Albemarle Corp. v. United Steel Workers Ex Rel. Aowu Local 103 , 703 F.3d 821 ( 2013 )

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IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
January 3, 2013
No. 11-31185 Lyle W. Cayce
Clerk
ALBEMARLE CORPORATION,
Plaintiff–Appellee
v.
THE UNITED STEELWORKERS, on behalf of AOWU Local 103,
Defendant–Appellant
Appeal from the United States District Court
for the Middle District of Louisiana
Before JOLLY, PRADO and HIGGINSON, Circuit Judges.
HIGGINSON, Circuit Judge:
Albemarle Corporation (“Albemarle” or the “Company”) terminated two
employees for violating the Company’s safety protocols. Their union, the United
Steel Workers (“USW”), filed a grievance, and Albemarle and USW brought the
dispute to arbitration pursuant to their collective bargaining agreement (“CBA”).
The arbitrator tempered Albemarle’s discharge penalty, ordering the employees
reinstated after a lengthy, unpaid suspension. Albemarle filed this action to
vacate the arbitrator’s award, and USW counterclaimed to enforce the decision.
On the parties’ cross-motions for summary judgment, the district court rendered
judgment in Albemarle’s favor, vacating the arbitrator’s decision in reliance on
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our per curiam decision in E.I. DuPont de Nemours & Co. v. Local 900 of the
International Chemical Workers Union, AFL-CIO, 968 F.2d 456 (5th Cir. 1992).
DuPont does not control on the facts of this case, and, guided by the considerable
deference we must grant arbitrators’ decisions, we REVERSE.
FACTS AND PROCEEDINGS
Albemarle, a chemicals manufacturer, operates a Process Development
Center (“PDC”) in Baton Rouge, Louisiana. Marcel Collor and Kevin Deville
(“Grievants”), the terminated employees, were operators in the Pilot Plant
Building of the PDC. PDC employees work with dangerous chemicals, and the
Company emphasizes maintaining safe operations at the plant. Albemarle’s
Emergency Response Manual sets procedures for immediately reporting minor
and major spills or releases. A minor incident requires informing a supervisor,
while a major event requires alerting security. As the arbitrator determined, the
Grievants received “extensive” safety training concerning chemical spills and
were “held accountable to immediately report any spill to supervision or security.
The means available include the use of a telephone, 2-way radio or pull the
alarm.”
On March 17, 2009, the Grievants were leaving work in their street clothes
after completing a twelve-hour shift. They were the only employees remaining
in the Pilot Plant Building. On their way out, they noticed that a liquid was
leaking in the Pilot Plant Building’s Middle Room, where no employees were
assigned to work at the time. The Grievants repeatedly attempted to reach their
foreman, Jessie Ourso, by phone to report the incident, but they were
unsuccessful. Five minutes later, they arrived at the security guard station near
the Pilot Plant Building’s exit. They reported the leak to the security guard on
duty, and stayed while the guard successfully reached Ourso by radio. Ourso
arrived at the scene of the spill, determining that the liquid the Grievants had
spotted was glycol. The glycol had leaked from a tank due to the “failure of the
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gasket on the top flange of the meter.” The Company issued no emergency
notifications as a result of the incident.
A week later, Albemarle terminated the Grievants for failing promptly and
properly to report the spill. In framing the issue for the arbitrator, USW and
Albemarle posed the following two stipulated questions: “Did the Company have
causes [sic] to terminate the Grievants, Marcell Collor and Kevin Deville, on or
about March 23, 2009? If not, what is the appropriate remedy?” The arbitrator
credited the Grievants with making several attempts to report the spill and with
bringing the spill to the attention of security within five minutes of discovering
the incident. The arbitrator determined the five minute delay did not
measurably increase the leak’s costs to the Company. Still, relying on Company
safety policies, the arbitrator strictly construed the Grievants’ obligation to
report spills “immediately,” finding that when they could not reach Ourso by
phone themselves, the Grievants “should have either called Security or pulled
the alarm.” He noted that “[t]he Grievants[] . . . seemed to be more concerned
about leaving work than fulfilling their obligations as employees.”
The arbitrator adverted to provisions in the CBA touching on Albemarle’s
authority to discipline employees for safety breaches. Article III of the CBA,
“Management Rights,” provides that “the suspending, disciplining and
discharging employees for cause . . . are all rights solely of the COMPANY.” The
CBA nowhere defines what employee actions are “cause” for sanction. Article
906 of the CBA does express that “[s]trict adherence to the safety rules . . . is a
condition of employment.” Citing Article 906, the arbitrator found the Grievants
had not strictly adhered to the Company’s safety rules in failing to “ma[ke]
immediate contact with supervision or security for approximately five (5)
minutes.” That violation, the arbitrator concluded, provided “cause for the
Employer to issue discipline.” The arbitrator reasoned, however, that “discharge
was not appropriate” because the Grievants had no prior safety violations, were
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exiting the facility after completing their day’s work, and succeeded in notifying
the proper persons of the spill. The arbitrator found the violation instead “was
a cause for a lengthy suspension.” He ordered the Grievants reinstated without
loss of seniority, but also without backpay for the period during which they had
been terminated. Under the arbitrator’s decision, issued May 17, 2010, the
Grievants faced a penalty of approximately fourteen months lost wages.
