Medical marijuana, arbitration and the courts

In two recent decisions courts have vacated arbitrators' awards reinstating employees dismissed for use of marijuana. Both cases discuss the impact of medical marijuana legislation.

In Freightliner v. Teamsters Local 305 the U.S. District Court for Oregon granted the Company's request to vacate the award of Arbitrator Carlton Snow based primarily on the Arbitrator's reliance on the Oregon Medical Marijuana Act in contravention of what the Court believed to be the governing language of the cba.

Grievant had been employed as a material handler. After his involvement in a forklift accident he was required to submit to a drug test. On the day he took the drug test, grievant informed the Company that he had a prescription for medical marijuana that he had obtained a couple of months earlier. The results of the drug test showed that grievant was "under the influence" as defined in the Company's drug policy, which was expressly incorporated into the cba. The policy provided that being "under the influence" was cause for suspension or termination. As a result of the positive result, and his claimed failure to comply with the Company's notification requirement for prescription drugs, grievant's employment was terminated.

The termination was grieved and submitted to arbitration before Arbitrator Snow. Arbitrator Snow found that grievant was in fact under the influence as defined in the policy, but found further that there was no evidence that his work performance was impaired. According to the Court, the Arbitrator concluded that "in light of [Oregon's Medical Marijuana Act] an employer cannot 'discipline an employee (1) who ingests marijuana pursuant to a valid prescription, (2) does so on his or her own time, and (3) reports to work in an unimpaired state of being." Accordingly the Arbitrator upheld the grievance and ordered the grievant's reinstatement. Freightliner sought to vacate the award on the basis that the Arbitrator had exceeded his authority by relying on the Medical Marijuana Act, and that the award violated public policy.

In ruling on cross motions, the Court concluded that the Arbitrator "cited no credible internal authority [in the cba] justifying his reliance on the Marijuana Act and resultant disregard of the CBA's plain language about marijuana use." The court further concluded that the Arbitrator misread the law to provide affirmative workplace protection, noting that he:

seemed to suggest ... the Act permits parties to a CBA to regulate marijuana use only insofar as employers may forbid actually impaired employees from working. Snow, however, cited no statutory authority for the proposition the Act restricts how parties to a CBA may choose to treat marijuana use. Nor did Snow meaningfully link that proposition to the Act's workplace provision. Instead, he effectively applied his own notions of what the law should be, an approach tantamount to "ignoring" the law.

Finding that the award did not represent a "plausible" interpretation of the contract the Court granted Freightliner's motion to vacate. In light of this finding, the Court did not reach the public policy question.


In contrast, public policy was the primary basis for the decision of the Connecticut Superior Court in State of Connecticut v. Connecticut Employees Union Independent. Grievant had been arrested for smoking marijuana while at work in a state owned vehicle. His employment was terminated, and the termination was grieved and submitted to arbitration. The arbitrator found that the termination was not "within a proper range of progressive discipline" and modified the termination to a six month suspension and ordered the grievant's reinstatement. The State sought to set aside the award "on the grounds that the award violates the State's public policy on drug use while on state duty and operating a state owned vehicle."

The court first determined that there was a well defined public policy against the use of marijuana. It rejected plaintiff's contention that this public policy was diluted because of the state's implementation of its medical marijuana law. The court observed:

Although the defendants are accurate in stating the law, nothing in the records indicate that the grievant was prescribed marijuana. The arbitrator, in his award and opinion, makes no finding that the grievant was prescribed marijuana or that it was medically necessary for him to use marijuana to treat his depression and anxiety. As this court's review is limited to the facts as found by the arbitrator, the arbitrator's award cannot be confirmed on this ground.

On the merits the court concluded:

Similar to the findings of the arbitrator in AFSCME, Council 4, Local 387 , the arbitrator in the present case noted that the grievant's use of marijuana allegedly stemmed from "a number of stressors before and after the time he used marijuana." ... In addition, as noted by the court in AFSCME, Council 4, Local 387, AFL-CIO,, a progressive sanction of reinstatement suggested by the arbitrator in the present case would send the message that stress experienced in one's personal life somehow excuses the use of marijuana in the workplace. Thus, the arbitrator's award in the present case violates a clearly defined public policy.
 
Update: The Connecticut Supreme Court (here) reversed the decision of the Superior Court and upheld the decision of the arbitrator. The Court's decision is discussed at Drugs in the workplace, reinstatement and public policy. Connecticut Supreme court upholds arbitrator's award

Can an arbitrator disregard a last chance agreement?

Deciding what it describes as a case involving "unusual labor arbitration issues," the Eighth Circuit  overturns a district court and substantially confirms an arbitrator's award.

Grievant was employed by Associated Electric Cooperative, Inc. After being selected for a random drug test, grievant informed the Company that the test would show a positive result. He explained that he had smoked marijuana with family members while on leave to attend his brother's funeral. Grievant declined union representation, signed a standard form last chance agreement, and was suspended to undergo drug dependency treatment. When the test results were returned a little more than a week later, however, they were negative. Nevertheless, the Company kept grievant on the last chance agreement and continued his suspension and treatment. During his treatment grievant tested positive on two occasions and the Company terminated his employment prior to his return to work.

