LOCAL 97, INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, A.F.L.-C.I.O., Plaintiff-Counter-Defendant-Appellant,
v.
NIAGARA MOHAWK POWER CORPORATION, Defendant-Counter-Claimant-Appellee.
No. 98-7138
UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT
June 1, 1999, Argued
August 18, 1999, Decided
As Amended October 28, 1999.
[Copyrighted Material Omitted]
D. JEFFREY GOSCH, Syracuse, NY, for Appellant.
ROBERT W. KOPP, Syracuse, NY (David M. Pellow, Bond, Schoeneck & King, Syracuse, NY, of counsel), for Appellee.
Before: MESKILL and WALKER, Circuit Judges, and TRAGER, District Judge.*
MESKILL, Circuit Judge:
Plaintiff-counter-defendant-appellant International Brotherhood of Electrical Workers, Local 97, A.F.L.-C.I.O. filed suit to confirm an arbitration award directing defendant-counter-claimant-appellee Niagara Mohawk Power Corporation to reinstate a previously discharged employee. After the parties cross-moved for summary judgment, the United States District Court for the Northern District of New York, Munson J., granted judgment in defendant's favor and vacated the award, on the ground that enforcement of the award would violate public policy. Local 97, Int'l Brotherhood of Elec. Workers v. Niagara Mohawk Power Corp., 1997 U.S. Dist.
BACKGROUND
I. Factual Background
Niagara Mohawk Power Corporation (Company) is a public utility licensed by the United States Nuclear Regulatory Commission (NRC) to operate two nuclear generating plants in New York state, located at Nine Mile Point in Lycoming, New York. The Company is engaged in the business of supplying and generating natural gas and electrical power to commercial, residential and industrial consumers throughout upstate New York. The Company is an employer "in an industry affecting commerce" within the meaning of the Labor-Management Relations Act of 1947 (LMRA), 29 U.S.C. 185(a).
The International Brotherhood of Electrical Workers, Local 97 (Union) is the only duly recognized collective bargaining agent for employees of the Company. The Union represents non-management employees in clerical, technical, production and maintenance job classifications, and is a "labor organization" under the LMRA. The Union and the Company have been parties to a series of collective bargaining agreements (CBA) which govern the hours, wages and working conditions of those employees represented by the Union. The CBA relevant to this litigation was in effect from June 1, 1993 to February 29, 1996.
The CBA limits the Company's ability to discipline its represented employees and makes any such discipline subject to an agreed on grievance procedure. In particular, the CBA provides that employees may be terminated only for "just cause," and that wrongfully discharged employees should be reinstated and compensated at the basic rate for all time lost.1 The grievance procedure provides for arbitration of unresolved disputes before a tripartite panel. According to the CPA, the decision of the arbitration panel is final and binding upon the parties.
The Company, as a licensed nuclear power plant operator, is subject to regulations promulgated by the NRC, many of which are concerned with insuring the reliability of the human resources used to operate and safeguard the structures and components that generate nuclear power. Among those regulations is 10 C.F.R. 73.56, which requires a licensee to incorporate an "access authorization plan" into its Physical Security Plan. This access authorization plan must ensure that "individuals granted unescorted access are trustworthy and reliable" and "do not constitute an unreasonable risk to the health and safety of the public." 10 C.F.R. 73.56(b)(1). A licensee's decision to grant or withhold access must be based on "review and evaluation of all pertinent information developed." Id. 73.56(b)(3).
Prior to his February 4, 1994 discharge, Michael O'Hearn (O'Hearn) had been employed as a Nuclear Security Officer at the Nine Mile nuclear facility for eight and one-half years and was subject to all requirements set by the NRC. In his capacity as a security officer, O'Hearn was responsible for monitoring certain of the nuclear facility's alarm systems, enforcing the facility's various security rules and regulations and responding to any active alarms. All Nuclear Security Officers, such as O'Hearn, receive NRC-mandated training in connection with the various internal security systems of the facility. At the Nine Mile facility the NRC-mandated alarm system consists of a Central (CAS) and Secondary (SAS) alarm systems. There is also a non-NRC-mandated alarm system known as the Central Alarm Receiving Station (CARS), which monitors two buildings, neither of which is within the actual nuclear plant container. When an alarm sounds, the signal is sent to a monitor, which is watched over by a security officer, who then is required to contact the fire department and follow any other instructions that are shown on the monitor.