STANDARD OF REVIEW
We review the district court’s grant of summary judgment de novo, Weber
Aircraft Inc. v. Gen. Warehousemen & Helpers Union Local 767, 253 F.3d 821,
824 (5th Cir. 2001), and apply the same standards as the district court.
Dameware Dev., L.L.C. v. Am. Gen. Life Ins. Co., 688 F.3d 203, 206 (5th Cir.
2012). Significantly, judicial review of an arbitration award arising from the
terms of a CBA is “narrowly limited.” Beaird Indus., Inc. v. Local 2297, Int’l
Union, 404 F.3d 942, 944 (5th Cir. 2005). “[A]s long as the arbitrator is even
arguably construing or applying the contract and acting within the scope of his
authority, that a court is convinced he committed serious error does not suffice
to overturn his decision.” United Paperworkers Int’l Union, AFL-CIO v. Misco,
Inc., 484 U.S. 29, 38 (1987); see also United Food & Commercial Workers Union
AFL-CIO v. Pilgrim’s Pride Corp., 193 F.3d 328, 332 (5th Cir. 1999) (“ The award
should be upheld if it draws its essence from the collective bargaining agreement
. . . and the arbitrator did not exceed his or her authority under the CBA.”)
(internal quotation marks and citation omitted). However, if the arbitrator’s
decision exceeds the express, jurisdictional limits of the CBA, “judicial deference
is at an end.” Delta Queen Steamboat Co. v. Dist. 2 Marine Eng’rs Beneficial
Ass’n, 889 F.2d 599, 602 (5th Cir. 1989).
DISCUSSION
Albemarle challenges the arbitrator’s award on two grounds. Albemarle
first contends that the arbitrator’s finding of “cause for the Employer to issue
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discipline,” left no choice under the CBA but to affirm the Company’s decision
to terminate the Grievants. Second, Albemarle maintains that the award is
unenforceable as a violation of public policy. Under narrowly limited judicial
review of an arbitration award, neither argument is persuasive.
A. The Arbitrator’s Authority under the CBA
Albemarle reasons from the stipulated questions before the arbitrator: (1)
“Did the Company have cause[] to terminate the Grievants, Marcell Collor and
Kevin Deville, on or about March 23, 2009? [(2)] If not, what is the appropriate
remedy?” Since the arbitrator found the Grievants in violation of Article 906,
which states that “[s]trict adherence to the safety rules . . . is a condition of
employment,” and determined that breaching Article 906 gave rise to “cause,”
he was required to answer question (1) in the affirmative. So doing, he could not
advance to question (2) and review Albemarle’s choice of discipline.
Albemarle argues that result is compelled by our decision in E.I. DuPont
de Nemours & Co. v. Local 900 of the International Chemical Workers Union,
AFL-CIO, 968 F.2d 456 (5th Cir. 1992). In that case, two employees were fired
for using marijuana on company premises. Id. at 457. The CBA in DuPont
prohibited discharge except for just cause. Id. The issue presented to the
arbitrator by the parties was nearly identical to the stipulated questions in the
case at bar. Id. at 458. In DuPont, however, the arbitrator found that the
employer had “‘[u]nquestionably . . . made it plain to its employees that using
drugs on the Company premises was a discharge offense.’” Id. at 458. The
arbitrator found by clear and convincing evidence that the terminated employees
had used marijuana on company property and that discharge accordingly was
an available remedy, but nonetheless determined that discharge was
inappropriate. Id. We found the arbitrator had exceeded his authority under
the CBA in finding just cause to terminate the employees yet imposing a lesser
punishment. Id. at 458–59; see also Am. Eagle Airlines, Inc. v. Air Line Pilots
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Ass’n Int’l, 343 F.3d 401, 407–10 (5th Cir. 2003) (holding same where “the Board
determined that Balser’s ‘violation’ of American Eagle’s ‘anti-harassment policy’
provided American Eagle with ‘not only a right, but a duty to rid the workplace’
of Balser’s conduct” but the Board had also found, contrary to the express
language of the CBA, that a procedural default by the employer permitted
finding a lesser sanction than discharge appropriate).
