Exxon Shipping Co. v. Exxon Seamen's Union

• Decision Date: 19 May 1993
• Docket Number: No. 92-5489,92-5489
• Citation: 11 F.3d 1189
• Parties: 144 L.R.R.M. (BNA) 2955, 127 Lab.Cas.\\P 10,956 EXXON SHIPPING COMPANY, A Delaware Corporation, Appellee, v. EXXON SEAMEN'S UNION, Appellant. \ .\
• Court: U.S. Court of Appeals — Third Circuit

Page 1189

11 F.3d 1189

144 L.R.R.M. (BNA) 2955, 127 Lab.Cas.\\P 10,956

EXXON SHIPPING COMPANY, A Delaware Corporation, Appellee, v. EXXON SEAMEN'S UNION, Appellant.

No. 92-5489.\

United States Court of Appeals, Third Circuit.\

Argued May 19, 1993.\\

Decided Dec. 8, 1993.\\

Sur Petition for Rehearing March 9, 1994.

Schneider, Goldberger, Cohen, Finn, Solomon, Miceli,\Leder & Montalbano, A Professional Corporation, Howard A. Goldberger\(argued and on the brief), Cranford, NJ, for appellant.

John F. Tully, Joseph T. Walsh III, Douglas B. Neagli (argued), Exxon Co. U.S.A., Linden, NJ, for appellee.

Before: STAPLETON, ALITO and SEITZ, Circuit Judges.

OPINION OF THE COURT

ALITO, Circuit Judge:

The Exxon Seamen's Union has appealed from a district court order vacating an arbitration award that required the Exxon Shipping Company to reinstate an able bodied seaman on an oil tanker who was found to be highly intoxicated while on duty.\ The district court held that this arbitration award was contrary to the well defined and dominant public policy against having intoxicated persons participate in the operation of commercial vessels.\ After the district court entered the order at issue here, we upheld a similar district court order vacating an arbitration award that required the reinstatement of an able bodied seaman on another oil tanker who had failed a company drug test.\\Exxon Shipping Co. v. Exxon Seamen's Union, 993 F.2d 357 (3d Cir.1993)\("Exxon Shipping Co. I"). \ In light of that decision, we affirm the order now before us.

I.

In 1985, the Exxon Shipping Company and the Exxon Seamen's Union entered into a collective bargaining agreement that required the arbitration of grievances and provided that the decision of an arbitration panel would be final and binding.\ In April 1988, after bargaining to an impasse, Exxon\Shipping announced that it was implementing certain modifications of\this agreement, including a new policy on employee alcohol and drug use.\ This policy stated that "[b]eing unfit for work because of use of drugs, or alcohol is strictly prohibited and is grounds\for termination of employment." \ The policy also provided that Exxon Shipping had the\"right to require employees to submit to medical evaluation or alcohol and drug testing where cause exists to suspect alcohol or drug misuse."\¹

In September 1988, Exxon Shipping sent a letter to all of its oceangoing employees further explaining its alcohol and drug policy.\ This letter stated that it served as "another official notice that violation of the Company Alcohol and Drug Use Policy, or regulations governing alcohol or drug use in the work place will result in immediate termination from the vessel." \ The letter added: "While we must continue to thoroughly investigate the facts of each individual case and make a final determination on a case-by-case basis, termination of employment is the penalty for violation of these standards."

Approximately one year later, on September 5, 1989, Exxon Shipping and the union entered into a Memorandum of Understanding modifying the collective bargaining agreement.\ This Memorandum provided:

A breathalyzer test may be given "for cause" by a\supervisor trained to conduct such tests to anyone suspected of intoxication.\ A .04 or above Blood Alcohol Content (BAC) is considered intoxication and may result in discharge from the vessel and subject the employee to further discipline up to and including termination.\²

On September 13, 1989, shortly after this memorandum\was signed, the Exxon Long Beach, a 987-foot oil tanker used to transport crude oil from Alaska to California, was anchored at San Francisco.\ One of the able bodied seamen assigned to this ship was Randall Fris.\ Able bodied seamen have duties that are related to the safe operation of the ship.\ See\33 C.F.R. Sec. 95.015 (1993); \46 C.F.R. Sec. 12.05-9 (1992).\ At about midnight, Fris returned to the ship and reported for duty.\³\ Several officers who observed him\ believed that he was in an impaired condition.\ A breathalyzer test was administered,\⁴ and the test revealed a blood alcohol content of 0.150, more than three times the maximum (0.04) permitted by the Memorandum of Understanding and by Coast Guard regulations.\\See\33 C.F.R. Secs. 95.020(b), \95.050(b), 95.055 (1993).\ The next day, Exxon Shipping discharged Fris.

