Truck Drivers Local No. 164 v. Allied Waste System

• Decision Date: 04 January 2008
• Docket Number: No. 06-1572.,06-1572.
• Citation: 512 F.3d 211
• Parties: TRUCK DRIVERS LOCAL NO. 164, a/w International Brotherhood of Teamsters, Plaintiff-Appellant, v. ALLIED WASTE SYSTEMS, INC., dba Great Lakes Waste Services, Defendant-Appellee.
• Court: U.S. Court of Appeals — Sixth Circuit

512 F.3d 211

TRUCK DRIVERS LOCAL NO. 164, a/w International Brotherhood of Teamsters, Plaintiff-Appellant, v. ALLIED WASTE SYSTEMS, INC., dba Great Lakes Waste Services, Defendant-Appellee.

No. 06-1572.

United States Court of Appeals, Sixth Circuit.

Argued: June 6, 2007.

Decided and Filed: January 4, 2008.

ARGUED: Gerry M. Miller, Previant, Goldberg, Uelman, Gratz, Miller & Brueggeman, Milwaukee, Wisconsin, for Appellant. John A. Libby, Law Offices, Sterling Heights, Michigan, for Appellee. ON BRIEF: Gerry M. Miller, Nathan D. Eisenberg, Previant, Goldberg, Uelman, Gratz, Miller & Brueggeman, Milwaukee, Wisconsin, for Appellant. John A. Libby, Law Offices, Sterling Heights, Michigan, for Appellee.

Before: MARTIN, BATCHELDER, and CLAY, Circuit Judges.

OPINION

ALICE M. BATCHELDER, Circuit Judge.

Truck Drivers Local No. 164 ("Union") appeals from the district court's grant of summary judgment in favor of Allied Waste Systems, Inc. ("Allied"), which vacated an arbitrator's award ordering reinstatement of Grievant Keith Miller ("Miller"). On appeal, the Union argues that the district court erred in vacating the arbitrator's award. At oral argument, both parties agreed that this case is directly impacted by our recent en banc decision in Michigan Family Resources, Inc. v. Service Employees International Union, 475 F.3d 746, 752-53 (6th Cir.2007), which held that courts are without authority to overturn an arbitrator's award so long as the arbitrator was "arguably construing or applying the contract and acting within the scope of his authority." Id. After carefully reviewing the arbitrator's decision and the parties' arguments, we find that the arbitrator was faithfully attempting to construe and apply the terms of the collective bargaining agreement, that the arbitrator was acting within the scope of his authority, and that the district court lacked legal authority upon which to vacate the arbitrator's award. We accordingly REVERSE the district court's decision and REMAND with instructions to reinstate the arbitrator's award and for further proceedings consistent with this opinion in regard to the Union's demand for additional back pay.

I.

Allied is engaged in the business of collecting and disposing of nonhazardous solid waste, and the Union represents Allied's employees at its Adrian, Michigan, location. Allied acquired its Adrian, Michigan, facilities from Laidlaw Waste Services in 1999, and for a few years after this acquisition, Allied and the Union operated under the predecessor collective bargaining agreement negotiated between Laidlaw and the Union. In May 2003, the Union and Allied entered into a new agreement, which borrowed in large part from the language of the predecessor agreement.

Several provisions of the May 2003 agreement are relevant to our review of the arbitrator's award. Article 18 of that agreement reserves management rights to Allied, stating:

"Except as expressly and specifically limited or restricted by a provision of this Agreement, the Company has and shall retain the full right of management and direction of the Company and its operations. Such rights and responsibilities of management include, but are not limited to, the right ... to discharge and otherwise discipline employees for just cause."

Article 8 governs the employer's right to discharge or suspend employees. Section 8.1 states that "[t]he right to discharge and the maintenance of discipline shall be the exclusive right and responsibility of the Company except that the Company shall not discharge or otherwise discipline an employee without just cause." Section 8.2 prescribes the allowable discipline for a violation of the "Company's Mandatory Safety and Work Rules" — distinguishing between a violation of Section 1 of those rules, which permits Allied to discharge the employee immediately, and a violation of Section 2 of those rules, which requires Allied to give the employee at least one warning notice prior to discharge.

Article 9 governs the arbitration and grievance procedures. Section 9.4 outlines the process and procedures by which arbitration is to be conducted, and Sections 9.4(D), 9.4(F), and 9.4(G) define the scope of the arbitrator's power. Section 9.4(D) states:

[T]he arbitrator shall have no power or authority to amend, alter[,] or modify this Agreement, but shall be limited to deciding whether or not a violation of its expressed terms has been committed.

