Empire Steel Castings, Inc. v. United Steelworkers

455 F. Supp. 833, 99 L.R.R.M. (BNA) 2728, 1978 U.S. Dist. LEXIS 16570
CourtDistrict Court, E.D. Pennsylvania
DecidedJuly 17, 1978
DocketCiv. A. No. 77-2608
StatusPublished
Cited by2 cases

This text of 455 F. Supp. 833 (Empire Steel Castings, Inc. v. United Steelworkers) is published on Counsel Stack Legal Research, covering District Court, E.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Empire Steel Castings, Inc. v. United Steelworkers, 455 F. Supp. 833, 99 L.R.R.M. (BNA) 2728, 1978 U.S. Dist. LEXIS 16570 (E.D. Pa. 1978).

Opinion

MEMORANDUM AND ORDER

HUYETT, District Judge.

This case, involving a review of the decision of a labor arbitrator, is before us on cross-motions for summary judgment. The employer plaintiff is seeking vacation of an arbitrator’s award in which a discharged employee was reinstated and given full backpay.

The material facts are not contested. On Friday, June 18, 1976, an employee of plaintiff was arrested for possession and sale of marijuana on the plaintiff’s premises during the employee’s work shift. As a result, on June 21, 1976, the plaintiff informed the employee that he had been discharged effective June 18. A discharge notice was issued on June 22, stating that the employee was discharged for “violation Rule # 35: (Possession and selling a controlled substances (sic) to a narcotic agent during working hours and on Company property. Arrested 6/18/78.)” (Plaintiff’s Exhibit 3.) Rule 35 provides for the discharge of an employee who has been convicted of a felony or crime of moral turpitude. The Rules and Regulations of plaintiff expressly provide that “rules and regulations cannot be provided for every possible situation, but those listed in this pamphlet will serve as a guide to the conduct expected from other employees.”

On July 19, 1976, almost a month after receipt of the written notice of discharge, the defendant union filed a grievance protesting the employee’s discharge.1 After the normal grievance procedures required by contract had been exhausted, the matter was submitted to arbitration. On May 3, 1977, the arbitrator ordered the Company to reinstate the employee with full backpay.

The decision of the arbitrator was based upon procedural irregularities in the employer’s actions. First, the arbitrator cited the employer’s failure to follow certain discharge procedures contained in a letter agreement dated July 11,1975.2 Those pro[835]*835cedures, according to the arbitrator’s opinion, required that the employer in all cases suspend an employee prior to discharge and hold a hearing within five days of the notification of suspension with intent to discharge. Second, the arbitrator concluded that it was error to invoke Rule 35, which governs dismissal upon conviction of a crime, in this case involving an employee arrested but not yet convicted.3

The employer contends that the arbitrator’s award should be overturned as lacking fundamental rationality. First, the employer argues that the notice of termination clearly provided that the reason for dismissal was possession and sale of controlled substances during working hours. Since the Rules and Regulations expressly state that they are not exclusive grounds for discipline, the employer may discharge employees for reasons not listed in the manual if they constitute “proper cause” as required in Article XII of the collective bargaining agreement. The fact that Rule 35 was mistakenly cited in the discharge notice did not prejudice or mislead the employee since the reasons for his dismissal were clearly set out as well. Second, the employer contends that the letter agreement imposes no absolute requirement on the company to suspend an employee prior to discharge. Rather, the procedures described in the letter are required only when there is a suspension preceding discharge. Furthermore, the employer argues that if it is held to a strict compliance with the letter agreement, the union should be also. The union, however, failed to file for arbitration within five days of the company’s written notice of discharge, as required by the letter agreement, and instead proceeded with the normal grievance procedures set forth in Article X of the collective bargaining agreement. For these reasons, the employer argues that the labor award be vacated.

The scope of review of a labor arbitration award is limited. The only issue to be decided is whether the labor arbitrator’s award “draws its essence from, the collective bargaining agreement.” United Steelworkers of America v. Enterprise Wheel and Car Corp., 363 U.S. 593, 80 S.Ct. 1358, 4 L.Ed.2d 1424 (1960). This standard has been interpreted by the Court of Appeals for the Third Circuit as requiring affirmance of an award if “the interpretation can in any rational way be derived from the agreement, viewed in the light of its language, its context, and any other indicia of the parties’ intention; only where there is a manifest disregard of the agreement, totally unsupported by principles of contract construction and the law of the shop, may a reviewing court disturb the award.” Ludwig Honold Manufacturing [836]*836Company v. Fletcher, 405 F.2d 1123, 1128 (3d Cir. 1969). Stated another way, an arbitrator’s award may be overturned only if it does not meet the test of “fundamental rationality.” Swift Industries, Inc. v. Botany Industries, 466 F.2d 1125, 1131 (3d Cir. 1972). Accord, Schlesinger v. Building Services Employees International Union, 367 F.Supp. 760, 767 (E.D.Pa.1973). Although the standard of review is stringent, it is clear that the powers of an arbitrator are not unlimited. “[A]n arbitrator is confined to interpretation and application of the collective bargaining agreement; he does not sit to dispense his own brand of industrial justice.” United Steelworkers of America v. Enterprise Wheel & Car Corp., supra 363 U.S. at 597, 80 S.Ct. at 1361.

In the case before us, we believe that the decision of the arbitrator exceeded the bounds of the collective bargaining agreement and lacked fundamental rationality. The arbitrator did not consider the merits of the discharge, but instead based his decision solely upon alleged procedural irregularities. In so doing, we believe that the arbitrator so misconstrued the procedural requirements as to constitute a “manifest disregard” for the collective bargaining agreement.

First we address the arbitrator’s determination that it was a procedural error for the company to invoke Rule 35 as a reason for plaintiff’s discharge. The arbitrator failed to note that the precise reason for the discharge was stated clearly in parentheses following the citation to Rule 35. Therefore, no prejudice due to lack of notice to the employee could have resulted. Thus, assuming that the stated reason constituted “proper cause” as required by Article X of the collective bargaining agreement, the discharge notice was proper in form.

We are frankly confused by the arbitrator’s reasoning on this issue. He did not say that the stated reason for the dismissal, possession and selling of a controlled substance on company premises, is not “proper cause” for dismissal. Indeed, he never considered the issue of “proper cause.” Furthermore, he did not find that the reasons for discharge stated in the company’s “Rules and Regulations” are exclusive; such a reading would be unreasonable in view of the clear statement by the employer that they are not exclusive.

The arbitrator appeared to be saying that merely by mislabelling the stated reason for discharge by citing to Rule 35, the discharge is thereby invalidated. If this is so, then we believe that the arbitrator strayed beyond the essence of the contract he was charged with interpreting.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
455 F. Supp. 833, 99 L.R.R.M. (BNA) 2728, 1978 U.S. Dist. LEXIS 16570, Counsel Stack Legal Research, https://law.counselstack.com/opinion/empire-steel-castings-inc-v-united-steelworkers-paed-1978.