Non-disciplinary termination, a zipper clause and the covenant of good faith and fair dealing

An award by Arbitrator David Stiteler addresses these topics and upholds a grievance filed on behalf of an employee of the Washington Department of Social and Health Services who was separated from service because of a pre-employment criminal conviction. Washington Federation of State Employees and Washington Department of Social and Health Services.

The facts presented to Arbitrator Stiteler were largely undisputed. Grievant was hired and thereafter promoted into several positions despite his having a criminal conviction which, under Agency policies, should have disqualified him from employment. There was no claim that the managers were unaware of the conviction when they took action. In 2016 (after grievant had been employed for at least eight years) an audit of the Agency's background check files noted several employees with apparently disqualifying convictions. The Agency was advised to reevaluate the background checks of several employees, including the grievant. It attempted unsuccessfully to move grievant to a position not impacted by his conviction, and he was ultimately separated from employment on what the Agency described as a "non-disciplinary" basis.

The Union grieved the Agency's action and the matter was submitted to Arbitrator Stiteler for resolution.

  The Union claimed that grievant's separation was disciplinary and was without just cause. It also claimed hat the Agency's action violated two provisions of the CBA, Article 28 which addressed privacy and off duty conduct and Article 50, the Entire Agreement or zipper clause. Article 28 provided that off-duty conduct would not be grounds for discipline unless it was a conflict of interest or was otherwise detrimental to the employee's performance of the Agency's programs. Article 50 included both a waiver of the right to bargain during the contract's term and a bar to past practices. 

The Agency maintained that the separation was non-disciplinary and therefore not subject to the just cause provision. It claimed that the removal was required by"operation of policy" and that because of his criminal conviction grievant was not qualified to hold his former position. 

Arbitrator Stiteler agreed with the Agency that the separation was not disciplinary. He also rejected the Union's reliance on Article 28 (privacy and off duty conduct). He therefore found that the just cause standard did not apply. He found that the Union's claim under the zipper clause was a matter of contract interpretation for which the Union had the burden of proof.

On the merits, the Arbitrator found that the Union had sustained its burden. Initially he found that Article 50, the "entire agreement" provision, was ambiguous as to the parties intent:

Article 50 has several elements. The parties agreed that the CBA was their entire agreement and nullified past practices not specifically included. They agreed to waive the right to demand bargaining during the contract term over subjects covered in the CBA. They also agreed that the CBA supersedes agency policies that conflict with it.
I find that Article 50 is ambiguous because it is capable of being interpreted in more than one way. Did the parties intend to limit the Agency’s discretion to dismiss employees for non-disciplinary reasons to those specified in the agreement? Or is their silence on non-disciplinary removals, other than those specified (such as disability separations), intended to mean that the Agency had the discretion to enact policies such as the one in question?

Since there was no evidence of bargaining history, he turned to another interpretive tool, the concept of the covenant of good faith and fair dealing. He noted of that concept:

It is inherent in every collective bargaining agreement. The concept exists to prevent one party from taking an action that will result in interfering with the right of the other party to receive the benefit of the bargain. It is used by arbitrators to determine if an employer acted reasonably.

He concluded that while the CBA provided for one specific form of non-disciplinary separation, in the case of disability, the agreement nowhere addressed the Agency's ability to dismiss an employee in the circumstances presented in this case. He rejected the Agency's contention that the managers involved in the hiring and promotions erroneously believed they had the power to waive disqualification. None of these managers testified and there was no persuasive evidence to support that claim. 

Sustaining the grievance, Arbitrator Stiteler concluded:

In the end though, it does not matter whether these hiring authorities chose to deliberately flout the express language of the policy or were guilty of making an egregious error. The Agency, by the actions of these managers, created this problem by hiring Grievant and compounded the problem by promoting him. The result was that Grievant, a good employee, was harmed by the loss of his job. It is hardly consistent with good faith for the Agency punish Grievant for its managers’ misapplication of the policy.
The Agency deprived Grievant of job security, seniority, and significant financial benefits by belatedly removing him from his position. While the Agency may have the managerial discretion to adopt policies regarding disqualification, it must exercise such discretion reasonably and not in a manner that conflicts with its obligations under the contract. In removing Grievant, the Agency acted unreasonably, contrary to its duty of good faith and fair dealing and in violation of Article 50.

He ordered grievant's reinstatement to the position he held at the time of his separation and the payment to him of back pay for the time lost.

