Madison County Board of Commissioners and Madison County Highway Department v. American Federation of State County and Municipal Employees Local 3609

ATTORNEY FOR APPELLANTS ATTORNEYS FOR APPELLEE
Jeffrey K. Graham William R. Groth
Bingham Farber & Wilson P.C. David T. Vlink
Elwood, Indiana Fillenwarth Dennerline Groth &
Towe, LLP
Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Madison County Board of November 12, 2015
Commissioners and Madison Court of Appeals Case No.
County Highway Department, 33A05-1505-PL-409
Appellants-Plaintiffs/Counterclaim Appeal from the Henry Circuit
Defendants, Court
The Honorable Mary G. Willis,
v. Judge
Trial Court Cause No.
American Federation of State 33C01-1502-PL-8
County and Municipal
Employees Local 3609,
Appellee-Defendant/Counterclaim Nov 12 2015, 6:13 am
Plaintiff
Crone, Judge.
Case Summary
[1] Two employees of the Madison County Highway Department (“the
Department”), who were also members of the American Federation of State
County and Municipal Employees Local 3609 (“the Union”), loafed on the job
for two consecutive days and took an excessively long lunch break on the third
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day. The Union has a collective bargaining agreement (“CBA”) with the
Madison County Board of Commissioners (“the County”)1 that mandates
progressive discipline for minor infractions such as those committed by the
employees. Commission of a third minor infraction results in the employee
being subject to discharge. By contrast, commission of a single major
infraction, such as theft, results in the employee being subject to discharge.
[2] The County did not initiate disciplinary proceedings against the employees until
the end of the third day. The County initially alleged that the employees
committed minor infractions and ultimately discharged them for what it
claimed were major infractions. The matter was submitted to arbitration
pursuant to the CBA, and the Union represented the employees at the hearing.
The arbitrator determined that the employees had not committed major
infractions and, based in part on what he characterized as “procedural and
substantive due process concerns raised by the County’s failure to promptly
notify [the employees] of the wrongful nature of their workplace behavior,”
concluded that the appropriate punishment for the employees’ misconduct was
a five-day unpaid layoff. Appellants’ App. at 67.
[3] The County asked the trial court to correct or vacate the arbitrator’s award. In
response, the Union filed an answer and counterclaim. The Union and the
1
Because the Department is an arm of the County, we sometimes refer to these entities interchangeably or
collectively as “the County” below.
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County filed cross-motions for summary judgment. The trial court granted the
Union’s motion and denied the County’s motion.
[4] On appeal, the County argues that the arbitrator exceeded his authority under
the CBA by basing his award on due process concerns and by reducing the
employees’ punishment. We disagree. The County circumvented the CBA’s
progressive discipline scheme, and the CBA does not require discharge for the
infractions committed by the employees or prohibit the arbitrator from reducing
an employee’s punishment. Therefore, we affirm summary judgment in favor
of the Union.
Facts and Procedural History
[5] Scott Amos and Travis Benfield (“the Employees”) were employed as truck
drivers by the Department. They were also members of the Union and its
president and vice president, respectively. The Union has a CBA with the
County, under which the parties “recognize the authority of the County to take
appropriate disciplinary action for just cause.” Id. at 27. Pursuant to the CBA,
Department employees may be disciplined for class A minor infractions, class B
minor infractions, or major infractions of work rules. Among the class B minor
infractions listed in the CBA are “[u]nauthorized use or removal of County
vehicles, equipment or tools for other than Department work,” “[s]leeping on
the job, loafing or spending excessive time at lunch periods,” and “[o]ther
actions of similar consequences deemed Class B minor infractions by the
Superintendent.” Id. at 44. “Under extenuating circumstances a Class B
infraction may be upgraded to a major infraction.” Id. Among the major
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infractions listed in the CBA are “[t]heft or dishonesty of any kind,” “[u]sing
County property or equipment for personal matters not required by job duties,”
“[f]alsification, tampering with, removing, or misusing any County records,
documents, or reports,” “[l]eaving job during working hours without prior
authorization,” and “[o]ther actions of similar consequences deemed
infraction[s] by the Superintendent.” Id. at 45.
