Employment Law Daily Arbitrator arguably construed CBA in reinstating employee, even if error in analysis
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Friday, April 12, 2019

Arbitrator arguably construed CBA in reinstating employee, even if error in analysis

By Ronald Miller, J.D.

Because it was not clear that an arbitrator acted on his own notions of industrial justice rather than making an effort to construe the bargaining agreement, he arguably construed the contract, even if there was a serious error in his analysis.

A district court erred in vacating an arbitration award where the arbitrator was at least arguably construing the parties’ collective bargaining agreement in issuing an award reinstating a union member without backpay after he was discharged, ruled the Eighth Circuit. Here, the arbitrator relied heavily on the potential breadth of the terms “neglect of duty” and “dishonesty,” and his view that accepting the employer’s position on “absolute cause” would effectively negate the agreement’s “just cause” standard. Right or wrong, this was an interpretation of the contract, concluded the appeals court (CenterPoint Energy Resources Corp. dba CenterPoint Energy Minnesota Gas v. Gas Workers Union, Local No. 340 aw United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada, April 10, 2019, Colloton, S.).

GPS tracking of employee. The employer offers maintenance and repair services on various home appliances. The employee worked as a service technician. Service technicians are assigned to a geographic service area. They use laptops equipped with a global positioning system (GPS) to receive work orders, to record when they begin and complete a service call, and to input remarks about the work performed. In 2015, a supervisor questioned the employee about where he was located on four separate dates earlier in the year, noting discrepancies between his time sheet entries and GPS records. Ultimately, the employer terminated him for falsifying his time sheets and neglect of duty. The union protested the discharge. After the employer denied the union’s grievance, the matter was submitted to arbitration in accordance with the terms of the parties’ collective bargaining agreement.

“Just cause” determination. In the arbitration proceedings, the union argued that the issue to be decided by the arbitrator was whether the employee was discharged for just cause, and if not, what the appropriate remedy should be. The employer framed the first issue in two parts: (1) whether the employee’s conduct constituted dishonesty or neglect of duty as defined by the “absolute cause” provision of the CBA; and (2) whether the employee’s conduct constituted “just cause” as defined by the CBA.

Arbitrator’s decision. The arbitrator reviewed the language of the CBA and concluded that even if the employee committed one of the four offenses listed in the “absolute cause” provision, the arbitrator had authority to determine whether the employee was appropriately discharged. The arbitrator then found that even though the employee acted dishonestly and neglected his duty as cited by the employer, the discharge penalty must be modified to comport with the seriousness, length, and scope of his misconduct. Thus, the arbitrator ordered the employee reinstated without backpay. Finding that the arbitrator exceeded his authority, the district court vacated the arbitration award.

Action to vacate arbitration award. Courts have a “limited role” in actions to vacate an arbitration award because interpretation of a CBA is a matter for the arbitrator. “It is the arbitrator’s construction which the parties bargained for; and so far as the arbitrator’s decision concerns construction of the contract, the courts have no business overruling him because their interpretation of the contract is different from his,” the appeals court observed. “So long as the arbitrator ‘is even arguably construing or applying the contract and acting within the scope of his authority,’ the arbitral award must stand.”

Arbitrator’s analysis of CBA. Here, the arbitrator began his analysis of the evidence by quoting Article 26, the contractual provision on discipline and discharge. He concluded that Article 26 “includes a just cause standard for discipline and discharge.” He then addressed the employer’s position that he lacked authority to modify the discipline if he found the employee guilty of dishonesty or neglect of duty at any time.

Reviewing the language of Article 26, the arbitrator reasoned that it was clear the parties did not intend that any employee found to have committed one of the four offenses listed could be summarily discharged without regard to the factors arbitrators normally consider in determining whether there was just cause for discharge. Because the parties included a “just cause” standard in Article 26, it seemed unreasonable that the union would give the employer the unfettered right to discharge for any act of neglect of duty, dishonesty, sick leave abuse, or use of alcohol or non-medical drugs, he concluded. The arbitrator expressed concern that “almost every violation of Company policy could also be interpreted to constitute an act of neglect of duty or dishonesty.” According to the arbitrator, given the breadth of the term “absolute cause,” accepting the employer’s position would mean that “an employee guilty of almost any violation of Company policy, no matter how insignificant, could be subjected to summary discharge without the right to challenge the appropriateness of the penalty before an arbitrator.”

No basis to vacate award. To justify vacating the arbitration award, the employer had to establish that the arbitrator based his decision on “some body of thought, or feeling, or policy, or law that is outside the contract.” Here, it was not clear that the arbitrator acted on his own notions of industrial justice instead of attempting to construe the contract. Rather, the arbitrator relied heavily on the potential breadth of the terms “neglect of duty” and “dishonesty,” and his view that accepting the employer’s position on “absolute cause” would effectively negate the just cause standard derived from the CBA’s discipline and discharge provisions. Right or wrong, this was an interpretation of the contract, concluded the appeals court. Even if there was a serious error in his analysis, the arbitrator arguably construed the contract.

Accordingly, the appeals court reversed the judgment of the district court and remanded with directions to confirm the arbitration award.

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