Town of Groton v. United Steel Workers of Am.

• Court: Connecticut Supreme Court
• Writing for the Court: McDonald; Katz; In this opinion NORCOTT; PETERS; MCDONALD; BORDEN
• Citation: Town of Groton v. United Steel Workers of Am., 747 A.2d 1045, 252 Conn. 508 (Conn. 2000)
• Decision Date: 17 March 2000
• Parties: (Conn. 2000) TOWN OF GROTON v. UNITED STEELWORKERS OF AMERICA (SC 16164)

747 A.2d 1045 (Conn. 2000)

TOWN OF GROTON v. UNITED STEELWORKERS OF AMERICA

(SC 16164)

IN THE SUPREME COURT OF CONNECTICUT

Argued November 4, 1999

March 17, 2000

Thomas W. Meiklejohn, for the appellant (defendant). Susan M. Phillips, with whom was Harry E. Calmar, for the appellee (plaintiff).

McDonald, C. J., and Borden, Norcott, Katz and Peters, Js.

Katz, J.

OPINION

The dispositive issue in this appeal is whether an arbitral award reinstating to employment an employee, who had been convicted of embezzlement of his employer's funds based solely upon his plea of nolo contendere, violates public policy. The defendant union, United Steelworkers of America, appeals from the judgment of the trial court in favor of the plaintiff, the town of Groton, vacating an arbitration award that reinstated the employment of David Warren, whom the plaintiff had discharged after he was convicted of embezzlement. That conviction was predicated solely upon his plea of nolo contendere.

The defendant claims that the trial court improperly applied the "public policy" exception to the general rule of deference to arbitration awards. Pursuant to an unrestricted submission,¹ an arbitrator ruled that Warren had been discharged from his employment without just cause, in violation of the governing collective bargaining agreement, and ordered him reinstated with limited back pay. The plaintiff filed an application in the trial court to vacate the award, and the defendant filed a cross application to affirm the award. After determining that the award had been in violation of public policy, the trial court rendered judgment granting the plaintiff's application to vacate and denying the defendant's application to confirm.

The defendant appealed from the judgment of the trial court to the Appellate Court, and we transferred the appeal to this court pursuant to Practice Book §§ 4023, now §§ 65-1, and General Statutes §§ 51-199 (c). Because we agree with the defendant that the trial court acted improperly, we reverse the judgment of the trial court.

The detailed award of the arbitrator discloses the following undisputed facts and procedural history. Warren was employed by the plaintiff as a weighmaster at the town landfill until April 14, 1997, when he was discharged. His duties included selling daily landfill permits to town residents, who would pay him for the permits, and he was responsible for accounting for the permits that he sold and turning the money received over to the plaintiff.

On November 20, 1996, Warren was charged by the Groton police department with two counts of larceny by embezzlement in the sixth degree in violation of General Statutes §§ 53a-119 (1)² and General Statutes §§ 53a-125b,³ and one count of violating a Groton town ordinance. These charges arose out of allegations that Warren had taken money for permits and kept it for himself, rather than turning it in to the plaintiff. On November 22, 1996, the police notified Warren's supervisor of his arrest and, in response, the supervisor transferred Warren temporarily to the highway division of the town and notified him that "[o]nce court action is final, we will review its findings and take any disciplinary action, as appropriate, which may include action up to and including employment termination."

On December 4, 1996, Warren's criminal defense attorney and the state's attorney reached a plea bargain pursuant to which the state would drop one of the larceny counts and the municipal ordinance count, Warren would plead nolo contendere to the remaining larceny count, and the state would recommend a fine of $85 plus $15 in court costs. The arbitrator found that Warren had agreed to this plea bargain because contesting the charges at trial would cost him $5000 in legal fees, representing a significant percentage of his gross annual salary of approximately $35,000, and a larger percentage of his net annual salary. Warren thereupon entered a plea of nolo contendere to the larceny count, upon which the court rendered a judgment of conviction and sentenced him according to the plea bargain.

The next day, Warren's supervisor contacted the clerk of the court and learned of Warren's conviction. Following a lengthy series of meetings among the supervisor, Warren and his union representative, on April 14, 1997, the plaintiff terminated Warren's employment.