We drew support in DuPont in part from Delta Queen Steamboat Co. v.
District 2 Marine Engineers Beneficial Association, 889 F.2d 599 (5th Cir. 1989).
The CBA in Delta Queen read: “‘No Officer shall be discharged except for proper
cause such as, but not limited to, inefficiency, insubordination, carelessness, or
disregard of the rules of the Company.’” 889 F.2d at 601. The arbitrator found
that a riverboat captain employed by the company had been “‘grossly careless’”
in the operation of his vessel, but that to avoid disparate treatment of employees,
the captain should nevertheless be reinstated. Id. We concluded that where a
CBA “defines ‘proper cause’ to include a nonexhaustive list of offenses, an
arbitrator cannot ignore the natural consequence of his finding that a listed
offense was committed.” Id. at 604. Having found proper cause for discharge as
the CBA defined it, the arbitrator could not issue another form of discipline. Id.
As we later observed, Delta Queen and DuPont teach that “when authority to
impose a lesser alternative sanction cannot be arguably inferred from a CBA, the
arbitrator may not exceed the scope of the CBA to fashion one.” Weber Aircraft,
253 F.3d at 825.
We do not accept, as Albemarle advances, that the arbitrator in this case
was similarly constrained by the CBA to require the Grievants’ terminations.
The CBA does not make clear that any violation of safety rules is an offense
requiring discharge. Article III provides that Albemarle, “for cause,” may not
only “discharg[e],” but also “suspend[]” or “disciplin[e]” its employees. Thus, by
its terms, the CBA contemplates situations in which a finding of “cause” could
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support lesser sanctions than termination. See Weber Aircraft, 253 F.3d at 824
(rejecting an employer’s challenge to the arbitrator’s decision to vacate the
employer’s sanction of discharge and instead order suspension where the CBA
could be read to permit either suspension or discharge for the offense at issue).
The arbitrator, having been given the matter to arbitrate, made no implicit or
explicit finding that Albemarle had entertained cause enough to discharge the
Grievants; rather, he explicitly concluded the opposite, that “discharge was not
appropriate,” and that there was instead “cause for the Employer to issue
discipline.” We cannot say that he erred in so concluding, let alone that he was
not “even arguably construing or applying the contract and acting within the
scope of his authority.” Misco, Inc., 484 U.S. at 38.
Albemarle’s position is also in tension with our precedent stating that
explicating broad CBA terms like “cause,” when left undefined by contract, is the
arbitrator’s charge. Amalgamated Meat Cutters & Butcher Workmen of N. Am.,
Dist. Local No. 540 v. Neuhoff Bros. Packers, Inc., 481 F.2d 817, 820 (5th Cir.
1973) (“Rather, by using only the general words ‘proper cause,’ [the agreement]
leaves the question of what is a good reason for discharge—the ultimate
disciplinary measure—for subsequent interpretation.”). Had the Company
wished to remove doubt as to whether safety violations like the Grievants’ met
the criteria for cause to terminate, it had only “to bargain for a specific list of
violations that will be considered sufficient grounds for discharge” in the CBA.
Id.; see Johnston-Tombigbee Furniture Mfg. Co. v. Local Union No. 2462, United
Bhd. of Carpenters & Joiners of Am., AFL-CIO, 596 F.2d 126, 129 (5th Cir.
1979).
Nor does the “condition of employment” language in Article 906 require
finding the Grievants committed a discharge offense. Granted, an arbitrator
could quite naturally read the CBA to specify that Albemarle employees’ jobs are
contingent on strict adherence to safety rules. But that is not the only arguable
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reading. Indeed, the CBA provides no clear indication that the “condition of
employment” language in Article 906 is intended to support disciplinary
sanctions. Rather, the phrase occurs within a contract term otherwise
describing management and union obligations to ensure adequate safety in
aspirational tones.1 It nowhere references “termination” or “discharge” or the
Company’s Article III authority to sanction, according to gradations of severity,
employees. Reading “condition of employment” as the Company suggests also
assumes that all safety violations mandate the same, harsh penalty of
termination. But as the Company’s Emergency Response Manual indicates,
spills may differ in severity between major and minor and call for different
responses by employees. An arbitrator might correspondingly infer degrees of
punishment for infractions based on the egregiousness of employee conduct and
the character of the spill.
We find persuasive the Tenth Circuit’s decision in Kennecott Utah Copper
Corp. v. Becker, 195 F.3d 1201 (10th Cir. 1999), in which the court found room
for multiple meanings in“condition of employment,” even when that phrase was
1
Article 906 in full reads:
906. Safety and Health
A. The COMPANY will continue to promote and improve safety, health, and
sanitary conditions at the PDC and to provide such safety equipment as is
necessary to the proper fulfillment of this program. Matters pertaining to
safety, health and sanitary conditions will be proper subject for discussion
between the COMPANY and the UNION. The UNION will promote safety
among its members and cooperate with the COMPANY in carrying out the
safety program. Strict adherence to the safety rules and participation in the
PDC safety program is a condition of employment.