The union filed a grievance protesting Fris's discharge, and eventually the dispute was submitted to a three-member arbitration panel consisting of a neutral arbitrator and representatives of the company and the union.\ Over the dissent of the company representative, the panel concluded that Fris's discharge had not been for good cause.\ The majority agreed that Fris had been intoxicated when he boarded the Exxon Long Beach, but it concluded that the Memorandum of Understanding and the company's alcohol policy, while permitting discharge for such conduct, did not require that result.\ Relying on Fris's good record during his eight years\of employment by Exxon Shipping, the majority concluded that discharge was not the appropriate remedy.\ The majority stated that "[s]uch an employee should have been given an opportunity to demonstrate that the events on September 13, 1989 were an aberration, and that they would not occur again." \ App. at 50.\ The majority determined that the appropriate penalty\was a 90-day suspension and directed Exxon Shipping to reinstate Fris to his prior position with back pay.\ The award did not require Fris to undergo any type of rehabilitation, treatment, or counselling.

Exxon Shipping then filed this action in the United States District Court for the District of New Jersey, seeking to have\the arbitration award vacated.\ The district court granted summary judgment for Exxon Shipping, concluding that the award was contrary to "a well defined\and dominant public policy against having intoxicated persons operate commercial vessels." \ Dist.Ct.Op. at 25.\ The court relied on a Coast Guard regulation prohibiting the operation of a vessel while intoxicated, as well as "a myriad of regulations from various Government agencies concerning alcohol and drug use in the workplace." \\Id. at 26.\ Noting that Fris "was not a desk-bound employee" but\had "significant responsibilities for the operation of a large, ocean-going oil tanker," the court stated: "With an excess of three to four times the blood alcohol permitted by Exxon and the Coast Guard, Fris would be hard pressed to exercise the judgment and discretion required even on a moored oil tanker." \\Id. at 34-35.\ The court added that if Fris were involved in an accident while intoxicated, "Exxon would be hard put to explain or justify his employment." \\Id. at 35.\ The court observed that "[t]here is no margin for error in the operation of an oil tanker." \\Id. at 36.\ The court continued: "A mistake is usually catastrophic in terms of loss of life, damage to the environment, or destruction of property.\ A mistake caused by or clouded by an excessive level\of alcohol in the system of a worker is simply unacceptable." \\Id.

After the district court entered its order vacating the arbitration award, the union took this appeal.

II.

A. In\W.R. Grace & Co. v. Local Union 759, International Union of the United Rubber Workers of America, 461 U.S. 757, 766, 103 S.Ct. 2177, 2183, 76 L.Ed.2d 298 (1983), the Supreme Court stated that "[a]s with any contract, ... a court may not enforce a collective-bargaining agreement that is contrary to public policy." \ The Court cautioned, however, that "[s]uch a public policy ... must be well defined and dominant, and is to be ascertained 'by reference to the laws and legal precedents and not from general\considerations of supposed public interests.' "\\Id. (quoting\Muschany v. United States, 324U.S. 49, 66, 65 S.Ct. 442, 451, 89 L.Ed. 744 (1945)).

Several years later, in\United Paperworkers International v. Misco, Inc., 484 U.S. 29, 36, 108 S.Ct. 364, 369-70, 98 L.Ed.2d 286 (1987), a union argued that "an arbitral award may not be set aside on public policy\ grounds unless the award orders conduct that violates the positive law." \ The Court found it unnecessary to reach this argument, however, because the Court found that the court of appeals decision under review did not comply with the minimum standards set out in\W.R. Grace & Co. \ See\Misco, 484 U.S. at 45 n. 12, 108 S.Ct. at 374 n. 12.

Misco involved an employee who operated a machine that used sharp blades to cut rolls of paper.\ The employee was found in the backseat of a car in the company parking lot "with marijuana smoke in the air and a lighted\marijuana cigarette in the frontseat ashtray."\\Id. at 33, 108 S.Ct. at 368. \ In addition, marijuana gleanings were discovered in the employee's car, and marijuana was found in his home.\\Id. After learning these facts, the company discharged him, but an arbitrator ordered his reinstatement.\ The district court, however, refused to enforce the award, and the court of appeals affirmed, holding that reinstatement would violate the public policy "against the operation of dangerous machinery by persons under the influence of drugs or alcohol."\\768 F.2d 739, 743 (5th Cir.1985).\ The Supreme Court reversed, stating that the court of appeals had "made no attempt to review existing laws and legal precedents in order to demonstrate that they establish a 'well-defined and dominant' policy against the operation of dangerous machinery while\under the influence of drugs."\\Misco, 484 U.S. at 44, 108 S.Ct. at 374. \ The Court also stated that even if the court of appeals' formulation of public policy were accepted, "no violation of that policy [had been] clearly shown" in that case because there was insufficient evidence that the employee would have operated his machine under the influence of drugs.\\Id.

While\Misco left open the question whether an arbitration award may be set aside on public policy grounds only when...