Coal Industry Decisions - Construction or maintenance, remedies for contracting, and "production of coal"

Several recent decisions of the District Court for the Northern District of West Virginia address issues involving coal industry arbitration awards as the parties sought to confirm or vacate them.

Maintenance or construction

Two cases turned on whether the arbitrator correctly determined whether the work that was the subject of the grievance involved construction or maintenance. Generally speaking maintenance work could not be contracted out  while, with certain exceptions, construction work could.

In The Harrison County Coal Company v. UMWA and Local 1501 the Court confirmed an award of Arbitrator Thomas Hewitt. Arbitrator Hewitt had found that construction of a belt drive in a new section of the mine was more properly categorized as Maintenance work. In doing so he relied on a prior settlement between the parties that "recognized that belt drive installation work customarily performed at the Robinson Run Mine is classified work."

The Company sought to vacate the award, claiming that the Arbitrator exceeded his authority and substituted his own brand of industrial justice for the provisions if the cba. The Court rejected this claim, concluding "by focusing on the 2002 Settlement, the Arbitrator was not ignoring contractual language or applying his own notions of industrial justice. Recognizing the Court's extremely limited  role in reviewing labor arbitrators' decisions, the Courts finds that the Arbitrator's decision draws it essence from the Agreement."

In The Monongalia County Coal Company v. UMWA and Local 1702  the Court vacated another award of Arbitrator Hewitt. Arbitrator Hewitt had concluded that the Company's use of contractors to build cribs (a "supplemental roof support") was maintenance rather than construction work and sustained the grievance. In doing so he distinguished the case from one in which the District Court had previously held (here) that installation of a "pumpable crib" was construction, not maintenance work.  He further found:

An Employer who regulates/reduces the size of the workforce and assigns work that is unable to be performed within its self-imposed time limit if it uses only its current fully employed classified employees creates an "impossibility of performance" situation. If this Employer then relies upon Article A l, subsection (1) as authority to utilize sub-contractors to perform work customarily performed by classified employees, the Employer is circumventing the intent of the contract under Article I. This use of abuse of authority cannot then be relied upon as a reason to permit the use of outside contractors even when all classified employees are fully employed working no less than five (5) days a week, Obviously, this is not the intent of the drafters of the contract and this self-imposed scheduling may not be used to circumvent the intent and purpose of the NBCWA or diminish the use of the workforce under Article I.

 On the Company's Petition to Vacate the award, the Court found:

Here, under the guiding principles in the 2017 Decision, which considered a large amount of binding precedent, the work at issue was construction work because the contractors were hired to "build" new cribs (i.e., create something new at the mine). The Court agrees with Defendants that the work is production work, but it also falls into the secondary category of construction work pursuant to binding precedent.

The Court also found unsupported by the evidence the Arbitrator's finding of a "concerted effort to abridge the rights" of employees. Notwithstanding the limited role of Courts in reviewing arbitration awards, the Court found that the Arbitrator had ignored plain language in the contract and accordingly vacated the award.

Remedies for improper contracting - Confirmed, vacated, remanded

In UMWA and Local 1702 v. The Monongalia Coal Company the Court confirmed an award of Arbitrator William A. Babiskin.  The Union claimed that the Company had improperly contracted what it claimed to be unit work. Arbitrator Babiskin denied the grievance without addressing the merits, concluding:

It is not necessary to reach or decide the issues raised by the parties as there was no financial loss to the employees in this case. As held by me in Blacksville No. 2 Mine, Case 07-31-09-040, I strongly believe in the principle of "no harm, no foul." See ex. Sterling Winthrop Research Institute, FMCS 86K/07572; Wisconsin Public Corp., 52 LA 1028. Since Grievants suffered no financial harm, there is nothing to be remedied.

The Union sought to vacate the award, arguing that the Arbitrator failed to consider the evidence, ignored the issue, and adopted a principle of "no harm, no foul" that did not appear in the cba.

The District Court confirmed the award. It concluded that while the Arbitrator's description of the principle may have been inartful, it was an effort to apply "long standing" principles that monetary awards in absence of compensatory damages are improper. The Court held that:   

The arbitration award issued here is entitled to significant deference, and the Court will not substitute its own judgment based on Plaintiffs' preference for an arbitration award with a less-casual statement of a long-standing legal principle.

A somewhat similar issue was addressed in the Court's decision in Monongalia Coal Company v. UMWA and Local 1702. That case involved a challenge to the award  of Arbitrator Ralph Colflesh.  Arbitrator Colflesh found that the Company had improperly contracted work which should have been performed by the bargaining unit. However, he also found that no identifiable unit employee had suffered economic harm. Rejecting the Company's argument that there are some contractual violations that must go without remedy, he provided for an alternate remedy:

 Based on the foregoing, I join Arbitrator Drucker in awarding damages to the Union for the breech [sic], and concur with the principle implied in her award that  in general every sustained grievance must have some remedy. At the same time, I depart from any thinking that Union members should rewarded for not working when they had the opportunity.  Rather, remedial compensation in this case should go to the Union only for the costs of prosecuting this grievance. Such costs shall be reasonable and shall be based on the documented fees, if any, the Union's legal team billed for the preparation of the grievance as well as  the documented per hour cost of the work of Mr. Frey, who represented the Union here, that was spent preparing and presenting the case. The latter amount shall be calculated on his hourly salary as a Union staff member and based on a 40-hour work week.  The cost shall not include any costs of witnesses, nor shall it include the Union's share of the undersigned's fees and expenses, as those must contractually be divided equally by the parties. 