B. Each employee at the PDC is part of a safety team. Team captains and other
team members depend on each employee to attend scheduled safety meetings
and contribute to the achievement of the team’s goals and objectives.
Participation in safety team activities and attendance of safety meetings is a
condition of employment.
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more directly linked to disciplinary provisions than it is here. The court in
Kennecott was similarly faced with a CBA that allowed the employer to
discharge or discipline for “just cause,” but did not itself define “just cause.” Id.
at 1203. A separate agreement between the employer and union barred drug use
in the workplace, instituted employee drug testing, and announced that
“‘[c]ompliance with this Policy is a condition of employment,’” noting that the
“‘[t]he Company intends to take disciplinary action, up to and including
termination, against any employee who violates this Policy.’” Id. at 1203
(emphasis added). Interpreting those contracts, the arbitrator reduced the
punishment from discharge to reinstatement without backpay for a truck driver
who tested positive for marijuana use after his dump truck rolled over in part
due to mechanical failure. Id. at 1203. On appeal to the Tenth Circuit, the
employer pressed the same argument Albemarle does here, that violation of the
substance abuse policy “condition of employment” was tantamount to “just
cause” to discharge the employee, and that the arbitrator could not alter the
penalty once he found the employee had violated the substance abuse policy. Id.
at 1205. The court rejected that reasoning, stating: “This is simply a matter of
interpretation. It is the province of the arbitrator to interpret contractual
provisions and a reviewing court may not substitute its interpretation for that
of the arbitrator.” Id. at 1205.2 Similarly, in this case, the arbitrator’s reading
2
Also instructive is the Seventh Circuit’s decision in Clear Channel Outdoor, Inc. v.
Int’l Unions of Painters & Allied Trades, Local 770, 558 F.3d 670 (7th Cir. 2009), where the
arbitrator confirmed the employee had violated a safety rule for which the CBA specifically
provided “‘the Employee may be immediately discharged.’” Id. at 672–73 (emphasis omitted).
The arbitrator relied on the permissive word “may” in the CBA provision, concluding the
employer lacked just cause, based on the circumstances of the infraction, to fire the employee,
and instead imposed a six-month, unpaid suspension. Id. at 674. The Seventh Circuit rejected
the employer’s argument that the CBA prevented the arbitrator from assigning punishment
short of discharge, finding the arbitrator’s interpretation “was tethered to the language of the
agreement.” Id. at 676.
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of “cause” in light of “condition of employment” was within the bounds of his
authority under the CBA.
B. Violation of Public Policy
Last, Albemarle urges that enforcing the arbitrator’s decision would
violate public policy. Although a CBA may be unenforceable for contravening
public policy, the Supreme Court has made clear that this bar is a high one, and
“any such public policy must be explicit, well defined, and dominant.” E.
Associated Coal Corp. v. United Mine Workers of Am., Dist. 17, 531 U.S. 57, 62
(2000) (internal quotation marks omitted); see Cont’l Airlines, Inc. v. Air Line
Pilots Ass’n, Int’l, 555 F.3d 399, 418 (5th Cir. 2009). Albemarle notes that it is
“required by law to report unpermitted chemical spills and perform prompt
remedial action so as to eliminate those releases that could pose a threat to
human health or the environment.” While that imperative is true, the question
is not whether the spill, or even the failure of the Grievants to report it
immediately, is against public policy, but whether the CBA, in providing for the
Grievants’ reinstatement following the incident, is contrary to “public policy, as
ascertained by reference to positive law and not from general considerations of
supposed public interests.” Id. at 62-63. In the present case, the Grievants
made a serious error in the manner they reported the spill for which they are
being strictly disciplined. However, the arbitrator at the same time found that
the Grievants had no prior record of safety violations; that a gasket failure, and
apparently not the Grievants, was responsible for causing the leak; that the
Grievants reported the incident within five minutes to a security guard who
quickly reached a supervisor; and that the spill was not cause for issuing
emergency notifications. In light of the factual record, Albemarle does not
articulate how the CBA, if read by the arbitrator to permit reinstating the
Grievants after sanctioning them fourteen months lost wages, violates public
policy. We find the public policy exception does not apply.
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CONCLUSION
We conclude that because the arbitrator’s award neither violated the
terms of the CBA nor public policy, we must enforce it. We REVERSE the
award of summary judgment in favor of Albemarle and RENDER judgment in
favor of USW.
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