Keebler Co. v. Truck Drivers Local 170

• Decision Date: 05 March 2001
• Docket Number: No. 00-1994,00-1994
• Citation: 247 F.3d 8
• Parties: (1st Cir. 2001) KEEBLER COMPANY, PLAINTIFF, APPELLEE, v. TRUCK DRIVERS, LOCAL 170, DEFENDANT, APPELLANT. Heard
• Court: U.S. Court of Appeals — First Circuit

Page 8

247 F.3d 8 (1st Cir. 2001)

KEEBLER COMPANY, PLAINTIFF, APPELLEE, v. TRUCK DRIVERS, LOCAL 170, DEFENDANT, APPELLANT.

No. 00-1994

United States Court of Appeals For the First Circuit

Heard March 5, 2001

Decided April 23, 2001

ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS [Hon. Rya W. Zobel, U.S. District Judge]

Scott W. Ellis, with whom Richard J. Rafferty, Jr., and Eden Tolins & Rafferty were on brief, for appellant.

Kent D.B. Sinclair, with whom Seyfarth Shaw was on brief, for appellee.

Before Boudin, Circuit Judge, Bownes, Senior Judge, and Lynch, Circuit Judge.

Lynch, Circuit Judge

On April 27, 1999, the Keebler Company discharged an employee, Michael Menchin, for gross insubordination and fighting on the job. Menchin and his union, Truck Drivers, Local 170, took the matter to arbitration, as they were entitled to do under the Union's collective bargaining agreement with the company. The arbitrator found that Keebler did not have just cause to terminate Menchin, but did have just cause to suspend him, and ordered his reinstatement without back pay. Keebler filed an action in federal court to vacate the arbitral award; the Union counterclaimed for enforcement. The district court granted Keebler's motion for judgment on the pleadings, finding that the arbitrator had clearly departed from the language of the collective bargaining agreement. The Union appeals. In light of the high degree of judicial deference owed to arbitral awards, we reverse.

I.

Judicial review of arbitral awards is "extremely narrow and exceedingly deferential." Bull HN Info. Sys. v. Hutson, 229 F.3d 321, 330 (1st Cir. 2000) (quoting Wheelabrator Envirotech Operating Servs. v. Mass. Laborers Dist. Council Local 1144, 88 F.3d 40, 43 (1st Cir. 1996)). As this court recently noted, "disputes that are committed by contract to the arbitral process almost always are won or lost before the arbitrator. Successful court challenges are few and far between." Teamsters Local Union No. 42 v. Supervalu, Inc., 212 F.3d 59, 61 (1st Cir. 2000).

Where a collective bargaining agreement commits the parties to arbitration, the arbitrator's interpretation of the agreement is the one they have "bargained for" and must abide by. E. Assoc. Coal v. United Mineworkers of Am., Dist. 17, 531 U.S. 57, 121 S. Ct. 462, 466 (2000). The job for a reviewing court "ordinarily is limited to determining whether the arbitrator's construction of the collective bargaining agreement is to any extent plausible." Exxon Corp. v. Esso Workers' Union, Inc., 118 F.3d 841, 844 (1st Cir. 1997), abrogated on other grounds by E. Assoc. Coal, supra (citing United Paperworkers Int'l Union v. Misco, Inc., 484 U.S. 29, 36-38 (1987)). Even if a court strongly disagrees with the arbitrator's decision, that is not enough to vacate the arbitral award "as long as the arbitrator is even arguably construing or applying the contract." Misco, 484 U.S. at 38.

The district court found that the arbitrator's decision did not rest on a plausible construction of the collective bargaining agreement, but simply reflected "his own brand of industrial justice." United Steelworkers of Am. v. Enter. Wheel and Car Corp., 363 U.S. 593, 597 (1960). Specifically, the court found that the arbitrator exceeded his contractual authority by: (1) requiring Keebler to meet a "clear and convincing evidence" standard of proof rather than the more usual "preponderance of the evidence" standard; (2) holding that there was no "fighting on the job" because Keebler had not shown by clear and convincing evidence that Menchin started the fight in question; and (3) not explicitly discussing Keebler's claim that Menchin's termination was warranted due to his "gross insubordination" in addition to his fighting on the job.

We review the district court's decision de novo. See Bull HN, 229 F.3d at 330. Because the heart of the legal analysis turns on the language of the pertinent collective bargaining agreement provision, we recount it in full. Article 10 of the agreement provides:

The Employer shall not discharge nor suspend any employee without just cause, but in respect to discharge or suspension shall give at least one (1) warning notice of the same complaint against such employee to the employee, in writing, and a copy of the same to the Union affected, except that no warning notice need be given to an employee before he is discharged if the cause of such discharge is dishonesty, drinking, and/or drunkenness, sale, use, or possession of illegal drugs during working hours, willful destruction of Company property, or recklessness resulting in a serious accident while on duty, gross insubordination, or the carrying of unauthorized passengers, and/or fighting on-the-job.