The Company sought vacate the award, and the District Court granted that request. Finding the ordered remedy beyond what was authorized by the cba, the Court  concluded:

Had the Arbitrator calculated Defendants' loss based on the actual breach, the award could possibly be upheld. As discussed above, compensating a Union based upon loss of Union work has been held to be permissible under the NBCWA. See Cannelton, 951 F.2d at 594. The Arbitrator did not, however, take that approach. His award contained no supporting findings of monetary loss to establish the award as compensatory, and it did not find any basis in the language of the contract. Instead, the Arbitrator chose to award Defendants their costs in preparing the grievance. The monetary award issued did not stem from the breach of the contract but, instead, stemmed from the Arbitrator's own sense of industrial justice.

Arbitrator Drucker's award, referenced by Arbitrator Colflesh, can be found here. That award was also subject to a petition to vacate, but the Court remanded the case to the Arbitrator for clarification as to how she determined the remedy. here.

In another case, The Monongalia Coal Company v. UMWA and Local 1702 , the court confirmed an award of Arbitrator Mathew Franckiewicz. Arbitrator Franckiewicz upheld the Union's grievance and ordered a make whole remedy. However he noted that the method of allocating the pay for the work performed by the contractors was not clear:

The evidence discloses the number of contractor employees and the number of hours they worked on each day in issue. There are more Grievants than there were contractor employees on any of the days involved. The easiest, but perhaps not the fairest, method for allocating damages would be to award a pro rata share to each  of the Grievants. This, however, would ignore individual considerations as to which individuals likely would have worked on particular days, or whether particular Grievants were or were not available on particular days. 

He therefore assigned to the parties the initial responsibility to allocate the damages, retaining jurisdiction in the event of a dispute. 

Rejecting the Company's Petition to vacate the award, the Court concluded:

After considering the arguments and the evidence, the Arbitrator found that it was more appropriate to categorize the work as "performing repairs, although extensive repairs," because many original components were reused. ECF No. 11-4 at 8. The Arbitrator then found, based on evidence presented, "that the repairs performed by the contractor were and are normally and customarily performed by bargaining unit employees." Id. at 9. He did so based on careful analysis of the contract and the evidence presented at the hearing.

Further, there are no grounds to overturn the Arbitrator's monetary award. The Arbitrator left the issue of damages up to the Parties to distribute, while retaining jurisdiction in case the parties cannot agree. The monetary award is clearly aimed to compensate because it left the issue of damages to the parties to decide. Further, as Defendants have noted, it "granted only the amount of time directly related to the amount of work performed by contractors." ECF No. 17 at 13. Because the NBCWA is silent as to an appropriate remedy, it is within the Arbitrator's discretion to select one, and the Court finds that this Award draws its essence from the NBCWA.

Production of coal and work jurisdiction

In The Ohio Valley Coal Company v. UMWA the Court vacated an award of Arbitrator Mollie Bowers that had found the Company in violation of its cba. The Court summarized the somewhat complicated facts as follows:

Ohio Valley formerly operated the Powhatan No. 6 Mine ("Mine") in Belmont County, Ohio. Defendant United Mine Workers of America, District 31 represented all bargaining unit employees of the Mine since it was constructed and commenced operation in 1972. The 2016 National Bituminous Coal Wage Agreement ("NBCWA") governs the terms and conditions of employment for all bargaining unit employees at the Mine.
***
The Mine was in operation through exhaustion of its coal reserves with production permanently ceasing on October 16, 2016. Ohio Valley finished processing mined coal from the Mine on December 15, 2016, and it was permanently sealed on December 31, 2016. The Mine, which once employed nearly 500, was staffed by only 16 classified employees when the underlying grievance was filed....
In 2001, an unrelated subsidiary of Murray Energy Corporation, American Energy Corporation, opened the Century Mine to mine a coal reserve contiguous with the Mine. Ohio Valley has no ownership interest in the Century Mine and the UMWA does not represent any employees at the Century Mine.
On July 15, 2002, Ohio Valley and American Energy Corporation entered into a Slurry Disposal Agreement. Ohio Valley licensed rights to dispose of coal slurry materials to American Energy Corporation in the impoundment on property formerly associated with the Mine.... Pursuant to the terms of the agreement, American Energy Corporation retains sole responsibility for the transportation of its slurry materials to the impoundment.... Ohio Valley did grant an easement and right-of-way entry onto its property for installation and maintenance of the necessary pipeline. ... American Energy continued to dispose of its slurry materials in the impoundment as of briefing in this matter.

The Court determined that the cba limited work jurisdiction to activities related to "the production of coal" and since the mine had been permanently closed, no work jurisdiction claim was viable. The Court rejected the Arbitrator's contrary conclusion as being based on a false premise.  Arbitrator Bowers had found that while production had ceased, work performed at the mine was essential to coal production and operation at an adjacent mine "which is also owned by the Company." The Court concluded that "Despite wholly inaccurate assumptions to the contrary, Ohio Valley was not engaged at any relevant time in the production of coal at the Mine as it was closed and sealed ...." The use of the property by American Energy "a separate legal entity" was insufficient to sustain a work jurisdiction claim. Finding the Arbitrator's decision based on an "inaccurate factual premise" the Court vacated the award. 

Recent cases - Untimeliness of an award, public policy challenges, and neutrality of party appointed arbitrators

Untimeliness of arbitrator's award doesn't warrant vacating award

In First Student, Inc v International Brotherhood of Teamsters, Local 959, the District Court for Alaska denied a request to vacate an award of Arbitrator Elizabeth Ford. The parties had submitted to Arbitrator Ford a dispute concerning the Company's alleged failure to seek an alternate assignment for a bus driver taken off his route at the client's request. The cba called for the arbitrator's award to be issued within 30 days of the closing of the hearing or submission of  briefs. The signed award of Arbitrator Ford was not submitted until almost four weeks beyond that date. 

