Way Bakery v. Truck Drivers L164

• Court: Court of Appeals for the Sixth Circuit
• Decided: April 7, 2004
• Docket: 02-2051
• Status: Published

Opinion

RECOMMENDED FOR FULL-TEXT PUBLICATION Pursuant to Sixth Circuit Rule 206 2 Way Bakery v. Truck No. 02-2051 ELECTRONIC CITATION: 2004 FED App. 0099P (6th Cir.) Drivers Local 164, et al. File Name: 04a0099p.06 _________________ UNITED STATES COURT OF APPEALS COUNSEL FOR THE SIXTH CIRCUIT ARGUED: Daniel G. Cohen, PILCHAK, COHEN & TICE, _________________ Farmington Hills, Michigan, for Appellant. Andrea F. Hoeschen, PREVIANT, GOLDBERG, UELMAN, GRATZ, WAY BAKERY , X MILLER & BRUEGGEMAN, Milwaukee, Wisconsin, for Plaintiff-Appellant, - Appellees. ON BRIEF: Daniel G. Cohen, Rhonda H. - Sanko, PILCHAK, COHEN & TICE, Farmington Hills, - No. 02-2051 Michigan, for Appellant. Andrea F. Hoeschen, PREVIANT, v. - GOLDBERG, UELMAN, GRATZ, MILLER & > BRUEGGEMAN, Milwaukee, Wisconsin, for Appellees. , TRUCK DRIVERS LOCAL NO . - 164 and JAMES ZENTGRAF, _________________ - Defendants-Appellees. - OPINION - _________________ N Appeal from the United States District Court RONALD LEE GILMAN, Circuit Judge. This case arises for the Eastern District of Michigan at Detroit. out of an arbitrator’s reinstatement of a white employee who No. 01-73392—Avern Cohn, District Judge. was terminated for making a racially offensive remark to a black coworker. The employer brought suit to vacate the Argued: March 18, 2004 arbitrator’s award. After the district court ruled in favor of the employee and Truck Drivers Local No. 164 (the Union), Decided and Filed: April 7, 2004 the employer appealed. For the reasons set forth below, we AFFIRM the judgment of the district court. Before: COLE and GILMAN, Circuit Judges; SCHWARZER, Senior District Judge.* I. BACKGROUND James Zentgraf worked for Way Bakery and is a member of the Union. In February of 2000, Zentgraf, a white employee, told Diana Thomas, an African-American coworker, to “relax Sambo.” Despite his repeated attempts to apologize to Thomas shortly thereafter, Zentgraf was suspended for making the remark. He then filed a grievance in protest of the * discipline. After denying the grievance, Way Bakery The Honorable William W Schwarzer, Senior United States District Judge for the Northern District of California, sitting by designation.

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terminated Zentgraf because his “conduct clearly violated the standards of judicial review in all of American Company’s Equal Employment Opportunity policy.” jurisprudence.” Id. at 515. (quotation marks and citation omitted). Disagreement with an arbitrator’s factual findings Zentgraf’s grievance against Way Bakery was subsequently does not constitute grounds for a court’s rejection of those submitted to arbitration. The arbitrator found for Zentgraf, findings. Id. reducing his discharge to six months unpaid suspension and reinstating him at Way Bakery. But the arbitrator placed We must enforce the arbitrator’s agreement as long as the Zentgraf on “probation for a period of five years during which award “draws its essence from the collective bargaining a repeat of this type of conduct, that is, racial harassment or agreement” and is not merely the arbitrator's “own brand of racially abusive language, would be the basis for immediate industrial justice.” Id. (quoting United Steelworkers v. discharge.” Enterprise Wheel & Car Corp., 363 U.S. 593, 597 (1960) (quotation marks omitted)). “[I]f an arbitrator is even Way Bakery brought suit to vacate the arbitration award arguably construing or applying the contract and acting within pursuant to the Federal Arbitration Act, 9 U.S.C. §§ 1-16, the the scope of his authority, the fact that a court is convinced he Labor Management Relations Act of 1947, 29 U.S.C. § 185, committed serious error does not suffice to overturn his and Michigan state law. The complaint alleged that the decision.” Major League Baseball Players Ass’n v. Garvey, arbitrator’s award violated public policy, exceeded the scope 532 U.S. 504, 509 (2001) (per curiam) (quotation marks and of the arbitrator’s authority, and did not draw its essence from citation omitted). the Collective Bargaining Agreement (CBA). Both parties filed motions for summary judgment. Way Bakery sought, B. Essence of the collective bargaining agreement among other things, to vacate the arbitration award. The Union and Zentgraf, on the other hand, sought summary Way Bakery argues that the arbitration award fails to draw judgment. After the district court heard arguments on the its essence from the CBA because (1) the arbitrator exceeded respective motions, it granted the Union’s and Zentgraf’s the authority expressly granted to him by the CBA, and motion for summary judgment in July of 2002. This timely (2) the arbitrator based the award upon general considerations appeal followed. of fairness. To determine whether an arbitration award fails to draw its essence from the CBA, this court has developed a II. ANALYSIS four-pronged test: “[A]n award so fails when: (1) it conflicts with express terms of the agreement; (2) it imposes additional A. Arbitration awards requirements not expressly provided for in the agreement; (3) it is not rationally supported by or derived from the Although we review the district court’s grant of summary agreement; or (4) it is based on general considerations of judgment to the Union and Zentgraf de novo, “courts play fairness and equity instead of the exact terms of the only a limited role when asked to review the decision of an agreement.” Int’l Union v. Dana Corp., 278 F.3d 548, 554 arbitrator.” Tennessee Valley Auth. v. Tennessee Valley (6th Cir. 2002) (quotation marks and citation omitted). Trades & Labor Council, 184 F.3d 510, 514 (6th Cir. 1999) (per curiam) (quotation marks and citation omitted). A In a detailed 35-page opinion, the arbitrator thoroughly court’s review of an arbitration award “is one of the narrowest reviewed and analyzed the CBA and Way Bakery’s Equal No. 02-2051 Way Bakery v. Truck 5 6 Way Bakery v. Truck No. 02-2051 Drivers Local 164, et al. Drivers Local 164, et al.

