William J. Burns Intern. Detective Agency, Inc. v. New Jersey Guards Union, Inc.

• Decision Date: 01 December 1960
• Docket Number: No. A--760,A--760
• Citation: 64 N.J.Super. 301,165 A.2d 844
• Parties: WILLIAM J. BURNS INTERNATIONAL DETECTIVE AGENCY, INC., etc., Plaintiff-Respondent, v. NEW JERSEY GUARDS UNION, INC., etc., and William Zwald, Defendants-Appellants.
• Court: New Jersey Superior Court — Appellate Division

Page 301

64 N.J.Super. 301

165 A.2d 844

WILLIAM J. BURNS INTERNATIONAL DETECTIVE AGENCY, INC., etc Plaintiff-Respondent, v. NEW JERSEY GUARDS UNION, INC., etc., and William Zwald Defendants-Appellants.

No. A--760.

Superior Court of New Jersey Appellate Division.

Argued Nov. 14, 1960.

Decided Dec. 1, 1960.

Martin J. Loftus, Newark, for defendants-appellants.

Americus S. Muti, Newark, for plaintiff-respondent.

Before Judges CONFORD, FREUND and KILKENNY.

The opinion of the court was delivered by

FREUND, J.A.D.

This is an appeal by the individual defendant and his collective bargaining representative from a Law Division judgment setting aside that portion of an arbitrator's adjudication which awarded back wages to the employee.

The employee, William Zwald, first entered the service of plaintiff in 1951, assuming the duties of guard. He worked a regular 48-hour week and, except for one minor infraction in 1953, his record was spotless and his performance satisfactory. In due course he was promoted to the position of sergeant.

On March 24, 1958 Zwald was assigned by plaintiff to guard a valuable shipment at the Baltimore Transfer Co., in Jersey City, on the midnight to 8 a.m. shift. Zwald's testimony before the arbitrator was to the effect that he had a severe cold that day, and before reporting for duty he attempted to provide home medication for his condition in the form of a number of drinks of whiskey. He had intended to phone in ill, but because the electric and telephone wires were down, as the result of a crippling storm in the area, he could not inform the company of his illness and therefore reported for work.

At 12:45 a.m., 45 minutes after Zwald's tour of duty had commenced, two F.B.I. agents entered the Jersey City plant. They found Zwald asleep, his feet propped up on a desk. The representatives of the Baltimore Company and a supervisor of the Burns Agency were summoned to the scene. In their presence, Zwald was awakened and was found to be in a state of intoxication.

Zwald was forthwith discharged from plaintiff's employ pursuant to section 5 of the existing collective bargaining agreement between the plaintiff and the defendant union, which provides as follows:

'5. The management of the work, the direction of the working force and the right to discharge an employee for just cause are vested exclusively in the Employer. It is not the intention to hereby encourage the discharge of employees. However, if an employee considers himself unjustly discharged by the Employer, he shall have the right, upon submitting his case in writing to the Union, to have the matter taken up with the Employer for review and final decision by arbitration, provided the Union shall have notified the Employer of its intention to so proceed in writing within one (1) week following the discharge.'

The union, after several weeks of fruitless negotiation, notified the employer of its intention to seek review and final decision by arbitration as to the reasonableness of the discharge. No objection to the tardiness of the union's notification was ever raised by the plaintiff.

The matter came on for arbitration on October 3, 1958, on the sole submitted issue of '* * * whether the Company, Burns International Detective Agency, is justified in discharging William Zwald under the provisions of the Union Contract for the offenses hereinafter enumerated, and if not, to what relief he is entitled.' The employer sought to justify Zwald's discharge on the ground that he had been guilty of five separate infractions of company rules, contained in a 'Handbook For Guards' prepared by the employer and distributed to all employees at the time of their employment. The parties are in strong disagreement as to whether the handbook, which specifies certain violations--including Zwald's--as grounds for dismissal, is to be taken as a part of the collective bargaining agreement. But since the arbitrator's decision assumed Zwald's guilt of all five offenses, and since the employer does not here contest the ruling as to discharge, but only as to the award of back pay, the question is moot. The alleged infractions are: failure to make a routine check on various locations, failure to complete his log, parking his automobile on the premises, falling asleep on the job, and being under the influence of intoxicating liquor during working hours. The union did not deny any of the factual charges but raised as a defense what it termed 'mitigating circumstances,' namely, Zwald's illness and inability to phone in ill, and his assertion that his drinking was for medicinal purposes only. Its contention was that under the circumstances, including Zwald's prior record, discharge was an excessive penalty.

