FILED

United States Court of Appeals

Tenth Circuit

August 12, 2011

Elisabeth A. Shumaker

Clerk of Court

PUBLISH

UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

CHEVRON MINING INC., f/k/a The

Pittsburg & Midway Coal Mining Co.,

Plaintiff-Counter-DefendantAppellant,

v.

UNITED MINE WORKERS OF

AMERICA LOCAL 1307,

Defendant-Counter-ClaimantAppellee.

No. 10-8074

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF WYOMING

(D.C. No. 09-CV-00277-NDF)

Bradley T. Cave, P.C. of Holland & Hart, L.L.P., Cheyenne, Wyoming, for

Plaintiff-Counter-Defendant-Appellant.

Arthur R. Traynor III of United Mine Workers of America, Triangle, Virginia, for

Defendant-Counter-Claimant-Appellee.

Before KELLY, BALDOCK, and LUCERO, Circuit Judges.

KELLY, Circuit Judge.

Plaintiff-Appellant Chevron Mining, Inc. (“CMI”) appeals from the district
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court’s denial of its motion to vacate an arbitration award reinstating CMI

employee John Weston following his termination for just cause by CMI. CMI

argues that the arbitrator’s decision to reverse CMI’s just cause determination

based upon “forgivable” rule violations cannot be said to “draw its essence” from

the governing collective bargaining agreement and that the award imposed

contradicts and modifies the terms of the collective bargaining agreement. We

affirm.

Background

Mr. Weston was terminated when he failed to follow company rules

requiring him to supervise refilling of his fuel truck and he was not forthcoming

about the ensuing consequences. The parties do not dispute the relevant facts. 

Prior to the incident involved here, Mr. Weston received three oral warnings for

unexcused absences or failure to report, and a written warning and three-day

suspension for horseplay. Aplt. App. 276, 278, 280, 282. On October 8, 2009,

Mr. Weston proceeded to refill a 5000-gallon diesel fuel tank truck at the end of

his swing shift. Id. at 8. He started the refueling then sat in the cab of the truck

where he was joined by his ride-share partner, Tom Higgens. They were

discussing elk hunting when they heard what they described as a bang or pop. 

Mr. Weston got out of the cab and shut off the supply pump, but the tank was

already overfilled.
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Mr. Weston did not report the spill. Instead, he attempted to wash off the

quantity of fuel that had accumulated on top of the tank. He asked his partner not

to discuss the incident. Id. at 8-10. He then dropped off the truck, telling the BShift Greaser that he had simply overfilled the truck and that it may need to be

washed off. The tanker was used to fuel four pieces of equipment before it was

discovered that there was water in the diesel fuel, causing the engines to

malfunction. Id. at 8. This led CMI to conduct an investigation into the source of

the contamination. During the course of its investigation, CMI sought statements

from Mr. Weston and Mr. Higgens. Neither recounted a spill in his statement. 

Id. at 9. Nevertheless, CMI suspended Mr. Weston with intent to discharge

effective October 13, 2009. Id. at 9, 266. CMI then scheduled managementunion joint interrogations with both men, during the course of which each

admitted to the spill and the concocted stories about it. Id. at 9-10.

CMI and the Union are parties to the Western Coal Wage Agreement of

2006 between the Pittsburg & Midway Coal Mining Co. and the International

Union United Mine Workers of America (the “Collective Bargaining Agreement”

or “CBA”). The CBA requires CMI to establish “just cause” for discipline and

discharge of employees. Id. at 237 (“No Employee covered by this Agreement

may be disciplined or discharged except for just cause. The burden shall be on

the Employer to establish grounds for discharge in all proceedings under this

Agreement.”). It does not, however, define “just cause.”
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Mr. Weston’s decision to sit in the cab during refueling was contrary to

company training and posted notices. See id. at 301-07. Mr. Weston also

violated CMI’s formal Rules, Work Practices, Regulations and Instructions. The

CBA provides that “[r]easonable rules and regulations of the Employer, not

inconsistent with federal and state laws, for the protection of the persons of the

Employees and the preservation of property shall be complied with.” Id. at 193. 

Upon his hiring in June 2006, Mr. Weston received and signed a certification that

he had read CMI’s Rules, Work Practices, Regulations and Instructions. Id. at

299. The certification provided that “[v]iolation of rules or work practices will

subject employee to corrective action up to and including discharge.” Id. These

Rules state: “Signs posted throughout the mine property are messages to warn of

danger, or instruction on what to do or not to do. Read and comply with all

warning signs.” Id. at 290. They also prohibit “[g]iving false or misleading

information, or withholding relevant information, in any matter affecting your

employment or the Interests of the Company,” “[i]nattention to your job,” and

“[k]nowing violation of, or disregard for, environmental, health or safety rules,

practices or legal requirements.” Id. at 295-96.