The defendant filed a grievance on Warren's behalf challenging the termination. Upon the plaintiff's denial of the grievance, the matter was submitted to arbitration pursuant to the collective bargaining agreement between the plaintiff and the defendant. The collective bargaining agreement provided in relevant part: "All discharges, demotions, and/or suspensions will be for just cause only . . . ." The plaintiff's personnel rules provided for possible disciplinary action for "employee misconduct," two examples of which were stated as: "(a) Conviction of a felony or misdemeanor arising out of the performance of duty or within the scope of employment which may affect the performance of duty"; and "(h) Misappropriation, destruction, theft or conversion of municipal property or equipment."⁴

Because the parties were unable to agree on how to state the issues submitted to the arbitrator, he framed the relevant issue⁵ as follows: "Whether the [plaintiff] had just cause under Article XVIII of the collective bargaining agreement in terminating David Warren for the following reasons: (1) his conviction of a crime arising out of his employment . . . . If not, what shall the remedy be?"⁶ The plaintiff relied exclusively on subsection (a) of §§ 1 of personnel rule 10, namely, the fact of Warren's conviction of larceny in the sixth degree by embezzlement following charges that he had stolen funds that he was obligated to turn in to the plaintiff. The plaintiff, however, did not rely on subsection (h) of §§ 1 of personnel rule 10. In other words, the plaintiff did not seek to establish by independent evidence that Warren had in fact engaged in the larcenous conduct.

The arbitrator determined that, under the circumstances of the case, the fact of the conviction did not establish just cause for Warren's termination. The arbitrator first noted his agreement with the proposition that "[i]f Warren in fact sold daily landfill permits and intentionally pocketed the money instead of turning it over to the [plaintiff], there would be just cause to discharge Warren from his employment. Discharge would be justified even if Warren had done so on only a single occasion. Any theft of [t]own funds for which an employee is responsible constitutes such an egregious breach of trust that summary discharge clearly would be justified. There would be no need or requirement to apply principles of progressive discipline."

The arbitrator noted, however, that the plaintiff had relied, not on any independent proof that Warren had in fact stolen such funds, but solely on the fact of conviction under the circumstances disclosed by the record. Those circumstances were that Warren neither had pleaded guilty to the crime charged nor had he been found guilty after a trial. He had, instead, been convicted after a plea of nolo contendere pursuant to the plea bargain.

The arbitrator then turned to the legal effect of a plea of nolo contendere. In this regard, the arbitrator relied on this court's decision in Lawrence v. Kozlowski, 171 Conn. 705, 711-12 n.4, 372 A.2d 110 (1976), cert. denied, 431 U.S. 969, 97 S. Ct. 2930, 53 L. Ed. 2d 1066 (1977), holding that neither a plea of nolo contendere nor a conviction based upon such a plea can be used in a subsequent proceeding to establish (1) an admission of guilt or (2) a res judicata effect regarding guilt. The arbitrator also noted this court's statements in Lawrence, citing C. McCormick, Evidence (2d Ed. 1972) §§ 265, p. 633, that pleas of nolo contendere may be entered for reasons of convenience and without much regard to guilt and collateral consequences, and are often entered with the expectation that they will not be used against the accused in subsequent proceedings. Lawrence v. Kozlowski, supra, 711-12 n.4. Thus, the arbitrator, quoting from Lawrence, concluded that, although such a plea might be regarded as a tacit admission of guilt, because of their inconclusive and ambiguous nature, the plea and conviction "`should be given no currency beyond the particular case in which it was entered.'" See id.

Applying these principles to the facts before him, the arbitrator noted that Warren had entered his plea with the expectation that it would not be used against him in subsequent proceedings. The arbitrator also noted that Warren had compelling reasons of convenience to enter such a plea, namely, the significant portion of his gross and net annual income that it would have cost him to go to trial, balanced against the modest fine and the advice of his attorney that he was not admitting any guilt. On the basis of these reasons, the arbitrator concluded that Warren's conviction of a crime arising out of his employment did not constitute just cause to terminate his employment under the collective bargaining agreement.

The plaintiff applied to the trial court to vacate the award, and the defendant cross applied to confirm the award. In its application to vacate, the plaintiff claimed that the award violated clear public policy.⁷ The trial court determined that the arbitrator's award violated public policy. Accordingly, the court rendered judgment vacating the award.

The defendant claims that the trial court misapplied the public policy exception to the general rule of deference to an arbitrator's award made pursuant to an unrestricted submission. The defendant argues that, because Warren's conviction was based on a plea of nolo contendere, the conviction: (1) cannot be used to establish that he in fact embezzled funds from the plaintiff; and (2) cannot be given any other legal effect. Thus, the defendant contends...