General Truck Drivers, Chauffeurs, Warehousemen & Helpers, Local No. 957 v. Dayton Newspapers, Inc. , 190 F.3d 434 ( 1999 )

BOGGS, J., delivered the opinion of the court, in which KRUPANSKY, J., joined. CLAY, J. (pp. 439-446), delivered a separate dissenting opinion.

OPINION

BOGGS, Circuit Judge.

Plaintiff union appeals a judgment for defendant newspaper company vacating an arbitration award in favor of the union. Union employee Rick Elliott, a newspaper carrier dispatcher, was discharged by the company following an incident in which he grabbed a carrier by the neck. An arbitrator had ruled that Elliott was entitled to reinstatement because this incident did not constitute “just cause” for his termination as required under the parties’ collective bargaining agreement. The court below set aside the arbitrator’s decision, finding that Elliott had committed an “assault” and, thus, the newspaper was entitled to terminate him under the agreement. We reverse, on the ground that the court below did not have the authority to vacate the arbitration award simply because it disagreed with the arbitrator on the question of whether Elliott’s behavior constituted “just cause” for his termination. The arbitrator arguably construed and interpreted the collective bargaining agreement which, under the standard outlined by the Supreme Court in United Paperworkers Int’l Union, AFL-CIO v. Misco, Inc., 484 U.S. 29, 108 S.Ct. 364, 98 L.Ed.2d 286 (1987), is all that is needed to sustain the award.

I.

Rick Elliott was a supervisory employee at the Beavercreek, Ohio Distribution Branch of defendant-appellee Dayton Newspapers, Inc. (“DNI”). As Branch Captain, he was in charge of the morning distribution of newspapers to approximately 100 paper carriers, Elliott was a member of the General Truck Drivers, Chauffeurs, Warehousemen & Helpers Local Union No. 957 (“the Union”). The Union and DNI had a collective bargaining agreement, which read, in pertinent part:

ARTICLE 5. UNION-COMPANY RELATIONSHIP

Section 3. The management of the plant and the direction of the working force including the right to hire, promote, suspend, discipline, discharge for proper cause, the right to transfer, the right to change working processes and equipment, and the right to publish and enforce reasonable plant rules for the performance of duties hereunder ... are vested exclusively in the Company except as is set forth in writing in this Agreement....

ARTICLE 11. GRIEVANCE AND ARBITRATION PROCEDURE.

Section 3. The Company agrees not to discharge or discipline any employee without just cause. The Company shall have the right at any time to promulgate rules and regulations and all employees shall be subject to such rules and regulations. The Company shall post such rules and regulations....

Section 4. The arbitrator shall have no power to change, modify, add to or detract from any terms of the contract. In discharge cases, the arbitrator shall have the power, but is not required, to order the discharged employee reinstated with back pay, less amounts received elsewhere, if he shall determine that the Company did not discharge such employee for proper cause.

DNI’s workplace rules read, in pertinent part:

The purpose of these rules and regulations is to provide you with examples of unacceptable conduct which may warrant discipline. Forms of discipline which the company may utilize include, but are not limited to, reprimand, suspension, or termination. The Company may impose any form of discipline, up to and including immediate discharge, that it deems appropriate.

7. Assault or the use of profane, abusive or threatening language toward fellow employees or supervisory personnel.

Elliott was terminated for an act he committed on February 24, 1996; an arbitrator later made specific findings of fact regarding Elliott’s behavior on that date, which are summarized in this paragraph. These factual findings were later relied upon by the court below. The arbitrator found that Elliott reported for work at approximately 2:30 a.m. Iris Thomas, one of DNI’s paper carriers, arrived at Beaver-creek at around 3:30 a.m. to pick up the newspapers she was responsible for delivering that day. Elliott, a married man, was having a “personal relationship” with Thomas, who was not his wife. When Thomas arrived at the distribution facility, she was intoxicated, and started shouting at Elliott. The two got into an argument that lasted for several minutes. During this argument, Thomas told Elliott that he had been unfaithful to her, that she “knew how to make people disappear,” and that “she would make [Thomas], his wife, and his kids disappear.” Thomas then took several newspaper inserts and threw them on the floor in anger. Elliott came up behind Thomas, who “appeared put of control,” and “grabbed her by the neck and started her towards the door.” Steven Noffsinger, another carrier, told Elliott to let Thomas go; Elliott told Noffsinger to mind his own business. Elliott then “guided [] Thomas and her papers out the door,” put Thomas’s newspapers in her car, and went back inside.