After a full hearing, the arbitrator ruled that in the light of Zwald's advanced age (he was then 59), his satisfactory prior record, and his having earned, in the view of the hearer the right to be excused for 'one bad night,' the employer did not have just cause for discharging him. The arbitrator further decided that a suspension of oen month was a more appropriate penalty, and ordered Zwald fully reinstated as of one month from the date of discharge, with back wages--less any outside employment income received by Zwald--to be paid from the date of formal reinstatement.

Plaintiff immediately commenced an action in the Superior Court, asking that the award and opinion of the arbitrator be vacated. N.J.S. 2A:24--7, N.J.S.A. Defendant union counterclaimed, seeking confirmation of the award, and Zwald, subsequently added as a party defendant, counterclaimed demanding judgment confirming the award and awarding him back wages in the amount allegedly due. The trial judge, after consideration of the facts and pertinent documents, expressed strong disagreement with the arbitrator's 'one bad night' philosophy but did not disturb his order restoring Zwald to his former position. However, the court held that the arbitrator's award of back wages constituted 'a plain and palpable error in law and fact,' and therefore set aside that portion of the order.

The instant appeal focuses solely on the question of the arbitrator's authority to award back wages. Plaintiff does not request that we reconsider the primary determination of the arbitrator that Zwald was not discharged for just cause. It may be noted, however, that we certainly imply no approval of the arbitrator's expression that Zwald was entitled to 'one bad night,' in the light of the nature of the employer's business and the essentiality of the employee's vigilance in the performance of the duties to which he was assigned.

In an effort to sustain the trial court's vacation of the back wages award, in the face of defendant's insistence that the arbitrator in no way abused or exceeded his powers, plaintiff submits the following propositions: (1) the collective bargaining agreement between the union and the employer did not authorize arbitration of the question of an employee's right to back wages; (2) in accordance with the agreement, the issue of whether Zwald was entitled to back pay was not submitted to the arbitrator, and the terms of the particular submission should not be construed as including this question; and (3) the arbitrator exceeded and so imperfectly executed his powers that a mutual, final and definite award upon the subject matter submitted was not made, thus providing statutory justification for vacation of the award. N.J.S. 2A:24--8(d), N.J.S.A.

It is settled law that submission to arbitration is essentially a contract, that the parties thereto are bound by the arbitration only to the extent they have so agreed, and that they have every right to demand that the arbitrator be restricted within the terms of the agreement. Goerke Kirch Co. v. Goerke Kirch Holding Co., 118 N.J.Eq. 1, 4, 176 A. 902 (E. & A. 1934); Public Utility Construction and Gas Appliance Workers of State of New Jersey Local No. 274 v. Public Service Co., 35 N.J.Super. 414, 419, 114 A.2d 443 (App.Div.), certification denied 19 N.J. 333, 116 A.2d 828 (1955); Mitchell v. Alfred Hofmann, Inc., 48 N.J.Super. 396, 405, 137 A.2d 569 (App.Div.), certification denied 26 N.J. 303, 139 A.2d 589 (1958). Plaintiff's initial assertion is, essentially, that the union-management agreement makes no reference to the question of back wages as an arbitrable issue, and that construction of the specific submission framed for the arbitrator must be construed in the light of the entire agreement. The pertinent portion of the agreement, according to plaintiff, is section 5, quoted above.

It is plaintiff's contention that the 'matter' which may be submitted to arbitration is simply and solely the question of whether the employee's discharge is for just cause, and that if the issue of back wages had been intended by the parties to be arbitrable, then the contract would have contained a provision to the effect that where the arbitrator finds an employee to have been wrongfully discharged, the employee shall be reinstated with or without back pay. Defendants respond by reasoning that the arbitrator's commission to render 'final decision' included the imposition of a proper remedy, and that the terms of the submission, '* * * and if not, to what relief he is entitled,' clearly encompassed the award under attack.

The scope of the arbitrator's power must be determined by consideration of the entire collective bargaining agreement. Cf. Botany Mills, Inc. v. Textile Workers Union, 50 N.J.Super. 18, 29, 141 A.2d 107 (App.Div.), certification granted 27 N.J. 320, 142 A.2d 710 (1958), appeal dismissed April 27, 1959. The agreement is to be construed according to the usual methods of contract interpretation; from the language of the parties, a mutual, reasonable, and meaningful design is sought. Kennedy v. Westinghouse Electric Corp., 16 N.J. 280, 287, 108 A.2d 409, 47 A.L.R.2d 1025 (1954); see Casriel v. King, 2 N.J. 45, 50, 65 A.2d 514 (1959)...