[6] The CBA mandates “progressive discipline” for minor infractions. Id. at 43, 44.
For class B minor infractions, the first “Offense” results in a written warning,
the second in a five-day layoff without pay, and the third in the employee being
“Subject to Discharge.” Id. at 44. By contrast, the commission of a single
major infraction results in the employee being “subject to discharge.” Id. at 45.
The CBA states, “If disciplinary action is to take place, it shall be done within
three (3) working days from [the] time the incident was reported to the
Superintendent or Designee.” Id. at 27.
[7] On June 23 through 25 of 2014, the Employees were assigned to the same truck
to repair potholes and broken pavement on rural roads with a DuraPatch
machine. On June 23, a county commissioner saw the Employees’ truck and
the Employees sitting idle on the road near his house. After the truck left, the
commissioner “found an area approximately two and one-half feet wide by 12
feet long that had been filled and patched and noticed a similarly-sized area of
the road still in need of repair.” Id. at 51. The commissioner reported his
observations to the Department superintendent. On June 24, the commissioner
again saw the truck and the Employees sitting idle. After they filled a few
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potholes and departed, the commissioner again reported his observations to the
Department superintendent. On June 25, the GPS tracking device on the
Employees’ truck indicated, and a fellow Department employee personally
observed, that the truck was parked near two restaurants for over an hour.
Under the CBA, employees are given a “half hour at mid-day, without pay, to
eat lunch[.]” Id. at 38.
[8] When the Employees returned the truck to the Department garage on June 25,
they “were given Disciplinary Notice Written Warnings dated Monday, June
23, 2014,” which “state[d] as the reason for the discipline ‘On 6/23/14 Minor
Infraction Class B 5 sleeping on the job (loafing) or spending excessive time at
lunch periods.’” Id. at 52. On June 26, they were suspended without pay in a
memorandum from the Department superintendent that reads as follows:
This is to inform you today your [sic] suspended without pay
pending an investigation that you have committed violations of
the [CBA] and Madison County Personnel Policies and Indiana
employment statutes [sic].
It was reported that you are not performing assigned work which
may constitute a violation of the Indiana Ghost-employment
law. It is [sic] come to my attention via the County Highway
Department GPS tracking devises [sic] and witness reports that
you were parked for extended periods of scheduled work time
and did not perform any work on June 23, June 24, and June 25,
2014. Based on this information County is investigating this
matter is [sic] continuing violation of Coast [sic] employment
statutes.
Once the investigation is complete you will be notified of the
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findings and recommendations, and will be afforded the
opportunity to respond.
Id. (excerpted from arbitration award; some “[sic]” designations added).
[9] Pursuant to the CBA, the Employees were given a pre-deprivation hearing on
July 2. Two weeks later, they were given a memorandum that reads in
pertinent part as follows:
Please be advised that based on our findings stemming from an
investigation of your actions on June 23, 24 and 25, 2014, your
employment with Madison County is terminated effective
immediately.
Based on our findings, you have violated the Ghost Employment
policy found on page 72-73 of the Madison County Policies
Hymnbook [sic] (the “Employee Handbook”) by submitting
timecards which purport to show you working during times that
is [sic] contradicted by substantial evidence, including but not
limited to, eyewitness testimony in [sic] GPS tracking data.
Pursuant to the Employee Handbook, disciplinary action for
violations of the Ghost Employment policy may include
termination.
In addition, based on our findings, you have committed the
following Major Infractions as defined by the [CBA]:
• Theft or dishonesty of any kind
• Using County property or equipment for personal matters not
required by job duties
• Falsification, tampering with, removing, or misusing any
County records, documents, or reports.
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• Leaving job during working hours without prior authorization.
Pursuant to the [CBA], employees who commit Major
Infractions shall be subject to discharge.
Be further advised that we will be referring this matter to the
Madison County Prosecutor. In addition, we may seek
reimbursement of the wages paid to you that were not earned.
Id. at 53 (excerpted from arbitrator’s award).
