3M succesfully terminated a past practice but contract language supported grievance

The Steelworkers union represents a unit of production employees at 3M's Cottage Grove, MN facility. The facility is fueled by natural gas and, on January 5th, 2014, 3M was notified by the utility company that because of the severe cold it was curtailing their use of gas. As a result, certain gas-dependent production lines were shut down and, because of the resulting loss of work, the affected employees were temporarily laid off. This gas curtailment continued until the afternoon of January 7th. This was the first time in at least ten years that the gas supply to the facility had been curtailed. Because of continued cold weather gas supply was again curtailed from January 25th through January 29th. Once again, certain employees were temporarily laid off as a result of loss of work caused by the curtailment. The Steelworkers filed grievances claiming in both instances that 3M had breached its cba by laying off employees out of seniority order.

In support of the grievances the Union claimed that the Company had breached an established past practice of providing employees with a 40 hour work week guarantee. It also relied on language in the cba providing that "The principle of Plant Seniority shall be applied in cases of layoff, recall, promotion, demotion, reduction and transfer of employees ...." 3M maintained that even if a past practice had existed it was effectively terminated in the last round of negotiations It also pointed to language in the cba providing that employees reporting for work without prior notice that work was not available would be provided with a minimum of four hours pay "except in cases beyond the control of the Company" as evidence that the layoff language did not apply in this situation.

Arbitrator Mario Bognanno rejected the Union's claim of breach of a binding past practice. He found that 3M had notified the Union during negotiations that it was repudiating certain practices, including "Granting employees work when work is not available." He noted:

It is firmly established in labor law, labor arbitration and industrial relations that an enforceable past practice may not be changed during the term of a CBA, without mutual assent. This is the rule, whether the term of employment is implied (i.e., an enforceable past practice) or expressly stated in CBA language. However, absent mutual assent, implied and expressed terms of employment may be changed during the negotiations of a successor agreement. In the present case, 3M repudiated the practice in question (i.e., it withdrew “mutuality”), during negotiations of the current CBA. At that point, for the practice to have continued, the Union, through negotiations, would had to have the terms of the practice explicitly incorporated into the CBA or to have persuaded the Company to objectively retract its expression of repudiation. The record evidence is that the Parties neither incorporated the referenced practice into the current CBA nor did 3M recant. (Un. Ex. 6) For these reasons, the undersigned rejects the Union’s claim that 3M violated an enforceable past practice when it laid off the Grievants in January 2014.

The Arbitrator then turned to an analysis of the impact of the express language of the cba, ultimately reaching different decisions on the two layoffs. With regard to the first, the Arbitrator concluded:

 Record evidence supports the conclusion that the actual curtailment of gas on January 5th and the resulting need to close down production lines was unprecedented, or nearly so, even though Minnesota’s freezing cold January weather is anything but unprecedented. Thus, even though the gas curtailment in question was a possibility, at least to Mr. Rogers, it is properly and sensibly characterized as a condition that 3M could not have reasonably expected. ...

[A]s the Union accurately pointed out, the CBA does not expressly allow management to disregard Article 8, §8.01 and §8.07’s seniority rules. However, as the Company accurately observed, arbitrators often hold that layoffs may be exempted from the seniority rule when unusual, unexpected, unplanned, even emergency, circumstances dictate same. Mr. Wakefield’s decision to have immediately shut down the FATT production lines at 10:00 p.m. on Sunday, January 5th was a necessity.

...

The first of 3M’s two (2) January 2014 layoff events was an unforeseen emergency that required 3M to immediately shutdown the FATT production lines unfettered by the seniority rule and its time-consuming procedure. Under these circumstances, to penalize 3M would be unjust and wholly inequitable. Thus, under said circumstances, the undersigned concludes, to penalize 3M would be to impose a remedy that the Parties never intended under Article 8. For these reasons, Grievance #2014-14 is denied.