Rejecting the Company's argument that this delay rendered the award void, the Court relied on the Ninth Circuit's decision in McKesson Corp. v. Local 150 IBT. In McKesson the Ninth Circuit noted :

In the absence of an express agreement to the contrary, procedural questions are submitted to the arbitrator, either explicitly or implicitly, along with the merits of the dispute. ... The question of the authority of the arbitrator to issue an award after the sixty day period involves just such a procedural matter. McKesson's contention that the time limit is jurisdictional in nature and may not be submitted to the arbitrator is in error. Courts have uniformly held that limitations on the time in which an arbitrator may render an award are procedural not jurisdictional.

The District Court concluded that the Arbitrator's decision to issue an award after the thirty day period was a procedural matter that had been submitted to the arbitrator along with the merits of the dispute and that the thirty day limitation was "precatory" and did not limit the arbitrator's authority.

Courts reject public policy challenges to awards

Two recent decisions reject employer public policy challenges to arbitrators awards.

In City of Duluth v. Duluth Police Union, Local 807 the Minnesota Court of Appeals denied an appeal by the City of Duluth from the lower court's order rejecting the City's challenge to an award of Arbitrator Mario Bognanno. Arbitrator Bognanno had found that grievant had improperly used excessive force, but found termination too severe. He ordered grievant's reinstatement without backpay. The arbitrator's award and the lower court's decision are addressed in City will appeal reinstatement of police officer dismissed for improper use of force. Observing that the public policy challenge must be to the arbitrator's award, not the grievant's conduct, the Court concluded "in sum, even though [grievant's] use of force was contrary to a public policy against unreasonable use of force, the arbitrator's award of reinstatement without back pay is not."

In Steward Carney Hospital, Inc. v. Massachusetts Nurses Association the District Court in Massachusetts rejected the Hospital's public policy challenge to an award of Arbitrator Michael Stutz reinstating a nurse in the Hospital's adolescent psychiatric unit. Grievant had been dismissed for allegedly failing to review a "safety tool" (a questionnaire used to identify important patient information including what makes them feel upset or unsafe, preferred methods on intervention and how best to communicate when the patient is upset) and for allegedly failing to intervene when another nurse was observed mistreating the patient. 

Arbitrator Stutz found that grievant was properly subject to discipline, but not termination. He converted the termination to a disciplinary warning.

The Hospital sought to vacate the award, asserting that the reinstatement was contrary to applicable regulations requiring that hospital staff  "meet 'clinical competencies and operational standards,' that all personnel be 'qualified' and demonstrate 'competencies' and that provide that the Hospital could lose its license it cannot provide proper treatment to patients."

Rejecting the Hospital's challenge, the Court concluded:

... nothing in the regulations establishes a policy that a nurse who committed the grievant’s conduct be prohibited from working at a hospital. See Bos. Med. Ctr. 260 F.3d at 23  (holding that the question is whether the order to reinstate the grievant violates public policy).  The only positive law that could be discerned from the Hospital’s argument is a policy against hospitals employing unqualified personnel. Notably, while the Hospital could have reported the grievant’s conduct to the Massachusetts agency governing the registration of nurses, the Arbitrator found that the Hospital did not file a report about the grievant’s conduct with any such state agency. Award [#1-7] at 9. The Hospital offers no connection between the Arbitrator’s Award and “some explicit public policy that is well defined and dominant and is to be ascertained by reference to the laws and legal precedents and not from general considerations of supposed public interests.” Misco, 484 U.S. at 43 (internal quotations and citations omitted).

Party arbitrators and neutrality

Matter of Patrolmen's Benevolent Association of the City of New York, Inc. v. New York State Public Employment Relations Board involved a challenge to the City of New York's anointment of a party arbitrator to a three person panel in an interest arbitration. The Union challenge the City's appointee, claiming that his service as a consultant to the City and prior representation of it demonstrated a lack of impartiality. Rejecting the challenge, the Appellate Division found no requirement that a party appointed arbitrator be "neutral." The Court observed:

We turn next to petitioner's claim that Linn should be disqualified based upon improper partiality and hostility toward petitioner. "[S]trange as it may seem to those steeped in the proscriptions of legal and judicial ethics," New York has no requirement that a party-appointed arbitrator must be impartial (Matter of Siegel [Lewis], 40 N.Y.2d 687, 690 [1976]). It is well recognized that tripartite arbitration has a "partisan character" (Matter of Astoria Med. Group [Health Ins. Plan of Greater N.Y., 11 N.Y.2d 128, 135 [1962]). "The right to appoint one's own arbitrator, which is of the essence of tripartite arbitration ..., would be of little moment were it to comprehend solely the choice of a `neutral.' It becomes a valued right, which parties will bargain for and litigate over, only if it involves a choice of one believed to be sympathetic to [the selecting party's] position or favorably disposed to him [or her]" (id.; see 13 Weinstein-Korn-Miller, NY Civ Prac CPLR ¶ 7511.16). Notably, in tripartite arbitration, both parties are equally free to select the arbitrators they prefer. Further, party-appointed arbitrators typically have a depth of knowledge on the subject in question that "can be of assistance to the neutral member, who is not in a position to appreciate the problem and the fine points of its setting.... [T]o disqualify an arbitrator because of [partiality] ... would be to withhold from the [panel] a source of the specialized knowledge which contributes to the unique value of the arbitration process" (Matter of Astoria Med. Group [Health Ins. Plan of Greater N.Y.], 11 NY2d at 138 [internal quotation marks and citations omitted]). Consistent with these principles, CPLR article 75 provides for the vacatur of an arbitration award based upon the partiality of an arbitrator only when the challenged arbitrator was "appointed as a neutral" (CPLR 7511[b][1][ii]; see Matter of Meehan v Nassau Community Coll., 243 A.D.2d 12, 17-18 [1998], lv denied 92 N.Y.2d 814 [1998]). [footnote omitted]

The court held that the "evident partiality" of a party appointed arbitrator was not a basis for disqualification.

Recent complaints to set aside awards - outsourcing, alcohol tests and piece rates

Several recent filings involve efforts to vacate arbitration awards.

