2007 D e c i sion s O p inion s of the U nit e d S t at e s C our t of Appe al s for the Thir d C ir c uit 6-14-2007 

# M e rck & C o Inc v

. Lo c al 2-86 P r e c e de nt i al or N on-P r e c e de nt i al : N on-P r e c e de nt i al D ocke t N o . 06-1072

F o llow thi s and a dd it ion al work s at : http://d i git alc ommon s .l a w . vi ll anova . e du/thir dc ir c uit_2007

Thi s de c i sion i s br ou ght t o you for f r e e and ope n a c c e s s b y the O p inion s of the U nit e d S t at e s C our t of Appe al s for the Thir d C ir c uit at V i ll anova U nive r sity S choo l of L a

w Di git al Reposit ory

. It h as be e n a c c ept e d for inclusion in 2007 D e c i sion s b y an author i z e d a dmini s tr at or of V i ll anova U nive r sity S choo l of L a

w Di git al Reposit ory

. F or mor e inform at ion, p le as e c ont a ct Be n j amin . C arl s on@l a

w . vi ll anova . e du . Re c omme nde d C it at ion " M e r ck & C o Inc v

. L ocal 2-86" (2007). 2007 D e cisio n s . P ape r 942. http://d i git alc ommon s .l a

w . vi ll anova . e du/thir dc ir c uit_2007/942NOT P RE CE DE NT I AL UN I TED STATES CO UR T OF A PP EALS F O R T H E T H IR D C IR C U IT

_______________ N o. 06- 1072

_______________ M E R C K & C O ., IN C .,

v. P AP E R, AL L I E D- I NDUS T RI AL , CH E M I CA L AND E NE RG Y W O R K E R S I N T E R N A T I O N A L U N I O N , L O C A L 2- 86,

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_______________ O n A p p e a l F ro m th e U n ited S tate s D istric t C o u rt f o r th e E a ste rn D istric t o f P e n n sy lv a n ia ( N o. 05- cv- 02679) D i s t r i ctJ udge: H onor abl e J ohn R . Padova Subm i t t ed U nderT hi r d C i r cui tL A R 34. 1( a)

J anuary25, 2007 B e f o re : S C IR IC A , C hi ef

Judge , F U E N T E S a n d C H A G A R E S , C i r cui tJudges . ( Fi l ed: J une 14, 2007)

__________________ OPI NI ON O F THE COURT

__________________2

C H A G A R E S , C i r cui tJudge . T hi s cas e conc erns t he val i di t yof an a rbi t r at i on aw ar d w hi ch r ei ns t at ed an em p loy ee w h o w as d isch arg ed fo r fa lsi fy ing h is t im ec ard rec o rds. T h e D istri ct C o u rt vaca t ed the aw ar d. Paper , A l l i ed- I ndus t r i al , C hemi cal and Ener gyW or ker s I nt ernat i onal U ni on, L ocal 2- 86 ( t he “U ni on”) appea l ed on beha l f of the empl oy ee. Forthe r eas ons e x p re s s e d b e lo w , w e w ill a f f ir m th e d e c is io n to v a c a te th e a w a rd .

I. T he mat er i al fac t s ar e notdi s put ed. T he U ni on and M er ck & C o. , I nc. ( “M er ck”) ar e part i es t o a col l ect i ve bar gai ni ng agr eement( “C B A ”) w hi ch s et s for t h t he t erm s and condi t i ons of empl oym entforU ni on- r epr es ent ed empl oy ees . T he C B A expr es s l ys t at es t hat“[n] o r egul arempl oy ee s hal l be di s char ged exc eptforj us tcaus e. ” ( A 115. ) T he CBA d o e s n o te n u me r a t e a c t i o n s t h a tc o n s t i tu t e “ j u s tc a u s e ” f

