Bakers Union Factory #326 v. ITT Continental Baking Co., Inc.
| Decision Date | 29 November 1984 |
| Docket Number | 83-1761,Nos. 83-1451,s. 83-1451 |
| Citation | 117 L.R.R.M. (BNA) 3145,749 F.2d 350 |
| Parties | Page 350 749 F.2d 350 117 L.R.R.M. (BNA) 3145, 102 Lab.Cas. P 11,262 BAKERS UNION FACTORY, # 326, Plaintiff-Appellee, v. ITT CONTINENTAL BAKING COMPANY, INC., Defendant-Appellant. United States Court of Appeals, Sixth Circuit |
| Court | U.S. Court of Appeals — Sixth Circuit |
Edwin C. Thomas, Jeffrey A. Blevins, Sara McL. Green (argued), Bell, Boyd & Lloyd, Chicago, Ill., David H. Paruch, Clark, Klein & Beaumont, Detroit, Mich., for defendant-appellant.
L. Rodger Webb (argued), Maurer, Kalls & Webb, Detroit, Mich., for plaintiff-appellee.
Before EDWARDS and MARTIN, Circuit Judges and SILER, Chief Judge. *
The question before us is whether a labor arbitrator has the authority to reinstate an employee who was dismissed pursuant to the terms of a prior, written settlement agreement which was entered into by the company and the union in accordance with the grievance procedures established by the collective bargaining agreement. Initially we must determine whether this issue was properly preserved for appeal.
ITT Continental Baking Company appeals from an order of the district court enforcing an arbitration award under section 301 of the Labor Management Relations Act, 29 U.S.C. Sec. 185. The award set aside the Company's discharge of employee James Tolbert. Bakers Union Factory Local 326 is the certified bargaining representative for production and maintenance employees at the Company's Wonder Bread Factory, where Tolbert was employed.
The conflict between the parties is a result of Tolbert's drinking problems. On February 20, 1981, Tolbert was suspended from his job because he was intoxicated while at work. The Company rescinded the suspension when Tolbert agreed to attend biweekly meetings at Alcoholics Anonymous. On May 1, 1981, Tolbert again was intoxicated on the job, but still the Company agreed to work informally with him on his problem. On October 19, 1981, Tolbert once again appeared on the job intoxicated; this time the Company suspended him and refused to rescind the suspension.
The Union filed a grievance over the suspension. Pursuant to the formal grievance procedures of the collective bargaining agreement, the Company, the Union, and Tolbert attended a third-step grievance meeting. A third-step meeting is the last grievance procedure before arbitration. The product of that meeting was a written agreement among the parties. Pursuant to that agreement of December 7, 1981, the Company agreed to rescind the suspension and Tolbert agreed to follow the recommendations of the Garden City Hospital Alcoholism Treatment Program, attend weekly Alcoholics Anonymous meetings, take antibuse pills daily, and continue total abstinence from alcohol. The agreement put Tolbert on a six-month probationary period and provided that Tolbert's adherence to the agreement was a condition of employment. Specifically, the agreement stated, "Failure to comply with any of the [stated conditions] or any alcohol related infractions at work will result in dismissal." All three parties signed the agreement.
On January 26, 1982, an official from the Garden City Hospital Alcoholism Treatment Program notified the Company that Tolbert had not attended his treatment sessions for the prior two weeks. The Company confronted Tolbert with this information and he responded by claiming that car trouble and financial difficulty prevented his attendance at the sessions. The Company suspended Tolbert, the parties negotiated pursuant to the formal grievance procedures, and Tolbert ultimately was notified in writing of his discharge. The Union protested the result reached under the grievance procedure, and an arbitrator was selected.
The arbitrator found that the conditions of the December 7 settlement agreement were understood by Tolbert and the Union and that Tolbert had, in fact, violated the terms of the agreement. Calling the agreement "reasonable and humanitarian," the arbitrator concluded "there was certainly just and proper cause for discipline in this case." Nevertheless, he held that the penalty of discharge was too severe under the circumstances of the case. Citing Tolbert's "long years of seniority" with the Company, the arbitrator found that, although he had "severe misgivings," Tolbert "should be offered one last opportunity to salvage his work career and perhaps his life." Accordingly, the arbitrator reinstated Tolbert on the condition that he agree to be bound by an agreement the terms of which were substantially identical to those of the parties' own prior settlement agreement.