 Churchill Downs Racetrack, LLC, v. Laborers' International Union of North America, Local Union No. 576

Churchill Downs Racetrack seeks to set aside an award of Arbitrator Mark C. Travis. Arbitrator Travis sustained a grievance claiming that the Company violated the cba when it subcontracted "all" housekeeping and maintenance work at one of its locations. The Company relied on language in the cba which, it asserted, expressly allowed its actions. The cba provided:

The Company shall have the right to determine whether and to what extent the Company's business and the work required in its business shall be performed by employees covered by the Agreement.

The Union's grievance claimed that the Company's actions were inconsistent with the parties' past practice of only using contractors to supplement the bargaining unit, were inconsistent with the explanation of the language provided to the Union during negotiation of the cba, and were contrary to the recognition clause.

Upholding the grievance, Arbitrator Travis essentially agreed with the Union's position.  He concluded:

The Union's argument is correct that taken to its logical conclusion, the Company could contract out all maintenance and housekeeping jobs covered by the CBA. For example, if an award upholding the Company's decision here were sustained as precedent, the Company could ostensibly decide to create a new subsidiary for the operation Churchill Downs and subcontract all housekeeping and maintenance duties at that location as well. That is a slippery slope indeed, and one that cannot be sanctioned in this case.

The Company's complaint alleges that the Arbitrator ignored the explicit language of the Agreement, added requirements not found in the Agreement, and simply substituted his own ideas of industrial justice.  (A similar issue is addressed in Contracting and erosion of the bargaining unit)


Cleveland Brothers Equipment Co., Inc., v. The International Union of Operating Engineers, Local 66,66A,B,C,D,O &R, AFL-CIO

Cleveland Brothers Equipment Co. is seeking to vacate an award of Arbitrator James Rimmel.

The award overturned the termination of a commercial truck driver who was found, as a result of a random alcohol screening test, to have a Breath Alcohol Test result of 0.034 on the first test and 0.029 on the second. These readings placed him in violation of regulations of the Department of Transportation/Federal Motor Carrier Safety Administrationl and, according to the Company, of the Company's Drug-Free Workplace Policy.

The Arbitrator found the test results undisputed, and concluded that it was "clear that grievant was in violation" of the regulation. However, he found that the language of the Company's Policy was ambiguous. He noted that the Policy contained an Exclusion Clause. That clause allowed the moderate use of alcohol at approved functions or in conjunction with customer business meals or entertainment  provided the employee did not reach a blood alcohol level of 0.04 which it defined as being "under the influence." This exclusion appeared just under a reference to the DOT/FMCSA regulations.

Arbitrator Rimmel concluded:

Cleveland's Policy is ambiguous as to what BAC level is acceptable for which class of employee. By placing the "exclusions provision" immediately following language generally incorporating DOT/FMCSA requirements for a certain class of employees, it is unclear whether the prohibited BAC level is 0.02 or 0.04 and/or to which class of employee each separate standard may apply. The ambiguity is only further highlighted by the fact that simple clarifying language could have been added setting forth the Policy's intent and Cleveland's expectations as to its employees. Moreover, the training provided by Cleveland does not provide additional color or clarification to the issue. The training is limited to providing guidance that a BAC level between 0.00 and 0.02 does not equate to a violation of DOT/FMSCA Regulation 392.5(a)(2). No evidence was proffered showing that the training informed employees as to the consequences of a BAC reading between 0.02 and 0.04 (as required by Regulation 382.601(b)(10)), or discussed in any cogent fashion the Policy's definition of "under the influence” as exceeding a BAC of 0.04. Under these circumstances, I am left to conclude that Cleveland did not have proper cause for the meted-out discipline because the inherent ambiguity in the Policy did not adequately inform grievant as to what level of alcohol body content was deemed acceptable. Subject to varying interpretations, it is not fair to impose upon grievant the onus of reconciling the ambiguity in the Policy. Simply put, had Cleveland desired to establish two (2) separate standards, one for DOT/FMCSA regulated employees and another for non-regulated employees, then it was incumbent upon Cleveland to clearly set forth such in its Policy and/or training
Accordingly, I find that this grievance must be sustained.

In its Complaint, the Company asserts that the award is contrary to the "well-defined  and dominant public policy interest as set forth in DOT/FMCSA regulations"  and "effectively condones permitting a commercial motor vehicle driver driving while in violation of established federal regulations ...."

Browning-Ferris Industries of Oho, Inc.  v.  International Brotherhood of Teamsters, Teamsters Local Union No. 20

The dispute before Arbitrator Robert Stein involved a claim that the Company breached its cba when it unilaterally changed the piece rate paid to drivers following the introduction of  new system for waste management. The Company claimed that the cba authorized it to make such changes when there was a change in service requirements. It relied on the management rights provision as well as Article 9.04 that provides:

The Company agrees to guarantee piece work rates for the term of this Agreement as long as service requirements remain the same, such requirements including, but not limited to, the location of disposal sites, volumes generated per units and equipment utilized to perform the service. A mere increase in house count shall not establish a change in service requirements, thereby justifying a reduction in the piece work rate. The Union reserves the right to grieve the adjusted rate.

 The Union's grievance asserted that the Company had sought unsuccessfully in prior negotiations to change or modify the language of Article 9.04. It also claimed that the new rate was below that paid to employees at the Company's other locations performing the same automated waste collection services.

Arbitrator Stein sustained the grievance (here), concluding:

 ... the Union has successfully met its burden of establishing that the Employer's acted in violation the Agreement's terms in determining or establishing a lower incentive or piece work rate than that which was in effect prior to the activation of the new Agreement without establishing that that was a recognized component resulting from the parties' negotiations.

The Company's complaint alleges that the Arbitrator exceeded his authority by adding restrictions on the Company's ability to change rates not contained in the cba and his reliance on the piece rate used in other municipalities.

