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No. 95-2661

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Midwest Coca-Cola Bottling Co., *

*

 Plaintiff - Appellee, *

*

v. * 

* 

* Appeal from the United States

Allied Sales Drivers, Ambulance,* District Court for the

Beer, Brewery, Grain Elevator, * District of Minnesota.

Retail Liquor, Livery, Malt *

House, Spring Water, *

Soft Drinks, Taxi Cab, Vending *

Drivers, Helpers, Inside *

Employees, and General Workers *

Union, Local 792, *

*

 Defendant - Appellant. *

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 Submitted: February 16, 1996

 Filed: July 11, 1996

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Before McMILLIAN, LAY and JOHN R. GIBSON, Circuit Judges.

___________

JOHN R. GIBSON, Circuit Judge.

Allied Sales Drivers, Ambulance, Beer, Brewery, Grain Elevator,

Retail Liquor, Livery, Malt House, Spring Water, Soft Drinks, Taxi Cab,

Vending Drivers, Helpers, Inside Employees, and General Workers Union,

Local 792, appeals from an order of the district court vacating an

arbitrator's award that ordered Midwest Coca-Cola Bottling Company to

reinstate a discharged employee. The Union argues that the arbitrator's

award is consistent with the collective bargaining agreement between the

Union and Coca-Cola, 
 Article I(d) of the Agreement states: 1

ARTICLE I.

RECOGNITIONS AND COVERAGE

(d) Management Prerogatives: [Coca-Cola] has,

retains and shall continue to possess and exercise each

and every management right, right to function, privilege

and authority which it had prior to the certification of

the Union except, and only except, as specifically

limited, relinquished, modified, or restricted by this

Agreement. Illustrative, but not all inclusive of the

rights of management retained are the right to manage the

Company; to direct the work force, and to make and

enforce rules of conduct; . . . to classify, promote,

discipline, demote, and discharge employees; . . . .

Subject to the terms of this agreement, rights not

specifically set forth in the Agreement upon which the

parties negotiated or had the opportunity to negotiate,

whether or not such rights have been exercised by [CocaCola] in the past, remain with [Coca-Cola].

(emphasis added).

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and, therefore, the award should be enforced. We reverse the judgment of

the district court and order enforcement of the arbitrator's award.

William Thoreson worked for Coca-Cola and his employment with CocaCola was governed by a collective bargaining agreement negotiated between

the Union and Coca-Cola. The Agreement contains a management prerogatives

paragraph, giving Coca-Cola the right to make and enforce rules of conduct

and to discipline and discharge employees. The Agreement provides that

1

Coca-Cola shall not discharge an employee after he obtains seniority

without just 
 Article IV(d) of the Agreement states: 2

ARTICLE IV.

GENERAL WORKING CONDITIONS

(d) Discharge: [Coca-Cola] shall not discharge

any employee after he has been placed on the seniority

list without just cause. Notice of discharge or

suspension shall be mailed to the Union office within two

(2) work days of occurrence. In case of discharge, such

employee may request an investigation as to the discharge

and should such investigation prove an injustice has been

done, the employee shall be reinstated and compensated at

his usual rate of pay, while he has been out of work.

Appeal from a discharge or suspension must be taken

within five (5) work days following notice thereof to the

Union Steward by written notice by the Union to [CocaCola], and if a satisfactory decision is not reached by

the Union and [Coca-Cola], it shall be settled as

provided under Article VII of this Agreement.

Suspension or discharges will be imposed when the

decision to take action is made.

(emphasis added).

 Articles VII(a) and (b) of the Agreement state: 3

ARTICLE VII.

GRIEVANCE PROCEDURE

(a) No claimed grievance of any kind will be acted

upon or considered valid for any reason unless filed in

writing with [Coca-Cola] within thirty (30) days of the

alleged violation. This shall not apply to discharge or

suspension cases which shall be considered under Article

IV(d).

(b) Any controversy arising from the interpretation

of, or adherence to the terms and provisions of this

Agreement shall be settled promptly by negotiations

between the Union and [Coca-Cola]. If no adjustment

satisfactory to both parties can be reached in this way,

then the matter shall be settled by arbitration . . . .

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cause. There is a grievance procedure, the last step of which is

2

arbitration.3
(emphasis added).

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 Coca-Cola's work rules provide: 4

Violation of [work] rules will normally result in

progressive discipline. On a first occurrence, a verbal

warning will be issued. Second occurrence within a 12

month period will result in a written warning. On a

third occurrence, the employee will be given a three (3)

day suspension. Finally, a fourth violation will result

in discharge.

. . .

Employees who are unable to attend work must call and

report their absence 30 minutes prior to the time they

are scheduled to start. "Call in" must be made every day

to the employee's immediate supervisor, unless the

supervisor specifically tells the employee that a call

does not have to be made every day (as in the case of a

long-term illness).