Timeliness, functus officio, mitigating circumstances, and use of force

Arbitrator erred in determining timeliness of a grievance

The Fifth Circuit has effectively vacated an award of Arbitrator Daniel Jennings (here), concluding that the Arbitrator's reliance on the execution date of the contract rather than its ratification date triggered the start of the timeline for the filing of a grievance. Southwest Airlines Company v. Local 555, Transport Workers Union of America. TWU Local 555 sought to arbitrate Southwest's use of non-union vendors to clean the interior of its aircraft. The cba called for a ten day period from the date of the union's knowledge of the alleged violation for the filing of a grievance. The dispute in this case turned on whether that ten day period started on the ratification date or the execution date of the cba. The cba provided that the cba would become effective "when [it] is accepted by the Company and ratified by the membership." The cba was ratified on February 19, 2016. It was actually signed on March 16, 2016. Rejecting the conclusion of the Arbitrator, the Court found that the contract became effective upon ratification, and since the grievance was not filed within 10 days of that occurrence it was untimely. It found the Arbitrator's contrary conclusion in conflict with the plain language of the contract;

It was not an arguable construction of the CBA and instead amounted to the arbitrator's own brand of industrial justice. The arbitrator's interpretation failed to account for (1) the CBA's title page that sets February 19, 2016 through February 18, 2021 as the "period" for the CBA; (2) Article 29's express language that the CBA shall "remain in full force and effect as of the date of ratification through and including February 18, 2021"; (3) the CBA's one-time bonus paid to employees working under the CBA as "of the Date of Ratification"; and (4) the parties' conduct, including Southwest's payment of the increased rates and bonuses set out in the CBA, starting after the CBA was ratified but before it was signed.

Functus officio precludes court's consideration of Arbitrator's third, fourth and fifth version of award.

The  Court of Appeals of Ohio has affirmed a lower court decision vacating an award of Arbitrator Susan Grody Ruben.  The award reinstated an employee of the Youngstown Developmental Center who had been dismissed for alleged abuse of a client at the facility. Office of Collective Bargaining v. Ohio Civil Service Employees Ass'n, Local 11.  Grievant had ben accused of abuse when she allegedly either slapped the hand of the client or forcibly knocked something out of her hand. In an award dated May 28, 2015, the Arbitrator rejected the Union's argument that she should use the definition of abuse found in the Ohio Code and used instead the definition of abuse found in the Department's Standards of Conduct. Nevertheless she found that grievant had engaged in the conduct alleged and that "slapping or knocking" fell within that definition. The next morning, the Arbitrator sent a revised award, correcting a typo and several dropped sentences but making no substantive changes in the award. The Arbitrator issued a third award on May 30, 2015, finding that grievant's conduct did not constitute abuse  as that term is used in the cba but was contrary to the Department's Standards of Conduct but still reduced the dismissal to a suspension "for the first offense of abuse." Later that same day the Arbitrator issued another award, substantially the same but noting the suspension was for "for a first offense of Rules E-3 and E-5." Finally the Arbitrator issued a fifth award on May 31, 2015 containing some additional discussion, and adopting the definition of abuse found in the Ohio Code (a position she had rejected in the first award). Applying that definition the Arbitrator found that grievant's conduct did not constitute client abuse as that term is used in the cba.

The State Office of Collective Bargaining and the Department sought to vacate the award. The trial court first determined that the Arbitrator had no authority to make substantive changes to the original award. It then concluded that the Arbitrator had exceeded her authority in concluding that the Department did not have just cause to dismiss grievant after finding that she had committed client abuse.

The Union appealed, and the appellate court affirmed. It agreed with the lower Court that its review should be limited to the original award, noting:

The doctrine functus officio is not applicable, however, where the arbitrator does not attempt to change his opinion in a substantive way.... Accordingly, there are several exceptions to the doctrine, such as "(1) where the arbitrator can `correct a mistake which is apparent on the face of [the] award'; (2) where `the award does not adjudicate an issue which has been submitted, then as to [the] issue the arbitrator has not exhausted his function and it remains open to him for subsequent determination'; and (3) where `the award, although seemingly complete, leaves doubt whether the submission has been fully executed, an ambiguity arises which the arbitrator is entitled to clarify.'" ...
None of the recognized exceptions apply in this case. Our review of the arbitrator's original opinion and award shows that the arbitrator exhausted her function by fully adjudicating all submitted issues and by making a final award. The arbitrator's original opinion and award makes all required factual findings, sets forth the applicable law, reaches the necessary legal conclusions, and makes an award that finally determines all pending matters. In our view, the arbitrator's third, fourth, and fifth iterations of the opinion and award affected changes to the original opinion and award that can only be characterized as substantive in nature both factually and legally. This is the very circumstance that the doctrine of functus officio and Miller intended to prevent.

In light of the Arbitrator's finding in the original award that grievant had committed client abuse, and the language of the cba that " In cases involving termination, if the arbitrator finds that there has been an abuse of a patient or another in the care or custody of the State of Ohio, the arbitrator does not have authority to modify the termination of an employee committing such abuse...." the Court found the Arbitrator's award "irreconcilable with the CBA."