Court vacates award reinstating police officer who struck handcuffed individual

A court has vacated the award of Arbitrator Jane Wilkinson reinstating Seattle police Officer Adley Shepherd. City of Seattle, Seattle Police Department v. Seattle Police Officers' Guild, Arbitrator Jane Wilkerson and Adley Shepherd  Officer Shepherd was dismissed following the Department's determination that he had used excessive force when he struck a handcuffed individual while attempting to place her in his patrol car. The interaction was captured by the in-car video.

Arbitrator Wilkinson concluded that Officer Shepherd violated the Department's Use of Force Policy. She found, however, that termination was too severe and not proportionate to the offense. Because of this lack proportionality, together with other mitigating factors, she reduced the termination to a fifteen day suspension.

In its decision, the Washington  Superior Court determined that the award was contrary to public policy and, accordingly, vacated it.

The Court found that the policy against police use of excessive force was explicit, dominant and well-defined. Turning to the question of whether the award reducing the termination to a fifteen day suspension was contrary to that policy, the Court concluded:

Allowing this imposed discipline to stand, which includes reinstatement of Officer Shepherd, sends a message to law enforcement officers and to the public that the use of excessive force on handcuffed or restrained persons is allowed in situations when officer patience is stretched thin or when an officer feels stinging pain inflicted by a handcuffed suspect who is no longer threatening immediate harm or when there are other options for control available. 

It is not clear from the opinion whether any discipline short of termination would address the Court's public policy concerns.

This award was one of the factors US District Court Judge James Robart relied on in concluding that the City was not in effective compliance with the consent decree entered into by the City and the US Department of Justice following a DOJ claim that the Seattle Police Department had engaged in a pattern and practice of excessive force. US v. City of Seattle. Judge Robart was critical of the City's efforts to ensure continuing accountability, particularly regarding the provisions contained in the most recent cba with the police union concerning the arbitration process for police discipline. The Court noted:

Because the CBA eliminates reforms instituted by the Accountability Ordinance and leaves the old arbitration regime "materially unchanged" (see U.S. Resp. at 3), the court finds that the City and SPD have fallen out of full and effective compliance with the Consent Decree concerning SPD discipline and accountability. Before the court will terminate the Consent Decree as it pertains to accountability, the City must bring itself into compliance in this area and then sustain that compliance for two years. (See Consent Decree ¶¶ 229-30.)

Both the City and the Community Police Commission have filed responses to the Court's concerns. Seattle’s police-reform plan is ‘busywork,’ citizen panel says in asking federal judge to reject proposal.  (Previous filings in the case are discussed here and here.)

Res judicata, CWA and Southwestern Bell, and a question of timeliness of a Loudermill hearing

Arbitrator's award given res judicata effect in subsequent suit for recovery of misappropriated funds

Peter Gibson was fired from his job after he was accused of receiving almost $200,000.00, allegedly from funds misappropriated by his ex-wife from their employer and directed to an account that he and his ex-wife shared. That termination was submitted to arbitration, and Arbitrator Mattye Gandel issued an award finding "beyond a reasonable doubt" that, while Gibson may not have participated the misappropriation of funds, he "knew about the fraudulent wire transfer, maybe not that day, but certainly in the following days and months and benefited from the fraudulent wire transfer" Accordingly he found just cause forth termination and denied the grievance.

Subsequently the company filed suit against Gibson, seeking recovery of the funds. It sought summary judgment, arguing that the arbitrator's award should be given preclusive effect. The Court granted the Motion for Summary Judgment. Sterling Equipment, Inc. v. Gibson 

The Court found that while Gibson was technically not a party to the arbitration his interests were represented by the Union, that the issues were actually litigated in the arbitration  and that the facts found by the arbitrator were "dispositive" of the claim that Gibson had been unjustly enriched by receipt of money belonging to the Company. The Court concluded:

In short, because the arbitration award is entitled to preclusive effect, and the Arbitrator specifically found that Gibson benefitted from his wife's fraudulent wire transfer, SEI is entitled to summary judgment on its claims of money had and received (Count I) and unjust enrichment (Count II). See Manganella v. Evanston Ins. Co., 700 F.3d 585, 591 (1st Cir. 2012) ("Generally, final arbitral awards are afforded the same preclusive effects as are prior court judgments."); Miles v. Aetna Cas. & Sur. Co., 412 Mass. 424, 427 (1992) ("An arbitration decision can have preclusive effect in a subsequent suit between the same parties or their privies."). The court will schedule a hearing to determine the amount of SEI's damages

Communications Workers of America and Southwestern Bell Telephone

Two recent decision address arbitration issues arising between CWA and Southwestern Bell Telephone Company. 

The Fifth Circuit denied the appeal of CWA from the District Court's dismissal of its complaint for lack of jurisdiction. Communications Workers of America v. Southwestern Bell Telephone Company CWA had sought to litigate an alleged violation of a provision of its cba with Southwestern concerning "Responsible Union-Company Relationship" which it asserted required the parties to deal with each other "in good faith and respect." The Union alleged that layoffs announced by the Company were not based on a lack of work, and that the Company was subcontracting work the laid off employee were trained and qualified to perform. The responsible relationship provision of the agreement was not subject to arbitration, and the Union's sued to enforce its claim that the Company had violated that  provision.