The procedure for discharge is as follows: (1) If CMI concludes that certain

conduct warrants discharge, “the Employee shall be suspended with intent to

discharge and shall be given written notice stating the reason”; (2) the employee

may meet with the mine superintendent or manager in the presence of a union
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representative; (3) if CMI continues to intend to discharge the employee, the

employee remains on suspension with intent to discharge for a period of time

necessary to permit the employee to file a grievance and have the grievance

arbitrated. Id. at 237. The CBA provides that if the arbitrator determines that the

employer has “failed to establish just cause for the Employee’s discharge, the

Employee shall be immediately reinstated to his job.” Id.

Mr. Weston challenged his discharge on the ground that CMI lacked just

cause. CMI asserted discharge was appropriate because, given that Mr. Weston

had been disciplined four times during his three years of employment, no

mitigating factors were present to justify a lesser penalty than discharge. Id. at

17. The arbitrator deemed the issue to be: “Did the company have just cause

when it discharged the Grievant? If not, what is the remedy?” Id. at 8.

The award portion of the arbitrator’s decision states,

The Company did not have just and sufficient cause to

discharge John Weston. However, he was guilty of negligence and

providing false information during an investigation. He is to be

suspended for thirty (30) working days starting October 8, 2009 and

returned to work without back-pay but without loss of seniority or

benefits, followed by a probationary period of 180 days during which

any violation of the Health & Safety Rules and/or negligence

pertaining to his job duties will constitute just cause for immediate

discharge.

Id. at 20. In the Discussion portion of the decision, the arbitrator laid out his

rationale for imposing probation:
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Yes, this is dishonest and deserves punishment. But we must

consider motive and here we find it was not for personal gain but to

prevent loss of his reputation, seniority, and benefits. Is this not far

more forgivable than if he had done it for personal gain? I believe it

is and that John is entitled to a last chance agreement such has been

done with other employees.

Id.

Discussion

We review a district court’s order vacating or enforcing an arbitration

award de novo. U.S. Energy Corp. v. Nukem, Inc., 400 F.3d 822, 830 (10th Cir.

2005) (citation omitted). In doing so, however, we give “great deference” to an

arbitrator’s decision. Id. An arbitral award should be reversed only if based on a

“manifest disregard” of the law, defined as “willful inattentiveness to the

governing law.” Id. (quoting Litvak Packing Co. v. United Food & Commercial

Workers, 886 F.2d 275, 276 (10th Cir. 1989); Jenkins v. Prudential-Bache Sec.,

Inc., 847 F.2d 631, 634 (10th Cir. 1988)). If the decision “draws its essence from

the collective bargaining agreement” then it must be upheld. LB&B Assocs., Inc.

v. Int’l Bhd. of Elec. Workers, Local No. 113, 461 F.3d 1195, 1197 (10th Cir.

2006) (internal quotation marks and citation omitted). We explained in Denver &

Rio Grande Western Railroad Co. v. Union Pacific Railroad Co.: 

Errors in either the arbitrator’s factual findings or his interpretation

of the law (unless that interpretation shows a manifest disregard of

controlling law) do not justify review or reversal on the merits of the

controversy. Because of the courts’ limited ability to review

arbitration awards, their powers of review have been described as
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“among the narrowest known to the law.”

119 F.3d 847, 849 (10th Cir. 1997) (citations omitted).

CMI argues that the arbitrator, despite the language of the decision

indicating otherwise, implicitly found that CMI had just cause to terminate the

employee, especially by finding that the employee was “guilty as charged.” Aplt.

Br. 20. Even assuming the arbitrator found CMI lacked just cause for

termination, CMI argues that by determining the employee’s conduct was

“forgivable,” the arbitrator relied on his own sense of justice rather than an

interpretation of the CBA. Id. at 5. CMI also argues that by imposing a

probationary period, or last chance agreement, the arbitrator exceeded the scope

of his authority, and that once the arbitrator determined there was an absence of

just cause, the only permissible action was for CMI to reinstate Mr. Weston

unconditionally to his position. Id. at 5-6; Aplt. Reply Br. 9.

A. Just Cause

CMI’s argument that a finding of just cause may be inferred from the

arbitrator’s decision in this case or that the arbitrator ruled in contradictions is not

persuasive given the express and unequivocal finding that CMI lacked just cause. 

