Midamerican Energy v. Intern. Broth. of Elec.

• Citation: 345 F.3d 616
• Decision Date: 26 September 2003
• Docket Number: No. 02-3919.,No. 02-3826.,02-3826.,02-3919.
• Parties: Midamerican Energy Company, Plaintiff-Appellant/Cross Appellee v. International Brotherhood of Electrical Workers Local 499, Defendant — Appellee/Cross Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (8th Circuit)

345 F.3d 616

Midamerican Energy Company, Plaintiff-Appellant/Cross Appellee v. International Brotherhood of Electrical Workers Local 499, Defendant — Appellee/Cross Appellant.

No. 02-3826.

No. 02-3919.

United States Court of Appeals, Eighth Circuit.

Submitted: June 12, 2003.

Filed: September 26, 2003.

Mark L. Keenan, argued, Atlanta, GA, for appellant/cross-appellee.

MacDonald Smith, argued, Sioux City, IA, for appellee/cross-appellant.

Before BOWMAN, MURPHY, and BYE, Circuit Judges.

BOWMAN, Circuit Judge.

In this labor case, MidAmerican Energy Company challenges the District Court's decision not to set aside an arbitrator's award that required it to reinstate Ronald Turner, a fired employee. The International Brotherhood of Electrical Workers Local 499 (Union) seeks to enforce the award insofar as it requires Turner's reinstatement but seeks to overturn the District Court's decision not to award Turner back pay. We affirm in part and reverse in part.

I.

MidAmerican operates a liquid natural gas storage facility in Waterloo, Iowa, that is capable of holding some ten million gallons of gas and that, at the time of the incident, held several million gallons of gas. On the night of June 1, 2001, Turner was the only employee at the facility and was responsible for the security of the facility and for monitoring the stability of the liquid natural gas on hand. Because he was the only employee on duty and because liquid natural gas is a volatile substance, he was not permitted to leave without being relieved. Shortly after midnight, Turner decided to leave work. He thereupon disabled nearly forty monitoring and safety devices (including fire warning and perimeter security systems) and left the premises in a company vehicle (he left his own car in its parking spot so that his absence would not be discovered). Turner does not dispute the fact that he disabled the safety and security systems and that he took the company vehicle in order to conceal his absence. Approximately a half-hour after Turner left, the plant manager received an anonymous telephone call about a company van being driven about town. The plant manager was unable to contact Turner at work and subsequently discovered Turner's absence when he went to the plant to investigate. Turner eventually returned to work at about three-thirty in the morning and was suspended on the spot and later fired. The parties agree that Turner's actions violated company rules and state and federal regulations and that, as a result of Turner's actions, MidAmerican was obliged to self-report the incident and was exposed to potential fines. Aside from the major dereliction of duty we have just described, Turner's work record was excellent.

After Turner was fired, he invoked the grievance procedures provided for in the collective bargaining agreement that governed his employment, and the Union represented him in the ensuing discussions and arbitration. MidAmerican refused to reinstate Turner because it maintained his termination was "for just cause," as provided for in the collective bargaining agreement. At the time his actions were discovered, during the company's investigation, and at the arbitration hearing, Turner insisted that he left his post because he received a call from his wife, who informed him that his son was missing and had possibly been injured in gang activity. He insisted that he was very worried and left work to search for his son. His wife corroborated this claim at the arbitration hearing. Although the arbitrator did state that Turner's explanation was less than convincing, the arbitrator also stated that:

I note that at no time has [Turner] not taken full responsibility for his actions. As the Local points out, he cooperated at all times with Management during the course of their investigation, and has consistently owned up to what he did, indicating that he knew it to be wrong.

Arbitrator's Award at 12 (Dec. 26, 2001). With that in mind, the arbitrator issued the following award:

[w]hile [Turner's] actions constitute just cause for discipline, his lengthy and otherwise unblemished service with the Utility warrants a reduction in the most severe of workplace penalties (termination). Accordingly, Mr. Turner's discharge shall forthwith be reduced to a suspension without any back pay. Further, should Management determine that he can no longer occupy a position of trust such as he held on June 22nd of this year, they may disqualify him from that job and transfer him to another position in the bargaining unit where more direct supervision is available. Hopefully, [Turner] will have learned from this experience the importance of trust, and the need for adhering to the requirements of his job assignment—whatever they may be. Should that again prove not to be the case, however, then a more severe penalty may well be justified.

Id. at 13.

