920 F.3d 1163
8th Cir.2019Background
- Mark Ness, a service technician for CenterPoint Energy, was fired in Sept. 2015 for alleged falsification of time sheets and neglect of duty after GPS/time discrepancies on multiple days.
- Ness’s union (Gas Workers Union, Local No. 340) grieved and appealed the discharge to arbitration under the parties’ collective bargaining agreement (CBA).
- Article 26 of the CBA authorizes the Company to discipline or discharge "for cause," and lists four "absolute causes" (use of alcohol/nonmedical drugs, dishonesty, neglect of duty, abuse of sick leave) but states the question whether the employee was guilty of the facts constituting those causes is negotiable.
- The arbitrator found Ness committed some dishonesty/neglect but concluded the discharge was "arbitrary and discriminatory," reinstating Ness without back pay after construing Article 26 to permit review of discipline severity even for listed "absolute causes."
- CenterPoint sued to vacate the arbitration award; the district court vacated it. The Eighth Circuit reversed, holding the arbitrator was at least arguably construing the contract and therefore the award must stand.
Issues
| Issue | Plaintiff's Argument (CenterPoint) | Defendant's Argument (Union) | Held |
|---|---|---|---|
| Arbitrator exceeded authority by reinstating employee despite finding misconduct | Arbitrator ignored unambiguous "absolute cause" language and substituted equity for contract; therefore exceeded scope | Arbitrator interpreted Article 26 as allowing review of penalty severity even where "absolute cause" conduct is found | Rejected plaintiff; arbitrator was at least arguably construing/applying the CBA, so award stands |
| Whether arbitrator relied on extra-contractual notions of fairness/due process | Company: references to "fairness and due process" show arbitrator applied his own industrial justice rather than contract | Union: arbitrator stated those notions were implicit in Article 26 and tied reasoning to CBA text (just cause language) | Court: ambiguous phrasing not controlling; arbitrator tied reasoning to contract and thus did not clearly act outside contract |
| Whether award nullifies the "absolute cause" clause | Company: arbitrator’s modification effectively negates absolute-cause protection for management | Union: arbitrator read clause as identifying misconduct that permits discipline but not necessarily mandatory discharge | Court: Arbitrator’s reading did not entirely nullify clause; it left absolute-cause conduct subject to discipline though not necessarily discharge |
Key Cases Cited
- United Paperworkers Int’l Union v. Misco, 484 U.S. 29 (1987) (courts should not override arbitrator’s contract constructions; only awards not drawing essence from contract may be vacated)
- United Steelworkers of Am. v. Enterprise Wheel & Car Corp., 363 U.S. 593 (1960) (arbitrator’s interpretation bargained for; courts should not substitute their interpretation)
- Alcan Packaging Co. v. Graphic Commc’n, 729 F.3d 839 (8th Cir. 2013) (arbitral award must stand if arbitrator is even arguably construing or applying the contract)
- NFL Players Ass’n v. NFL, 831 F.3d 985 (8th Cir. 2016) (reiterating limited court role when arbitrator arguably construes contract)
- Ethyl Corp. v. United Steelworkers of Am., 768 F.2d 180 (7th Cir. 1985) (party seeking vacatur must show arbitrator based decision on principles outside the contract)
- St. Louis Theatrical Co. v. St. Louis Theatrical Bhd. Local 6, 715 F.2d 405 (8th Cir. 1983) (vacatur where arbitrator balanced equities rather than interpreting/applying agreement)
- Truck Drivers & Helpers Union Local 784 v. Ulry-Talbert Co., 330 F.2d 562 (8th Cir. 1964) (vacatur where agreement unambiguously forbade arbitrator from reviewing penalty and arbitrator nonetheless substituted judgment)