o rt e r mi n a t i o n . Th e CBA p r o v i d e s t h a t“ [ t ] h e d e c i s i o n o f t h e a rb i t r a t o rs h a l l b e f i n a l a n d b i n d i n g o n th e C o m p a n y, t he U ni on, and the empl oy ee, exce ptthatthe arbi t r at ors hal l have no pow ert o add t o, s ubt r actfr om , orm odi fyanyof the t erm s of thi s A gr eementorany agr eem ent s m ade su p p lem e n ta ry h e re to . ” (A 7 7 -A 7 8 ) (em p h asis ad d ed . ) O n J une 18, 2004, M er ck and the U ni on i s s ued a “ J oi ntSt at ement ” i nvol vi ng t he r epor t i ng of t i m e on empl oy ee t i m eca r ds . T he J oi ntSt at ementr es ul t ed fr om an i n v e s t i g a t i o n i n t o t i me c a r d f a l s i f i c a t i o n a tM e r c k ’ s W e s tP o i n t , P e n n s y l v a n i a f a c i l i t y . By3

issuing the J o int Statem en t, M erc k an d the U n ion “e x p ress[ ed ] th eir m ut ualagr eem ent t h a tt h e i n t e n t i o n a l o v e rr e p o r t i n g o f t i me , th e k n o wi n g a c c e p t a n c e o f p a yme n tf

o rt i me n o t w o rk e d o r o th e r a b u se s o f w o rk tim e . . . w ill n o t b e to ler a ted .” (A 2 1 8 ) (e m p h a sis added) . M er ck and the U ni on agr eed that“[t ] he i nt ent i onal overr epor t i ng of t i m e ort he know i ng acc ept ance of m oneyfort i m e notw or ked cons t i tut es s t eal i ng fr om the C om pany and is discharge ab l e on a fi rst off ense . . . . T h e inten ti o n al fa il u re to [ ac cu ratelyrec o rd ac tual ti m e w o rke d ] w i l lr es ul ti n i m m edi at e dis char ge . ” ( I d. ) ( emphasi s added) . T he par t i es fur t herpr ovi ded thatm anage r s and s upervi s or s have no a uthor i t yt o offe r , appr ove oragr ee t o payempl oy ees fort i m e notw or ked, and that“[t ] he ‘ excus e’ thatm anage m ent author i zed s uch an a r r angementw i l l notbe a de fens e forthe ac cept ance of m oneyfor tim e n o t w o rk e d .” (A 2 1 9 .) T h e J o in t S ta te m e n t w a s s ig n e d b yA x e l J o h n s o n , a rep rese n tat ive o f M erc k , an d b yM . S yn d er f o r th e U n ion . B o th Jo h n so n an d S yn d er w ere a m o n g th e s ig n a to ri e s o f th e C B A . T h e J o i n tS t a t e m e n tw a s p o s t e d i n e m p l o ye e a r e a s a r o u n d th e M e r c k f a c i l i t y, i ncl udi ng, as r el evanther e, D epart m ent281. M i chae l Poust , a U ni on- r epr es ent ed empl oy ee of

M er ck, w or ked i n D epart m ent281. H e w as t erm i nat ed on M ar ch 23, 2005 aft eran i nves t i gat i on det erm i ned thathe fa l s i fi ed hi s t i m eca r d r ecor ds , over - s t at i ng the amount of t i m e he w or ked i n 2004 t o t he tune of 3, 824 m i nut es or63. 7 hour s – t i m e not w or ked butforw hi ch he c ol l ect ed pay . Speci fi cal l y , Poustw oul d r epor tthathe arr i ved o n tim e a t 6 :5 0 a .m . p ro v id e d h e a rr iv e d w ith in 3 0 m in u te s o f th a t tim e (i .e ., b y7 :2 0 a .m .)P o u st’s a rb itrato r a lso p re sid e d o v e r Y a ich ’s a rb itratio n . Y a ich f ra u d u len tly 1 re p o rt e d w o rk in g 2 ,0 1 7 m in u te s o r 3 3 .6 h o u rs th a t in f a c t h e d id n o t w o rk . 4 and w oul d r eportt hathe w or ked unt i l 3: 30 p. m . as l ong as he l eftno ear l i erthan 3: 00 p. m . Poustw as aw ar e of the i s s uance of the J oi ntSt at ementi n J une 2004. H ow ever , he di d notal t erfr om t hi s pr act i ce of t i m e r ecor di ng unt i l s om et i m e dur i ng the fa l l of 2004 w h e n h is s u p e rv iso r re d u c e d th e a llo w a b le g ra c e p e rio d . P o u st’s su p e rv iso r f in a lly i ns i s t ed upon ac cur at e t i m e- keepi ng i n February2005 and Pous tcompl i ed. T h e Un i o n g r i e v e d t h e t e r mi n a t i o n a n d th e d i s p u t e p r o c e e d e d t o a rb i t r a t i o n . At a rb itratio n , M e rc k a rg u e d th a t P o u st in ten tio n a llyf a lsif ied tim e re c o rd s e f