 The Company sought dismissal of the complaint, arguing that the disputes underlying the complaint were addressed in other provisions of the cba that were subject to arbitration and that the Union had failed to exhaust the grievance and arbitration procedure. The District Court agreed and dismissed the complaint. Here and here

The Fifth Circuit affirmed, concluding:

  To recap, the Union's federal complaint identifies two areas of conduct that are covered by the arbitration provision: Southwestern Bell's plan to lay off Union employees and Southwestern Bell's plan to contract out their jobs. Furthermore, the relief the Union requests is reinstatement of the laid off Union employees and a declaration that Southwestern Bell's layoffs and contracting out violated the CBA. In short, notwithstanding the Union's framing of its case, the resolution of the Union's lawsuit is impossible without resolving the merits of issues that are plainly within the CBA's agreement to arbitrate. See Nat'l Football League Players Ass'n v. Nat'l Football League, 874 F.3d 222, 227 (5th Cir. 2017) ("[W]here the contract provides grievance and arbitration procedures, those procedures must first be exhausted and courts must order resort to the private settlement mechanisms without dealing with the merits of the dispute." (quoting United Paperworkers Int'l Union, AFL-CIO v. Misco, Inc., 484 U.S. 29, 37 (1987))). Accordingly, the magistrate was correct in finding that the Union's lawsuit is "clearly and unambiguously challenging" conduct covered by the CBA's grievance and arbitration provisions

In a different case,  the District Court has rejected CWA's claim the Arbitrator Samuel J. Nicholas acted in contravention of AAA Rule 40 and the final and binding language of the cba when, on the Company's Motion for Reconsideration, he revised his award to correct what he described as a technical error. Arbitrator Nicholas' original award can be found here. The corrected award here. The correction changed the award from one sustaining the grievance to one denying it. The error related to the Arbitrator's reliance on a document he initially described as limiting the scope of work of Premises Technicians. The Company's Request for Reconsideration pointed out that the document in fact related to a different bargaining unit. The Arbitrator acknowledged his error and agreed that this correction changed his analysis. 

CWA filed a complaint seeking to vacate the modified award and seeking to enforce the initial one.

 The District Court adopted the Report of Recommendation of the magistrate rejecting the Union's claim (here) and concluded (here) that the Arbitrator had not exceeded his powers in applying Rule 40 to correct a technical error and that his interpretation of that rule was supported by Fifth Circuit precedent. 

Update: The Fifth Circuit affirmed the District Court, concluding that because Arbitrator Nicholas' award stemmed from a colorable interpretation of the parties' CBA, including AAA Rule 40 which was included in the Agreement, the award drew its "essence" from the parties' agreement and was not in excess of his authority.

Arbitrator rejects claim that Sheriff's Deputy was terminated prior to Loudermill hearing 

Arbitrator Peter Prosper rejected a claim that the Flagler County Sheriff's Office terminated the employment of a Deputy before giving him a Loudermill hearing. Coastal Florida Police Benevolent Association and Flagler County Sheriff's Office 

On April 16, 2018, the Deputy was responding to a request for assistance call when he passed a vehicle entering the wrong way on to Interstate 95. He did not take action regarding the car but continued on to his original destination. While the Deputy was there, a call came from Dispatch about a two car collision on I-95. The Deputy responded to that call. While at the scene, he informed his Commander that the had previously passed one of the vehicles involved entering the wrong way onto the highway. An investigation was conducted, and a report presented to the Undersheriff. 

On July 9, 2018, a Notice of Intent to Discipline was presented to the Deputy with a recommendation for termination. The Deputy was given 10 working days (until July 23) to schedule a Loudermill hearing. The hearing was conducted on July 20, and on July 24 the Deputy was informed that his termination "stands as recommended."

The Union filed a grievance challenging the termination on the merits but also asserting that the Sheriff's Office had made the decision to terminate before the Loudermill hearing.

That argument appears to be based in part on a press release (here) issued by the Sheriff's Office on July 9. The full release is not reproduced in the award, but is headlined "FCSO Deputy Terminated After Failure to Take Action to Prevent Fatal Crash." The Union also pointed to what it described as the admissions of both the Sheriff and the Undersheriff that they had made the decision to terminate on July 9.  

In rejecting the Union's argument, Arbitrator Prosper noted that the text of the release indicated that the Deputy had been served a  "notice of intent to discipline with termination," and that he had been continued on payroll until July 23.  He therefore concluded that the Deputy had not been terminated until the end of the Loudermill hearing.

On the merits, the Arbitrator converted the termination to a suspension without pay. 

Contracting and erosion of the bargaining unit

Right to subcontract didn't authorize eliminating unit positions by attrition

The District Court for the District of New Jersey has denied a request by ExxonMobil Research and Engineering to vacate an award of Arbitrator Joyce M. Klein.

The dispute arose over the Union's claim that ExxonMobil violated the cba when it permanently contracted certain bargaining unit positions the Company claimed were non core. While the contract allowed the Company to contract work, it required notice to the Union and prohibited  layoff of unit employees qualified to perform the work and required the recall of any such employee prior to the contracting. 

The Company notified the Union that it intended to contract certain non core positions through attrition in order to enable it to focus on core research and development positions.

Arbitrator Klein sustained the Union's grievance, relying in large part on the cba's recognition clause:

The Company seeks to retain an employee workforce consisting of "core" employees while permanently contracting other non-core positions included in the recognition clause of the parties' Agreement.) 
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At issue is whether the Company has the authority pursuant to Article XVIII to contract out those positions on a permanent basis. Although Article XVIII was drafted broadly providing the Company with the authority to “let contracts," it was not designed to be without limitation.
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Permanently contracting positions covered by the Recognition Clause has the effect, over time, as additional positions are contracted permanently, of changing the scope of the Recognition Clause and potentially eroding both the coverage and size of the bargaining unit. While the concept of unit erosion is not expressly included in the bargaining unit, the Recognition Clause expressly covers all of the job classifications "listed in Exhibit ll and who are based at the Clinton, New Jersey facility." While Article XVIII permits the Company to contract the work performed by these positions without express limitation, these positions remain covered by the collective bargaining agreement and bargaining unit members may work in those positions in the event of demotion or layoff. As a result, both Article XVIII and the Recognition Clause prohibit the permanent contracting of these positions.