... The arbitrator shall have no power to substitute his discretion for that of the Company in cases where the Company has retained discretion or the right to act under this Agreement.

Section 9.4(F) provides:

The decision of the arbitrator ... shall be final and binding upon the parties when rendered upon a matter within the authority of the arbitrator and within the scope of the matters subject to arbitration provided in this Agreement, and shall be void insofar as the decision exceeds the authority of the arbitrator or passes upon matters not expressly made subject to arbitration under the terms of this Agreement.

And most relevant to this dispute, Section 9.4(G), states: "It is understood and agreed that the degree of discipline up to and including discharge imposed for just cause shall be in the sole discretion of management and shall not be subject to modification by an arbitrator." The agreement also contains a "zipper clause," which states that the terms of the enacted agreement "shall supersede and render ineffective any past practices, addendum, letters of understanding, oral or written agreement as may now exist or as may have existed."

On April 4, 2005, Allied employee and Union bargaining-unit member, Keith Miller, drove a garbage collection route normally assigned to another driver. While backing his truck down the left lane of a dead-end residential street, Miller "hooked" a low-hanging overhead wire, pulling it from a nearby house. Miller immediately informed dispatch of this incident; Allied supervisors arrived on the scene and completed a "Notice Form" summarizing the accident. The supervisors observed that Miller was backing down the wrong side of the street, that Miller violated Allied's "Zero Tolerance Safety Guidelines," and that Miller violated Allied's "Employee Safe Driving and Safe Practices."

On the same day as the accident, Allied suspended Miller without pay pending further investigation. On the following day, Allied terminated Miller because, according to Allied, he violated a rule in Section 1 of the Company's Mandatory Safety and Work Rules, which permitted immediate discharge under Section 8.2 of the collective bargaining agreement. Two days later, Miller filed a grievance, contending that he did not violate a Section 1 rule and, consequently, that Allied should reinstate him with back pay. Within a week, the company denied Miller's grievance, and the parties proceeded to arbitration.

At arbitration, the parties vehemently disputed which set of rules comprised the "Company's Mandatory Safety and Work Rules" referenced in Section 8.2 of the agreement. The parties conceded that during negotiation of the current agreement, neither side brought up Section 8.2, which was the primary cause of this contractual ambiguity. Allied argued that it had been using two sets of rules — the "Employee Safe Driving and Safe Practices" handbook and the "Zero Tolerance Safety Guidelines" — and that these rules were the ones referenced in Section 8.2 of the agreement. The Union contended that the applicable rules were those that were actually entitled "Mandatory Safety and Work Rules" and were attached to the predecessor agreement. The arbitrator sided with the Union, reasoning that Allied's proposed rules had "a different nomenclature than in [Section 8.2 of the agreement] and they ha[d] a different structure — i.e., no Section 1 or Section 2." After determining that the Union's proposed rules applied, the arbitrator concluded that Miller's conduct violated Section 2 of those rules — not Section 1 as alleged by Allied — and that the collective bargaining agreement required Allied to give Miller at least one warning notice prior to discharge.

The arbitrator then analyzed Miller's termination assuming that Allied's proposed rules applied. The arbitrator reasoned that even those rules contemplate degrees of discipline and do not automatically mandate discharge. For example, the Employee Safe Driving and Safe Practices handbook permits "disciplinary action up to and including immediate discharge," and the Zero Tolerance Safety Guidelines state that Allied generally will conduct "progressive discipline" but that an employee will be immediately discharged if his improper conduct causes an "accident." After acknowledging these degrees of discipline, the arbitrator determined that even though Miller violated some of Allied's proposed rules, his termination was inappropriate because this "incident involved an accident only in an obviously hypertechnical sense: the telephone lines had drooped far below standards, and [Allied] incurred no loss as a result of the incident." The arbitrator, in short, determined that Miller's discharge was unwarranted under either the Union's or Allied's proposed rules.

Allied cautioned the arbitrator that the collective bargaining agreement severely circumscribed his authority to review or modify the reasonableness of Miller's discipline, emphasizing Section 9.4(G)'s admonition that "the degree of discipline ... imposed for just cause shall be in the sole discretion of management and shall not be subject to modification by an arbitrator." The arbitrator, however, perceived an internal tension between Section 9.4(G), which, according to Allied, limited the arbitrator's authority to review or modify the degree of discipline imposed by management, and Section 8.1, which prohibited Allied from disciplining an employee without just cause. The arbitrator attempted to reconcile this tension, reasoning:

The term ...