While working the late shift on January 16, 1994, O'Hearn was assigned to alarm station/escort duties, which included working in the SAS, the backup system to the CAS. O'Hearn reported to the SAS at approximately 3:00 a.m. At 3:16 a.m., a fire alarm sounded in the CARS area which O'Hearn promptly silenced. He failed to follow directions on the CARS console, however, and did not contact any of the listed response personnel.
About one hour later, at approximately 4:15 a.m., another Nuclear Security Officer on patrol noticed strobe lights flashing in the Operations Building. He informed a supervisor that the alarm was sounding and that there were no response personnel at the scene. When the supervisor contacted O'Hearn and asked him if he was aware of an alarm, O'Hearn told him that "[a] trouble alarm just came in." When asked, O'Hearn told the supervisor that he had attempted to contact the fire department, but that he had been unable to speak with anyone. The supervisor then instructed O'Hearn to call Nine Mile Point's control room so that the personnel on duty could radio the fire department. Soon after the fire department arrived at the Operations Building they discovered that the CARS alarm had been triggered by a broken sprinkler head. As a result of this malfunction, the building was partially flooded.
The next day, the Company began an investigation into the incident. During an interview with the Company's General Supervisor for Nuclear Security Operations, O'Hearn untruthfully stated that there was only a "momentary delay" from the time the alarm sounded to when he called the control room; O'Hearn also stated that the delay occurred because he received no answer when he tried to contact the fire department. On January 17, 1994, on the advice of his supervisor, O'Hearn wrote a memorandum, setting forth his version of the events that took place the day before. In that memorandum, O'Hearn misrepresented that the alarm had sounded at 4:15 a.m. He also stated that he notified the supervisor of the alarm and that he did not make any attempt to contact the fire department until after he had notified his supervisor.
Although the Security Department initially did not suspect that anything was amiss with respect to O'Hearn's conduct, the significant amount of water damage in the Operations Building suggested that a longer amount of time had elapsed between when the alarm came in and when O'Hearn reported it to the fire department. This prompted the fire department to check the computer printout from the Operation Building's fire system to determine the exact time the alarm had been transmitted to the SAS. The printout revealed that the alarm had sounded at 3:16 a.m., one hour before O'Hearn had represented it had sounded. As a result of this new information, the Nuclear Security Department continued its investigation and interviewed individuals involved with the incident. O'Hearn was interviewed on January 27, 1994, at which time he admitted that the delay between when the alarm sounded and when he reported it could have been as long as forty-five minutes and also admitted that he did not attempt to contact the fire department or the control room until he was instructed to do so by his supervisor.
On February 4, 1994, during a disciplinary meeting held pursuant to Article XVI of the CBA, the Company informed O'Hearn that his employment was terminated because their investigation revealed that he had failed to respond properly to the security alarm and that he knowingly and willfully provided false information to his supervisors and to the Nuclear Security Investigators throughout the investigation. O'Hearn, accompanied by his Union representative, was given the opportunity at the meeting to respond to these findings, but failed to do so. On February 7, 1994, the Union filed a grievance challenging the decision to discharge O'Hearn. The grievance was not resolved and the matter was submitted to arbitration.
The Company and the Union waived their rights to a tripartite panel and mutually agreed on a neutral arbitrator (Arbitrator) to hear the matter. Arbitration hearings were held in Syracuse, New York on September 13, November 1, and December 12, 1995, and the Arbitrator delivered his decision and award (Award) on March 1, 1996. In sum, the Award concluded that O'Hearn had not engaged in gross negligence as alleged by the Company and that, although he was untruthful with regard to this incident, his behavior did not constitute just cause for dismissal. The Award reinstated O'Hearn and instructed that he receive back pay for the balance of his period of termination.
The Company refused to honor the Award and on May 7, 1996 the Union filed suit in the United States District Court for the Northern District of New York to confirm the Award under Section 301 of the LMRA, 29 U.S.C. 185.2 The Company counterclaimed to vacate the Award on the ground that it violated public policy. The district court granted the Company's motion for summary judgment, concluding that the Award violated public policy because it required the Company to grant unescorted access to an individual who was not "trustworthy" or "reliable" within the meaning of NRC regulations. This appeal followed.
II. Prior Proceedings
A. Arbitration Proceedings and Decision
The parties agreed that the Arbitrator would decide the following issue: "Was there just cause for the discharge of the grievant Michael O'Hearn? If not, what shall be the remedy?"