Elliott was terminated on March 23, 1996 for his “physical abuse of a co-worker” on February 24, 1996. Elliott filed a grievance protesting his termination. A hearing on the grievance was held before an arbitrator on September 20, 1996. DNI contended that it discharged Elliott because it had “zero-tolerance” policy against violence in the workplace. The Union, however, argued that Elliott was dismissed without “just cause.” The arbitrator sided with the Union, finding that Elliott’s conduct did not provide DNI with “just cause” for termination because it did not constitute “workplace violence” as Elliott “was anxious to get Ms. Thomas out of the building as soon as possible.” He granted Elliott a back pay award and reinstatement on December 19,1996.

DNI notified Elliott that it was reinstating him on January 27, 1997, and that Elliott' should appear on that date for a meeting to discuss the terms and conditions of his employment. At the January 27, 1997 meeting, DNI told Elliott that he was reinstated, that the meeting was a pre-disciplinary hearing, and that he was being terminated for being an ‘unacceptable liability risk.” The Union filed a grievance protesting this discharge, but DNI refused to arbitrate the dispute, contending that it did not have an obligation to do so.

On March 24, 1997, DNI filed a complaint against the Union, pursuant to Ohio Rev.Code § 2711.13, seeking to vacate the December 1996 arbitration award. The union removed the case to district court. It also filed a complaint of its own in district court, seeking to (1) enforce the award under the Labor Management Relations Act, 29 U.S.C. §§ 141-168 (“the Act”),¹ and (2) require DNI to arbitrate the Union’s grievance regarding Elliott’s January 1997 termination. The two cases were consolidated.

A magistrate judge² granted summary judgment for DNI on its complaint and dismissed the Union’s complaint. In vacating the arbitration award, the magistrate judge ruled that Elliott had committed an “assault” and, thus, the newspaper was entitled to terminate him under the collective bargaining agreement. The magistrate judge subsequently denied a motion by the Union to amend the judgment. The Union appeals.

II

The standard of review of an arbitrator’s award is very narrow, and the courts must therefore accord the arbitrator’s decision substantial deference. United Paperworkers Int’l Union, AFL-CIO v. Misco, Inc., 484 U.S. 29, 36-37, 108 S.Ct. 364, 98 L.Ed.2d 286 (1987). If an arbitrator’s award “draws its essence” from the collective bargaining agreement and is not merely the arbitrator’s “own brand of industrial justice,” we must uphold the award. See United Steelworkers of America v. Enterprise Wheel & Car Corp., 363 U.S. 593, 597, 80 S.Ct. 1358, 4 L.Ed.2d 1424 (1960). An arbitrator’s award fails to draw-its essence from the agreement when it (1) conflicts with express terms of the agreement; (2) imposes additional requirements not expressly provided for in the agreement; (3) is not rationally supported by or derived from the agreement; or (4) is based on “general considerations of fairness and equity” instead of the exact terms of the agreement. Cement Divisions, National Gypsum Co. v. United Steelworkers of America, 793 F.2d 759, 766 (6th Cir.1986). If “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 decisión.” Misco, 484 U.S. at 38, 108 S.Ct. 364 (emphasis added). “It is the arbitrator’s construction which was bargained for; and so far as the arbitrator’s decision concerns construction of the contract, the courts have no business overruling him because their interpretation of the contract is different from his.” United Steelworkers v. Enterprise Wheel & Car. Corp., 363 U.S. 593, 599, 80 S.Ct. 1358, 4 L.Ed.2d 1424 (1960), quoted in Lattimer-Stevens Co. v. United Steelworkers of America, 913 F.2d 1166, 1169 (6th Cir.1990).

In making his award, the arbitrator found that the collective bargaining agreement required DNI to have “just cause” for terminating an employee, and that the company did not have “just cause” for Elliott’s termination. The court below evidently thought that the arbitrator’s award somehow conflicted with express terms of the collective bargaining agreement, because DNI’s workplace rules, according to the court, “provide that DNI may discipline for ... assault in the workplace .... [and] may impose any form of discipline including ... termination.” The court below believed that since DNI was permitted to enforce reasonable disciplinary rules, its termination of an employee under those rules for assault automatically constituted “just cause.”

Under the law of this circuit, this is simply wrong. In Bruce Hardwood Floors v. Southern Council of Indus. Workers, 8 F.3d 1104 (6th Cir.1993), the plaintiff company and defendant union had entered into a collective bargaining agreement that expressly listed sleeping on duty as conduct for which employees “may” be discharged immediately. Id. at 1105. An employee was fired by the company for breaking this rule, but an arbitrator ordered the reinstatement of that employee on the ground that the employee was not terminated for “just cause,” even though the arbitrator had found that employee had fallen asleep on job. See id. at 1105-06. The district court vacated the award on the ground that it did not “draw its essence” from the agreement between the Union and the Company, because once the Company determined that an employee had committed the offense of sleeping on the job, it necessarily established just cause for the employee’s dismissal. See id. at 1106-07. This court reversed, noting:

[One clause of the collective bargaining agreement at issue] states only that an employee “may” be discharged for committing the enumerated offenses. Moreover, section 1 [of the collective bargaining agreement] vests the Company with the right “to discipline and discharge employees for just cause.” We find that these clauses ... created sufficient basis for the arbitrator to conclude that he had the authority to review the penalty imposed. The arbitrator’s award thus was rationally derived from the terms of the agreement and not simply based on general considerations of fairness and equity. The award, moreover, did not conflict with the express terms of the agreement, and did not impose additional requirements not expressly provided in the agreement. Whether the arbitrator’s reading of the agreement was strained or even seriously flawed, and whether the district court’s per se just cause analysis is more plausible, is irrelevant. The arbitrator arguably construed and applied the agreement, and this is precisely what the parties bargained for him to do.

Id. at 1108 (citations omitted) (emphasis added).

Bruce Hardwood Floors compels a finding that the arbitrator in this case had a “sufficient basis ... to conclude that he had the authority to review the penalty imposed.” In fact, unlike the collective bargaining agreement at issue in Bruce Hardwood Floors, the collective bargaining agreement in this case does not even explicitly permit the employer to discharge an employee for committing certain specified workplace offenses; it only states that “[t]he Company shall have the right at any time to promulgate rules and regulations and all employees shall be subject to such rules and regulations.”

Under the holding of the court below, DNI would seem to have carte blanche to terminate an employee for violating any workplace rule. However, the arbitrator, in construing and applying the collective bargaining agreement, felt that the agreement did not give DNI this power. The plain language of the collective bargaining agreement states only that DNI “agrees not to discharge or discipline any employee without just cause,” and that the arbitrator is to determine whether “the Company did [or did] not discharge such employee for proper cause.” The arbitrator’s weighing of whether Elliott’s behavior constituted “just cause” not only does not conflict with express terms of the agreement, but in fact seems to be the type of review compelled by the agreement. At a bare minimum, the arbitrator’s analysis is clearly “rationally supported by or derived from the agreement” and based on “the exact terms of the agreement,” as required under National Gypsum.

The court below mistakenly believed that the arbitrator imposed additional requirements not expressly provided for in the agreement. The court stated, “The collective bargaining agreement nowhere provides that before DNI may discipline an employee for engaging in assault in the workplace, it must last for a particular period of time, that abuse and/or physical harm must have resulted, or that the assault requires that one person ‘hit’ another.” This holding by the court is completely backwards, since it is based on the assumption that DNI had some sort of right to terminate employees for breaking the company rule on assault independent of “just cause.” This is incorrect, for the collective bargaining agreement does not explicitly give the company such a right. The arbitrator was not creating “additional requirements” under the collective bargaining agreement; he was simply evaluating whether DNI had “just cause” to terminate Elliott for his behavior. In so doing, the arbitrator had the power to determine whether Elliott was fired for “just cause,” even if the company was correct in its contention that the termination was simply the result of DNI’s literal application of its workplace rules to Elliott’s behavior. In fact, a rather strong argument can be made that the court below (and not the arbitrator) rendered a decision that was not rationally supported by or derived from the collective bargaining agreement, since it seems to have believed that the agreement gave DNI a right to terminate employees for engaging in any conduct that would be a technical assault in the workplace that was somehow independent of the company’s right to terminate employees only for “just cause.”

The court below failed to rule on two issues on the ground that its vacation of the arbitration award rendered the issues moot. DNI stated in its complaint that the arbitrator’s award was not properly reduced by “amounts received elsewhere,” as required by the CBA. The Union contended in its complaint that DNI’s refusal to arbitrate its dispute with the Union regarding Elliott’s second termination for being an “unacceptable liability risk” was a breach of DNI’s obligations under the DNI. Since we hold that the vacation of the arbitration award was improper, this consolidated matter is remanded so that the court below can determine whether (1) the arbitrator’s award was properly not reduced by “amounts received elsewhere,” and (2) DNI’s refusal to arbitrate its dispute with the Union regarding Elliott’s second termination for being an “unacceptable liability risk” was a breach of DNI’s obligations under the collective bargaining agreement.

Ill

This case is REVERSED and REMANDED for further proceedings consistent with this opinion.

1 . This court’s jurisdiction to hear cases of this type arising under the Act is granted by 29 U.S.C. § 185 (1998), which states that

[sjuits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce as defined in this chapter, or between any such labor organizations, may be brought in any district court of the United States having jurisdiction of the parties, without respect to the amount in controversy or without regard to the citizenship of the parties.

2 . This case was referred to a magistrate judge by the district court with the consent of the parties. For this reason, the magistrate judge will simply be referred to as "the court below” in this opinion.