In the event an employee will be late reporting for work,

a call will be made to report the intended lateness 30

minutes prior to the scheduled starting time.

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The Agreement recognizes Coca-Cola's right to make work rules for its

employees, except where this right is specifically limited, modified, or

restricted by the Agreement. Exercising its right to make rules of

conduct, Coca-Cola required any employee who was going to be late or absent

from work to call and notify Coca-Cola thirty minutes before his scheduled

work time. Coca-Cola provided for increasing punishments for each

successive violation of its rule within a twelve-month period: a verbal

warning for the first; a written warning for the second; a three-day

suspension for the third; and discharge of the employee for the fourth

violation in twelve months.4

Thoreson reported for work late four times from October 1993 to May

1994, and on every occasion failed to call in thirty minutes before his

scheduled time for work. Before October 1993, Thoreson had worked for

Coca-Cola for seventeen years without a problem.

Coca-Cola gave Thoreson a verbal warning for his first late 
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arrival to work without calling in, a written warning for his second, and

a three-day suspension for his third. Finally, after Thoreson arrived late

for work without calling in for the fourth time in less than twelve months,

Coca-Cola discharged Thoreson. The Union disagreed with Coca-Cola's

decision to discharge Thoreson and asked Coca-Cola to reinstate Thoreson,

but Coca-Cola refused to change its decision.

The dispute between the Union and Coca-Cola over Thoreson's discharge

went to arbitration as required by the Agreement after the Union and CocaCola failed to settle the dispute themselves. The arbitrator found that

between October 1993 and May 1994 Thoreson had failed four times to call

Coca-Cola before his late arrival at work and that Thoreson had no good

excuse for his failures. The arbitrator ruled, however, that Coca-Cola

should reinstate Thoreson without backpay because Thoreson had a good work

record over the seventeen years he worked for Coca-Cola before October

1993.

Coca-Cola refused to reinstate Thoreson and brought this action in

federal district court to vacate the arbitrator's award. The district

court stated that the arbitrator found that Thoreson had violated CocaCola's work rules four times without any good excuse for doing so. The

district court concluded that Thoreson's four violations constituted just

cause to discharge Thoreson and that the Agreement did not permit the

arbitrator to order Thoreson's reinstatement after his four unexcused

violations of Coca-Cola's work rules. The district court vacated the

arbitrator's award, and the Union appeals.

Our review of this arbitration award is exceptionally narrow because

Coca-Cola and the Union have contracted to have their disputes settled by

an arbitrator, and it is the arbitrator's view of the facts and the meaning

of the Agreement that they have agreed to accept. See United Paperworkers

Int'l Union v. Misco, Inc., 484
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U.S. 29, 37-38 (1987). We must enforce the arbitrator's award, even if we

think he has committed serious error, as long as he is arguably construing

or applying the Agreement and acting within the scope of his authority.

Id. at 38. The arbitrator cannot, however, dispense his own brand of

industrial justice and his award is legitimate only so long as it draws its

essence from the Agreement. United Steelworkers v. Enterprise Wheel & Car

Corp., 363 U.S. 593, 597 (1960).

Coca-Cola argues that the arbitrator could not order it to reinstate

Thoreson because the Agreement permits it to make and enforce work rules

and that it properly discharged Thoreson under those rules.

We reject Coca-Cola's argument because it fails to consider the

entirety of the applicable contract provisions. The Agreement gives CocaCola the ability to adopt and enforce work rules and to discipline and

discharge employees, and makes clear that these management rights exist

except as specifically limited, relinquished, modified or restricted by the

Agreement. Thus, while the Agreement gives Coca-Cola the right to enforce

work rules and to discharge employees, it also provides that Coca-Cola

"shall not discharge any employee after he has been placed on the seniority

list without just cause." These provisions of the Agreement are the basis

for the issues that were presented to the arbitrator for a decision. 

We have in earlier cases, one of which involves Coca-Cola, considered

the tension that may exist between the right to discipline and contract

provisions requiring just cause for discharge. In Chauffeurs, Teamsters

& Helpers Local Union No. 878 v. Coca-Cola Bottling Co., 613 F.2d 716 (8th

Cir.), cert. denied, 446 U.S. 988 (1980), we rejected an argument that an

arbitrator's award reinstating an employee was unenforceable because it had

no foundation in the collective bargaining agreement. Like the 
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agreement in this case, the contract provided that the company could not

discharge an employee without just cause. Id. at 718-19. The management

rights provision, which is quite similar to the one before us, reserved to

the company the rights not "clearly and expressly relinquished" by the

specific terms of the contract, and provided that the company could

"discharge or otherwise discipline employees for cause determined to be

just by the [company]." Id. at 719. The Chauffeurs case specifically

involved the issue of whether "just cause" was ambiguous as to its

procedural implications, and determined that interpretation by an

arbitrator was appropriate. Id. at 719-20. Chauffeurs is instructive in

that it examines the relationship between specific provisions of the

contract concerning management's right to discharge and just cause.

