Merck & Co. v. International Chemical Workers Union Council of the United Food & Commercial Workers Union, Local 94C , 335 F. App'x 300 ( 2009 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 08-1917
MERCK & COMPANY, INCORPORATED,
Plaintiff – Appellee,
v.
INTERNATIONAL CHEMICAL WORKERS UNION COUNCIL OF THE UNITED
FOOD AND COMMERCIAL WORKERS UNION, LOCAL 94C,
Defendant – Appellant.
Appeal from the United States District Court for the Western
District of Virginia, at Harrisonburg. Samuel G. Wilson,
District Judge. (5:07-cv-00114-SGW)
Argued: March 25, 2009 Decided: July 6, 2009
Before MICHAEL, KING, and AGEE, Circuit Judges.
Reversed and remanded by unpublished per curiam opinion.
ARGUED: Jonathan G. Axelrod, BEINS & AXELROD, PC, Washington,
D.C., for Appellant. Joseph Edward Santucci, Jr., MORGAN, LEWIS
& BOCKIUS, LLP, Washington, D.C., for Appellee. ON BRIEF:
Heather S. Gelfuso, MORGAN, LEWIS & BOCKIUS, LLP, Washington,
D.C., for Appellee.
Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:
The International Chemical Workers Union Council of the
United Food and Commercial Workers Union, Local 94C (the
“Union”), appeals from the district court’s adverse decision of
August 12, 2008, awarding summary judgment to Merck & Company,
Incorporated (“Merck”), and vacating an arbitration award in
favor of the Union. See Merck & Co., Inc., v. Int’l Chem.
Workers Union Council of the United Food and Commercial Workers
Union, Local 94C, No. 5:07-cv-00114 (W.D. Va. Aug. 12, 2008)
(the “Memorandum Opinion”). 1 The court ruled that the arbitrator
had exceeded his authority in making the arbitration award,
which required Merck to reinstate one of its employees. As
explained below, we reverse and remand for enforcement of the
award.
I.
A.
On September 7, 2005, Dale Moubray reported to work at
Merck’s Elkton, Virginia, facility under the influence of
alcohol. Moubray, a pipe-fitter/millwright, is represented by
the Union, which is the exclusive collective bargaining
1
The Memorandum Opinion is found at J.A. 151-56.
(Citations herein to “J.A. ___” refer to the contents of the
Joint Appendix filed by the parties in this appeal.)
2
representative for a bargaining unit of production and
maintenance employees at Merck’s Elkton facility. 2 Rather than
terminate Moubray from his employment, Merck imposed a five-day
unpaid disciplinary suspension. Following the suspension, on
September 13, 2005, Merck, Moubray, and a Union representative
entered into a “Return to Work & Last Chance Agreement” (the
“Last Chance Agreement” or the “LCA”). See J.A. 58-59.
The Last Chance Agreement required Moubray to, inter alia,
meet with a representative of Merck’s Employee Assistance Plan
in order to establish a treatment plan. The LCA further obliged
Moubray “to comply with all recommendations and requirements as
established by the Employee Assistance Plan and the Health
Services Department.” J.A. 58. If, at any time, Moubray failed
to comply with these recommendations and requirements, the LCA
provided that he would “be subject to immediate termination and
such termination [would] not be subject to the contractual
grievance and arbitration procedures.” Id. at 59. 3 The LCA
stated, however, “that in the event of a termination, Mr.
Moubray may file a grievance challenging the facts upon which
2
Merck and the Union were signatories to a collective
bargaining agreement in effect from May 1, 2003, through April
30, 2006 (the “CBA”). See J.A. 1-49.
3
The CBA created a governing grievance procedure that
included arbitration of certain disputes. See J.A. 38-39.
3
the Company determined that Mr. Moubray was non-compliant or
otherwise in violation of this Agreement.” Id.
On the following day, September 14, 2005, Martha Sheridan,
a representative of Merck’s employee assistance program, met
with Moubray and decided that he was to participate in a program
offered by an independent entity called the LIFE Recovery
Program (the “Program”). At his first session in the Program,
on September 19, 2005, Moubray executed a patient contract (the
“Program Contract”), agreeing to the following relevant
conditions:
1. I will attend the LIFE Recovery Program . . .
Monday, Tuesday, Thursday . . . . If extraordinary
circumstances prevent my attendance or results in
tardiness, I will notify the staff immediately.
. . .
7. I will follow all relevant patient rules and
regulations as stated in patient handbook. 4
. . .
11. I understand that the following behaviors may
result in premature discharge from the program:
. . .
4
The “patient handbook” of the Program provides, in
relevant part, that “[p]rompt attendance at all scheduled groups
and activities is expected except when excused by your
counselor, doctor, or nurse. You are expected to participate in
and attend all scheduled groups and activities.” J.A. 63.
