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."