The Union (IBEW Local No. 53) grieved the termination and submitted the dispute to arbitration. The arbitrator upheld the grievance. He determined that the lca was "unconscionable" since the initial negative drug test established grievant had not broken any work rule, and that the continuation of the suspension after learning of the negative results was "indefensible."  He ordered the Company to reinstate grievant with back pay.

The Company sought to set side the award, and, in a decision discussed here, the district court determined that the arbitrator had exceeded his authority by disregarding the last chance agreement. The Union appealed, and the Eighth Circuit has reversed.

The Circuit court described the issue before it as:

 When an employer and employee enter into a last chance agreement ("LCA") enforcing the employer's drug policy without the union's participation, the employer subsequently invokes the LCA provision mandating discharge in the event of a violation, and the union claims this discipline was contrary to the "just cause" limitation in the grievance and arbitration provisions of the collective bargaining agreement ("CBA"), what is the appropriate standard of review (i) for the arbitrator, and (ii) for this court in reviewing the arbitrator's award?

While observing that it agreed with the district court's determination that the last chance agreement was not unconscionable when initially entered into, the Court concluded that the district court erred by reading the Court's previous decision in Coca-Cola Bottling Co. v. Teamsters Local No. 688 too broadly. In the Coca-Cola case, the court overturned an arbitrator who had disregarded a last chance agreement entered into between the company and union in resolution of a grievance. Here, however, the Union was not a party to the agreement and the lca itself was premised on the "mutual mistake" that grievant had violated the drug policy. In reviewing the instant grievance, the arbitrator "correctly focused" his decision on the just cause issue. According to the Court:

This focus did not permit the arbitrator to ignore the LCA, but it did mean he was not contractually bound to apply the LCA's mandatory termination clause if the evidence persuaded him there was not just cause to do so.

Noting the narrow scope of review, the Court concluded that the arbitrator decision on the termination was within his authority and his award should be confirmed.

The concurring opinion agreed that the award should be confirmed, but would not reach as far as it believed the majority had in determining that the absence of the union's participation in the lca rendered it unenforceable. 

The Court's opinion in Associated Electric Cooperative, Inc. v. International Brotherhood of Electrical Workers, Local No. 53, can be found here.

New York High Court: Positive drug test doesn't compel termination

The New York Court of Appeals has rejected an effort by the Shenendowa Central School District Board of Education to vacate an arbitration award reinstating a bus driver who failed a drug test. Grievant, a ten year employee, had tested positive for marijuana after a random drug test. The arbitrator concluded that termination was too severe a penalty, and ordered grievant reinstated without back pay, subject to an evaluation by a substance abuse professional and a negative drug test. 

The Court initially noted that the parties' cba did not require a penalty of termination in these circumstances, and observed that the District did not have a zero tolerance policy.

The Court also rejected a suggestion that the award violated public policy, concluding:

 The ... determination that reinstatement with conditions was the appropriate penalty did not violate public policy (see Eastern Associated Coal Corp. v Mine Workers, 531 US 57 [2000]). "That reasonable minds might disagree over what the proper penalty should have been does not provide a basis for vacating the arbitral award or refashioning  the penalty" (City School Dist. of the City of N.Y. v McGraham, 17 NY3d 917, 920 [2011]).

 The Court's opinion, In the Matter of the Arbitration between Shenendowa Central School District Board of Education and Civil Service Employees Association, Inc., Local 100 AFSCME, can be found here.

Termination for second positive test result upheld

Arbitrator Jay Fogelberg has upheld the termination of a City of Minneapolis employee who tested positive for a controlled substance a second time. City of Minneapolis and Teamsters Local 320. Grievant had been suspended for three days in 2005 after testing positive and was charged with operating city equipment while under the influence of marijuana. He was required to successfully complete a treatment program and was warned that any subsequent positive test result could subject him to job termination.

In August of 2011, Grievant was notified that he was required to undergo a random drug test. He notified his management that he knew he would test positive for marijuana. This prediction was confirmed by the test results. As a result, his employment was terminated. Arbitrator Fogelberg agreed with the City’s assertion that Grievant had engaged in “gross misconduct”. While noting that the term was not defined in the applicable rules, the arbitrator concluded:

There is no dispute that the grievant, with full knowledge he would fail a drug test for marijuana on the day in question, was about to climb into a 48,000 pound vehicle and operate it on a public road, when he received the call to be tested. Under the circumstances, it would take a quantum leap of faith in my judgment to exclude such behavior from the definition of “gross misconduct”.

The arbitrator also rejected the Union’s argument that Grievant had not reported to work “under the influence” since the effects of the marijuana had worn off by the time he reported to work. He noted that the City’s policy described the term to mean the presence of a drug or alcohol at or above the level of a positive test result.

Finally, the arbitrator was unpersuaded that the Grievant’s length of service and relatively clean work record was sufficient to support reinstatement, observing “Of and by itself, his work history does not constitute a vaccination against discipline. The multiple rule and policy infractions the Grievant committed in 2011, relative to the safe performance of his job, and the potential exposure to liability that the City risks, outweigh any other mitigating factor…”