Sunday, September 24, 2017

Last Chance Agreements- Arbitrability of triggering event

Dontay Stokes was employed by Cenveo Corporation. In December of 2015, his employment was terminated for violation of the Company's Workplace Violence Policy. The termination was grieved and Cenveo and the Union (USW) entered into a Last Chance Agreement (LCA) in settlement of that grievance. The LCA provided:

I, Dontay Stokes, by affixing my seal and/or signature, acknowledge, in the presence of and witnessed by Cenveo management and USW Local 198G representation, that I have been issued disciplinary actions in accordance with progressive discipline guidelines as provided for in Cenveo Mt. Pleasant, PA Plant Rules. Additionally, I confirm that, I am subject to the last and final step of the progressive disciplinary process, which terminates my employment.

I am in complete agreement and understanding that this agreement permits me to continue as an active employee, on a non-precedent setting basis, at the Cenveo Mount Pleasant Facility, with the stipulation if I have a violation of Cenveo Workplace Violence Policy, in the next six (6) month period, that generates a warning, it will result in immediate termination. Further, I consent to waive all bargaining unit agreement rights to the grievance process regarding such termination and agree to hold harmless, Cenveo management, USW Local 198G and its officers or representatives for such actions with respect to such termination.

Pursuant to the LCA, Stokes was reinstated. Thereafter his employment was again terminated when the Company claimed that he had threatened to physically harm a supervisor. Stokes denied making a threat and grieved the termination. Cenveo denied the grievance and also took the position that the grievance was not subject to arbitration because of the provisions of the LCA.

Cenveo filed a complaint with the District Court seeking declaratory relief and an injunction against arbitration. Cenveo and the Union filed cross motions for Summary Judgment. Judge Cathy Bissoon granted the Union's motion and denied that of the Company. Cenveo Corporation v. United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers Intern'l Union. Judge Bissoon found that the factual dispute about whether grievant had made the threat was properly subject to arbitration. In doing so the Court relied in large part on the Third Circuit's decision in United Steelworkers of America v. Lukens Steel. In that case, the Court held that in a dispute where the LCA did not specify who would make the decision of whether the grievant had committed the offense alleged to have triggered the LCA, determination of that threshold question was properly submitted to arbitration.

Judge Bissoon found that Cenveo had not rebutted the normal presumption of arbitrability, noting:

Where a collective bargaining agreement contains an arbitration clause, there is a presumption of arbitrability. See United Steel Workers of America v. Century Aluminum of Kentucky, 157 Fed. Appx. 869 (6th Cir. 2005) (citing AT&T Technologies, Inc. v. Communications Workers of America, 475 U.S. 643, 650 (1986)). The presumption of arbitrability may be overcome, however, if the collective bargaining agreement contains an "`an express provision excluding a particular grievance from arbitration,'" United Steelworkers of America v. Lukens Steel, 969 F.2d 1468, 1474 (3rd Cir. 1992) ... . In general, "[s]ettlement agreements (such as the Last Chance Agreements) between parties to a collective bargaining agreement containing a broad arbitration clause are arbitrable when the underlying disputes are arbitrable, except when the parties expressly exclude the settlement agreements from arbitration." ...

Judge Bissoon rejected the Company's efforts to distinguish Lukens, and its claim that the LCA in this case waived not just arbitration of the propriety of the disciplinary penalty but rather "all" rights to arbitration. The Court agreed with the Union's argument that, because the LCA did not expressly state who would make the initial determination of whether the grievant had committed the offense alleged, there was no waiver of the right to arbitrate that issue. The Court noted:

Cenveo has not presented "strong and forceful" evidence that Stokes waived his right to arbitrate the threshold issue of guilt. Indeed, Stokes's agreement "to waive all bargaining unit agreement rights to the grievance process regarding . . . termination" could be interpreted as a waiver only of his right to arbitrate his termination in the event that an arbitrator finds that he has violated the Policy. Plaintiff relies on Sterrett v. Giant Eagle, Inc., 2015 WL 791401 (W.D. Pa. Feb. 25, 2015), but that case is readily distinguishable. ... . In Sterrett, the last chance agreement states: "In the event that plaintiff is determined by the Company to have committed any dishonest act . . . the Company will have the right to discharge [Plaintiff]." ... . In contrast, the LCA at issue here does not explicitly state who will determine the threshold issue of guilt. Instead, the LCA provides that "if [Stokes has] a violation of Cenveo Workplace Violence Policy, in the next six (6) month period, that generates a warning, it will result in immediate termination." ... Such language leaves open the possibility that it will be an arbitrator, and not the Company, that will determine whether Stokes violated the Policy. Because the language of the LCA can be read to support either the Union's or Cenveo's position, the presumption of arbitrability applies.

Other issues arising from Last Chance Agreements are discussed in Can an arbitrator disregard a last chance agreement?, Reinstatement with Conditions - Last Chance Awards, and Last chance agreement doesn't bar arbitration when union is not a party

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