The Union sought to confirm the award while the Company sought to vacate it. The Court confirmed the award. Independent Laboratory Employee's Union, Inc v. ExxonMOBIL Research and Engineering Co. Recognizing the limited scope of review of arbitration awards, and noting that it was not passing judgment on the wisdom of the arbitrator's conclusion, the Court found that the award was a good faith interpretation of the cba and was therefore entitled to be confirmed:

Whether or not this Court agrees with the Klein Award's analysis, the arbitrator's good faith interpretation of the CBA is reasonable, especially in light of the history between ILEU and EMRE on which the arbitrator relied. The Klein Award cites the 1977 comments of an EMRE vice president, stating that EMRE will hire independent contractors only when operational needs require and will never seek to reduce the number of ILEU-covered employees. Id. at 6. Those comments are consistent with the 1983 arbitration award which explains that the CBA's language does not justify a program of using the attrition of union employees to permanently replace covered positions with non-union contractors. See Florey Award at 13-14. EMRE's present plan directly conflicts with both its vice president's 1977 comments and the Florey Award's 1983 CBA interpretation. Given this history, the Court cannot say that the Klein Award "is so completely irrational that it lacks support altogether," or is "totally unsupported by principles of contract construction and the law of the shop." Sutter, 675 F.3d at 219-20; Akers, 712 F.3d at 160 (quoting Ludwig Honold, 405 F.2d at 1128).

Update: The Third Circuit has affirmed the District Court decision, similarly rejecteing the argumets for vacating the award.  here

Recent Decisions - Last Chance Agreement, "substantive due process" and police use of force

Arbitrator ignored Last Chance Agreement - Award vacated

The Sixth Circuit has affirmed a District Court decision vacating an award of Arbitrator John M. Felice. Tecnocap, LLC v. Graphic Communications Conference/International Brotherhood of Teamsters, Local 24M   Grievant was terminated after an absence caused by his car breaking down. Relying on a last chance agreement entered into by grievant and the Union, the employer terminated his employment. While acknowledging the LCA, the Arbitrator concluded:

 The fundamental principle underlying the discharge of an employee is that management must have just cause for imposing the discharge. The Company in the instant case appears to be applying its Policy in a punitive fashion. Simply because an employee is absent a specific number of times and accumulates a certain number of points does not, ipso facto provide for automatic discharge. No policy can vitiate the right of the Union to challenge whether the cause asserted for discharge is just under the CBA. To recognize such a policy through arbitration would be unreasonable since it would contravene the express intent and purpose of establishing and specifying cause for discharge under a labor agreement.

Finding that the Company had failed to meet the "fundamental indicia of just cause," the Arbitrator sustained the grievance and ordered the grievant's reinstatement with back pay.

The Company sought to have the award vacated and the District Court did so. here The Court concluded that the Arbitrator had exceeded his authority by ignoring the last chance agreement.

The Sixth Circuit (2-1) affirmed. It noted:

... an LCA is an agreed-upon predetermination of “just cause.” It is a concession by the employee (and the union) that the employer already had “just cause” to discipline the employee, who is thereafter on the grace of one “last chance” in exchange for a promise of compliance, the violation of which all three agree will be “just cause” for immediate discipline. ...  The employee is given ‘one last chance’ to correct his errant behavior, in exchange for which he agrees to certain conditions[,] . . . [the] failure to live up to [which] is [almost always] grounds for immediate dismissal, without the opportunity to file a grievance. . . .”). By signing the LCA in this case, both Witherow and the Union agreed that if Witherow had an unexcused absence in the next eight months, Tecnocap would have “just cause” to fire him.

Concluding that the LCA was an "agreed-upon predetermination of just cause" the Court affirmed the decision of the lower court.

Last chance agreements are also discussed in Last Chance Agreements- Arbitrability of triggering event

Arbitrator's reliance on "substantive due process" beyond the provisions of the cba, award vacated

The District Court in Kentucky vacated an award of Arbitrator Stephen L. Hayford reinstating an employee terminated pursuant to the employer's no fault attendance policy. Zeon Chemicals, L.P v. United Food and Commercial Works, Local 72D

Grievant's final absence resulted from his 30 day incarceration because of a plea to two charges of  battery in connection with an off duty incident. That absence put him at the point of termination pursuant to the employer's policy.  The Union grieved, arguing, inter alia, that the employer had the discretion under the policy to impose a thirty day suspension but refused to do so. The policy provided that, if an employee has 20 or more years of service "The Company may, at its discretion, impose a 30-day suspensions as an alternative to termination ... "  While acknowledging that grievant's accumulation of points under the employer's policy created prima facia proof that his discharge was for just cause, the Arbitrator concluded that other factors militated against termination. In particular he noted:

The substantive due process element of the contractual just cause standard contemplates that in this type of highly unusual situation, before terminating an employee under the ACP the Company will fully investigate the circumstances that led to the employee's exceeding  the 12 points total termination threshold of the Policy's progressive discipline procedure. This is especially imperative when the precipitating absences of an employee are due to off-duty misconduct that involves a felony criminal offense indicating moral turpitude on the employee's part. The Company's choosing not to investigate the events of July 15, 2015, that eventually resulted in [grievant's] being absent from the workplace ... was a serious omission on its part that arrived [grievant's] contractual right to substantive due process. It is a significant mitigating factor.

The Arbitrator reduced the termination to a 30 day suspension.