4
5. Lack of cooperation with program expectations
to the extent of impeding progress (This includes
chronic tardiness or absenteeism).
J.A. 62.
In the weeks following the Program’s first session, Moubray
attended ten of eleven sessions, with a single excused absence
on September 22, 2005. He then missed a session on October 13,
2005, attended sessions on October 17, 2005 and October 24,
2005, and missed sessions on October 18 and October 25, 2005.
Moubray did not, prior to any of the three missed sessions,
notify the Program to explain his absence or request to be
excused. Moubray returned for a session on October 27, 2005,
and met with his Program case manager, Dee Michael. Michael
advised him not to miss the October 31, 2005 session, even
though Moubray requested to be excused from it to take his
godson trick-or-treating. Despite Michael’s warning, Moubray
did not attend the October 31 session. Moubray returned for the
session of November 1, 2005, and was advised that he could not
continue with the Program until he met with Michael. Moubray
called Michael on November 2, 2005, and scheduled an appointment
for the following day. Also on November 2, Sheridan, Merck’s
employee assistance program representative, called Michael to
check on Moubray’s status in the Program. Michael summarized
Moubray’s participation, and on November 3, 2005, sent a
confirming letter to Merck (the “Letter”). Michael’s Letter
5
concluded: “As of today’s date, Mr. Moubray is not in
compliance with our program requirements.” J.A. 69.
Upon Merck’s receipt of the Letter, Sheridan instructed
Moubray not to attend the November 3, 2005 meeting with Michael
because he had been kicked out of the Program. That same day,
Merck notified Moubray by letter that he was out of compliance
with the Last Chance Agreement and was, therefore, being
suspended from employment, with intent to discharge. On
November 14, 2005, Moubray was discharged by Merck.
B.
On November 15, 2005, the Union filed a grievance with
Merck, protesting Moubray’s discharge and seeking his
reinstatement. Merck conducted a grievance hearing on December
16, 2005, and, that same day, denied the Union’s grievance. The
Union then submitted its grievance to arbitration before the
Federal Mediation and Conciliation Service, on whether Moubray
had complied with the terms of the Last Chance Agreement. On
August 8, 2007, the parties participated in an arbitration
hearing conducted by Arbitrator Jeffrey B. Tener (the
“Arbitrator”). Two months later, on October 19, 2006, the
Arbitrator entered an Arbitration Opinion and Award (the
“Award”), 5 concluding that, although Merck was entitled to
5
The Award is found at J.A. 89-109.
6
terminate Moubray if he was out of compliance with the Last
Chance Agreement, “[i]t cannot be concluded that Moubray was not
compliant with the conditions of the last [chance] agreement so
he was not subject to immediate termination.” Award 20. The
Award thus directed Merck to “reinstate [Moubray] to his former
position and to make [him] whole.” Id. When Merck refused to
accept the Award and reinstate Moubray, this litigation ensued.
Two months later, on December 26, 2007, Merck filed its
complaint in the Western District of Virginia, pursuant to § 301
of the Labor Management Relations Act, 29 U.S.C. § 185, seeking
to vacate the Award. Merck alleged that the Arbitrator had
ignored the plain language of the Last Chance Agreement and that
the Award failed to draw its essence from the LCA. The Union
disagreed, and counterclaimed for enforcement of the Award. On
May 1, 2008, the parties filed cross-motions for summary
judgment.
On August 12, 2008, the district court granted summary
judgment to Merck and denied the Union’s cross-motion. See
Memorandum Opinion 1-2. In so ruling, the court recognized the
narrow scope of judicial review for an arbitration award, but
concluded that the Award must be vacated in any event because it
“contradicts the express provisions of the last chance
agreement.” Id. at 5. The court observed that “Moubray plainly
agreed to comply with ‘all’ treatment program ‘requirements’ and
7
recommendations, which unequivocally include punctual
attendance. He also plainly agreed that he was subject to
immediate termination if ‘at any time’ he became noncompliant.”
Id. The Memorandum Opinion observed that “[t]he agreement says
absolutely nothing about expulsion or discharge from the
program. Nor can the agreement be read to mean that Moubray is
in compliance with all program requirements and recommendations
so long as he has not been expelled.” Id. at 5-6. Predicated
on these observations, the court concluded that the Award “does
not draw its essence from the last chance agreement” and must
therefore be vacated. Id. at 6.
On August 18, 2008, the Union filed its timely notice of
appeal, and we possess jurisdiction pursuant to 28 U.S.C.
§ 1291.
II.