f e c tiv e ly ste a lin g m o n e yf

ro m th e c o m p a n y . In re sp o n se , the U n io n a rg u e d th a t P o u st m e re ly fol l ow ed the ac cept ed depa r t m ent al pr act i ce of appendi ng, tw i ce- dai l y , a 30- m i nut e gr ace per i od t o hi s s t art i ng and endi ng t i m es . A ccor di ng t o t he U ni on, Poust ’ s act i ons di d not s uppor tt he cha r ge of de l i ber at e ori nt ent i onal fr aud and t erm i nat i on as a pena l t yw as u n w a rr a n te d . T h e a rbitrator ag ree d w ith the U n ion that term ination w as n o t j u sti fied in P o u st’ s cas e and or der ed Pous tr ei ns t at ed al bei tw i t houtback pa y . I n r eac hi ng thi s concl us i on t he arbi t r at orcompar ed Pous t ’ s over - r eport i ng of t i m e t o t hatof hi s co- w or kerJ os eph Y ai ch. 1 Y ai ch’ s fal s i fi cat i on w as appar ent l ym or e egr egi ous ( he exc eede d t he 30- m i nut e gr ace per i od) t hough i tamount ed t o l es s t i m e fr audul ent l yr epor t ed over al l . Y ai ch w as t erm i nat ed. B el i evi ng t her e t o be a s i gni fi cantdi ffe r ence betw een Y ai ch and Pous tthat5

m e rited a d if

f e re n t re su lt, th e a rb itrato r f o u n d th a t [u] nt i l [February2005] , . . . M r . Poustt ook ful l advant age of depart m ent al pr act i ces r egar di ng arr i vi ng l at e and l eavi ng ear l y , and no taccou nti ng for the d i fferences betw een ac tual t i m e and these pr act i ces on t i m e ca r ds . H e di s r egar ded both t he Em pl oy ee Conduct M a n u a l a n d th e jo in t le tte r o f J u n e 1 8 , 2 0 0 4 o n R e p o rt in g o f T im e . H e a ls o c la im e d p a yf

o r t im e w o rk e d to w h ic h h e w a s n o t e n title d . H is m isre p re se n tatio n m a yn o t h a v e b e e n d e lib e ra te o r in ten tio n a l, buti tcons t i tut ed fr aud nonethel es s . M r . Poust ’ s act i ons cannotbe c o n d o n e d . H e n c e , w h ile te rm in a tio n is n o t ju stif ied , a le ss e r p e n a lty is i n o rde r. (A 2 3 . ) M er ck s oughtr evi ew i n t he D i s t r i ctC our t . I n i t s m ot i on t o vaca t e the arbi t r at i on a wa r d , M e r c k a r g u e d t h a tt h e J o i n tS t a t e me n twa s a s u p p l e me n t a l a g r e e me n tt o th e CBA t hatexpr es s l yand unambi guous l ypr ovi ded fori m m edi at e di s char ge fors om eone f ound t o have f al s i fi ed t i m e ca r ds . A ccor di ng t o M er ck, underthe C B A the arbi t r at orhad “no pow ert o add t o, s ubt r actfr om , orm odi fyanyof the t erm s of thi s A gr eementorany a g re e m e n ts m a d e su

p p lem e n ta ry h e re to ,” th u s, th e a rb itrato r’s o n lyre c o u rse w a s to uphol d M er ck’ s deci s i on t o t erm i nat e Pous t . I n fai l i ng t o do s o, M er ck ar gued, the arbi t r at orm ani fes t l ydi s r egar ded the t erm s of the J oi ntSt at ement . T he U ni on admi t t ed t hatPoustfal s i fi ed hi s t i m eca r ds , butar gued thatPoust ’ s act i ons m us tbe vi ew ed thr ough t he l ens of the C B A ’ s gener al “j us tcaus e” pr ovi s i on. B eca us e the arbi t r at orconcl uded, bas ed on a r evi ew of the ci r cumst ance s , thatPoustw as s i m pl yfol l ow i ng an “a cce pt ed depart m ent al pr act i ce, ” the U ni on ar gued thatthe aw ar d r educi ng the t erm i nat i on t o a s u s p e n s io n c a n n o t b e d is tu rb e d .6

