir. 1998); Cargill, 66 F.3d at 990-91.
The second problem with Wholesale's argument is that Wholesale cannot establish that the Arbitrator's award so deviates from the language of the CBA that it fails to draw its essence from the contract. Wholesale now attempts to re-characterize the arbitrable issue, claiming the Arbitrator overstepped the stipulation by imposing his own definition of just cause, and that Wholesale's agreement to the framing of the issue (whether there was just cause) merely conferred upon the Arbitrator the ability to determine whether the facts supported a finding of just cause "as defined in the contract." Pl.'s Reply Mem. at 5. Citing several cases in which the Eighth Circuit found the arbitrator had exceeded his contractual authority, Wholesale maintains that the CBA explicitly defines just cause and thus circumscribes the Arbitrator's role.
The cases Wholesale relies on to support its position are distinguishable from the present dispute. The most factually similar case on which Wholesale relies is Truck Drivers Helpers Union Local 748 v. Ulry-Talbert Co., 330 F.2d 562 (8th Cir. 1964). In Ulry-Talbert, the grievant was fired for dishonesty in falsifying time records and reinstated after an arbitrator's finding that dismissal was an excessive remedy. Id. at 563. The employer argued and the court agreed that once the arbitrator found the complaint against the employee sustained and discipline justified, he was prohibited from substituting his own judgment for that of the company with respect to the proper penalty. Id. at 564-65.
The contract at issue in Ulry-Talbert, however, contained a provision plainly specifying that dishonesty and other misbehavior "shall be grounds for discharge" and that these grounds represented a non-exhaustive list that did not prohibit termination "for other proper cause." Id. at 564. Furthermore, the arbitration clause was far narrower than the instant, permitting the arbitrator to reverse management "only . . . if [he] finds that the Company's complaint against the employee is not supported by the facts, and that the management has acted arbitrarily and in bad faith or in violation of the express terms of the agreement." Id. at 564.
In contrast, in the instant case, the CBA contains an ambiguous discharge provision that does not explicitly enumerate grounds that constitute just cause per se, but merely implies that certain behavior will provide just cause. See CBA art. 14. Additionally, although the arbitration clause limits the arbitrator to determination of the facts and prohibits modification of the contract, it does not preclude reversal of the employer's decision merely because the facts warrant any discipline. Cf. Ulry-Talbert, 330 F.2d at 564-65. Here, the Arbitrator did not change the terms of the CBA by determining that Knox's actions did not amount to just cause. While he found justification for discipline, he did not find that Knox's behavior constituted just cause as recited in Article 14, and thereby interpreted the imprecise discharge provision, a function expressly within his authority. See Award at 11, 15; CBA art. 16.02 (stating "[a]ny controversy arising over the interpretation and/or adherence to the terms and provisions of this agreement . . . shall be referred . . . to an arbitrator of mutual choice").
Wholesale further analogizes this case to St. Louis Theatrical Co. v. St. Louis Theatrical Bhd, Local 6, 715 F.2d 405 (8th Cir. 1983), where the Eighth Circuit affirmed vacation of a portion of an arbitration award determining that termination was an excessive penalty for the employee's conduct. See id. at 407, 409. The agreement at issue narrowly tailored the arbitrator's authority to determining "the fact of participation" in prohibited activity and did not permit the arbitrator to question or modify the employer's choice to terminate the employee once the participation was established. Id. at 408. The court concluded the arbitrator's contractual authority only allowed him to establish whether the employee engaged in the alleged work stoppage and that upon this finding, his reinstatement of the employee had no basis in the plain language of the contract. Id. at 409.
The CBA between the present parties has no such limiting provision. It constrains the arbitrator to a determination of the facts, without power to change the agreement, but does not limit the arbitrator to finding only the fact of whether or not an employee falsified time records or acted negligently. Because this CBA is drawn in more general, expansive terms, leaving room for ambiguity, "the arbitrator must interpret and decide the meaning of the Agreement with respect to its discharge provisions." Midwest Coca-Cola Bottling Co. v. Allied Sales Drivers, 89 F.3d 514, 518 (8th Cir. 1996). The Union relies on numerous cases supporting the proposition that absent clear, unambiguous language and directives to the contrary, the courts must respect an arbitrator's arguable construction of the contract. See, e.g., Id.; Misco, 484 U.S. at 37-38; Trailmobile Trailer, LLC v. International Union of Elec., Elec., Salaried, Mach., and Furniture Workers, 223 F.3d 744, 747 (8th Cir. 2000).
The Arbitrator referenced the CBA in relevant part and applied the facts as he found them, ultimately concluding that, based on Article 14 and the issue framed by the parties' stipulation, Knox's activity justified discipline by Wholesale but did not rise to the level of just cause. See Award 3-4, 11-15. He then, pursuant to the stipulation, devised and awarded the appropriate remedy of suspension and reinstatement. See id. at 15, 16. Such action evidences an arguable construction and application of the contract that should not be disturbed even if "the court's interpretation of the agreement is different from that of the arbitrator." George A. Hormel Co. v. United Food Commercial Workers, Local 9, 879 F.2d 347, 349 (8th Cir. 1989) (citing Enterprise, 363 U.S. at 599).
Accordingly, in light of the requisite deferential standard to which courts are limited when reviewing an arbitrator's decision, Wholesale has not shown that the Award does not draw its essence from the CBA. Based on his consideration of the facts as presented by the opposing parties, the Arbitrator found that there was no just cause for Wholesale to discharge Knox. See Award at 11. This was precisely the issue presented by the parties for resolution, and considering the express stipulation and the imprecision of the discharge provision of the CBA, the Award must be enforced as within the authority of the Arbitrator.
IV. CONCLUSION
Based on the foregoing, and all the files, records and proceedings herein, IT IS HEREBY ORDERED that:
1. Wholesale's Motion for Summary Judgment to vacate the arbitration award [Docket No. 15] is DENIED, and
2. The Union's Motion for Summary Judgment to enforce the arbitration award [Docket No. 10] is GRANTED.
LET JUDGMENT BE ENTERED ACCORDINGLY.