II.

We discuss the three grounds for the district court's decision seriatim, and in addition discuss a fourth argument made by Keebler that the district court found unnecessary to address.

1. Standard of Proof

The arbitrator required Keebler to establish its case by clear and convincing evidence. Keebler argues that the arbitrator exceeded his authority in doing so because nothing in the text of the collective bargaining agreement provided for a heightened standard of proof, and in the absence of such provision, the customary civil standard -- "preponderance of the evidence" -- should control. The district court agreed, finding no justification for the arbitrator's departure from the customary standard of proof. The court rejected the rationale of the arbitrator, who thought such a departure was warranted because Menchin had been terminated for "criminal conduct," in that the fight in question had led to an assault-and-battery charge against Menchin that was pending at the time.

We share the district court's skepticism about the merits of the arbitrator's rationale. It is unclear why the existence of a criminal proceeding should ratchet up the standard of proof in a related but independent arbitral proceeding about the termination of employment. Even so, such skepticism is not enough to vacate the arbitrator's decision. Arbitration is a creature of contract. Here, the collective bargaining agreement is entirely silent as to the standard of proof to be used by the arbitrator. Where an arbitration agreement is silent, court customs do not stand as binding default rules. See Slaney v. Int'l Amateur Ath. Fed'n, 244 F.3d 580,592 (7th Cir. Mar. 27, 2001) ("[P]arties that have chosen to remedy their disputes through arbitration rather than litigation should not expect the same procedures they would find in the judicial arena."). Rather, the arbitrator is free to set his own rules of procedure so long as he stays within the bounds of fundamental fairness. Compare Gen. Drivers, etc. v. Sears, Roebuck & Co., 535 F.2d 1072, 1076 (8th Cir. 1976) (given national policy favoring arbitration of collective bargaining grievances, arbitrator's procedural rulings are not subject to judicial review), with Ramirez-de-Arellano v. Am. Airlines, 133 F.3d 89, 91 (1st Cir. 1997) (arbitration must meet minimal requirements of fairness). Applying a heightened standard of proof to terminations resulting from potentially criminal conduct, while judicially unorthodox, is not fundamentally unfair. Thus, given the agreement's silence on the issue, the choice of standard was within the arbitrator's discretion. See Gen. Drivers, 535 F.2d at 1075-76 (finding nothing impermissible in arbitrators' choice to use "clear and convincing evidence" standard in reviewing promotion decision); Amalgamated Meatcutters v. Neuhoff Bros. Packers, Inc., 481 F.2d 817, 819-20 (5th Cir. 1973) (finding nothing impermissible in arbitrator's choice to use "beyond a reasonable doubt" standard where employees were terminated for stealing from the company).

2. Fighting on the Job

Menchin was fired after a physical altercation with his supervisor. The Union challenged Menchin's termination on the ground that he had fought in self-defense. The arbitrator was unable to determine how the incident began, but he specifically found that Menchin did not "sucker punch" his supervisor as claimed and could find no other evidence sufficient to prove that Menchin provoked the altercation. Thus, the arbitrator declined to find that Menchin had engaged in "fighting on-the-job" on the ground that Keebler could not prove by clear and convincing evidence that Menchin started the fight.

Keebler argues, and the district court agreed, that the term "fighting on-the-job" unambiguously encompasses any physical fighting at work, whether offensive or defensive, so that the arbitrator's narrower construction of the term was implausible. Keebler's argument is without merit; the arbitrator's construction of the term was patently plausible. Courts themselves are no strangers to the ambiguity latent in facially absolute prohibitions against acts of violence. Crimes of murder, assault, and the like are routinely construed to contain exceptions for acts taken in self-defense or upon provocation. The arbitrator acted well within his bounds in interpreting the contractual prohibition against "fighting on-the-job" in analogous fashion.

3. Gross Insubordination

Before Menchin's physical altercation with his supervisor, the two had an aggravated verbal exchange. Keebler argues, and the district court agreed, that the arbitrator erred by failing to discuss whether Menchin's conduct in the exchange constituted gross insubordination, which the collective bargaining agreement lists as a possible ground for immediate discharge. Consequently, Keebler concludes, the arbitrator's decision cannot be fairly said to draw its essence from the collective bargaining agreement. For support, Keebler cites a Fourth Circuit case for the proposition that "where . . . the arbitrator fails to discuss critical contract terminology, which terminology might reasonably require an opposite result, the award cannot be...