T h e D istric t C o u rt a g re e d w ith M e rc k , co n c lu d in g th a t in re d u c in g P o u st’s p e n a lty to a su sp e n sio n w ith o u t p a y , “th e a rb itrato r e x c e e d e d h is a u th o ritya n d im p e rm iss ib ly su b sti tuted h is ow n n o ti o n s o f in d u str ial justi ce . ” (A 7 . ) S p ec ifi ca ll y , the D istri ct C o u rt held that the reason the arbi t rat or gave for con si deri ng such les serpen al t y– thatP ou st w as m er el yfol l ow i ng an ac cept ed depa r t m ent al pr act i ce – w as i t s el f expr es s l ydi s al l ow ed b yM e rc k a n d th e U n io n a s a n “ e x c u s e ” f o r t im e c a rd f

a ls if ic a tio n . II. W e have j ur i s di ct i on under28 U . S. C . § 1291. T he s cope of j udi ci al r evi ew of an arbi t r at or ’ s aw ar d i s extr emel ynarr ow . A r co- Pol ym er s , I nc. v. L ocal 8- 74, 671 F. 2d 752, 7 5 4 ( 3 d Ci r . 1 9 8 2 ) . Ho we v e r , a n a rb i t r a t o r ’ s “ a wa r d i s l e g i t i ma t e o n l ys o l o n g a s i td r a ws i t s es s ence fr om t he col l ect i ve bar gai ni ng agr eement . ” U ni t ed St eel w or ker s of A m er i ca v . E n terprise W h ee l & C ar C o rp., 3 6 3 U . S . 5 9 3 , 5 9 7 (19 6 0 ). W e h av e h eld th at an aw ard dr aw s i t s es s ence fr om t he C B A “i f the i nt erpr et at i on can i n anyr at i onal w aybe der i ved f ro m th e a g re e m e n t, vie w e d in th e lig h t o f its lan g u a g e , it s c o n tex t, an d a n yo th e r in d icia o f th e p a rties ’ in ten tio n ; o n lyw h e re th e re is a m a n if e st d isre g a rd o f

th e a g re e m e n t, t o tally u n s u p p o r t e d b y p r i n c i p l e s o f c o n t r a c tc o n s t ru c t i o n a n d th e l a w o f th e s h o p , m a y a r evi ew i ng cour tdi s turb t he aw ar d. ” Ludw i g H onol d M fg. C o. v. Fl et cher , 405 F. 2d 1123, 1 1 2 8 (3 d C ir . 1 9 6 9 ).7 II I. A . T h e f ir s t is s u e w e c o n s id e r i s w h e th e r t h e J o in t S ta te m e n t s u p p le m e n ts th e C B A . M er ck ar gues t hati tdoes , and cont ends fur t herthatbeca us e the J oi ntSt at ementi ndi cat es t hatt i m eca r d fal s i fi cat i on w i l l r es ul ti n i m m edi at e di s char ge, i toverr i des anyarbi t r al r evi ew forj us tcaus e. I n otherw or ds , i tr emoves the i s s ue of j us tcaus e r evi ew of M e rc k ’s d e c isio n to ter m in a te P o u st f o r tim e c a rd f

