Mistletoe Exp. Service v. Motor Expressmen's Union

• Decision Date: 09 December 1977
• Docket Number: No. 76-1596,76-1596
• Citation: 566 F.2d 692
• Parties: 96 L.R.R.M. (BNA) 3320, 83 Lab.Cas. P 10,303 MISTLETOE EXPRESS SERVICE, an Oklahoma Corporation, Plaintiff-Appellee, v. MOTOR EXPRESSMEN'S UNION, a Labor Organization, and Roy Martin, Defendants-Appellants.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 692

566 F.2d 692

96 L.R.R.M. (BNA) 3320, 83 Lab.Cas. P 10,303

MISTLETOE EXPRESS SERVICE, an Oklahoma Corporation, Plaintiff-Appellee, v. MOTOR EXPRESSMEN'S UNION, a Labor Organization, and Roy

Martin, Defendants-Appellants.

No. 76-1596.

United States Court of Appeals, Tenth Circuit.

Submitted Sept. 26, 1977.

Decided Dec. 9, 1977.

Clark Nichols, Edmond, Okl. and Charles W. Ellis, Oklahoma City, Okl., submitted on the brief for plaintiff-appellee.

Jerry D. Sokolosky, Oklahoma City, Okl., submitted on the briefs for defendants-appellants.

Before McWILLIAMS, BREITENSTEIN and BARRETT, Circuit Judges.

BREITENSTEIN, Circuit Judge.

This controversy concerns the validity of an arbitration award. The employer sued to set aside the award. The Union and the employee counterclaimed for enforcement. Federal jurisdiction is based on 29 U.S.C. § 185(a). The district court held the award invalid and denied enforcement. We affirm.

Plaintiff-appellee, Mistletoe Express Service, had a collective bargaining contract with defendant-appellant Motor Expressmen's Union. Defendant-appellant Martin was an employee of Mistletoe and a member of Union. He worked as a driver-salesman and was required to collect from the consignees of C.O.D. shipments. Section 11 of the contract between Mistletoe and Union provided "Employees may be discharged for just cause, among which just causes are the following:

(G) Failure to settle bills and funds collected for the company within twenty-four (24) hours."

A company rule required that a driver accept only cash or cashier's checks in payment of C.O.D. deliveries. On January 16, 1975, Martin delivered a C.O.D. shipment to a consignee and accepted a personal check. On January 23, Martin returned the check to the consignee, collected in cash, and settled with Mistletoe that evening. Mistletoe terminated Martin's employment for failing to settle within 24 hours and accepting a personal check for a C.O.D. shipment. After receipt of the notice of termination, Martin threatened the Mistletoe cashier who handled C.O.D. transactions.

As provided by the contract, the Union and Martin followed the grievance procedures which culminated in arbitration. After an evidentiary hearing, the arbitrator held:

"It is the opinion of the arbitrator that the acts of the grievant justify discipline and the company did show 'just cause' to impose some discipline. At the hearing exhibits were introduced to show that the grievant had received some letters of discipline, however, the theory of progressive discipline was not pursued during the handling of the grievance. It is the opinion of the arbitrator that just cause was not shown by the company for discharge and that the supreme penalty of termination should be reduced to a suspension."

In the district court, the issues were tried on a stipulation of facts. The court gave consideration only to the failure to settle within 24 hours as a basis for discharge. The court held that the arbitrator exceeded his authority by reading the theory of progressive discipline into the Union contract and by changing the penalty from discharge to suspension.

The narrow scope of judicial review of arbitration awards was outlined by the Supreme Court in the Steelworkers trilogy, Steelworkers v. American Mfg. Co., 363 U.S. 564, 80 S.Ct. 1343, 4 L.Ed.2d 1403, Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574, 80 S.Ct. 1347, 4 L.Ed.2d 1409, and Steelworkers v. Enterprise Wheel & Car Corp., 363 U.S. 593, 80 S.Ct. 1358, 4 L.Ed.2d 1424. The courts may not review the merits of a grievance or an award. 363 U.S. at 568, 80 S.Ct. 1343. An arbitration award will be enforced if "it draws its essence from the collective bargaining agreement." 363 U.S. at 597, 80 S.Ct. at 1361. See also Campo Machining Co. v. Local Lodge No. 1926, etc., 10 Cir., 536 F.2d 330, 332-333. In determining whether an award draws its essence from the Union contract, the courts have applied various tests. An arbitrator's award must be upheld unless it is contrary to the express language of the contract, Amanda Bent Bolt Co. v. U. A. W., 6 Cir., 451 F.2d 1277, 1280; and Truck Drivers & Helpers Union Local 784 v. Ulry-Talbert Company, 8 Cir., 330 F.2d 562, 566, or unless it is "so unfounded in reason and fact, so unconnected with the wording and purpose of the * * * agreement as to 'manifest an infidelity to the obligation of the arbitrator.' " Brotherhood of Railroad Trainmen v. Central of Georgia Railway Co., 5 Cir., 415 F.2d 403, 415, cert. denied, 396 U.S. 1008, 90 S.Ct. 564, 24 L.Ed.2d 500. The award does not draw its essence from the agreement if "viewed in the light of its language, its context, and any other indicia of the parties' intention," it is without rational support. Ludwig Honold Mfg. Co. v. Fletcher, 3 Cir., 405 F.2d 1123, 1128.

The employer had much difficulty with C.O.D. collections because of a substantial number of stop-payment and insufficient fund checks. The employer and the Union negotiated a new labor contract which became effective on November 9, 1974. It contained § 11(G), a provision not appearing in previous labor contracts.

It is not disputed that Martin delivered the C.O.D. shipment on January 16 and did not settle with his employer until January 23. The arbitrator found that this conduct justified discipline but was not "just cause" for discharge.

The Union and the employee assert that the labor contract is ambiguous and that the interpretation of that ambiguity is within the authority of the arbitrator whose decision is binding and not subject to judicial review. The ambiguity is said to arise from the provision of § 11(G) that...