After the arbitrator issued his award, MidAmerican was notified by an anonymous caller that Turner might have lied about his reasons for leaving work on the night in question. The caller also suggested that MidAmerican contact Carol Carey, whom the caller suggested might have information relating to Turner's whereabouts on the night in question. MidAmerican did contact Carey, who later testified in her deposition that she had been having an extramarital affair with Turner and that he was with her on the night of June 1.

Thereafter, MidAmerican filed the present suit to vacate the arbitrator's award. Both MidAmerican and the Union moved for summary judgment. MidAmerican urged that the award should be set aside under one of two narrow exceptions that permit a reviewing court to set aside arbitration rulings: public policy or fraud. For its part, the Union sought to have the award enforced and also sought back pay for the time between the issuance of the award and Turner's eventual reinstatement. The District Court entered summary judgment denying MidAmerican's motion to set aside the award, denying the Union's motion for back pay, and granting the Union's motion to enforce the decision. MidAmerican appeals this adverse ruling and seeks to vacate the award. The Union cross-appealed seeking back pay for Turner.

II.

We apply "ordinary, not special, standards when reviewing district court decisions upholding arbitration awards." First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 948, 115 S.Ct. 1920, 131 L.Ed.2d 985 (1995). Thus, we review a district court's findings of fact for clear error and conclusions of law de novo. Id. at 947-48, 115 S.Ct. 1920. Our review of the District Court's decision to grant summary judgment is de novo. Gen. Trading Int'l, Inc. v. Wal-Mart Stores, Inc., 320 F.3d 831, 835 (8th Cir.2003). We review the grant of summary judgment de novo even though the enforcement of an arbitration award is involved. Teamsters Local Union No. 42 v. Supervalu, Inc., 212 F.3d 59, 65 (1st Cir.2000).

Judicial review of arbitration rulings is limited. See United Paperworkers Int'l Union v. Misco, Inc., 484 U.S. 29, 37-38, 108 S.Ct. 364, 98 L.Ed.2d 286 (1987). Indeed, we have observed that "the decision of an arbitrator who has not exceeded his contractual authority is almost always upheld." Iowa Elec. Light & Power Co. v. Local Union 204 of the Int'l Bhd. of Elec. Workers, 834 F.2d 1424, 1427 (8th Cir.1987). In this case, MidAmerican argues that two possible grounds exist on which to vacate the arbitrator's award. First, MidAmerican argues that the public policy exception repeatedly recognized by the Supreme Court is applicable to this case. See E. Associated Coal Corp. v. United Mine Workers, 531 U.S. 57, 62-63, 121 S.Ct. 462, 148 L.Ed.2d 354 (2000). Second, MidAmerican contends that the rule permitting a reviewing court to decline to enforce an arbitration award procured by fraud should apply here. See 9 U.S.C. § 10(a)(1) (2000); Goff v. Dakota, Minn. &amp E. R.R. Corp., 276 F.3d 992, 996 (8th Cir.2002). We consider these arguments in turn.

MidAmerican first argues that the public policy exception is applicable here and that our decision in Iowa Electric Light & Power requires us to vacate the arbitration award. The Supreme Court has repeatedly reaffirmed the existence of a public policy exception and has explained that an arbitration award is unenforceable if it contravenes an "explicit public policy." W.R. Grace & Co. v. Local Union 759, Int'l Union of the United Rubber Workers, 461 U.S. 757, 766, 103 S.Ct. 2177, 76 L.Ed.2d 298 (1983). The public policy in question "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, 324 U.S. 49, 66, 65 S.Ct. 442, 89 L.Ed. 744 (1945)). Our inquiry is further focused by the Supreme Court's decision in Eastern Associated Coal Corporation, where the Court explicitly stated that the question in these labor cases is not whether the employee's behavior violated some explicit public policy, but whether his reinstatement violates public policy. E. Associated Coal Corp., 531 U.S. at 62-63, 121 S.Ct. 462. Thus, it is not for us to determine whether Turner's behavior violated public policy; rather, the question is whether the arbitrator's award, with its requirement that Turner be reinstated into his previous position or "transfer[ed] ... to another position in the bargaining unit where more direct supervision is available," Arbitration Award at 13, violates "an explicit, well-defined, and dominant public policy, as ascertained by reference to positive law and not from general considerations of supposed public interests." E. Associated Coal Corp., 531 U.S. at 62-63, 121 S.Ct. 462. Applying the foregoing standard, we agree with the District Court that the arbitrator's award does not violate public policy for two related reasons. First, we are unable to discern the type of explicit safety concerns within the statutes and...