Gulf Coast Indus. Workers Union v. Exxon Co., U.S.A.

• Decision Date: 24 May 1993
• Docket Number: No. 91-6374,91-6374
• Citation: 991 F.2d 244
• Parties: 143 L.R.R.M. (BNA) 2375, 61 USLW 2779, 125 Lab.Cas. P 10,699, 4 NDLR P 76 GULF COAST INDUSTRIAL WORKERS UNION, Plaintiff-Appellant, v. EXXON COMPANY, U.S.A., Defendant-Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 244

991 F.2d 244

143 L.R.R.M. (BNA) 2375, 61 USLW 2779,

125 Lab.Cas. P 10,699,

4 NDLR P 76

GULF COAST INDUSTRIAL WORKERS UNION, Plaintiff-Appellant, v. EXXON COMPANY, U.S.A., Defendant-Appellee.

No. 91-6374.

United States Court of Appeals, Fifth Circuit.

May 24, 1993.

Sharon D. Groth, Gen. Counsel, Gulf Coast Indus. Workers Union, Baytown, TX, for plaintiff-appellant.

Douglas B. Neagli, William J. Davis; and Gibson Gayle, Jr., Fulbright & Jaworski, Houston, TX, for defendant-appellee.

Appeal from the United States District Court for the Southern District of Texas.

Before WILLIAMS, HIGGINBOTHAM, and BARKSDALE, Circuit Judges.

JERRE S. WILLIAMS, Circuit Judge:

Thomas Woods wants his job back. He lost it when he tested positive for cocaine, a clear violation of Exxon's Alcohol and Drug Use Policy and its after-care program. The district court refused to enforce an arbitration award instructing the company to reinstate him. The court held that the arbitrator's ruling was doubly defective because (1) it offended public policy by ordering the reinstatement of a proved drug abuser to his safety-sensitive position, and (2) the arbitrator exceeded his authority by relying upon Woods's post-discharge conduct. We agree with the district court on both counts and affirm the summary judgment in favor of Exxon.

I. FACTS AND PRIOR PROCEEDINGS

This appeal is somewhat unusual for a disciplinary case in that the parties are in complete agreement regarding the underlying facts. For the most part, they are straightforward and largely stipulated.

Exxon Company, U.S.A. ("Exxon") employed Thomas Woods, the grievant, as a process technician at its Baytown, Texas petro-chemical refinery. Woods was not a desk-bound employee. As a process technician, he was freely transferable into assignments involving the supply of electricity, steam, water, and nitrogen to other parts of the plant. These volatile gases and liquids are produced and handled at extremely high temperatures and pressures. ¹

Woods is a member of the Gulf Coast Industrial Workers Union ("Union" or "GCIWU") which, along with Exxon, is signatory to a collective bargaining agreement covering disputes between the parties. As with most agreements, it authorizes Exxon to discipline or discharge its employees for just cause and provides for final and binding arbitration of unsettled employee grievances. Article 26, Section B of the agreement provides: "The Company shall have the right to discipline and discharge employees for just cause. The commission of the offenses listed in Schedule C [including drug use] shall be just cause to render an employee liable to discharge on first offense."

Since January 1990, Exxon has also had in place a comprehensive Alcohol and Drug Use Policy that, while recognizing drug dependency as a treatable condition and encouraging troubled employees to seek help, "absolutely prohibit[s]" a worker from using or being under the influence of controlled substances on the premises. Any violation of the Policy is "cause for termination of employment." The Policy also requires workers who have completed programs for substance abuse or alcoholism to participate in a mandatory five-year after-care program. Among other things, the after-care contract requires total abstinence from all alcohol and non-prescription, controlled drugs. Employees are instructed what actions to take if a relapse occurs or if stress threatens to endanger the worker's sobriety. The contract also authorizes unannounced and periodic random drug/alcohol testing for the entire five-year duration of the after-care program. A positive test result is grounds for disciplinary action, including termination. If the employee follows the instructions, he may receive a second chance. If he fails to comply, he faces possible termination.

In April 1990, Woods voluntarily informed his supervisor at Exxon that he had recently participated in a 30-day, alcohol-rehabilitation program. In accordance with the stated Policy, Woods met with management to fashion his after-care program. Woods agreed to forego all alcohol and non-prescription drugs and to notify his supervisor or a counselor in case of relapse. In addition, Woods acknowledged that Exxon would perform random tests for drugs and alcohol throughout the five-year period. He signed an agreement, which provided in part:

I have read Exxon's Alcohol and Drug Use Policy. The policy requires me to submit to periodic alcohol and drug testing at the Company's request. I understand I will be subject to periodic and unannounced alcohol and drug testing for a period of 60 months.... I understand that a positive alcohol or drug test result or refusal to submit to periodic testing is grounds for discipline as referenced in Exxon's Alcohol and Drug Use Policy.

