E.I. DuPont De Nemours and Co. v. Grasselli Employees Independent Ass'n of East Chicago, Inc., 85-1577

• Decision Date: 09 May 1986
• Docket Number: No. 85-1577,85-1577
• Parties: 122 L.R.R.M. (BNA) 2217, 54 USLW 2588, 104 Lab.Cas. P 11,918 E.I. DuPONT de NEMOURS AND CO., Plaintiff-Appellee, v. GRASSELLI EMPLOYEES INDEPENDENT ASSOC. OF EAST CHICAGO, INC., Defendant- Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 611

790 F.2d 611

122 L.R.R.M. (BNA) 2217, 54 USLW 2588,

104 Lab.Cas. P 11,918

E.I. DuPONT de NEMOURS AND CO., Plaintiff-Appellee, v. GRASSELLI EMPLOYEES INDEPENDENT ASSOC. OF EAST CHICAGO INC., Defendant- Appellant.

No. 85-1577.

United States Court of Appeals Seventh Circuit.

Argued Dec. 10, 1985.

Decided May 9, 1986.

Barry A. Macey, Segal & Macey, Indianapolis, Ind., for defendant-appellant.

Ronald J. Hein, Matkov, Griffin, Parsons, Salzman & Madoff, Chicago, Ill., for plaintiff-appellee.

Before CUMMINGS, Chief Judge, POSNER and EASTERBROOK, Circuit Judges.

CUMMINGS, Chief Judge.

This appeal comes to us from a decision by the district court to deny a motion by defendant Grasselli Employees Independent Association of East Chicago, Inc. ("defendant") to enforce an arbitrator's award against plaintiff E.I. DuPont de Nemours and Company ("plaintiff"). This case requires us to discuss the proper standard of review of an arbitrator's decision and to apply that standard. For the reasons set forth below, we reverse the decision of the district court and order that the arbitration award be enforced.

I

The controversy at issue involves the discharge of Willie McClendon by plaintiff on December 29, 1977. McClendon had been working the night shift (11:30 PM-7:30 AM) at plaintiff's plant for several days prior to the morning of December 26, 1977, and did not have any sleep before starting the late shift for December 25-26. At the end of that shift (i.e., on the morning of December 26), McClendon had made arrangements with his supervisor Ralph Beiriger to meet him at the employee change house and to drive him to the front gate. However, when Beiriger came by to meet McClendon at 8:00 AM, McClendon was sitting naked in the change house and was not ready to leave. Beiriger stopped by at 8:30 AM and again at 9:00 AM, but McClendon was still naked and not ready to leave. Then, without any apparent provocation, McClendon flew into a rage. McClendon attacked Beiriger and damaged company property. McClendon, still naked, then ran into another building, where he struck an operator and attempted to create a chemical reaction that could have caused further damage. McClendon was finally subdued by police.

McClendon was admitted to the psychiatric ward of a hospital where he remained for more than thirty days. He took drug tests immediately after admission on December 26, and they were positive for both amphetamines and barbiturates. Three days later, the same tests were performed on McClendon and were negative. Physicians later testified that the initial tests could have been a false positive in view of the subsequent negative test and the fact that drugs remain in a person's system for three to four days. On December 29, McClendon was officially discharged for assaulting fellow employees and destroying company property. He was hospitalized for thirty days and has not been treated subsequently.

Pursuant to the collective bargaining agreement, defendant filed a grievance protesting McClendon's discharge. The grievance was denied by plaintiff, and the parties proceeded to submit the dispute to arbitration as required by the union contract. The critical issue at arbitration was whether McClendon was discharged for "just cause."

The arbitrator heard testimony that the incident could have been caused by drugs taken by McClendon or by his mental or nervous breakdown. The arbitrator weighed the evidence and concluded that McClendon suffered a mental breakdown, did not misuse drugs, and that the likelihood of McClendon's having a future breakdown was remote. The arbitrator reasoned that lack of fault must be considered in determining just cause for discharge, and that since McClendon's outburst was caused by a mental breakdown rather than drug use, he was not at fault for his outburst, and thus just cause was not established. The arbitrator considered the danger to other employees and company property posed by the continued employment of McClendon but concluded that these concerns were not significant because he found the likelihood of a future breakdown by McClendon to be remote. Additionally, the arbitrator noted that his conclusion of no just cause was buttressed by plaintiff's failure to follow its own procedural policy since it discharged McClendon without conducting a full investigation and giving him the opportunity to present his side of the story. Based on all of the above, the arbitrator reversed the discharge of McClendon and ordered him reinstated, though without compensation for lost wages for the twenty-one months between McClendon's discharge and his reinstatement.