CMI does not dispute that the arbitrator stated expressly that CMI lacked just

cause despite his prior statement that “Weston was guilty as charged.” See Aplt.

App. 20. And there is no dispute that Mr. Weston committed the conduct in

question and violated work rules, which is the conclusion more properly evinced
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by the statement that “Weston was guilty as charged.”

In any event, under our precedent, findings that Mr. Weston committed the

conduct in question and that CMI lacked just cause are not mutually exclusive;

instead where a rule could be interpreted either as articulating examples of

conduct all of which would amount to just cause for termination or as proscribing

certain conduct that may or may not amount to just cause, we give deference to an

arbitrator’s just cause determination. See Local No. 7 United Food &

Commercial Workers Int’l Union v. King Soopers, Inc., 222 F.3d 1223, 1227

(10th Cir. 2000); Local No. 113, 461 F.3d at 1198.

As in Local No. 7 and in Local No. 113, a finding of just cause in this case

does not necessarily follow from a finding of Rules violations. Because CMI’s

Rules simply provide that violations may be grounds for termination, one can

contemplate circumstances where noncompliance with the Rules, “subject[ing]

employee to corrective action up to and including discharge,” would nevertheless

fall short of the just cause required for termination by the CBA. We need not

comment on whether this is the best construction of the CBA; but we do conclude

the arbitrator’s decision was drawn “from the essence” of its terms.

B. “Forgivable” Rules Violations

We also must conclude that the arbitrator’s conclusion that Mr. Weston’s

conduct was “forgivable” in this case is not indicative of inattentiveness to the

CBA and governing law. In Kennecott Utah Copper Corp. v. Becker, we made it
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clear that “[i]n determining whether or not the arbitration award ‘draws its

essence’ from the CBA, a reviewing court looks to the award itself and not at

every phrase contained in the arbitrator’s opinion.” 195 F.3d 1201, 1204 (10th

Cir. 1999) (quoting United Steelworkers v. Enter. Wheel & Car Corp., 363 U.S.

593, 598 (1960) (internal quotation marks omitted)). Therefore, in that case, use

of words such as “believe” did not compel the conclusion that the arbitrator was

dispensing his own brand of justice rather than interpreting the contract. Id. We

noted that focusing on the language of an arbitration decision rather than its

outcome–in this case reinstatement–“may lead arbitrators to play it safe by

writing no supporting opinions. This would be undesirable for a well-reasoned

opinion tends to engender confidence in the integrity of the process and aids in

clarifying the underlying agreement.” Id. 

In Kennecott an employer sought to vacate an arbitration award requiring

the employer to reinstate an employee even though he tested positive for

marijuana after an accident. The collective bargaining agreement stated, “No

employee shall be disciplined or discharged without just cause,” but did not

define “just cause.” Id. at 1203. Employees were also subject to a “Drug and

Alcohol Abuse Policy” proscribing use of drugs in the workplace and which

stated, “Compliance with this Policy is a condition of employment. The Company

intends to take disciplinary action, up to and including termination, against any

employee who violates this Policy.” Id. The arbitrator found that Kennecott was
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justified under the CBA in testing the employee for drugs but that just cause

required more than a positive drug test–in the manner of evidence showing onthe-job impairment, possession, or use. Id. The arbitrator ordered reinstatement

but denied back pay because the grievant had initially lied about his drug use. Id.

In upholding the arbitration award we reasoned that “[t]he interpretation of just

cause to require a prerequisite, such as on-the-job impairment, before termination

is allowed draws its essence from the CBA and must be upheld.” Id. at 1205 

(citing Exxon Corp. v. Esso Workers’ Union, Inc., 118 F.3d 841, 845-46 (1st Cir.

1997)). The same principle applies here.

C. “Last Chance Agreement”

Finally, the arbitrator’s imposition of discipline was not inconsistent with

the award of reinstatement; it was within the arbitrator’s discretion to fashion an

appropriate remedy given the circumstances. Enterprise Wheel & Car, 363 U.S.

at 597 (“When an arbitrator is commissioned to interpret and apply the collective

bargaining agreement, he is to bring his informed judgment to bear in order to

reach a fair solution of a problem. This is especially true when it comes to

formulating remedies.”); Mistletoe Express Serv. v. Motor Expressmen’s Union,

566 F.2d 692, 695 (10th Cir. 1977) (“In a proper case an arbitrator, in reliance on

custom or usage in an industry, may construe a ‘just cause’ provision of a labor

contract to include a progressive discipline requirement and may determine that

certain conduct is ‘just cause’ for discipline but not for discharge.”); e.g., Local
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No. 7, 222 F.3d at 1229.

AFFIRMED.