The Policy then-effective provided that the "use ... of illicit or unprescribed controlled drugs ... is strictly prohibited and is grounds for termination."

Less than two months into the after-care program, Woods tested positive for cocaine. ² In violation of the agreement, however, Woods had failed to notify anyone of his relapse. Moreover, he never admitted using cocaine until the test results came back positive, three days after the test was administered. Exxon immediately fired Woods for violating its Alcohol and Drug Use Policy and for breaching the after-care agreement in using cocaine and also in failing to report his relapse.

The Union filed a grievance contesting the termination. After the earlier steps in the grievance process failed, GCIWU invoked arbitration. ³ A single issue was submitted to the arbitrator: "Was Thomas W. Woods discharged for just cause and, if not, what is the proper remedy?" Noting that violation of the after-care agreement does not mandate automatic termination, the arbitrator held that summary discharge was unjustified and too harsh a penalty. Instead, he sustained the grievance and directed Exxon to reinstate Woods to his previous job without backpay contingent upon a negative drug and alcohol screen. ⁴ The arbitrator said in his opinion that while there was "no question that the Company had just cause to discipline Woods," the grievant seemed "a good bet for successful rehabilitation."

When Exxon informed Gulf Coast that it did not intend to abide by the award, the Union instituted this suit to enforce the award. Exxon counter-claimed to vacate the award asserting that it violated sound principles of public policy in directing the reinstatement of Woods to his safety-sensitive position and also that the arbitrator exceeded his authority by basing his decision upon Woods's post-discharge conduct.

Upon cross-motions for summary judgment, the district court granted Exxon's requested relief and vacated the arbitration award. Gulf Coast timely appealed.

II. DISCUSSION

In reviewing a summary judgment, we employ the same standard used by the district court. Netto v. Amtrak, 863 F.2d 1210, 1212 (5th Cir.1989). Since the facts are undisputed here, our sole mission is to determine whether "the moving party is entitled to judgment as a matter of law." FED.R.CIV.P. 56(c). Accordingly, we review de novo the district court's order to vacate the arbitration award. Forsythe Intern., S.A. v. Gibbs Oil Co. of Texas, 915 F.2d 1017, 1020-21 (5th Cir.1990).

In making this determination, we recognize that federal courts defer to the arbitrator's resolution of the dispute "whenever possible." Anderman/Smith Co. v. Tenn. Gas Pipeline Co., 918 F.2d 1215, 1218 (5th Cir.1990), cert. denied, --- U.S. ----, 111 S.Ct. 2799, 115 L.Ed.2d 972 (1991). Congress's decided preference for arbitration, as reflected in federal statutes regulating labor-management relations, establishes a standard of review that is highly deferential to the arbitrator's bargained-for judgment.

Notwithstanding this admonition, however, arbitration awards are not inviolate. We properly review arbitration awards to determine whether the award "stems from fraud or partiality; ... concerns a matter not subject to arbitration under the contract; ... does not 'dra[w] its essence' from the contract; ... or ... violates public policy." Manville Forest Prod. v. United Paperworkers Intern., 831 F.2d 72, 74 (5th Cir.1987). In this background we consider the two alternative grounds Exxon asserts for vacating the award.

A. "Well Defined and Dominant" Public Policy ⁵

Exxon argues the well-settled rule that, as with any other contract, arbitration awards are subject to challenge if they violate public policy. United Paperworkers Intern. Union v. Misco, Inc., 484 U.S. 29, 42, 108 S.Ct. 364, 373, 98 L.Ed.2d 286 (1987). As the Supreme Court there explained, a court's refusal to enforce an award that is contrary to public policy is little more than "a specific application of the more general doctrine, rooted in the common law, that a court may refuse to enforce contracts that violate law or public policy." 484 U.S. at 42, 108 S.Ct. at 373.

Misco is the leading and dominant case setting out the rules applicable to reviewing arbitration awards on public policy grounds. In Misco, an employee at a paper converting plant was discharged after police apprehended him in a co-worker's car that was filled with marihuana smoke. The company asserted that being in a car with a lit marihuana cigarette violated the plant's rule against having an illegal substance on company property. The arbitrator upheld the grievance and ordered reinstatement. As in the instant case, the company attempted to vacate the arbitration award on several grounds, including the argument that reinstatement was offensive to public policy. The district court agreed that the award must be set aside because it contravened general safety concerns that arise from the operation of dangerous machinery while under the influence of drugs, as well as state laws proscribing drug possession. ⁶ A divided panel of this Circuit affirmed, reasoning generally that...