Sunday, April 7, 2013

Eighth Circuit rejects award finding just cause but awarding remedy.

A majority of the Eight Circuit has affirmed a District Court's decision vacating an arbitrator's award, concluding that he had found that the employer had just cause for the termination of the grievant but nevertheless reinstated him without back pay. Northern States Power Co. d/b/a Xcel Energy v. IBEW, Local 160.

 The Company had terminated the employment of grievant after learning through a background check that he had been convicted of "possession of a pornographic work involving a minor." The terms of grievant's probation included a prohibition on contact with minors. The Company maintained that they could not guarantee that grievant would have no contact with minors during his employment and, as a result, terminated his employment.

The Arbitrator concluded:

[T]he Local’s grievance is denied in part and sustained in part. To the extent that Mr. Snow was convicted of a serious crime that raises some very legitimate concerns on the part of the Management going forward, they have demonstrated justification for their decision. At the same time however, the Union has presented convincing evidence which sets forth a number of factors that existed which ultimately favor the imposition of a penalty less than the Grievant's dismissal.

The Company sought to set aside the award, and the District Court granted the employer's motion. The Eight Circuit affirmed, observing:

Here, the language of the arbitrator’s decision—specifically that NSP had “demonstrated justification” for its decision to terminate Snow—is sufficient to show that the arbitrator found the termination was supported by “just cause.” Having answered the first submitted question in the affirmative, the arbitrator had no authority to address the second question or to fashion a remedy different than the termination. Therefore, the district court properly vacated the arbitrator’s award for reaching beyond his authority under the CBA.

In reaching this conclusion, the Court noted with approval decisions from other circuits, including the Fifth Circuit's "implied just cause" cases (discussed here), holding that having found just cause an arbitrator was without authority to reduce the penalty.

The dissenting opinion argued that the arbitrator had made no finding of just cause, and that when read in context the arbitrator's award "cannot fairly be read to favor NSP".

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