a lsif ica tio n f ro m th e a rb itrato r’s a m b it. Th e Un i o n a r g u e s t h a tt h e J o i n tS t a t e me n tc a n n o tb e v i e we d a s a s u p p l e me n tt o th e CBA beca us e i tw as notr at i fi ed byt he U ni on’ s negot i at i ng comm i t t ee. T her efor e, acc or di ng t he U ni on, t he J oi ntSt at ementhas no l egal eff ectand ce r t ai nl ydoes notoverr i de any re v ie w f o r j u s t c a u s e . In o u r v iew , b o th p a rties o v e rsta te th e ir re sp e c tiv e p o sitio n s. M e rc k ’s p o sitio n is nots o concr et e. A l t hough no m agi c w or ds ar e r equi r ed, w e not e thatthe J oi ntSt at ement w as nott i t l ed an “ A gr eement ” and di d noti ncl ude anyexpr es s l anguage t o t he ef fec tt hat i tw as i nt ended t o s uppl ementt he C B A . H ow ever , i tdi d unequi vocal l yexpr es s the part i es’ “m utual agreem ent” that t i m ecard fal si fi cat i on “w i l l no tbe tol erat ed at the W est Poi ntfac i l i t y . ” Thus, byi t s pl ai n t erm s , the J oi ntSt at ementw as an agr eement , the vi ol at i on of w hi ch “w i l l r es ul ti n i m m edi at e di s char ge. ” A s forthe U ni on, i toffe r s no evi dence orauthor i t yt hata s uppl ement al agr eementm us tbe s i gned byal l m ember s of the n e g o tiatin g c o m m itt e e to b e c o n sid e re d su p p lem e n tal to th e C B A . A n d , the U n io n p o in tsT he arbi t r at i on aw ar d al s o r efe r ence s M er ck’ s E m pl oy ee ConductM anual w hi ch 2 “i ncl udes as a di s char geabl e vi ol at i on ‘ D el i ber at e fa l s i fi cat i on of C om panyr ecor ds and d o cu m en ts, inclu d ing ti m e c ard s. ’” (A 1 6 . ) 8 to n o th in g th a t re q u ire s a su p p lem e n tal a g re e m e n t to m o d if yo r a m e n d th e C B A b e f o re it can, and s houl d, be cons i der ed byan arbi t r at oras the “l aw of the s hop. ” T he J oi ntSt at ementi s an agr eementw i t h a func t i on. I tpr ovi des not i ce t o U ni on m em b ers tha t M erc k w il l stri ctl yen fo rce a p o li cyo f term ination fo r co m m itti n g ti m ec ard fr aud. I n t hi s w ay , i ts uppl ement s t he “j us tcaus e” pr ovi s i on of the C B A beca us e the J oi nt S tate m e n t ar ticu late s th e p a rties ’ m u tu a llya g re e d p o sitio n o n tim e c a rd f ra u d . A n d , itis clea r th at th e U n ion rec o g n ized the J o int Statem en t as g iving n o ti ce to U n ion m em b ers t hat , goi ng forw ar d, M er ck w oul d s t r i ct l yenfor ce t erm i nat i on as puni s hm entfors uch conduct ; a fa ctt hati s demonstr at ed bythe t erm s of a s ett l ementagr eementar i s i ng outof

2 th e in v e stig a tio n in to tim e c a rd f a lsif ica tio n w h e re th e U n io n a g re e d to th e f o llo w in g : 8. T he U ni on agr ees that[the empl oy ee] s houl d nothave acc ept ed moneyfort i m e thathe di d notw or k. T he U ni on ag ree s to sign a join t st atem en t w ith the C o m p an y , in the fo rm a ttac h e d h e re to a s A ttac h m e n t A , w h ich c o m m u n ica tes c lea rly to its m e m b e rsh ip th a t em p lo y e e s s h o u ld n o t o v e r re p o rt th e ir t i m e oracc eptm oneyfort i m e notw or ked and thatthe C o m p a ny w ill

ter m in a te e m

p lo y e e s fo u n d

to h a v e e n g a g e d

in s u c h c o n d u c t. T

h e U n io n a g re e s th a t th e C o m p a ny m a y m a il this s tat em ent

t o i t s m em bers , pos ti ton bul l et i n boar ds or o th e rw ise d istrib u te it to th e m e m b e rs h ip . (A 2 1 7 . ) W e do notdoubtt hatt he U ni on under s t ood t hatthe J oi ntSt at ement ’ s purpos e w as to in f o rm its m e m b e rs th a t ti m e c a rd f a lsif ica tio n c o n stitu ted g ro u n d s f o r im m e d iate9