We review de novo a district court’s award of summary
judgment. Volvo Trademark Holding Aktiebolaget v. Clark
Machinery Co., 510 F.3d 474, 481 (4th Cir. 2007). Judicial
review of an arbitration award in the collective bargaining
context is “extremely limited,” and “among the narrowest known
to the law.” Long John Silver’s Rests., Inc. v. Cole, 514 F.3d
345, 349 (4th Cir. 2008) (internal quotation marks omitted). A
reviewing court is entitled to “determine only whether the
8
arbitrator did his job — not whether he did it well, correctly,
or reasonably, but simply whether he did it.” Mountaineer Gas
Co. v. Oil, Chem. & Atomic Workers Int’l Union, 76 F.3d 606, 608
(4th Cir. 1996). “[A]s long as the arbitrator is even arguably
construing or applying the contract and acting within the scope
of his authority,” an arbitration award should be sustained,
even if “a court is convinced he committed serious error.”
United Paperworkers Int’l Union v. Misco, Inc., 484 U.S. 29, 38
(1987).
III.
A.
Under the deferential standard applicable here, an
arbitration award must be sustained if it “draws its essence”
from the parties’ agreement. United Steelworkers of Am. v.
Enter. Wheel & Car Corp., 363 U.S. 593, 597 (1960). An
arbitration award draws its essence from the agreement so long
as “[t]he arbitrator [does] not ignore the plain language of the
contract.” United Paperworkers Int’l Union v. Misco, Inc., 484
U.S. 29, 38 (1987); Norfolk & W. Ry. Co. v. Transp. Commc’ns
Int’l Union, 17 F.3d 696, 700 (4th Cir. 1994) (observing that
“an award that ignores the plain and unambiguous language of the
arbitration contract does not ‘draw its essence’ from the
agreement”). Notwithstanding this deferential mandate, “[a]n
9
arbitrator does not have carte blanche . . . to ‘dispense his
own brand of industrial justice.’” U.S. Postal Serv. v. Am.
Postal Workers Union, 204 F.3d 523, 527 (4th Cir. 2000) (quoting
Enter. Wheel, 363 U.S. at 597). Rather, “an arbitrator is
confined to interpretation and application of the parties’
agreement.” Id. (internal quotation marks omitted). In
resolving a labor dispute, an arbitrator may be called upon to
make factual findings or to interpret the applicable agreement.
See Misco, Inc., 484 U.S. at 38. So long as an arbitrator does
so within the confines of the controlling agreement and his
interpretation of the agreement is not “wholly baseless and
without reason,” Norfolk & W. Ry. Co., 17 F.3d at 700, “the
courts have no business overruling [an arbitrator] because their
interpretation of the contract is different from [the
arbitrator’s],” U.S. Postal Serv., 204 F.3d at 527 (internal
quotation marks omitted).
B.
In this proceeding, the parties agree that the underlying
arbitration proceedings were governed by the discharge
provisions of the Last Chance Agreement. Cf. Coca-Cola Bottling
Co. v. Teamsters Local Union No. 688, 959 F.2d 1438, 1441 (8th
Cir. 1992) (concluding that comparable last chance agreement
superseded collective bargaining agreement). The LCA provided
for Moubray’s immediate termination — without recourse to the
10
grievance and arbitration procedures established in the CBA —
“[i]f at any time Mr. Moubray [became] non-compliant with the
conditions of this Agreement.” J.A. 59. The Union was
authorized to dispute, however, “the facts upon which the
Company determined that Mr. Moubray was non-compliant or
otherwise in violation of this Agreement.” Id. Pursuant to the
LCA’s authorization, the Union challenged and arbitrated the
issue of whether Moubray had complied with the terms of the LCA.
The parties do not dispute that the termination of Moubray was
properly arbitrable. They also do not dispute the fact that the
Arbitrator possessed authority to consider and make an award
concerning the matter. Rather, Merck argues that the Award of
reinstatement does not draw its essence from the LCA.
Accordingly, the terms of the LCA, and the Arbitrator’s view of
those terms, are controlling here.
The Last Chance Agreement required that Moubray “comply
with all recommendations and requirements as established by the
Employee Assistance Plan and the Health Services Department.”
J.A. 58. In making the Award, however, the Arbitrator
determined that “[t]here is no evidence that either the Plan or
the [Health Services] Department established any requirements or
had any recommendations other than those of the LIFE Recovery
Program.” Award 18. As such, the Award incorporated the
requirements of the Program into the Last Chance Agreement,
11
concluding that “it is the requirements of that program which
are controlling in this case.” Id.The Program, in turn, imposed attendance requirements on
Moubray and specified conditions for his continued participation
therein. Moubray was required to attend sessions three evenings
per week and to notify staff if “extraordinary circumstances”
prevented his attendance, and the patient handbook of the
Program provided that “[p]rompt attendance at all scheduled
groups and activities is expected except when excused by [a]
counselor, doctor, or nurse.” J.A. 62-63.