In the decision accompanying his Award, the Arbitrator first decided that it was the Company's burden to prove, by clear and convincing evidence, that O'Hearn was discharged for "just cause." According to the Arbitrator, determining just cause entails a two-step inquiry: "first, whether the evidence supports the Employer's conclusion that a disciplinary offense was committed; and second, if so, whether the penalty imposed was appropriate and justified by the gravity of the offense."
The Company argued that O'Hearn's discharge was justified not only because he had failed to respond to the alarm (a failure that led to substantial property damage), but also because he lied repeatedly about the incident throughout the ensuing investigation. Because, the Company maintained, O'Hearn's dishonesty established that he was not "trustworthy" or "reliable," his further employment would run contrary to NRC regulations that required the Company to provide "high assurance" that employees in O'Hearn's position were both "trustworthy" and "reliable" individuals. In sum, the Company argued that O'Hearn's conduct amounted to "gross negligence," which was more than adequate to justify termination.
In response, the Union argued that the Company lacked just cause for the termination. Advancing multiple arguments, the Union maintained that O'Hearn had, in fact, performed his job properly; that the Company had not sustained any damage as a result of the sprinkler having gone off; that any property damage that did occur was caused by the faulty sprinkler, not by O'Hearn; that, in any event, discharge was a disproportionately harsh penalty because at most O'Hearn was careless but not grossly negligent; and that any disciplinary decision must account for O'Hearn's prior eight and one-half years of unblemished service to the Company.
The Arbitrator found for the Union, but not before concluding that O'Hearn had indeed lied to cover up the incident. The Arbitrator's conclusions on this score were clear, as he noted that O'Hearn "lost his credibility and integrity" on account of his testimony; that O'Hearn is a "perpetually untruthful person . . . whose testimony changes like the ocean tide;" and that there were a "litany of untruthful statements by O'Hearn during these proceedings" that were "far too many to list." In his summary findings, the Arbitrator conceded that the Company's "argument that O'Hearn was untruthful are [sic] sound and correct."
Nonetheless, the Arbitrator concluded that the Company had failed to establish "just cause" for the discharge. First, rejecting the Company's argument that O'Hearn was guilty of "gross negligence" sufficient to justify discharge, the Arbitrator found that in failing to respond to the monitor O'Hearn had been "careless and negligent" but not "grossly negligent." Although noting that termination might be appropriate "where the employee is guilty of a single flagrant willful act or one act of 'gross negligence,'" the Arbitrator reflected that "generally speaking, one act of negligence or carelessness is not grounds for an employee's discharge." Reasoning that "negligence . . . is a disciplinary offense, but not a discharge under these circumstances," the Arbitrator found that O'Hearn should not have been fired because "there was no evidence to suggest" that he had engaged in "a malicious or evil act."
Furthermore, noting that "it is not unusual for an Arbitrator to consider an employee's past record," the Arbitrator concluded that O'Hearn's unblemished record during his previous eight and one-half years of service was additional evidence that discharge was inappropriate.
Ultimately, the Arbitrator concluded that the penalty was "rightly disproportionate to the offense" and was "too severe under guidelines of 'progressive discipline,'" which contemplate that warnings and suspension should precede discharge. Accordingly, the Arbitrator ordered O'Hearn's reinstatement with 17 months' back pay, and indicated that his record should reflect a 30 day suspension for his carelessness in response to the alarm and for his untruthfulness during the ensuing investigation.
