A weapon in the parking lot, the statute of limitations and public policy - court rejects challenge to arbitrator's award

In its decision in Alabama Gas Corp. v Gas Fitters Local Union No. 548, the District Court for the Northern District of Alabama denies Alabama Gas' request to set aside an award of Arbitrator Jack Clarke and instead grants the Union's request to confirm the award.

The dispute arose out of the dismissal of grievant, a senior mechanic at Alagasco. Co-workers of grievant had reported comments attributed to grievant they found troubling and which the Company believed indicated a potential for workplace violence. During the investigation of the incident grievant admitted making the comments alleged, and also admitted the possession of a firearm in his personal vehicle in the Company's parking lot.

After a hearing, Arbitrator Clarke concluded that the statements attributed to grievant were, taken in context, not threatening and were not "noteworthy" with respect to a propensity for violence. He also noted, however, that the Company had conceded that the "main factor" in the termination was grievant's possession of a loaded handgun in his vehicle in the Company parking lot. The Company maintained that this was contrary to its employment rules.

. While finding that possession of the weapon was a serious act of misconduct, the arbitrator concluded that the penalty of termination was "so excessive a punishment as to exceed the bounds of reasonableness." Accordingly, he reduced the penalty to a thirty day suspension and ordered the Company to reinstate grievant with back pay for the remaining period.

Alagasco filed suit to set aside the award as contrary to public policy. The Union filed a counterclaim seeking to confirm the award.

Alagasco initially sought the dismissal of the Union's counterclaim on the basis that it had been filed more than three months after the award, allegedly outside the applicable statute of limitations. Rejecting this claim, the Court observed:

Alagasco claims that Local 548's counterclaim is filed outside the three-month limitations period set forth in United Steel v. Wise Alloys, 642 F.3d 1344 (11th Cir. 2011). That three-month limitations period, however, governs actions to vacate arbitration awards and thus is inapplicable to Local 548's counterclaim. The statute of limitations for actions to enforce arbitration awards is six months. Samples v. Ryder Truck Lines, 755 F.2d 881, 888 (11th Cir. 1985). Assuming the limitations period begins on the date of the arbitration award, the counterclaim is not barred, as Local 548 filed its answer and counterclaim on October 2, 2013, less than six months from the date of the arbitration award on May 16, 2013.

The Court also rejected the Company efforts to set aside the award on public policy grounds. Observing that the Company's argument was premised on OSHA's general duty clause, the Court determined that this provision "does not constitute an explicit, well defined public policy justifying the vacatur of the arbitration award in the case at bar."  The Court also found inapplicable Alagasco's reliance on the 11th Circuit's decision in Delta Air Lines v. Air Line Pilots Ass'n (vacating an arbitration award reinstating a pilot who flew a passenger jet while intoxicated). It found that decision distinguishable

...in at least three significant ways. First, [Grievant's] misconduct was not integral to the performance of his employment duties. Second, [Grievant] may have violated Alagasco's Policy No. 401, but he did violate federal  agency regulations and the criminal law that formed the basis of a well-defined and dominant public policy. Third, [Grievant's] reinstatement was not a clear violation of any public policy.

However, the Court denied the Union's request for attorney's fees finding the Company's reliance on the Delta Air lines decision was not "wholly unreasonable."

More from the Fifth Circuit on "implied findings of just cause"

The Fifth Circuit has, on several occasions, refused to confirm an arbitrator's award where it determined that the Arbitrator's factual findings constituted an "implied finding" of just cause. This line of cases is discussed here. Essentially, the Court has found that where the cba provides that a specific act of misconduct is grounds for termination, an arbitrator's finding that the grievant engaged in the conduct alleged impliedly finds just cause for termination and the arbitrator is not free to reduce the penalty.

The Court has once again addressed this issue, but in this case concludes that the cba in issue does not compel such a result.

In Steelworkers v. Delek Refining, LTD. the Court reversed the decision of a District Court and affirmed an award of Arbitrator Daniel Jennings reinstating a grievant who had been dismissed for "unacceptable performance and insubordination." Arbitrator Jennings concluded that Delik lacked just cause for the termination, but did find that grievant's actions warranted a two month suspension.