In making the Award, the Arbitrator agreed with these
conditions, but nevertheless concluded that “the evidence still
does not support the conclusion that Moubray was not in
compliance with the program requirements.” Award 19. Although
the Program Contract specified that certain behavior — such as
chronic absenteeism — “may result in premature discharge from
the program,” the Arbitrator explained in the Award that the
evidence was “clear” that Moubray had not been discharged from
the Program as of November 3, 2005. See id. The Award observed
that the Letter, “upon which the Company relied so heavily and
which states that ‘As of today’s date, Mr. Moubray is not in
compliance with our program requirements’” also specified that
Moubray “was told he would not be allowed back into the group
until he first met with me.” Id. (quoting J.A. 69). Thus,
12
although Michael concluded that Moubray was not in compliance
with the Program’s requirements, he had not been discharged from
the Program. See id. Accordingly, the Award concluded that the
“LIFE Recovery Program was not consistent,” and, although it
reported to Merck that Moubray was not in compliance with its
requirements, Moubray had not been discharged from it.
Finally, the Arbitrator emphasized in the Award that
“Moubray did not know or believe that he was not in compliance
nor did he have any reason to suspect that he was not in
compliance.” Award 19. Importantly, the Arbitrator found that
Moubray had credibly testified that he and the other
participants in the Program had been advised that they could
make up sessions if they missed them. See id. at 20. The Award
explained that the evidence corroborated Moubray’s testimony, in
that he had not been discharged from the Program and had been
permitted to make up earlier sessions that had been missed.
Thus, the Award concluded, “it was reasonable for [Moubray] to
believe that he was able to miss sessions and to make them up. .
. . He had no reason to believe he was not in compliance with
the requirements of the program.” Id.
We agree with the district court that the Award considered
Moubray’s continued participation in the Program — or the
absence of a discharge from the Program — to be synonymous with
his compliance with the Program’s requirements. We also agree
13
with the court that the Arbitrator relied, in part, on Moubray’s
subjective belief concerning his compliance with the Program
requirements in concluding that Moubray had complied with the
LCA. Notwithstanding these shortcomings, however, the Award
must be sustained. See Misco, Inc., 484 U.S. at 38 (explaining
that award should be sustained despite “serious error,” so long
as arbitrator “is even arguably construing or applying the
contract and acting within the scope of his authority”).
Although the terms of the LCA — requiring Moubray to
“comply with all recommendations and requirements as established
by the Employee Assistance Plan and the Health Services
Department” — are plain and unambiguous, these terms alone are
insufficient to resolve the issue presented to the Arbitrator.
As the Award recognized, the Program established the only
relevant recommendations and requirements, but applied them
inconsistently. Thus, the Program required Moubray to
unequivocally attend three weekly sessions, but statements of
the Program staff contradicted this attendance requirement.
And, although the Program established attendance requirements,
it also provided for exceptions — such as an excuse by a
counselor, doctor, or nurse. Importantly, the Program Contract
itself specified the consequences of violating it. Rather than
immediate expulsion for an unexcused absence, the Program
Contract provided that “chronic tardiness or absenteeism” “may
14
result in premature discharge from the program.” J.A. 62
(emphasis added). Although the district court concluded that
this provision “unequivocally include[d] punctual attendance,”
Memorandum Opinion 5, such language provides sufficient
flexibility to justify the Arbitrator’s interpretation of it.
Rather than “ignor[ing] the plain language of the contract,” the
Arbitrator confined himself “to interpretation and application
of the parties’ agreement,” U.S. Postal Serv., 204 F.3d at 527,
and we must defer to his interpretation of the Program’s
requirements.
In these circumstances, it was entirely plausible for the
Arbitrator to conclude that Moubray was yet in compliance with
the “requirements” of the Program. See Norfolk & W. Ry. Co., 17
F.3d at 700 (explaining that where arbitrator confines himself
to plain language of contract, arbitration award should be
confirmed unless “wholly baseless and completely without
reason”). The Arbitrator interpreted the LCA by looking to and
applying the requirements of the Program. He carefully examined
the Program’s documents and explained his view of what was
required. Even if we were to disagree with the Arbitrator’s
interpretation and reasoning, we cannot conclude that his
reasoning is wholly baseless or completely without reason. Put
simply, we are entitled to “determine only whether the
arbitrator did his job — not whether he did it well, correctly,
15
or reasonably, but simply whether he did it.” Mountaineer Gas
Co. v. Oil, Chem. & Atomic Workers Int’l Union, 76 F.3d 606, 608
(4th Cir. 1996). Accordingly, the Award “draws its essence”
from the Last Chance Agreement and, as a result, we must reverse
the ruling of the district court and direct enforcement of the
Award.
IV.
Pursuant to the foregoing, we reverse the district court
and remand for enforcement of the Award.
REVERSED AND REMANDED
16