t erm i nati on . F urther, bysi gn i ng t he JointS t at em ent w hich com m un i cat ed the part i es’ un equ i vo cal po si t i on and byperm i t t i ng the p ub l i cat i on of the st at em ent t o it s m em bers, th e U n io n ta c itly a g re e d th a t te rm in a tio n w a s th e p u n is h m e n t f o r o v e r- re p o rt in g tim e . T hus , t he J oi ntSt at ements uppl ement ed the C B A ’ s pr ovi s i on forj us tcaus e t erm i nat i on bynot i fy i ng empl oy ees t hatover - r epor t i ng w or k hour s w oul d l ead di r ect l yt o di s char ge. See G r i es m ann v. C hemi cal L eaman T ank Li nes , I nc. , 776 F. 2d 66, 71- 72 ( 3d C i r . 1985) ( val i d, enfor cea bl e l aborcontr actfound w her e s i de agr eementr efl ect s m i ni m um fea tur es of a f or m al l egal contr acti ncl udi ng i ndi cat i on thatuni on and companyagr eed t o t he p o s tin g a n d th a t th e te rm s o f th e a g re e m e n t w e re th e s u b je c t o f n e g o tia tio n s ). T he U ni on poi nt s outt hat , pur s uantt o i t s B y - L aw s , the M as t erand Local B ar gai ni ng C om m i t t ees cons i s tof m ul t i pl e mem ber s . T he U ni on ar gues , ther efor e, that t he J oi ntSt at ementcoul d notbe a modi fi cat i on of oramendm entt o t he C B A beca us e the J o i n tS t a t e me n twa s n o tr a t i f i e d b yth e Un i o n ’ s n e g o t i a t i n g c o mmi t t e e , a s wa s th e CBA i t s el f. A s not ed above , t he J oi ntSt at ementw as s i gned byM . Synderforthe U ni on, w ho h eld th e ti tl e o f P lant C h airm an an d b yA x el Jo h n so n , w h o at th e ti m e w as M erc k ’s D ire c to r o f

L a b o r R e latio n s. A c c o rd in g to th e U n io n , S yn d e r la c k e d sin g u lar a u th o rityto m o d if yo r a m e n d th e C B A . W h e th e r S yn d e r h a d a u th o ri ty to m o d if yo r a m e n d th e C B A m is s e s th e p o in t. W e do notcons t rue the J oi ntSt at ementas m odi fy i ng oramendi ng the C B A , butr atheras n o tice to U n io n m e m b e rs o f M e rc k ’s c lea r in ten tio n to d isc h a rg e e m p lo y e e s f o u n d toC ert ai nl yt he pr act i ce w as acc ept ed byPoustand hi s s upervi s or , buti n t he fa ce of 3 t he J oi ntSt at ement , i ti s cl eart hatM er ck and the U ni on cons i der ed thi s pr act i ce “unac cept abl e. ” ( A 218. ) W e fi nd t he U ni on’ s ar gum enther e t o be contr aryt o t he evi dence . 10 have f al s i fi ed thei rt i m eca r ds . I ti s fundament al thatempl oy ees pai d bythe hourw i l l not i nt ent i onal l ycol l ectpayfort i m e theydi d notw or k. T he J oi ntSt at ementnei t herm odi fi es noramends a nyt hi ng i n t hi s r egar d. A ccor di ngl y , w e conc l ude thatthe J oi ntSt at ement w as an agr eementt hats uppl ement ed the C B A bypr ovi di ng not i ce t o empl oy ees thatt he over - r epor t i ng of t i m e “w i l l notbe t ol er at ed” a nd “w i l l r es ul ti n i m m edi at e di s char ge”

“ o n a f ir s t o f f e n s e .” (A 2 1 8 .) B. A f ter th e Jo in t S tate m e n t w a s p o ste d in D e p a rtm e n t 2 8 1 in Ju n e 2 0 0 4 a n d d e sp ite th e f a c t th a t ite x p licitlysta ted th a t “[ l]in e m a n a g e m e n t d o e s n o t h a v e th e a u th o rityto off er, t o ap prove o r t o ‘agree’ t o p ayem ploy ees for t i m e no tw orked,” ( A 21 8), P ou st cont i nued t o fol l ow w hatt he U ni on ar gues w as “an a cce pt ed depa r t m ent al pr act i ce” of 3 over - s t at i ng hi s w or k hour s . T hi s br i ngs us t o ours econd i nqui r y , w hi ch i s w hethert he arbi t r at orover s t epped hi s author i t yi n r educi ng Poust ’ s t erm i nat i on t o a s us pens i on w ith o u t p a ya n d in o rd e ri n g P o u s t’ s e m p lo ym e n t w ith M e rc k to b e re in s ta te d . W here a C B A con t ai ns bo t h a b road “j ustcause” clause and a sep arat e cl ause defi ni ng act i ons t hatw i l l r es ul ti n “i m m edi at e di s m i s s al , ” w e have hel d t hatthe di s char ge is re v iew a b le f