B. District Court Decision
In December 1997 the district court issued a memorandum decision and order resolving the cross summary judgment motions in the company's favor. See
The district court reasoned that enforcement of the Award would run contrary to the "dominant and well-defined public policy requiring strict adherence to the nuclear safety rules," id at *5, particularly the regulation requiring licensees to provide "high assurance" that employees who have unrestricted access to nuclear facilities are "trustworthy and reliable" and do not pose an "unreasonable risk to the health and safety of the public," see id. (citing 10 C.F.R. 73.56).3 According to the district court, because the Arbitrator's findings established that "it is dubious whether O'Hearn is reliable" and that "it is certain he is not trustworthy," see id. at *6, O'Hearn's reinstatement would violate the public policy requiring strict compliance with 10 C.F.R. 73.56, i.e., reinstatement would impermissibly require the Company to employ an individual who demonstrably was neither "trustworthy" nor "reliable" and who would pose an unreasonable risk to the health and safety of the public. Concluding that O'Hearn's "dishonesty cannot be countenanced," the district court vacated the award as contrary to public policy.4
The district court was well aware of the extraordinary nature of the relief it granted, clarifying that its holding was "limited to the facts at hand," "should not be seen as undermining the decidedly valuable role of arbitration," and "'should not be read as a blanket justification for the discharge of every employee who breaches a public safety regulation at a nuclear power plant.'" Id. at *7 (quoting Iowa Elec. Light & Power Co. v. Local Union 204 of the Int'l Brotherhood of Elec. Workers,
DISCUSSION
I. Review of Arbitration Awards Generally
"We review a district court decision upholding or vacating an arbitration award de novo on questions of law and for clearly erroneous findings of fact." Wackenhut Corp. v. Amalgamated Local 515,
Because "the federal policy of settling labor disputes by arbitration would be undermined if courts had the final say on the merits of [arbitration] awards," United Steelworkers v. Enterprise Wheel & Car Corp.,
The result is that the "contractual theory of arbitration . . . requires a reviewing court to affirm an award it views as incorrect -- even very incorrect -- so long as the decision is plausibly grounded in the parties' agreement." Wackenhut,
II. The "Public Policy Exception"
Although courts accord nearly total deference to arbitral decisions, a court "may not enforce a collective-bargaining agreement that is contrary to public policy." W. R. Grace & Co. v. Local Union 759, Int'l Union of United Rubber Workers,
While the question of whether enforcement of an award would violate public policy "is ultimately one for resolution by the courts," id., authority to answer that question does not afford courts "authority to disagree with [the arbitrator's] honest judgment" about the proper remedy to be awarded in a given case. Misco,
In Niagara Mohawk I, decided after the district court issued its opinion in this case,5 we attempted to identify the limits of the public policy exception in the context of nuclear safety regulations. There, an employee, Rando, adulterated a urine sample to circumvent Niagara Mohawk's NRC-mandated drug testing policy. Niagara Mohawk terminated Rando and the matter was submitted to an arbitration panel that awarded the employee conditional reinstatement premised on his compliance with rehabilitative programs and future negative testing.
As in this case, Niagara Mohawk refused to reinstate the employee and the Union brought an action in the district court to confirm the award. Niagara Mohawk argued, as it does in this case, that reinstatement of the employee would offend public policy of ensuring strict compliance with nuclear safety rules, in particular by rendering the Company in violation of the "trustworthy and reliable" requirement found at 10 C.F.R. 73.56. The district court agreed and vacated the award, finding that the employee's adulteration of the sample rendered him "untrustworthy" within the meaning of the NRC regulations. Int'l Brotherhood of Electrical Workers, Local 97 v. Niagara Mohawk Power Corp.,
We reversed.
Noting that the question reduces to whether the employee's actions "rendered him an inherently untrustworthy person within the meaning of the NRC regulations when read as a whole," id. at 720, we observed that the public policy that mandated drug testing of nuclear plant employees also stressed the value of rehabilitation. In particular, the NRC regulations left punishment for first time drug offenses to the discretion of the employer, as long as the punishment imposed involved at least a two week denial of unescorted access and referral to a rehabilitative program. See id. at 709. Because there was evidence that the NRC drug testing regulations extended their rehabilitative approach to employees who acted to conceal their drug use, we were unable to say with certainty that conditional reinstatement of an employee who, like Rando, had adulterated a drug test specimen in order to conceal drug use and then lied when first confronted about that drug use would pose an "explicit conflict" with the public policy promoting nuclear safety. Id. at 722. Because the arbitrator's findings -- to which the district court was bound -- did not permit an "unequivocal showing" that reinstatement would violate clearly defined and well articulated public policy, we were constrained to let the award stand. Id. at 721.
The principles articulated in Niagara Mohawk I -- a case decided after the district court rendered its decision in this case -- dictate the result here.
III. Public Policy Does Not Specifically Militate Against the Relief Ordered by the Arbitrator
O'Hearn's behavior in this case was reprehensible. Nevertheless, the principles articulated in Niagara Mohawk I and the precedents drawn upon therein compel us to vacate the district court's judgment and direct enforcement of the Award. We reach this result because we cannot conclude unequivocally that the reinstatement Award necessarily violates clearly defined public policy of ensuring adherence to nuclear safety regulations.