The Company refused to reinstate Tolbert, and the Union sought enforcement of the arbitrator's award in district court. On cross motions for summary judgment the court held that, although the settlement agreement contemplated that Tolbert's failure to comply with the conditions would result in dismissal, the parties did not intend that the agreement would preclude further resort to the collective bargaining agreement. Therefore, the arbitrator did not exceed his authority in disregarding the penalty imposed by the settlement agreement. This appeal ensued.
Initially, the Union contends that we may not properly consider the issue whether the arbitrator exceeded his authority in disregarding the settlement agreement. In the Union's view, the Company waived its right to pursue this issue on appeal because the Company failed to raise it in the arbitration proceedings. The Company responds by claiming that it did raise the issue before the arbitrator and, in the alternative, that the Union waived its waiver argument by not raising it in the district court. We believe that the Company preserved the issue whether the arbitrator exceeded his authority; we therefore need not consider the Company's alternative argument.
The record reveals that the Company raised before the arbitrator the contention that the settlement agreement controlled the parties' obligations and that the arbitrator lacked authority to alter those obligations. In his written opinion, the arbitrator states: "The employer submits that this discharge was proper because [Tolbert] did indeed violate the [settlement agreement]." The arbitrator continued, In its post-hearing brief 1 the Company noted, "By far the most important point is that the probationary agreement constituted the grievant's last chance, and this arbitrator should not force another last chance upon the Company." Additionally, the Company quoted that part of Mohawk Rubber Co., 47 L.A. 1029 (Teple 1966), which holds:
When a "last chance" understanding has been reached, another chance must rest entirely within the Company's discretion. The Arbitrator has no authority to grant another chance when it has been agreed that no further chance is expected or will be given.
Id. at 1035. Finally, in its motion to reconsider submitted to the arbitrator, the Company argued, "The Union, [Tolbert] and the Company agreed [in the settlement agreement] that discharge was the only appropriate disciplinary action, and that binding decision removed authority from the arbitrator to decide otherwise." Although the Company's framing of the issue may have been less than precise, we do believe that the issue was presented with sufficient clarity to preserve the issue for appeal. Cf. Moreau v. Oppenheim, 663 F.2d 1300, 1307 (5th Cir.1981), cert. denied, 458 U.S. 1107, 102 S.Ct. 3486, 73 L.Ed.2d 1368 (1982); Tiger Trash v. Browning-Ferris Industries, Inc., 560 F.2d 818, 824-25 (7th Cir.1977), cert. denied, 434 U.S. 1034, 98 S.Ct. 768, 54 L.Ed.2d 782 (1978). Particularly probative is the Company's quotation from the arbitrator's decision in Mohawk Rubber Co.
That brings us to the central issue in this case: did the arbitrator have the authority to disregard the explicit terms of the prior settlement agreement reached by the parties? The district court held that the arbitrator properly ignored the settlement agreement because the parties did not contemplate that the settlement agreement would constitute an amendment or addendum to the collective bargaining agreement. Because the settlement agreement did not amend the collective bargaining agreement, the argument goes, the arbitrator retained his authority under the collective bargaining agreement to determine whether the penalty imposed by the employer under the settlement agreement was too harsh.
We decline to endorse the formalist approach adopted by the district court. In focusing on the question whether the settlement agreement constituted a formal amendment to the collective bargaining agreement, the district court failed to adopt the rule of law that most effectively implements the intent of the parties and the policy behind the Labor Management Relations Act, 29 U.S.C. Sec. 185.
The district court noted that the federal courts will overturn the decision of an arbitrator only if the arbitrator acted in excess of the authority granted by the collective bargaining agreement. The purpose of this limited scope of review is to promote the finality of arbitration. The Union urges that our policy in favor of the finality of arbitration and the concomitant rule restricting the scope of review are dispositive of the issue presented here.
We believe that the Union has defined federal labor policy too narrowly. The policy in favor of the finality of arbitration is but one part of a broader goal of encouraging informal, i.e., non-judicial, resolution of labor disputes.
It is not arbitration per se that federal policy favors, but rather final adjustment of differences by a means selected by the parties. If the parties agree that a procedure other than arbitration shall provide a conclusive resolution of their differences, federal labor policy encourages that...
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