o r ju st c a u se , ab se n t a c lea r in d ica tio n th a t d isc h a rg e u n d e r th e im m e d iate11

di s m i s s al cl aus e i s “s t r i ct l ya func t i on of m anage m ent . ” See A r co- Pol ym er s , 671 F. 2d at 756 ( ci t i ng U ni t ed St eel w or ker s v. W arr i or& G ul f N avi gat i on C o. , 363 U . S. 574, 584 ( 1960) ( defi ni ng “s t r i ct l ya func t i on of m anage m ent ” as “r efe r r i ng onl yt o t hatoverw hi ch the c o n tr ac t give s m an ag em en t com p let e c o n tr o l and u n fe tt ere d d iscreti o n ”)); Su p er T ir e E ng. C o. v. T eamst er s L ocal U ni on N o. 676, 721 F. 2d 121, 124 ( 3d C i r . 1983) . H er e, t her e i s no i ndi cat i on t hatM er ck and the U ni on agr eed t o r emove fr om arbi t r al r evi ew t erm i nat i ons fort i m eca r d fal s i fi cat i on. T her efor e, w e conc l ude thatthe arbi t r at orhad author i t yt o r evi ew Poust ’ s gr i evanc e. H o w e v e r, as th e D istric t C o u rt rig h tlyh e ld , the a rb itrato r o v e rste p p e d h is a u th o rity byr educi ng Poust ’ s t erm i nat i on t o a s us pens i on. I n per form i ng hi s dutyt o r evi ew the ci r cumst ance s s ur r oundi ng Poust ’ s t erm i nat i on, the arbi t r at orerr oneous l yr el i ed on the o n e r e a s o n e x p r e s s l yp r e c l u d e d b yt h e J o i n tS t a t e me n t : th a tP o u s twa s f o l l o wi n g s o me s upervi s or y - appr oved pr act i ce of r ece i vi ng paym entfort i m e notw or ked. T he J oi nt St at ementfl at l ypr ohi bi t s l i ne managementfr om offe r i ng, appr ovi ng oragr eei ng t o pay empl oy ees fort i m e notw or ked. T he J oi ntSt at ementemphat i cal l ydecl ar es : “A nys uch arr angementvi ol at es C om panypol i cy , w i l l notbe t ol er at ed and w i l l be gr ounds for i m m edi at e di s char ge. I f y ou ar e appr oache d byy ours upervi s orand off er ed s uch an a rr a n g e m e n t, o r b e c o m e a w a re o f o n e , th e n y o u a re e x p e c te d to re p o rt th is im m e d ia te ly.” ( A 218. ) Poustw as cert ai nl yaw ar e of hi s depart m ent ’ s pr act i ce of r epor t i ng t i m e, and aft ert he J oi ntSt at ementw as di s s emi nat ed, Poustw as on not i ce of the cons equenc es of12

cont i nui ng t o fol l ow s uch a pr act i ce. C f. SuperT i r e, 721 F. 2d at123 ( uphol di ng arbi tr al a w a rd re d u c in g su m m a ryd isc h a rg e to su sp e n sio n a b se n t n o tice th a t em p lo y e r in ten d e d to s tr ic tly e n f

o rc e th e lis te d c o n d itio n s o f im m e d ia te d is c h a rg e ). W e ac cor d a gr eatdeal of def er ence t o t he aw ar ds of arbi t r at or s . H ow ever , under th e f a c ts o f th is c a se , the a rb itrato r’s d e c isio n th a t term in a tio n w a s n o t ju stif ied m u st y ield to M e rc k a n d th e U n io n ’s jo in t ag re e m e n t th a t f a lsif y in g tim e c a rd s w ill re su lt i n i m m edi at e t erm i nat i on and thata s upervi s or ’ s condonat i on of the pr act i ce i s notan excus e. W e conc l ude thatt he arbi t r at orm ani fes t l ydi s r egar ded the J oi ntSt at ementand e x c e e d e d h is a u th o ri ty in o rd e ri n g re in s ta te m e n t o f P o u s t. I V. A ccor di ngl y , fort he for egoi ng r eas ons , w e w i l l aff i r m the or derof the D i s t r i ct C o u rt v a c a tin g th e a rb itr a tio n a w a rd .