Interstate Brands Corp., Butternut Bread Div. v. Chauffeurs, Teamsters, Warehousemen and Helpers Local Union No. 135

• Decision Date: 11 September 1990
• Docket Number: No. 89-3287,89-3287
• Citation: 909 F.2d 885
• Parties: 135 L.R.R.M. (BNA) 2006, 116 Lab.Cas. P 10,271 INTERSTATE BRANDS CORPORATION, BUTTERNUT BREAD DIVISION, Plaintiff-Appellee, v. CHAUFFEURS, TEAMSTERS, WAREHOUSEMEN AND HELPERS LOCAL UNION NO. 135, Defendant-Appellant.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 885

909 F.2d 885

135 L.R.R.M. (BNA) 2006, 116 Lab.Cas. P 10,271

INTERSTATE BRANDS CORPORATION, BUTTERNUT BREAD DIVISION Plaintiff-Appellee, v. CHAUFFEURS, TEAMSTERS, WAREHOUSEMEN AND HELPERS LOCAL UNION NO. 135, Defendant-Appellant.

No. 89-3287.

United States Court of Appeals Sixth Circuit.

Argued Nov. 19, 1989.

Decided July 26, 1990.

Rehearing and Rehearing En Banc

Denied Sept. 11, 1990.

George E. Yund (argued), Frost & Jacobs, Cincinnati, Ohio, for plaintiff-appellee.

Thomas J. Kircher, Cincinnati, Ohio, William R. Groth (argued), Fillenwarth, Dennerline, Groth & Baird, Indianapolis, Ind., for defendant-appellant.

Before KENNEDY, WELLFORD, and SUHRHEINRICH ^*, Circuit Judges.

SUHRHEINRICH, District Judge.

Appellant Teamsters Local Union No. 135 ("Union" or "Local 135") appeals the district court's decision vacating the initial and supplemental awards of a labor arbitrator rendered pursuant to a collective bargaining agreement between the Union and Interstate Brands Corporation ("Interstate" or "Company"). Because we find that the district court erred in vacating the arbitrator's award, we reverse.

Interstate is a manufacturer and distributor of bread and bread-related products. Interstate and Local 135 were parties to a collective bargaining agreement ("Agreement") from August 25, 1982 through July 13, 1985 covering a bargaining unit of driver-salesmen employed out of Interstate's Versailles and Madison, Indiana facilities. Article VI of the Agreement limited the Company's right to discharge or suspend an employee for "just cause" only and required that any suspension or discharge be preceded by one warning notice, in writing, unless the employee was discharged for "dishonesty or drunkenness." Article VII provided that a grievance had to be filed "within fifteen (15) days of its occurrence, or the parties awareness thereof ..." and also included a clause which stated: "In the event that such grievance is not submitted within this fifteen (15) day period, said grievance shall automatically be decided in favor of the defending party." Article VII 3(a). Finally, section 3(f) of Article VII authorized the arbitrator to interpret and apply the Agreement but also cautioned that the arbitrator "shall have no authority to add to, subtract from, or in any way modify the terms of this Agreement...."

Grievant Randy Furst ("Furst" or "Grievant") was a driver/salesman for Interstate who drove a 20-foot step van to deliver Interstate's products to stores, restaurants, and schools. At the time of the incident giving rise to the instant dispute Furst had ten years of seniority with Interstate.

On April 11, 1984, on his day off, Furst and a friend were arrested by the Greater Cincinnati Airport police on a road near the airport. They were driving a non-company vehicle. When an officer with the Kenton Airport Authority approached the stopped van, he found Furst, who was seated in the passenger seat, in a disoriented condition with slurred speech and alcohol on his breath. After noticing a white powdery substance in a plastic bag on the van's motor cover, the officer arrested Furst and his friend. The officer also observed blood and needle marks on Furst's arm and summoned a paramedic. Upon questioning, Furst told the officer that he was attempting to shoot up cocaine when the officer arrived.

Furst was charged under Kentucky law with possession of cocaine, marijuana, and drug paraphernalia. The State of Kentucky agreed not to prosecute Furst and to dismiss all charges against him on the condition that Furst complete a drug rehabilitation program and not commit any criminal act for twelve months. On February 25, 1986, one year after the diversion agreement was entered by the Kentucky court, Furst successfully completed all the conditions of the diversion agreement and all criminal charges against him were dismissed.

On April 13, 1984, Interstate's General Manager was informed that Furst had been arrested on drug charges. On April 19, 1984, representatives of the company confronted Furst with the unconfirmed reports. Furst denied the rumors. Interstate received copies of the police report on April 20, 1984, and once again confronted Furst, who denied the report's account of the incident. The Company suspended Furst on April 21, 1984, stating orally that his suspension would last "until this thing was dismissed proving his innocence." Furst filed the grievance protesting his indefinite suspension on June 8, 1984, forty-eight days after he was suspended. Interstate denied the grievance as untimely.

