Monday, January 21, 2013

Failure to follow earlier award not basis to set aside second award

Tower Rock Stone Company has failed in its efforts to set aside an award of Arbitrator Ruben Armendariz reinstating a grievant who had been dismissed for an alleged "Class 4" offense of "deliberately or recklessly misusing, destroying or damaging Company property or the property of any employee." Tower Rock Stone Company v. Quarry and Allied Workers Local No. 830. 

Pursuant to the cba, an employee found to have engaged in a Class 4 offense was subject to immediate discharge. Arbitrator Armendariz found that the grievant, who had lost control of a haul truck while reaching down for a bottle of milk, instead was guilty of a Class 3 offense of "careless misuse" of Company property for which a suspension was the appropriate penalty. The Arbitrator determined that a Class 4 offense required a showing of intent, which he found absent, and also found that the Company policy allowing employees to eat and drink in their vehicles was a contributing factor in the accident.

Tower Rock sought to set aside the award, arguing it was inconsistent with a prior award addressing what it believed were similar circumstances (although involving a different union), in which Arbitrator Josef Rohlik had upheld a termination finding that an employee who lost control of his truck while reaching for a soda was guilty of a Class 4 offense. According to Arbitrator Rohlik "To conclude otherwise would implicitly require to add an actual injury or the intent to cause damage to a Class 4 Offense of this kind. That element is not required by the negotiated provision in question."

Relying on the Eighth Circuits decision in Trailways, Inc. v. Trailways, Inc. Joint Council, Tower Rock maintained that the prior award was binding on Arbitrator Armendariz and that he exceeded his authority by failing to follow it.

The District Court for the Eastern District of Missouri rejected this position, concluding:

 In contrast to the second Trailways arbitrator [who had essentially ignored the prior award, concluding that it represented a minority position], in this case Armendariz acknowledged the relevant "law of the shop" by discussing Tower Rock's past disciplinary enforcement practices. He decided the issue to which the Tower Rock and Local 830 had stipulated, rather than reformulating it, and he carefully interpreted the relevant CBA language. The facts arbitrated by Rohlik in 2000 may have been similar, but they did not involve the same transaction, the same grievant-employee, or even the same union.
In Trailways, the Eighth Circuit recognized that "there may be situations where an arbitrator will refuse to defer to a prior award involving the same issue." ... One of those situations, it found, could be when the prior decision "was made without the benefit of some important and relevant . . . considerations." Id. at 1425 n.16 (quoting F. Elkouri & E. Elkouri, How Arbitration Works 428 (BNA 4th ed. 1985)). This is exactly the conclusion that Armendariz came to: that Rohlik had not had the opportunity to consider the effect of Tower Rock's eating policy.Far from supporting Tower Rock's position, the Trailways court acknowledged that "an arbitrator generally has the power to determine whether a prior award is to be given preclusive effect," especially when that arbitrator thoroughly explains his or her decision to break
from a prior award. Id. at 1426 (if an arbitrator "does not accord any precedential effect to a prior award in a case like this," he or she should "at least explain the reasons for refusing to do so"). Accord Am. Nat. Can Co. v. United Steelworkers of Am., 120 F.3d 886
, 890-93 (8th Cir. 1997) (discussing in detail what Trailways did and did not hold and enforcing arbitration award where arbitrator discussed prior interpretations of the same contractual language before departing from those awards).[footnotes omitted].

The court also rejected the Company's claim that the arbitrator had improperly relied on equitable principles in overturning the dismissal, noting that "The Eight Circuit has repeatedly upheld awards where arbitrators considered such factors as part of a 'just cause' analysis."

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