With regard to the second shutdown, however, Arbitrator Bognanno concluded that the Company was now on notice that a shutdown was a possibility, and the Union's grievance made it clear that the Union would be seeking to enforce the seniority provisions of the cba. He sustained the grievances regarding the second layoff, noting:

... it cannot be concluded that on January 26th 3M was confronted by an unforeseen emergency situation. Such an event either was or should have been reasonably anticipated. The record evidence does not credibly explain why 3M did not, as a contingency matter, execute Article 8’s bidding/bumping process among employees working in production operations that most likely would be affected by a gas curtailment. At a minimum, it should have done so during the week of January 19th.In effect, in a contract-compliant way, 3M should have pre-determined who to layoff in the event MERC again cut off its supply of gas. Under the circumstances that prevailed on January 26th, Article 8’s seniority rights would have no meaning whatsoever unless, facing layoff, the affected senior employees were given the opportunity to bid jobs held by junior employees, jobs that they were qualified to work. 

Arbitrator Bognanno's award can be found here.

"Functus officio" precludes arbitrator from substituting new award for an earlier one

Ruling on cross motions for summary judgment, the District Court for the Middle District of Florida addressed the "unique question" of:

whether an arbitrator, having finally addressed the merits of a CBA grievance, may reconsider and substitute an award which substantively changes the result, after being mistakenly persuaded that he had addressed an issue which was not to be arbitrated. 

Concluding that the arbitrator's first award was intended to be final, the Court determined that the doctrine of functus officio precluded the arbitrator from reconsidering the award and substituting a new one.

The dispute arose after several employees of Verizon Florida were declared surplus. The cba provided (in Article XI, Section 2) that surplus employees could bump junior employees within the same or lower wage progression schedule. Article XI also provided that an employee seeking to bump another

must have the ability to perform any job which he/she seeks to obtain through bumping. If it is a job which the employee has previously held, the employee will be allowed a reasonable period of time for re-familiarization and, if the job is one which he/she has not previously held, the employee must be able to perform the job with minimum additional training.

At the arbitration hearing the parties declined to stipulate an issue. The arbitrator framed the issue and, after reviewing the evidence and the cba, concluded that two of the nine grievants had previously held the position they sought to bump into and that they should have been allowed to bump into those positions. He rejected the grievance as it applied to the other grievants.

After the award, the Union requested clarification, maintaining that two additional employees had also previously held the position they sought to bump into and should therefore have been allowed to bump. Verizon opposed this request and also sought reconsideration, claiming that the issue of whether grievant's had previously held the job they sought to bump into was not properly before the arbitrator, and that the only issue was whether the grievants would require more than minimal training to perform the job. Three days after Verizon sought reconsideration the arbitrator issued a substituted decision, captioned "Order on Cross-Motions for Clarification/Change and Substituted Arbitrator's Award. In the new award the arbitrator indicated he had been persuaded that his earlier award had, in fact, relied on a contract provision not submitted for consideration. His new award deleted reference to whether the grievants' had previously held the position and rejected the grievances of all employees. 

The Union sought to vacate the second award while Verizon sought to confirm the second. 

Ruling on both motions the Court concluded:

the issue which the original arbitration award addressed had been presented to the arbitrator through the Union's broadly worded grievance and he was therefore well within his authority in his original determination of the merits. And contrary to the common law doctrine of functus officio, the arbitrator exceeded his authority when he reconsidered and issued the substituted award. The substituted award is therefore due to be vacated and the initial award confirmed.

The court explained:

The doctrine of functus officio ("a task performed") provides that an arbitrator may not revisit the merits of an award once it has issued. Office & Prof'l Emps. Int'l Union, Local No. 471 v. Brownsville Gen. Hosp., 186 F.3d 326, 331 (3d Cir. 1999). Because the arbitrator acts only as judge for a particular case, the doctrine arises "based on the analogy of a judge who resigns his office and, having done so, naturally cannot rule on a request to reconsider or amend his decision." Glass, Molders v. Excelsior Foundry Co., 56 F.3d 844, 846-47 (7th Cir.1995) (observing that an additional rationale is an arbitrator's susceptibility to ex parte communications, absent the constraint of judicial ethics). There are three established exceptions to functus officio, which allow an arbitrator to: (1) correct a mistake that is apparent on the face of the award; (2) rule upon an issue presented but not adjudicated; and (3) clarify an ambiguity in an otherwise complete award. Brown v. Witco Corp., 340 F.3d 209, 219 (5th Cir. 2003); Office & Prof. Emps., 186 F.3d at 331.

Finding that the question initially decided by the arbitrator was within the issue submitted, and that none of the exceptions applied, the court concluded that the arbitrator was without authority to reconsider his decision as Verizon had requested. 