The parties were unable to settle Furst's grievance and selected an arbitrator, Arthur R. Porter, to hear and decide 1) whether the grievance was arbitrable; and 2) whether there was just cause for the suspension of Furst. On May 25, 1985, the arbitrator issued an award sustaining the grievance and ordering Interstate to end the suspension and to reinstate the grievant. He also granted appropriate back pay and benefits.

In that award the arbitrator found that Furst did use cocaine and that the Company was warranted in its initial suspension of Furst pending a more complete investigation of the circumstances leading to Furst's arrest. The arbitrator also found that Furst and Local 135 had lost their right to protest the initial suspension by failing to file a grievance within fifteen days of the suspension. Notwithstanding, he further found that the suspension was a "continuing act" which could be grieved at any time. In setting aside the suspension the arbitrator stated that the Company's decision had placed Furst in a difficult position since his reinstatement was made contingent upon an impossible condition; namely, a judicial disposition of his innocence. He also noted that Interstate had no guidelines or policies to judge off-the-premises, off-hour activities by a driver/salesman, and stated that the policies established for in-plant employees were "contradictory and confusing." In this regard, he pointed out that Interstate's representative had testified that an employee convicted of "driving under the influence" would not have been penalized as long as the illegal act occurred outside normal work hours and off the premises.

Interstate subsequently filed suit in federal district court to vacate the arbitrator's award. The Union counterclaimed for enforcement. Following the filing of cross-motions for summary judgment, the district court denied both motions and remanded the case to the Arbitrator to render a final decision on back pay. On August 20, 1988, the arbitrator found a six-month suspension to be appropriate and ordered back pay from October 11, 1984, minus any interim earnings, unemployment compensation received, and compensation which Furst would not have been able to earn during a twenty-two day period in 1987 when his driver's license was temporarily suspended as a result of a conviction for driving while under the influence of alcohol. ¹

On March 9, 1989, the district court vacated the arbitration award and supplemental award on the grounds that the grievance was not timely filed and that the arbitrator had exceeded his authority in the interpretation of the labor contract. Further, in obiter dicta, the district court stated that Furst's reinstatement violated a well-defined public policy against permitting habitual users of mind-altering illegal drugs from operating motor vehicles.

The Union now appeals from this decision, contending that the district court, in vacating the arbitration awards, exceeded its authority by substituting its judgment for that of the arbitrator on the issue of whether the grievance was timely filed, and erred in its determination that the award requiring the reinstatement of the grievant violated public policy.

I.

It is a well-established principle that courts play only a limited role in reviewing labor arbitration awards. United Paperworkers Int'l Union v. Misco, Inc., 484 U.S. 29, 36, 108 S.Ct. 364, 369-70, 98 L.Ed.2d 286 (1987). In Misco, the Supreme Court reaffirmed its longstanding commitment to the highly deferential standard of review of arbitrator's decisions, a principle which has its genesis in the Steelworkers Trilogy. ² In those landmark labor cases, the Supreme Court stated that "the federal policy of settling labor disputes by arbitration would be undermined if the courts had the final say on the merits of the awards." United Steelworkers v. Enterprise Wheel & Car Corp., 363 U.S. 593, 598, 80 S.Ct. 1358, 1361, 4 L.Ed.2d 1424 (1960). Under this line of authority a court may not reconsider the merits of an award even when the parties allege that the award rests on errors of fact or on misinterpretation of the Contract. Misco, 484 U.S. at 36, 108 S.Ct. at 369-70. As long as the arbitrator's award " 'draws its essence from the collective bargaining agreement,' and is not merely the arbitrator's 'own brand of industrial justice,' " the Court must enforce the award. Id. (quoting Enterprise Wheel, 363 U.S. at 597, 80 S.Ct. at 1361).

In Misco, supra, the Supreme Court defined the scope of judicial review of arbitration awards as follows:

Because the parties have contracted to have disputes settled by an arbitrator chosen by them rather than by a judge, it is the arbitrator's view of the facts and of the meaning of the contract that they have agreed to accept. Courts thus do not sit to hear claims of factual or legal error by an arbitrator as an appellate court does in reviewing decisions of lower courts. To resolve disputes about the application of a collective-bargaining agreement, an arbitrator must find facts and a court may not reject those findings simply because it disagrees with them. The same is true of the arbitrator's interpretation of the contract. The arbitrator may not ignore the plain language of the contract; but the parties having authorized the arbitrator to give meaning to the language of the agreement, a Court should not reject an...