S.D. Warren Company, a Division of Scott Paper Co. v. United Paperworkers' International Union, Afl-Cio, Local 1069

846 F.2d 827, 128 L.R.R.M. (BNA) 2432, 1988 U.S. App. LEXIS 6522, 1988 WL 48628

• Court: Court of Appeals for the First Circuit
• Decided: May 19, 1988
• Docket: 87-1570
• Status: Published

Opinions

BREYER, Circuit Judge.

Appellant, United Paperworkers Union, and appellee, S.D. Warren, have entered into a collective bargaining contract that expressly provides that the “Company reserves the sole right to ... discharge employees for proper cause.” A different agreement between them, embodied in Mill Rule 7, says (in Part A) that “possession, use or sale on Mill property of intoxicants, marijuana, narcotics or other drugs” is “considered cause[] for discharge.” The arbitrator in this case stated that he was persuaded “that the Company ... clearly obtained sufficient evidence that the griev-ants [whom the Union here represents] are guilty of 7A violations.” The arbitrator also “concurs ... that arbitrators generally consider synonymous the language ‘proper cause/ ‘just cause’ or ‘cause.’ ”

Given the contract’s express language and the arbitrator’s findings, we must take the following as given:

I. The contract says the “Company reserves the sole right to ... discharge employees for proper cause.” (Emphasis added.)

II. The contract should be read as if it said, “violation of Mill Rule 7A is considered {proper ] cause for discharge.” (Emphasis added.)

III. The grievants violated Mill Rule 7 A.

This court recently held in a companion case, S.D. Warren Company v. United Paperworkers’ International Union, 845 F.2d 3 (1st Cir.1988) (Warren I) that this very contract gives the Company the “sole right” to decide whether to discharge an employee who violates Rule 7A, and the contract does not permit the arbitrator to take that right from the Company. In so holding, this court distinguished the recent, similar Supreme Court case, United Paper-workers Union, AFL-CIO v. Misco, — U.S. -, 108 S.Ct. 864, 98 L.Ed.2d 286 (1987), and there are critical distinctions between Misco and the cases before us:

(1) As the Supreme Court pointed out, the issue in Misco was not the interpretation of an “exclusive management rights” clause; it was whether the employees had violated Company Rule II. 1 (the anti-drug-possession equivalent of Rule 7A). The specific issue was whether, under the contract, the arbitrator could limit the evidence before him to the evidence that had been before the employer at the time of discharge (i.e., could the arbitrator refuse to take account of drugs found in the employee’s car after his discharge) — a matter on which the contract was silent. Misco, 108 S.Ct. at 371.

(2) The Supreme Court specifically said in Misco that its result might have been different had the issue before it there been the same as the issue before us here, namely, whether the contract gives to the Company the sole right to discharge one who violates a particular Company rule. The Court wrote:

The parties, of course, may limit the discretion of the arbitrator ... and it may be, as the company argues, that under the contract involved here, it was within the unreviewable discretion of management to discharge an employee once a violation of Rule II.1 was found. But the parties stipulated that the issue before the arbitrator was whether there was “just” cause for discharge and the arbitrator ... found that there was not. Misco, 108 S.Ct. at 372 (emphasis added!.

(3)The contract here more cxearly reserves to the Company the power to discharge one who violates the Company rule than did the Misco contract. The contract here uses the words “sole right;” as far as the Supreme Court’s opinion reveals, the Misco contract did not contain similar language. The contract here contains other clauses also suggesting that, in respect to the cases before us, the arbitrator correctly found a violation of Mill Rule 7A and that the contract means what it says. (Mill Rule 8, for example, unlike Mill Rule 7, lists “Causes for discharge after appropriate warning.”)

Given these differences, the arbitrator’s findings, and the difficulty one has imagining how one could use the English language to state more clearly that the Company retains the prerogative to decide whether or not to discharge one who violates Mill Rule 7, this court has concluded that the contract here falls within Misco’s extremely narrow exception permitting a court to find an arbitrator’s interpretation of a contract outside the authority delegated to him by the contract. Misco, 108 S.Ct. at 371. Given this holding in the companion case (Warren I), the arbitrator’s findings of Rule 7A violations, substantiated in the record before us, bind the Union here as well. Our examination of the record here reveals no significant difference between this case and the companion case.

The judgment of the district court is, therefore,

Affirmed.