In defending this appeal, the Company argues that O'Hearn's reinstatement would render the Company in violation of NRC regulation 10 C.F.R. 73.56, which mandates that individuals granted unescorted access to nuclear facilities be both "trustworthy" and "reliable." The Company maintains that the Arbitrator's statements impugning O'Hearn's credibility establish conclusively that O'Hearn is neither "trustworthy" nor "reliable" within the meaning of the NRC regulations. Accordingly, the Company maintains, it would automatically run afoul of 10 C.F.R. 73.56, and hence violate public policy, if it complied with the Award and reinstated O'Hearn.
We note at the outset that although the Company insists O'Hearn's misdeeds were so serious that the public policy in nuclear safety mandates his dismissal, there is no indication that the Company has ever brought O'Hearn's conduct to the attention of the NRC, the regulatory body charged with enforcing nuclear safety regulations. This may suggest that the Company assumed that the Arbitrator would decide in its favor. But the propriety of O'Hearn's discharge is a matter that the Company agreed to submit to binding arbitration; the Company is bound by the outcome of that bargained-for process. See Local 453, Int'l Union of Elec. Workers v. Otis Elevator,
Now the Company is asking the courts to overturn the Arbitrator's Award on public policy grounds. The Company chose not to notify the NRC of O'Hearn's wrongdoing; perhaps, if it had, the Company might have received clear guidance as to the degree to which his wrongdoing offends public policy in nuclear safety compliance. In this context, however, we must fulfill our duty to ascertain public policy as a matter of law, "by reference to . . . laws and legal precedents." W. R. Grace,
A. The NRC's Enforcement Policy
In Niagara Mohawk I, we declared that "public policy" in the context of nuclear safety is defined by the NRC's regulations.
The NRC has set forth a specific policy to guide its enforcement program, which supports its "safety mission in protecting the public and the environment." See General Statement of Policy and Procedure for NRC Enforcement Actions, 63 Fed. Reg. 26,630 at 26,633 (1998). Acknowledging that violations of nuclear safety requirements "have varying degrees of safety . . . significance," the NRC categorizes violations into four levels of relative severity. "Severity Level I," which applies to the "most significant" violations, is reserved for violations that are of "very significant regulatory concern and which "involve actual or high potential impact on the public."
In this case, if the Company could demonstrate that the NRC itself -- if confronted with the Arbitrator's findings concerning O'Hearn's conduct -- would unequivocally deem O'Hearn's conduct so severe as to render him ineligible for future employment in licensed activities, then perhaps there would be a sufficient basis on which to conclude that his reinstatement would necessarily run contrary to public policy. But, as noted above, the NRC was not notified of O'Hearn's wrongdoing and thus, we are without definitive guidance as to the level to which O'Hearn's future employment represents an unacceptable threat to nuclear safety. Furthermore, as explained below, the NRC's actions in different cases do not establish with any degree of certainty that public policy would be offended by O'Hearn's continued employment.
B. NRC Enforcement Actions
Consistent with its stated enforcement policy, the NRC's enforcement actions demonstrate that safety violations come in varying degrees of severity, and that not all violations compromise public safety to the same extent. Many reported enforcement actions involved individuals who deliberately omitted information from background questionnaires that they were required to fill out in order to gain "unescorted access" to nuclear facilities. The questionnaires are administered by licensees as part of their NRC-mandated access authorization programs, which, in turn, must allow the licensee to provide the NRC with "high assurance" that individuals to whom unescorted access is granted are "trustworthy and reliable" individuals, in compliance with 10 C.F.R. 73.56, the same regulation that the Company relies on in this case.
In a number of these cases, individuals who misrepresented information on security questionnaires received a five year ban from involvement in NRC-licensed activities. See, e.g., Order concerning Jeffrey Lee Barnhart, dated June 23, 1997, IA 97-049,
In these cases, in which the violators were dishonest about past criminal activity and sometimes indicated that they would continue to lie in the future, the NRC found that public safety would be compromised by any licensee's future employment of these individuals. The NRC often summarized its findings on that score by noting that it "lacked the requisite reasonable assurance that licensed activities can be conducted in compliance with the Commission's requirements and that the health and safety of the public would be protected" if the offending individual "were permitted at this time to be involved in NRC-licensed activities." See, e.g., Barnhart,
In other cases, however, dishonesty based infractions are classified as "Severity Level III" violations of "significant regulatory concern," see
While Smith was working as a security guard at a nuclear facility, he intentionally triggered an alarm and thereafter lied to cover up his transgression. The NRC issued a Notice of Violation to Smith, categorizing his violation as Severity Level III. The notice made plain that the NRC viewed his initial misconduct and subsequent dishonesty very seriously, and noted that Smith had failed to uphold the "special trust and confidence which places nuclear employees in the position where their performance is expected to be above reproach."