The District Court granted the Company's request to vacate the award. Rejecting the Arbitrator's reliance on the concept of "substantive due process" the Court concluded:

With this, it appears that the Arbitrator was not engaged in legitimate interpretation of the CBA, but referenced substantive due process solely to "dispense his own brand of industrial justice[]" in contravention of the explicit terms of the CBA. United Transp., 700 F.3d at 902 (citation omitted); see Mich. Family, 475 F.3d at 753. By employing the "interpolative reasoning underlying substantive due process," the Arbitrator effectively imposed upon the Company additional requirements found nowhere in the language of the CBA. The Arbitrator in this instance conflated the "just cause" language from Article III with the terms of the ACP to fashion a new requirement that the Company conduct an investigation into the facts surrounding an employee's accumulation of 12 points under the ACP. (Arbitration Award 21). Moreover, the Arbitrator essentially fashioned an additional subjective condition by requiring the Company "to make a full, fair and informed determination of whether exercise of its discretion to impose a suspension" and then held the Company failed in this regard, although the CBA explicitly leaves this determination to the Company's discretion and Jenkins never requested that he be suspended. (Arbitration Award 22). By the CBA's own explicit language, this provision of the ACP affords the Company the right to terminate any employee who exceeds 12 points under the attendance policy.

Finding that the Arbitrator "entirely disregarded" the plain language of the cba, the Court vacated the award.

Update: The Sixth Circuit reversed the decision of the District Court and reinstated the Arbitrator's award. Zeon Chemicals, L.P v. United Food and Commercial Works, Local 72D

Jury verdict finding excessive force insufficient to support termination

Arbitrator Peter R. Meyers overturned the termination of an Oak Park, Illinois police officer who had been dismissed for several alleged offense, most seriously the use of excessive force during his handling of a domestic violence call.  Illinois Fraternal Order of Police Labor Council and Village of Oak Park, Illinois.

An individual arrested and charged with domestic violence subsequently sued the Village and grievant, alleging grievant had used unnecessary and excessive force during the arrest.  A jury returned a verdict for plaintiff for $35,000. As a result of the verdict, the Chief ordered an investigation of the underlying incident. That investigation did not support a finding of excessive force, but did reveal what were alleged to be grievant's failure to have submitted a use of force form,  failure to properly secure evidence, and failure to provide the victim with paperwork required by the Illinois Domestic Violence Act.  Based on a review of transcripts in both the criminal trial for domestic violence and the civil case, the Village also concluded that "grievant had given untruthful testimony" that 'almost probably' met the standard of perjury under Illinois law.

Despite the initial conclusion that the evidence did not support a charge of use of excessive force, the Notice of Termination included this allegation as one of charges supporting grievant's ultimate termination.

In his award, Arbitrator Meyers noted that no explanation was provided for the inclusion of this unsupported claim except that the Chief's finding was based "almost entirely" upon the verdict in the civil case. Rejecting reliance on the jury's decision, the Arbitrator noted he must make the decision based on the evidence before him at the hearing, and that the award was entitled to no "precedential effect." He observed:

The Village has made much of the jury verdict in Durden’s favor in his civil rights suit against the Village and the Grievant, but this verdict has no impact here. Not only was the damages amount awarded to Durden basically nothing more than nuisance value, but Durden’s own testimony indicated that officers other than the Grievant were responsible for many of his claimed injuries and claimed civil rights violations. Just as a finding in an unemployment compensation hearing that the terminated employee was unfairly terminated has no weight or bearing on the subsequent arbitration over a just cause termination, so does a $35,000.00 judgment by a jury in a civil case where the standard of proof is different.

Based on the evidence and testimony presented at the hearing Arbitrator Meyers found no support for the allegation of use of excessive force. He also rejected several of the Village's other allegations as unsupported by credible evidence. Accordingly he found the termination to be without just case. Finding  merit to some of the other charges, Arbitrator Meyers converted the termination to a 30 day suspension.

Officer's use of force not unreasonable, Chief's subjective evaluation not supported by objective analysis

Arbitrator Daniel Saling upheld a grievance filed on behalf of a Tallahassee, FL police officer dismissed following an Internal Affairs investigation into a shooting incident. Florida Police Benevolent Association and City of Tallahassee The facts were largely undisputed. While on patrol, grievant had pulled behind what he believed to be a suspicious vehicle. The Arbitrator summarized what happened next:

On March 17, 2017, the Grievant was checking on a suspicious vehicle in a parking lot in front of a city owned building. When the Grievant got out of his marked patrol vehicle to speak with the occupant in the suspicious vehicle, the suspicious vehicle was placed in reverse and struck the Grievant's patrol vehicle, which then stuck the Grievant. The Grievant was without backup in a deserted parking lot and he drew his firearm and fired six shots into the driver side of the suspect's vehicle.

The vehicle left the area and was chased by Sheriff's Deputies.

 The Chief assigned the Department of Internal Affairs to conduct an investigation into grievant's actions during the incident. The initial report from IA found grievant's use of force reasonable. The Chief review that report and questioned the decision because it did not address the issue of "imminent danger" as set forth in the Department's Policy. That Policy provides "Officers may use deadly force only when they believe it is objectively reasonable to defend their life or the life of another person from imminent threat of great bodily harm or death." The IA investigator rewrote there report, changing the conclusion, and finding that grievant had not used reasonable force.  Grievant's employment was terminated, and the dispute was grieved and ultimately submitted to Arbitrator Saking for resolution.

Upholding the grievance, Arbitrator Saling concluded that grievant in fact "reasonably and objectively determined" that he was in imminent danger. Rejecting the conclusion of the modified finding he found:

The investigation by the lA Investigator was completed and there was a decision that the Grievant's conduct on the date of the incident, was within the provision of General Order 60, but the decision was changed when Chief DeLeo met with the lA Investigator and indicated that he subjectively did not believe the Grievant was in imminent danger. Chief DeLeo subjective evaluation of the incident is not supported by an objective analysis of the facts surrounding the incident.

Finding the Department's decision failed to follow the admonition found in the Supreme Court's Graham decision that an officer's judgment should not be evaluated based on hindsight, the Arbitrator ordered the grievant be reinstated with back pay.

A case containing a similar analysis is discussed in Oakland Police SWAT arbitration award - Just Cause not determined by reference to "Best Practices"