Employment Opportunity (EEO) policy. The arbitrator found Agreement. The arbitrator’s decision shall be final and that although the CBA authorized Way Bakery to adopt its binding upon both parties. EEO policy, the policy was not a part of the CBA: Way Bakery argues that the arbitrator exceeded his Section 11 gives the Employer the right to adopt rules ‘in authority because the EEO policy allowed Way Bakery to addition to those’ attached to the Agreement. Thus, the terminate Zentgraf for a policy violation. The plain language progressive discipline in the contract covers those rules of the EEO policy, however, does not preclude discipline less expressly spelled out, but does not by inference apply to severe than termination. Interpreting similar language, this other rules which the Employer may promulgate. court has held that arbitrators are within their authority to review and modify penalties imposed by employers. Bruce He then considered the question of Hardwood Floors v. S. Council of Indus. Workers, 8 F.3d 1104 (6th Cir. 1993). In Bruce, the employer discharged a what principles govern discipline under the Equal worker for sleeping on the job. The employee’s resulting Employment Opportunity policy. The policy itself says grievance was submitted to arbitration, and the arbitrator that discipline may be ‘up to and including discharge.’ modified the disciplinary action by reinstating her with back This implies a range of discipline. Section 11 permits pay. On appeal from the district court’s decision to vacate the the adoption of ‘reasonable rules and regulations.’ We arbitrator’s award, this court reversed, reasoning that the are not without guidelines. award did not conflict with the CBA. Id. at 1108-09. The arbitrator finally determined that although the EEO The relevant sections of the CBA in Bruce provided that the policy was not subsumed by the CBA, the same disciplinary employer could discharge an employee for committing an principles should apply. He concluded that offense enumerated in the CBA, and allowed the company to discipline and discharge employees for “just cause.” Id. at [t]he contract rules, taken as a whole, contemplate 1108. Nevertheless, this court held that the arbitrator’s award progressive discipline in a host of situations. The Equal was rationally derived from the terms of the CBA, did not Employment Opportunity policy may be enforced by conflict with the CBA’s express terms, and did not add discipline ‘up to’ discharge. Clearly, there may be requirements not expressly provided in the CBA. Id.; see also discipline less than discharge. Based on these elements, Eberhard Foods, Inc. v. Handy & Local 406, 868 F.2d 890, the undersigned finds that progressive discipline should 892 (6th Cir. 1989) (reinstating an arbitrator’s award that apply. modified an employer’s disciplinary action, reasoning that “nothing . . . in the CBA or work rules . . . expressly limits or Article 17 of the CBA prescribes the grievance procedure, removes from the arbitrator the authority to review the which limits an arbitrator’s authority as follows: remedy in this case”). The power of the arbitrator shall be limited to the written The arbitrator in the present case had the authority to contract and/or he shall have no power to modify, review Way Bakery’s termination of Zentgraf, and his award change, add to or subtract from, the terms of this does not conflict with the CBA or add requirements not present in the CBA; rather, the award is, as discussed above, No. 02-2051 Way Bakery v. Truck 7 8 Way Bakery v. Truck No. 02-2051 Drivers Local 164, et al. Drivers Local 164, et al.