Other NRC enforcement actions have also stopped short of banning the violator from continued involvement in NRC-licensed activities and, in some cases, the NRC has afforded the offender an opportunity to satisfy the NRC that he could, in fact, be trusted to comply with regulations in the future. See,e.g., Notice of Violation to Steven R. Allent, dated Sept. 5, 1996, IA 96-050,
C. O'Hearn's Reinstatement Viewed in Light of NRC Enforcement Policy and Prior Enforcement Actions
The NRC, if faced with the Arbitrator's findings as to O'Hearn's actions, might well conclude that the Company would be unable to conduct licensed activities safely as long as O'Hearn was still employed. In particular, based on the Arbitrator's findings one might argue that O'Hearn violated the NRC's "Deliberate Misconduct Rule," found at 10 C.F.R. 50.5(a)(1). If the failure to report the alarm formed the basis of a violation of a Nuclear Safety Rule, subsection one would be violated, as it specifies that a licensee's employee may not "engage in deliberate misconduct that causes . . . a licensee . . . to be in violation of any rule, regulation, or order." There is an even greater likelihood, however, that O'Hearn violated section 50.5(a)(2), which prohibits employees from "deliberately submitting to the NRC [or its] licensee . . . information that the person submitting the information knows to be incomplete or inaccurate in some respect material to the NRC." 10 C.F.R. 50.5(a)(2). His deliberate submission of alarm information would be "material to the NRC" because, as the NRC has observed, "information concerning the cause and response to security alarms is material to the determination the licensee must make regarding the adequacy of their security program pursuant to 10 C.F.R. 73.55, and is information relied upon by the NRC and reviewed during security inspections." See Smith, IA 97-056,
But even assuming that O'Hearn did commit such a deliberate omission, that fact is insufficient to establish that his reinstatement, after a thirty day suspension, would be in direct conflict with the public policy as expressed in the NRC regulations. Rather, the NRC's previous enforcement decisions do not preclude the possibility that O'Hearn's conduct, while unacceptable, would be categorized as a Severity Level III violation and result in a stern rebuke but not a ban from future involvement in NRC-licensed activities.
The NRC's treatment of Donald Smith, supra, demonstrates this point. The decision not to ban Smith does not suggest that the NRC viewed Smith's conduct lightly, or that no consequences flow from his wrongdoing. To the contrary, he was put on clear notice that further wrongdoing would likely prevent his future eligibility for involvement in NRC-licensed activities. But the NRC'S course of action is significant here because, when faced with conduct similar to O'Hearn's, the NRC did not conclude, as it has in other cases, that it "lacked the requisite reasonable assurance that licensed activities can be conducted in compliance with the Commission's requirements and that the health and safety of the public would be protected" if Smith "were permitted . . . to be involved in NRC-licensed activities." See Barnhart,
We simply cannot with reasonable certainty divine what result the NRC would reach in O'Hearn's case if it were to evaluate it in the first instance. Our inability to do so precludes us from vacating the reinstatement award on the ground that its enforcement would unequivocally violate public policy.
Looking, as we must, to "laws and legal precedents" rather than "general considerations of supposed public interests," Paperworkers v. Misco, Inc.,
None of these circumstances was present here: O'Hearn's conduct strikes us as grossly negligent, not wilful, and his lies, while reprehensible, were one-time attempts to cover up his mistake, not a criminal past. If the NRC, at the Company's request, had investigated the incident and determined that continued employment was incompatible with its "trustworthy" and "reliable" standard, that, too, would have constituted unequivocal evidence of a public policy prohibiting reinstatement. However, with the NRC regulations and precedents in their present posture, we are unable to conclude that Niagara Mohawk has met its burden of showing a clear and unequivocal public policy precluding reinstatement sufficient to override the arbitrator's award.