The district court vacated the arbitrator's award. The district court stated that the arbitrator premised his decision on McClendon's lack of fault without equal consideration of safety in the workplace, and that this indicated that the arbitrator was enforcing his own notions of equity instead of the collective bargaining agreement. The court dismissed the procedural irregularities noted by the arbitrator as irrelevant to the determination of just cause. Finally the court noted that public policy concerns regarding the safety of the workplace supported its decision to vacate the arbitrator's award.

II

At the outset, it should be stressed that judicial review of an arbitration award is extremely limited. Camacho v. Ritz-Carlton Water Tower, 786 F.2d 242, 244 (7th Cir.1986); International Union, United Automobile, Aerospace and Agricultural Implement Workers of America v. Keystone Consolidated Industries, Inc., 782 F.2d 1400, 1402 (7th Cir.1986); Ethyl Corporation v. United Steelworkers of America, 768 F.2d 180, 183 (7th Cir.1985), certiorari denied, --- U.S. ----, 106 S.Ct. 1184, 89 L.Ed.2d 300. With other deferential standards of review, we still review the merits of the question or issue decided below, but must be very certain that the decision below was erroneous before we reverse that decision. See, e.g., Fed.R.Civ.P. 52(a) ("Findings of fact shall not be set aside unless clearly erroneous...."). When reviewing an arbitration award, however, the standard of review is even more deferential, since the judiciary has no power to reach and determine the merits of arbitration awards merely because of disagreement, even strong disagreement, with the arbitrator's interpretation of the contract. As here, so long as the arbitrator interpreted the contract in making his award, his award must be affirmed even if he clearly misinterpreted the contract. Keystone Consolidated, 782 F.2d at 1402; Ethyl Corporation, 768 F.2d at 184, 186. An award may be overturned only if the arbitrator must have based his award on his own personal notions of right and wrong, for only then does the award fail to "draw its essence from the collective bargaining agreement" as required by the Supreme Court in United Steelworkers v. Enterprise Wheel, 363 U.S. 593, 597, 80 S.Ct. 1353, 1361, 4 L.Ed.2d 1424, and by ourselves in Ethyl Corporation, 768 F.2d at 184-85; Jones Dairy Farm v. Local No. P-1236, United Food and Commercial Workers International Union, 760 F.2d 173, 176 (7th Cir.1985), certiorari denied, --- U.S. ----, 106 S.Ct. 136, 88 L.Ed.2d 112; Miller Brewing Co. v. Brewery Workers Local Union No. 9, 739 F.2d 1159, 1162 (7th Cir.1984), certiorari denied, --- U.S. ----, 105 S.Ct. 912, 83 L.Ed.2d 926. See generally R. Gorman, LABOR LAW--UNIONIZATION AND COLLECTIVE BARGAINING 584-586 (1976); Note, Judicial Review of Labor Arbitration Awards : Refining the Standard of Review, 11 Wm. Mitchell L.Rev. 993, 995, 998 (1985).

This low standard of review is essential to prevent a "judicialization" of the arbitration process. Ethyl Corporation, 768 F.2d at 184. Arbitration is an alternative to the judicial resolution of disputes, and an extremely low standard of review is necessary to prevent arbitration from becoming merely an added preliminary step to judicial resolution rather than a true alternative. Id. The parties have bargained ex ante for arbitration as an alternative means of dispute resolution, and ex post they must abide by this bargain. Camacho, 786 F.2d at 244.

Given this standard of review, it cannot be said that this arbitrator based his award on his own personal notions of right and wrong rather than on an interpretation of the contractual phrase "just cause." The key to the arbitrator's award was his reasoning that the plaintiff lacked just cause to terminate McClendon because he was not at fault for his conduct. This notion of fault analysis as part of a just cause determination is not a novel concept based on the personal whims of a single arbitrator; the same concept has been applied by several other arbitrators. See, e.g., Johns-Manville Perlite Corp., 67 L.A. 1255, 1260 (1977); Brown & Williamson Tobacco Corp., 60 L.A. 17, 22 (1972); Silas Mason Co., 59 L.A. 197, 200 (1972); Consolidated Foods Corp., 58 L.A. 1285, 1288 (1972). Similarly, the idea that the right to be discharged only if there is just cause contains certain procedural guarantees which were not met in the instant case is not so far-fetched that it could fairly be said that the arbitrator was not interpreting "just cause" in the contract when he applied this concept. See, e.g., Whirlpool Corp., 58 L.A. 421, 427 (1972). In other words the arbitrator in the instant case did not apply "his own brand of industrial justice," Steelworkers, 363 U.S. at 597, 80 S.Ct. at 1361. While this Court does not necessarily agree with the arbitrator's conceptions of just cause, mere disagreement does not allow an overturning of the award.

Plaintiff contends that the arbitrator failed to give sufficient consideration to safety in the workplace. We disagree. First, he did not ignore workplace safety. Indeed he explicitly considered danger to company employees and property but concluded that these dangers were not significant since the likelihood of a future mental breakdown by McClendon is remote (...