[10] The Employees availed themselves of the CBA’s grievance procedures, and the
matter was ultimately submitted to arbitration. The CBA states, “The arbitrator
shall have no authority to add to, change, delete, or otherwise modify any part
of this agreement. Any decision of the arbitrator shall be final and binding on
all parties.” Id. at 26. At the arbitration hearing, the Employees were
represented by the Union. The parties stipulated that the issue before the
arbitrator was as follows: “Were the discharges of [the Employees] for just
cause? If not, what is the proper remedy?” Id. at 53.
[11] In January 2015, the arbitrator issued an award containing extensive factual
findings. 2 The arbitrator found that the County had failed to prove that the
Employees had “engaged in misconduct that can be accurately characterized as
2
The Union’s brief contains a link to the arbitrator’s online biography. We decline the Union’s invitation to
consider material that is both irrelevant and outside the record on appeal.
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ghost employment” as defined in the Employee Handbook. Id. at 63. The
arbitrator further found,
Like the charge of ghost employment, the four categories of
Major Infractions misconduct with which [the Employees] are
charged do not accurately capture the actions the County
contends they engaged in that warranted their discharges. Thus,
there is no evidence that [the Employees] used County
equipment for personal matters not required by their job duties;
or that they falsified, tampered with, removed or [misused] any
County records, documents or reports. Furthermore, there is no
evidence to indicate that the [Employees] left or abandoned their
jobs during work hours on the three days in question, and there is
no proof that they actually stole any County property or engaged
in blatant acts of dishonesty equivalent to stealing County
property.
It is true that viewed in the very broadest possible sense, [the
Employees’] alleged acts of malingering on the job on June 23
and 24, 2014; as well as the excessively-long lunch period the
County claims they took on June 25, 2014, could be deemed
dishonesty or stealing wages that they did not earn while they
were sitting idle instead of working. Nevertheless, the County
has not satisfactorily proven that the Major Infractions element
of the Minor Infractions/Major Infractions disciplinary scheme
agreed to by the Parties and memorialized in their [CBA] is
sufficiently elastic to encompass the purported acts of misconduct
engaged in by [the Employees] on the days in question.
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Id. 3
[12] The arbitrator went on to state,
The bifurcated disciplinary scheme reflected in the Minor
Infractions/Major Infractions table of misconduct offenses
paradigm set out in the [CBA] clearly demonstrates the Parties’
mutual agreement that when determining what disciplinary
action is warranted by particular acts of employee misconduct,
the first step is to properly categorize any such misconduct as
either a “Minor Infraction [] Class A,” “Minor Infraction Class
B,” or a “Major Infraction.” Stated simply, the misconduct with
which [the Employees] are charged does not rise to, or near the
level of perniciousness and malice reflected in the 13 specific acts
of misconduct set out in the Major Infractions element of the
contractual disciplinary scheme.
In fact, the acts of misconduct with which [the Employees] are
charged are specifically addressed in the Minor Infraction Class B
element of the contractual disciplinary scheme. Those specific
offenses, set out at Paragraph 5 of the Minor Infraction Class B
list of offenses, are “…, loafing or spending excessive time at
lunch periods.” This is precisely what the County claims [the
Employees] did on the three days in question.[ 4] Therefore, if the
3
In a footnote, the arbitrator stated,
Thus, for example even if proven to have constituted misconduct warranting discipline, the
[Employees’ actions] would not rise to the same level of perniciousness or malice as evidenced
by the possession or use of alcohol and/or drugs while on duty; willfully damaging or defacing
County property or equipment; insubordination evidenced by willfully disobeying a supervisor’s
direct order; fighting on the job or on County property; or possession of firearms or other
weapons while on duty or on County property.
Appellants’ App. at 63-64.
4
In a footnote, the arbitrator stated, “It warrants mention that the Written Warnings, dated June 23, 2014
and issued to the [Employees] on June 25, 2014, cite as the reason for those warnings ‘Minor Infraction Class
B 5 sleeping on the job (loafing) or spending excessive time at lunch periods.’” Appellants’ App. at 64
(citation to exhibits omitted).
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Arbitrator determines that the [Employees] actually engaged in
those acts of loafing and/or spending excessive time on their
lunch break then the disciplinary steps agreed to by the Parties in
the Minor Infraction Class B portion of the contractual
misconduct offenses paradigm would be applicable. The Major
Infractions penalty of summary discharge on the first offense is
not applicable in this Case. Thus, the County must prove that
the actions of [the Employees] on the three days at issue
nevertheless warranted their summary discharge, or some
alternative less severe form of discipline.