derived from and based upon the CBA. As the Union and Newsday, Inc. v. Long Island Typographical Union, No. 915, Zentgraf note, the parties “bargained for an arbitrator’s 915 F.2d 840 (2d Cir. 1990). The employer in Stroehmann interpretation of the Agreement, and they received the product discharged an employee for sexual harassment. An arbitrator of that bargain.” subsequently reinstated the employee without determining whether the sexual harassment charge was true. 969 F.2d at C. Public policy considerations 1437-38. The Third Circuit held that the district court properly vacated the arbitrator’s award as against public Way Bakery next argues that the arbitrator’s award should policy, reasoning that the arbitrator’s award be vacated because Zentgraf’s reinstatement violates public policy, which supports an employer’s efforts to comply with would allow a person who may have committed sexual Title VII and to “purge the workplace of harassment.” This harassment to continue in the workplace without a court has held that when an arbitration award is challenged on determination of whether sexual harassment occurred. public policy grounds, “the court must determine whether the Certainly, it does not discourage sexual harassment. arbitrator’s interpretation of the contract jeopardizes a well- Instead, it undermines the employer’s ability to fulfill its defined and dominant public policy, taking the facts as found obligation to prevent and sanction sexual harassment in by the arbitrator.” MidMichigan Reg’l Med. Ctr.-Clare v. the workplace. Prof’l Employees Div. of Local 79, 183 F.3d 497, 504 (6th Cir. 1999) (quotation marks and citation omitted). The Id. at 1442. relevant public policy is ascertained “by reference to the laws and legal precedents and not from general considerations of Similarly in Newsday, the employer discharged an supposed public interests.” Id. (quoting W.R. Grace & Co. v. employee for sexually harassing a coworker. An arbitrator’s Local Union 759, 461 U.S. 757, 766 (1983)) (quotation marks award reinstated the employee. 915 F.2d at 841. The Second omitted). Circuit held that the reinstatement award “completely disregarded the public policy against sexual harassment in the Courts do not possess a “broad power to set aside an work place,” and reasoned further that the award condoned arbitration award as against public policy.” Tennessee Valley the employee’s misconduct, thus perpetuating a hostile work Auth. v. Tennessee Valley Trades & Labor Council, 184 F.3d environment. Id. at 845. Way Bakery argues that these cases 510, 520 (6th Cir. 1999) (per curiam). The issue is “not show that “reinstatement undermined the employers’ duty to whether grievant’s conduct for which he was disciplined protect their employees from further harassment.” violated some public policy or law, but rather whether the award requiring the reinstatement of a grievance, i.e., the Although we have no particular disagreement with Way contract as interpreted, violated some explicit public policy.” Bakery’s characterization of Stroehmann and Newsday, the Id. (quotation marks and citations omitted). present case is clearly distiguishable. The arbitrator in Stroehmann reinstated the offending employee without In support of its argument that the arbitrator’s award making a determination of whether sexual harassment had reinstating Zentgraf violates public policy, Way Bakery even occurred. In Newsday, the discharged employee was primarily relies upon Stroehmann Bakeries, Inc. v. Local 776, reinstated despite having sexually harassed female coworkers Int’l Bhd. of Teamsters, 969 F.2d 1436 (3d Cir. 1992), and No. 02-2051 Way Bakery v. Truck 9 10 Way Bakery v. Truck No. 02-2051 Drivers Local 164, et al. Drivers Local 164, et al.

on a number of occasions and having previously been wages; it requires him to pay the arbitration costs of both disciplined for his misconduct. sides; it insists upon further substance-abuse treatment and testing; and it makes clear (by requiring Smith to Zentgraf, in contrast, did not have a prior disciplinary provide a signed letter of resignation) that one more record for purposes of progressive discipline. Furthermore, failed test means discharge. the arbitrator’s award in this case did not condone or fail to discourage hostile behavior in the workplace. Recognizing Id. at 65-66 (citation omitted). that “a serious offense ha[d] occurred,” the arbitrator’s award subjected Zentgraf to a six-month loss of pay and placed him Similarly, the arbitration award in the present case did not on probation for five years “during which a repeat of this type condone Zentgraf’s behavior, but rather punished him by of conduct, that is, racial harassment or racially abusive depriving him of his salary for six months and placing him on language, would be the basis for immediate discharge.” probation for five years. Way Bakery cites no case, nor have Zentgraf, moreover, had to “acknowledge this in writing.” we found any, that establishes a public policy of flatly The arbitrator concluded that Zentgraf “must demonstrate that prohibiting the reinstatement of a worker who makes a he understands that he can remain in the work site only if he racially offensive remark. We therefore hold that the understands what he has done and complies with the arbitrator’s award in this case did not violate public policy. Employer’s policies in this area.” III. CONCLUSION As framed by the Supreme Court, “the question to be answered is not whether the [employee’s conduct] itself For all of the reasons set forth above, we AFFIRM the violates public policy, but whether the agreement to reinstate judgment of the district court. him does so.” Eastern Associated Coal Corp. v. United Mine Workers, Dist. 17, 531 U.S. 57, 62-63 (2000). In Eastern, the Supreme Court held that public policy considerations did not require courts to refuse to enforce an arbitrator’s award reinstating a truck driver who twice tested positive for marijuana use. Id. at 59. The Court reasoned that the arbitrator’s award was not contrary to the relevant public policies, including policies “against drug use by employees in safety-sensitive transportation positions” and policies in favor of drug testing, id. at 65, holding as follows: The award before us is not contrary to these several policies, taken together. The award does not condone Smith’s conduct or ignore the risk to public safety that drug use by truck drivers may pose. Rather, the award punishes Smith by suspending him for nearly three months, thereby depriving him of nearly $9,000 in lost