Later, in Local 238 International Brotherhood of Teamsters v.

Cargill, Inc., 66 F.3d 988 (8th Cir. 1995) (per curiam), an employee was

discharged for refusing to submit to a drug and alcohol test. The

company's drug and alcohol policy, which the collective bargaining

agreement incorporated by reference, stated that any employee who refused

a test would be discharged. Id. at 989-90. The collective bargaining

agreement also stated that the company could not discharge an employee

without just cause. Id. at 990. An arbitrator reinstated the employee

because he concluded that there was insufficient cause to discharge the

employee. Id. at 989. After considering these facts we stated:

[T]here is an inherent tension or ambiguity between the portion

of the drug and alcohol policy which provides that if "testing

is refused, the employee . . . will be terminated," and the

provision in the collective bargaining agreement submitting

drug and alcohol policy disputes to grievance and arbitration.

Harmonizing these discordant provisions was clearly a matter

for the arbitrator and was well within his authority.

Id. at 990. We also observed that the arbitrator was concerned with the

question of remedy and went on to quote Misco, 484 U.S. at
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41, as follows:

[T]hough the arbitrator's decision must draw its essence from

the 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.'

Id.

In the case before us the Agreement specifically gives Coca-Cola the

right to make and enforce rules of conduct and to discharge. The work

rules adopted by Coca-Cola are based on this provision in the Agreement.

Discharge, however, is limited by the clear statement that Coca-Cola "shall

not discharge any employee . . . without just cause." Arbitration of the

issue of discharge under the Agreement of necessity involved the issue of

just cause. As the Agreement nowhere defines just cause, the arbitrator

must interpret and decide the meaning of the Agreement with respect to its

discharge provisions. Under the Agreement, the arbitrator was entitled to

decide that Coca-Cola did not have just cause to discharge Thoreson, and

to order Coca-Cola to reinstate Thoreson. Insofar as there was tension

between the right to enforce work rules specifying discharge, and to

discharge only for just cause, these were issues to be resolved by the

arbitrator. Cargill, 66 F.3d at 990. The fact that we, the district

court, or Coca-Cola may disagree with the arbitrator's arguable

interpretation of the Agreement is of no consequence, because Coca-Cola and

the Union bargained for the arbitrator's interpretation. See Enterprise

Wheel & Car Corp., 363 U.S. at 599. Because the arbitrator has arguably

construed and applied the Agreement and has acted within the scope of his

authority, his award drew its essence from the Agreement.

In support of its argument that discharge was mandated by a violation

of its work rules, Coca-Cola relies on Truck Drivers & 
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Helpers Union Local 784 v. Ulry-Talbert Co., 330 F.2d 562 (8th Cir. 1964),

and St. Louis Theatrical Co. v. St. Louis Theatrical Brotherhood Local 6,

715 F.2d 405 (8th Cir. 1983). The collective bargaining agreements in

those cases, however, are substantially different from the one before us.

In Ulry-Talbert, the company fired an employee for dishonesty in falsifying

his work records. 330 F.2d at 563. The agreement gave the company the

right to discharge and discipline employees, but also provided that regular

employees may be discharged for proper cause. Id. Immediately following

the "proper cause" provision, the agreement listed conduct, including

dishonesty, that "shall be grounds for discharge." Id. at 563-64.

Additionally, the agreement permitted the company to discharge employees

for dishonesty without the normally required written warning. Id. at 564.

Further, under the agreement, an arbitrator, in considering discharges,

"shall only reverse" the decision of the company if he "finds that the

Company's complaint against the employee is not supported by the facts, and

that the management has acted arbitrarily and in bad faith or in violation

of the express terms of this Agreement." Id. Because the agreement in

Ulry-Talbert specifically modified the requirement of proper cause for

discharge by stating dishonesty "shall be grounds for discharge," and

limited the arbitrator to deciding whether the company's complaint was

supported by the facts, Ulry-Talbert gives no support to Coca-Cola.

Further, this is not a case such as St. Louis Theatrical, where a

company discharged an employee for an unauthorized work stoppage. The

collective bargaining agreement in St. Louis Theatrical stated that any

employee discharged for participating in an unauthorized work stoppage

"shall have no recourse to any other provisions of this Agreement except

as to the fact of participation." 715 F.2d at 407-08. We held that once

the arbitrator found that the employee participated in the work stoppage

and was thus subject to discipline, any consideration as to whether the

discharge was an excessive penalty exceeded his 
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authority. Id. at 408-09. Again, because the agreement in St. Louis

Theatrical limited the arbitrator's authority in a way that the agreement

in this case does not, St. Louis Theatrical gives no support to Coca-Cola.

Coca-Cola's argument, at the core, is that the work rules trump the

Agreement. We reject this argument.

Accordingly, we reverse the judgment of the district court and order

enforcement of the arbitrator's award.

A true copy.

Attest:

CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.