Id. at 64.
[13] Ultimately, the arbitrator determined that the County had “failed to prove that
the discharges of [the Employees] were for just cause” but that the Employees
“did engage in repeated acts of misconduct that violated Paragraph 5 of the
Minor Infraction Class B table of misconduct offenses set out in the Parties’
[CBA]” and that “significant discipline [was] warranted.” Id. at 67. 5
Consequently, the arbitrator overturned the discharges and imposed the
following discipline:
The gravity of the intentional acts of misconduct engaged in by
[the Employees] is aggravated by their repetition over three
consecutive workdays and by the fact that both [the Employees]
5
See Appellants’ App. at 66 (“The County’s complaint regarding the behavior of [the Employees] on June 23
and 24, 2014, is well-enunciated by Superintendent Harless’ statement on cross examination that he was
‘dissatisfied with the quantity of the work and … [the] report [of] the truck sitting still and excessive breaks’.
That [the Employees] on June 23 and 24 did in fact loaf, sit idle for moments of time, and work at a pace
slower than expected in the operation of the DuraPatch truck to which they were assigned is clearly
established by the relevant evidence in the hearing record.”) (citation to transcript omitted); id. at 67 (“[The
Employees] offered no plausible explanation as to why they took a 65 minute lunch break sitting idle in that
strip mall parking lot on what was supposed to have been a 30-minute lunch break [on June 25].”).
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hold high Union office and therefore should be expected to set an
example for all bargaining unit employees. Having balanced the
seriousness of the [Employees’] intentional, repeated acts of
misconduct on the three days at issue against the mitigating
factor of the procedural and substantive due process concerns
raised by the County’s failure to promptly notify them of the
wrongful nature of their workplace behavior before the end of
their shift on June 25, 2014, the undersigned has determined that
the appropriate disciplinary penalty for the misconduct engaged
in by the [Employees] during the time period from June 23-25,
2014, is the second offense penalty for Minor Infraction Class B
offenses agreed to by the Parties in the [CBA] – a five-day layoff
without pay.
Id.
[14] Thereafter, the County filed a motion with the trial court for application to
correct or vacate the arbitrator’s award. In response, the Union filed an answer
and counterclaim. The Union and the County filed cross-motions for summary
judgment. The trial court summarily granted the Union’s motion and denied
the County’s motion and “confirmed” the arbitrator’s award “in all respects.”
Id. at 4. The County now appeals.
Discussion and Decision
[15] The County asserts that the trial court’s summary judgment ruling is erroneous.
When reviewing the entry or denial of summary judgment, our
standard of review is the same as that of the trial court: summary
judgment is appropriate only where there is no genuine issue of
material fact and the moving party is entitled to a judgment as a
matter of law. Ind. Trial Rule 56(C). All facts established by the
designated evidence and reasonable inferences drawn from those
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facts are construed in favor of the nonmoving party. The fact
that the parties filed cross-motions for summary judgment does
not alter our standard of review. We consider each motion
separately to determine whether the moving party is entitled to
judgment as a matter of law.
Wright v. City of Gary, 963 N.E.2d 637, 643 (Ind. Ct. App. 2012) (some citations
omitted), trans. denied.
[16] Indiana’s Uniform Arbitration Act (“the Act”) “provides a mechanism for
enforcing agreements to arbitrate and for securing judicial review and
enforcement of awards made.” Id. “Judicial review of an arbitration award is
extremely narrow in scope.” Id. An award should be corrected or vacated only
when one of the grounds specified by the Act for correcting or vacating an
award is shown. See id. A party who seeks to correct or vacate an arbitration
award under the Act bears the burden of proving the grounds for doing so. See
id. “Courts may not review the merits of arbitration awards de novo.” Id. Our
review of an arbitration award is limited to determining whether the party who
seeks to correct or vacate the award has established any of the grounds for
challenge permitted by the Act. See id.[17] “An arbitrator’s award is enforceable so long as it draws its essence from the
collective bargaining agreement.” Fort Wayne Cmty. Sch. v. Fort Wayne Educ.