The Court's opinion in IBEW, Local 824 v. Verizon Florida,LLC can be found here.

Preclusive effect of prior award

The U.S. District Court for the Northern District of Ohio has vacated an arbitrator's award for failing to give preclusive effect to an earlier award, and because it conflicted with the contract. Teamsters Local Union No. 436 v. The J.M. Smucker Company.
The earlier award arose from the reorganization of Smucker's facility. Smucker discontinued employee Pennie Graham's position and issued her a bump slip, enabling her to displace a less senior employee. Graham sought to displace a team leader, but Smucker refused to allow that bump, arguing that the contract allowed it discretion in hiring individuals for that position. Graham grieved this action, and Arbitrator Robert Vana found that Smucker had violated the contract and allowed Graham to bump into the team leader position. The Company, however, did not issue a bump slip to the incumbent in that position, employee Dave Rose. Rose grieved this denial and the matter was submitted to Arbitrator John J. Murphy. As summarized by the Court:

Analyzing Pennie Graham's bump, Arbitrator Murphy found that though she had prevailed before Arbitrator Vana, Graham had never in fact established that her job had been eliminated. Smucker had merely been estopped in that proceeding from arguing the point because it had issued her a bump slip and effectively conceded the issue. Considering Graham's reassignment anew, Arbitrator Murphy ruled that Graham's job had not in fact been eliminated, as there had been no layoffs and no workforce reduction at the plant. Rose's job, Arbitrator Murphy concluded, was unaffected by layoffs or job eliminations and Rose therefore had no right to a "sequential" bump. ... The Arbitrator's analysis relied on the CBA provision limiting bumping rights to circumstances where an employee's position has been eliminated.

The Union filed this action seeking to set aside Arbitrator Murphy's award. In granting the Union's request, the Court noted that ordinarily the preclusive effect of an earlier award is for the arbitrator to decide. Here, however, the cba provided that arbitration awards were "final and binding on the parties and all effected [sic] employees", and since Rose was an "effected" employee, Arbitrator Murphy's award conflicted with the express terms of the contract. The Court also determined that Arbitrator Murphy failed to consider the past practice of the parties and as a result his decision was without support in the cba.

Accordingly the Union's motion for summary judgment was granted.

Arbitrator correctly limited analysis to contract despite arguably conflicting City ordinance

A majority of the Court of Appeals of Indiana has reversed the trial court and enforced the  award of Arbitrator Edward Archer finding the City of Gary improperly refused to follow its contract concerning bumping.  Wright and AFSCME, Council 62, Local 4009 v. City of Gary, Indiana.

The Union was recognized in the contract as representative of a unit of “employees of the City of Gary, Gary Park Department, and Gary Health Department, as noted in the job classifications in Schedule A…” The unit excluded “confidential “employees as defined in a city ordinance.

After her position was eliminated, an employee sought to bump another employee, an administrative assistant to the Gary Fire Civil Service Commission (GFCSC), whose job title was among those included in Schedule A.  The employee was interviewed by the Chair of the GFCSC and determined to be qualified. Shortly thereafter, however, the City asserted that the administrative assistant position, despite its inclusion on Schedule A, was non union and it was a confidential position. The arbitrator rejected both of these contentions and upheld the grievance.

Seeking to set aside the award the City sought review, arguing that the Arbitrator had exceeded his authority and had imposed a remedy on an entity not a party to the contract. The City maintained that the inclusion of the administrative assistant position in the unit had been in error, and that a separate city ordinance had vested the GFSCS, a non party to the contract, with the sole authority to select the person who would fill that position.  The trial court agreed with the City, finding that the Arbitrator had ignored the city ordinance.

Reversing the trial court decision, a majority of the Appeals Court found that the Arbitrator correctly limited his decision to interpretation of the contract.  The court noted “An arbitrator exceeds his powers if his decision is based solely on the arbitrator’s view of the requirements of enacted legislation rather than on an interpretation of the collective bargaining agreement.”  Any damage suffered by the GFCSC by virtue of the inclusion of the administrative assistant position in the unit was an issue between the City and the GFSCS and not properly an issue before the arbitrator. The court also rejected the City’s challenge to the Arbitrator’s conclusion that the position was not confidential, noting that while the assistant did have access to personnel records, they were records of employees represented by a different union.