Delek sought to set aside the award, and the District Court for the Eastern District of Texas found that "The arbitrator exceeded his authority as set by an arguable construction and application of the CBA. The arbitrator made an implicit finding of just cause for discharge and improperly fashioned an alternate remedy. The District Court's decision, adopting the report and recommendation of the magistrate, can be found here.

The Union appealed, and the Fifth Circuit reversed. It determined that its prior decisions did not support the District Court's opinion. While recognizing that it has previously held that "[i]f a collective bargaining agreement defines "proper cause" to include a nonexhaustive lists of offenses, an arbitrator cannot ignore the natural consequences of his finding that a listed offense was committed, the Court found that principle inapplicable in this case. It noted :

Whereas the CBAs in Delta Queen and DuPont contemplated discharge as the only available sanction upon a finding of cause, the CBA here—like that in Albemarle—contemplated both discipline and discharge as available sanctions. ... Providing for the right to "fire and discipline for just cause," the CBA between Delek and the Union did not clearly mandate that any performance or safety issues required discharge. See Albemarle, 703 F.3d at 826 (holding that the availability of discharge, suspension, and discipline "for cause" did not "make clear that any violation of safety rules is an offense requiring discharge"). Rather, "by its terms, the CBA [between Delek and the Union] contemplate[d] situations in which a finding of `cause' could support lesser sanctions than terminations.

The Court also rejected Delek's argument that a final warning previously issued to grievant amounted to a binding last chance agreement.

Accordingly, a majority of the Court found that the Arbitrator had not exceeded his authority and his award was entitled to confirmation. The dissenting Judge believed "{Grievant's] accident-prone history and Delek's repeated attempts to discipline and warn him provide the requisite backdrop for holding that the arbitrator's finding of just cause to discipline was also an implicit finding of just cause to terminate."

APWU wins one, loses one

APWU prevailed in a recent arbitration before Arbitrator Stephen Goldberg concerning the minimum qualifications needed for excessed employees transferring to a different unit, but a grievance concerning outsourcing Personal Vehicle Service (PVS) trucking operations in Columbus, OH. was denied by Arbitrator Shyman Das.

Arbitrator Goldberg upheld a grievance asserting that the Postal Service had violated the cba by reassigning employees excessed from the APWU bargaining unit to positions in another bargaining unit for which they did not meet the minimum qualifications. The Arbitrator rejected the Postal Service's argument that it did not and need not consider the physical qualifications stated in the Qualification Standards for Letter Carriers as part of the minimum qualifications an excess worker must meet prior to reassignment. He also rejected the employer's claim that it would be violating the Americans With Disabilities Act if it failed to reassign employees who could not meet the physical requirements of the position.

Arbitrator Das rejected a Union grievance which claimed that the Postal Service had breached a provision of its cba with APWU that required advance notice of contracting "which will have a significant impact on bargaining unit work." Relying on a prior award of Arbitrator Goldberg (discussed here), the Union claimed that the "mode conversion" in Columbus represented a significant impact on unit work. It noted the loss of 54 driving jobs and the likelihood that the work would never return to the unit. 

Rejecting this argument Arbitrator Das observed:

The contracting out at issue in this Columbus PVS case, in contrast to that in the Goldberg decision, pertains to one location within Ohio with 54 affected bargaining unit members, rather than all 13 locations in California with 800 affected bargaining unit members. In the California case, 10% of the total drivers in the craft nationwide were displaced. The Columbus mode conversion had an impact on 0.7% of the drivers in the bargaining unit and less than half a percent of the entire MVS unit. Over the four-year length of the HCR, the salary and benefits of the Columbus drivers amounted to around $16.4 million out of a total PVS salary and benefits cost of $3.9 billion and a total drivers salary and benefits cost of $2.4 billion. Considering the impact from a unit, rather than a local, perspective, the displacement of 54 drivers at a single installation, while significant to the individuals involved, does not, in my opinion, rise to the level of significant impact contemplated in the National Agreement.

APWU reports on the decision of Arbitrator Goldberg Arbitrator Rules: Excessed Employees Must Meet Minimum Qualifications Before Reassignment, and links to the award here. It reports on the Award of Arbitrator Das Arbitrator Denies Union's Grievance Protesting PVS Conversion To Highway Contract Route and links to his award here.