This is not, of course, to say that O'Hearn's termination would offend public policy; as did the district court, we believe that O'Hearn's dishonesty should not be countenanced. But the just cause for termination decision is a matter that the Company agreed to leave to the Arbitrator's discretion. By now asking us to overturn that bargained-for decision on public policy grounds, the Company submits to a much more exacting standard of review, one that it has not met. We are not charged with exercising the NRC's enforcement duties on its behalf. Rather, we are beholden to the "firmly-established, legislatively-entrenched policy favoring resolution of labor disputes through arbitration." Saint Mary Home,
IV. Attorney's Fees
In its appellate brief, the Union also asks us to award it attorney's fees, costs and disbursements, claiming that a fee award is justified because the Company acted in bad faith when it refused to comply with the Award. It is unclear whether the Union is seeking fees incurred below or in the course of this appeal; in either case, however, the result is the same.
To the extent that the Union is seeking attorney's fees for work in connection with its appeal, its claim is meritless. The Company cannot be penalized for defending an appeal from a lower court decision in its favor. To the extent that the Union is seeking attorney's fees for work performed in the district court, its argument is disingenuous. The Union contends that the Company's refusal to enforce the Award was in bad faith in light of our decision in Niagara Mohawk I. But Niagara Mohawk I was decided over four months after the district court, relying on the district court decision in Niagara Mohawk I, ruled in the Company's favor in this case. The Union, therefore, cannot claim that the Company was acting in "bad faith, vexatiously, wantonly, or for oppressive reasons," Int'l Chemical Workers Union, Local No. 227 v. BASF Wyandotte Corp.,
CONCLUSION
Employing the standards we set out in Niagara Mohawk I we conclude that the NRC's regulations, taken as a whole, "cannot accurately be interpreted to preclude a finding that someone who acts as [O'Hearn] acted could, nonetheless, be trustworthy and reliable as those terms are used by the [NRC]." Niagara Mohawk I,
Notes:
Notes
Honorable David G. Trager, United States District Judge for the Eastern District of New York, sitting by designation.
1. The relevant CBA provision provides:
If an employee represented by the Brotherhood hereunder is discharged from employment on or after the date hereof and believes that they have been unjustly dealt with, such discharge shall constitute a dispute or difference for determination under the method of adjusting grievances provided for in this Article XXII and such dispute shall be first taken up within three (3) working days . . . if it is thereupon determined that such discharge was wrongful and without just cause, the Company shall reinstate the employee and pay full compensation at the basic rate for all time lost or as may be appropriate.
Federal jurisdiction over this suit is proper under 29 U.S.C. 185(a), which provides:
Suits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce as defined in this chapter, or between any such labor organizations, may be brought in any district court of the United States having jurisdiction of the parties, without respect to the amount in controversy or without regard to the citizenship of the parties.
10 C.F.R. 73.56 states in pertinent part:
(b) General performance objective and requirements. (1) The licensee shall establish and maintain an access authorization program granting individuals unescorted access to protected and vital areas with the objective of providing high assurance that individuals granted unescorted access are trustworthy and reliable, and do not constitute an unreasonable risk to the health and safety of the public including a potential to commit radiological sabotage. . . . (3) The licensee shall base its decision to grant, deny, revoke, or continue an unescorted access authorization on review and evaluation of all pertinent information developed.
The district court also rejected the Arbitrator's conclusion that discharge was too severe a punishment, not so much on account of O'Hearn's "baffling, lackadaisical response to the alarm" as because of his "subsequent attempt to mask this Homer Simpson-like conduct."
Indeed, the district court's opinion in this case relied extensively on the district court decision that was reversed by this Court in Niagara Mohawk I. Thus, the district court in this case did not have the benefit of our opinion in Niagara Mohawk I.
The Company brings to our attention one other enforcement action. Notice of Violation to Charles J. Naivar, dated July 17, 1998, IA 98-035 (N.R.C.). There, Naivar failed to conduct a proper equipment safety inspection and then falsified procedural documentation to cover up his failure. The NRC noticed a Severity Level III violation of "significant regulatory concern," but did not impose a ban on future employment. In imposing that level of discipline the NRC gave "considerable weight" to the fact that Naivar already had been terminated from employment. At oral argument, the Company suggested that the fact that Naivar was terminated lent support to the argument that public policy dictated that O'Hearn, as well, should be terminated. But the NRC's implicit approval of Naivar's termination does not alone establish that continued employment would violate public policy as defined by the NRC. More probative of the latter proposition would be the NRC independent determination -- a determination it chose not to make in Naivar's case -- that the employee should be banned prospectively from involvement in any NRC-licensed activities. Our inability to conclude that such a result would obtain in O'Hearn's case is the reason we cannot vacate the Award.