U.S. Postal Service v. American Postal Workers Union, AFL-CIO, AFL-CI

• Citation: 736 F.2d 822
• Decision Date: 19 June 1984
• Docket Number: D,No. 84-1094,AFL-CI,84-1094
• Parties: 116 L.R.R.M. (BNA) 2870, 101 Lab.Cas. P 11,168 UNITED STATES POSTAL SERVICE, Plaintiff, Appellee, v. AMERICAN POSTAL WORKERS UNION,efendant, Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (1st Circuit)

Page 822

736 F.2d 822

116 L.R.R.M. (BNA) 2870, 101 Lab.Cas. P 11,168

UNITED STATES POSTAL SERVICE, Plaintiff, Appellee, v. AMERICAN POSTAL WORKERS UNION, AFL-CIO, Defendant, Appellant.

No. 84-1094.

United States Court of Appeals First Circuit.

Argued May 9, 1984.

Decided June 19, 1984.

Joel C. Martin, Portland, Me., with whom Susan E. Peck, Arthur M. Luby, Petruccelli, Cohen, Erler & Cox, Portland, Me., and O'Donnell & Schwartz, Washington, D.C., were on brief, for defendant, appellant.

Susan R. Klavens, Atty., Office of Labor Law, United States Postal Service, with whom Richard S. Cohen, U.S. Atty., F. Mark Terison, Asst. U.S. Atty., Portland, Me., and D. Richard Froelke, Asst. General Counsel, Washington, D.C., were on brief, for plaintiff, appellee.

Before CAMPBELL, Chief Judge, BREYER, Circuit Judge, and PETTINE, ^* Senior District Judge.

PETTINE, Senior District Judge.

This case is an appeal of a district court ruling which overturned a labor arbitration award. We affirm the district court.

Donald Cote was a window clerk at the post office in Sanford, Maine. His duties included selling money orders, cashing money orders, and other matters involving the handling of money. An investigation of financial discrepancies at the Sanford post office revealed that $4,325.00 worth of postal money orders had been issued by Cote between November 1981 and January 1982 without prepayment. Cote signed a confession, was indicted, and subsequently pled guilty to a charge of embezzling postal funds in violation of 18 U.S.C. Sec. 500. Cote received a one year suspended sentence and was put on probation for two years, in addition to being ordered to make full restitution to the Postal Service.

During this same period, the Postal Service discharged Cote. His Notice of Removal laid three charges against him, all of which stemmed from his embezzlement activities. As he was a member of a bargaining unit represented by the appellant Union, the Union took the issue of Cote's discharge to binding arbitration pursuant to the National Agreement between the Postal Service and the Union. A hearing was held before an arbitrator on July 27, 1982, to determine whether the Postal Service had "just cause" to fire Cote.

One month later, the arbitrator rendered a decision which ordered that Cote be reinstated without back pay. The arbitrator focussed on Cote's intent in taking the money and found that he did not intend to keep it, but rather to repay it when he could. The arbitrator relied on evidence of past repayments by Cote, Cote's retention of records of money orders issued, unusual financial pressures on Cote, and Cote's record of seven years employment without disciplinary problems. Therefore, the arbitrator ruled that

The Postal Service did not have just cause for the removal of Mr. Cote, however, it did have just cause to suspend Mr. Cote without back pay and to transfer Mr. Cote away from a window clerk position to another position where similar action as [that] involved in this case could not take place.

The Postal Service then filed this action to vacate the arbitrator's award. The Postal Service challenged the award on two grounds: first, that the arbitrator failed to give proper collateral estoppel effect to Cote's conviction in that the arbitrator found that Cote intended to repay the money, and, second, that ordering the reinstatement of Cote was contrary to public policy. The parties filed cross-motions for summary judgment, and the matter went before a magistrate.

The magistrate rejected the Postal Service's first argument. He found that the arbitrator had considered the 18 U.S.C. Sec. 500 conviction but that the broad language of the statute did not mandate permanent intent to keep the funds as an element of the crime. On its second argument, the Postal Service fared better and the magistrate agreed that the reinstatement award violated "an important public policy against embezzlement of Government money." He therefore recommended that summary judgment be entered in favor of the Postal Service. The district judge accepted the recommendation and entered judgment for the Postal Service. The Union appealed.

The heart of the Union's argument is that although there may be a public policy against embezzling Postal Service funds, there is no public policy against the Postal Service employing convicted embezzlers. You have to have something more--a direct legal prohibition. And, in support the Union compares the instant case with American Postal Workers Union v. United States Postal Service, 682 F.2d 1280 (9th Cir.1982), cert. denied, --- U.S. ----, 103 S.Ct. 1183, 75 L.Ed.2d 431 (1983) (arbitrator's award reinstating Postal Service employee who had participated in strike vacated because of statute prohibiting employment of individuals who had participated in strikes) and with General Teamsters Local Union 249 v. Consolidated Freightways, 464 F.Supp. 346 (W.D.Pa.1979) (arbitrator's award upholding employer discharges of truck drivers who refused to drive trucks lacking mud flaps, despite state law requiring mud flaps, vacated because award compelled drivers to violate state law). Although these cases exhibit a particularly precise fit between the facts of the case and the public policy vindicated, an examination of the case law reveals that such a close fit is not required.

In Amalgamated Meat Cutters v. Great Western Food Co., 712 F.2d 122, reh. and reh. en banc denied, id. (5th Cir.1983), a case cited with apparent approval in the Union's brief, an arbitrator ordered an employer to reinstate a truck driver who had admitted to drinking prior to overturning an eighteen-wheel rig he was driving. The arbitrator stated that he ordered the driver's reinstatement because his employer had failed to disprove the driver's assertion that a steering mechanism failure had caused the accident; however, the arbitrator denied the driver back pay because the driver admitted to drinking and paying too much attention to his citizens band radio while driving. The Fifth Circuit vacated the award on the grounds of the public policy against drinking and driving. Id. at 124-25. Although the court cited cases which were directly on point, the opinion makes it clear that the court relied primarily on the general policy against drinking and driving and its special importance when applied to professional drivers. As that court stated...