Arbitrator failed to consider mitigation circumstances in determining appropriateness of discipline, case remanded to the Arbitrator for reconsideration

The Court of Appeals for the Federal Circuit has remanded a dispute to the Arbitrator because the Arbitrator ignored certain evidence of mitigating circumstances. Grievant was an officer with the United States Park Police. Koester v. United States Park Police He was dismissed for allegedly consuming alcohol on duty and being impaired while on duty due to alcohol consumption. Arbitrator James Harkless issued an award upholding the dismissal.The Union appealed, asserting that the Arbitrator had failed to consider  evidence of mitigation which had been presented at the hearing but which had not previously been presented to the Park Police. Agreeing with the Union, the Court noted:

In this case, the arbitrator abused his discretion when, during his independent assessment of the Douglas factors, he refused to consider evidence that he believed was never presented to the agency. He gave no weight to Mr. Koester's ability to demonstrate improvement after completing the Employee Assistance Program, the impact of Hurricane Sandy, the unfriendly work environment, and the effect of Mr. Koester's wife's poor immigration interview because the Union did not refer to that evidence at the agency level in its response to the Park Police's proposed removal. That rationale for disregarding evidence is clearly contrary to our decision in Norris. See Highmark Inc. v. Allcare Health Mgmt. Sys., Inc., 572 U.S. 559, 563 n.2 (2014) (indicating that taking an erroneous view of the law necessarily constitutes an abuse of discretion). And the arbitrator's erroneous view of the law is not harmless. He gave no alternative explanation for discounting some of that evidence even if it were in the mix, and we therefore cannot say without impermissibly reweighing the evidence ourselves whether that new body of evidence would alter the arbitrator's evaluation of the reasonableness of the agency's removal penalty.

The Court remanded the dispute to the Arbitrator and directed him to independently assess the relevant Douglas factors "taking into accountable of then evidence presented, including purported new evidence, now of record"

Court refuses to overturn award reinstating police officer despite claim that award was contrary to public policy

The Minnesota District Court has denied a request to vacate as contrary to public policy an award (discussed here) that reinstated a police officer dismissed for alleged use of excessive force. City of Duluth v. Duluth Police Union, Local 807. The arbitrator found that the officer's use of force was unreasonable, but that the penalty of termination was too severe.

While noting that the same issue is currently pending in the Minnesota Supreme Court (in a case discussed here), the District Court found that the current state of the law did not warrant vacating on public policy grounds the Arbitrator's conclusion that the discipline was too stringent. 

Court upholds arbitrator's award finding unilateral change in past practice, rejects public policy challenge

The District Court for the Northern District of Illinois has confirmed an award of Arbitrator Edward Krinsky that found  Mondelez Global improperly and unilateral modified a past practice allowing employee to voluntarily work seven days without a day of rest. Mondelez Global, LLC v International Association of Machinists and Aerospace Workers, AFL-CIO, District 8, Local Lodge 1202.

   For "many years" employees had been allowed, on a voluntary basis,  to work seven consecutive days during a calendar work week without having 24 hours of rest. In 2013 a new Human Resources Director became aware of an Illinois statute  providing that employers "shall allow every employee ... at least twenty-four consecutive hours of rest in every calendar week in addition to the regular period of rest allowed at the close of each working day." The statute also provided that the Department of Labor could grant permits authorizing the employment of a person on days of rest based on, among other things, "business necessity and economic viability in granting such permits." The Company requested permits from the DOL but never received them. In 2015, the company modified its practice, and refused to allow employees not covered by a valid permit to voluntarily work seven days straight.

The Machinists Union grieved this action and the matter was ultimately submitted to arbitration. Arbitrator Krisnsky sustained the grievance, concluding that there was insufficient evidence that the statute prohibited employees from voluntarily working without day of rest, that the contract did not prohibit such a practice, and that the Company acted improperly in terminating the practice during the term of the agreement. He noted:

The Company was obligated to continue the practice during the life of the Agreement unless there was an agreement with the Union to change it. Without such an agreement to change the practice, the Company could have notified the Union of its intent to end the practice and that could then have been the subject of bargaining for the next Agreement. The Company could not simply end the practice unilaterally during the term of the Agreement.

In reaching his decision Arbitrator Krinsky found support in an earlier award of Arbitrator Amadeo Grieco involving a similar dispute at another facility of the Company. (That award was confirmed in Mondelez Global, LLC v. International Association of Machinists and Aerospace Workers, AFL-CIO, District 8)    Arbitrator Grieco had similarly rejected the Company's position on the need to eliminate the past practice, noting that the statute was at least ambiguous and also noting prior testimony of a former DOL General Counsel that a side agreement between a City and a police union allowing police to voluntarily work seven consecutive days did not violate the statute.

In rejecting the Company's request to vacate the award, the Court found no basis for the Company's claim that it was contrary to public policy as compelling the Company to violate the day of rest statute. The Court concluded:

In sum, the cited provision of ODRISA, as it has been administered by the IDOL, allows parties to contract around it, which is exactly what Mondelez and the union have done for many years. Accordingly, the arbitrator's decision was not contrary to a "well defined and dominant" public policy. And as the arbitrator correctly concluded, MG was not entitled to unilaterally change a long-standing mutually understood and implemented past practice, particularly one effectively memorialized in the CBA, without bargaining with the union.