Ass’n, 490 N.E.2d 337, 340 (Ind. Ct. App. 1986).
A court will vacate an award only when the arbitrator’s words
manifest an infidelity to this obligation. It is only when the
arbitrator must have based his award on some body of thought,
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or feeling, or policy, or law that is outside the contract (and not
incorporated in it by reference) that the award can be said not to
draw its essence from the collective bargaining agreement. We
resolve any reasonable doubt regarding whether an award draws
its essence from a collective bargaining agreement in favor of
enforcing the award. Therefore, we will vacate an award only if
there is no possible interpretive route to the award.
Citizens Gas & Coke Util. v. Local Union No. 1400, Int’l Bhd. of Elec. Workers, 874
N.E.2d 391, 397 (Ind. Ct. App. 2007) (citations, brackets, and quotation marks
omitted).
[18] Pursuant to Indiana Code Section 34-57-2-14(a), a court “shall modify or
correct the award where … (2) the arbitrators have awarded upon a matter not
submitted to them and the award may be corrected without affecting the merits
of the decision upon the issues submitted[.]” And Indiana Code Section 34-57-
2-13(a) provides that a court “shall vacate an award where … (3) the arbitrators
exceeded their powers and the award can not be corrected without affecting the
merits of the decision upon the controversy submitted[.]” The County contends
that the arbitrator in this case “materially changed the CBA” and thus exceeded
his authority in two respects: (1) by finding mitigating due process concerns
based on the County’s compliance with the CBA’s three-day deadline for taking
disciplinary action against the Employees; and (2) by not upholding the
discharges based on each employee’s commission of three class B minor
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infractions. Appellants’ Br. at 4. 6 Thus, argues the County, the arbitration
award should be either corrected or vacated.
[19] We first observe that the County does not challenge the arbitrator’s authority to
determine that the offenses committed by the Employees were actually class B
minor infractions and not major infractions as alleged by the County. 7 We
further observe that the CBA mandates progressive discipline for class B minor
infractions and that the County did not follow that mandate here. The County
was put on notice that the Employees were loafing on June 23, but instead of
promptly taking disciplinary action for that class B minor infraction, it waited
until after the Employees committed two additional class B minor infractions to
do so. This procedure circumvented the CBA’s progressive discipline scheme
and deprived the Employees of adequate notice and an opportunity to reform
their conduct. See Anderson v. Stauffer Chem. Co., 965 F.2d 397, 403 (7th Cir.
1992) (stating that purpose of progressive discipline is “to give the employee
adequate notice and an opportunity to correct any deficiencies”). Under these
6
As stated above, the parties stipulated that the issue before the arbitrator was whether the Employees were
discharged for just cause and, if not, what the proper remedy should be. The County does not specifically
argue that the Employees were discharged for just cause. Therefore, we do not address the Union’s argument
about what constitutes just cause.
7
Nor does the County allege “extenuating circumstances” sufficient to upgrade any of the minor infractions
to a major infraction under the CBA. Appellants’ App. at 44.
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circumstances, we find ample justification for the arbitrator’s due process
concerns, which are drawn from the essence of the CBA. 8
[20] Also, as the Union points out, the CBA states that the commission of a third
class B minor infraction results in an employee being “Subject to Discharge”; it
does not provide for automatic discharge. Appellants’ App. at 44. 9 And finally,
the CBA does not prohibit an arbitrator from modifying an employee’s
punishment; it merely prohibits modification of the CBA itself. The arbitrator
did not modify the CBA by imposing a lesser punishment than discharge in this
case.
[21] In sum, the County has established no basis for correcting or vacating the
arbitrator’s award. Therefore, we affirm the trial court’s summary judgment
ruling.
[22] Affirmed.
May, J., and Bradford, J., concur.
8
This is not to suggest that the County must take disciplinary action against an employee immediately after
an incident is reported, or that an employee may not be discharged for committing three class B minor
infractions within a short period of time. But the County should be mindful of the purpose of the progressive
discipline scheme mandated by the CBA and the risks of delaying disciplinary action or circumventing that
scheme.
9
The same is true for a major infraction. Appellants’ App. at 45.
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