___________ No. 95-2661

___________ 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. *

___________ Submitted: February 16, 1996 Filed: July 11, 1996

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

___________ JOHN R. GIBSON, Circuit Judge.

Allied Sales Drivers, Ambulance, Beer, Brewery, Grain Elevator , Ret ail Liquor, Livery, Malt House, Spring Water, Soft Drinks, Taxi Cab , Vend ing Drivers, Helpers, Inside Employees, and General Workers Union , Loc al 792, appeals from an order of the district court vacating a n arbitra tor's award that ordered Midwest Coca-Cola Bottling Company t o 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, ri ght to function, privilege and authority which it had pri or to the certification of the Union except, and only except, as specificall y limited, relinquished, modified, or restricted by thi s Agreem ent. Illustrative, but not all inclusive of th e rights of management retained are the right to manage th e Compan y; to direct the work force, and to make an d enforc e rules of conduct; . . . to classify, promote , di scipline , demote, and discharge employees;

. . . . Subjec t to the terms of this agreement, rights no t specif icallyset forth in the Agreement upon which th e parties negotiated or had the opportunity to negotiate, whether or not such rights hav e been exercised by [CocaCola] in the past, remain with [Coca-Cola]. (emphasis added).
-2- and, therefore, the a ward should be enforced. We reverse the judgment of the district court and order enforcement of the arbitrator's award.

William T horeson 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 an d enforce rules of conduct and to discipline and discharge employees. The Agreement provides tha t 1 Coca-C ola shall not discharge an employee after he obtains seniorit y 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 seniorit y li st without just cause. Notice of discharge o r suspensionshall be mailed to the Union office within tw o (2) work days of occurrence. In case of discharge, such employee may request an investigation as to the discharg e andshould such investigation prove an injustice has bee n done, the employee shall be reinstated and compensated a t his u sual rate of pay, while he has been out of work

. Appeal from a discharge or suspension must be take n withinfive (5) work days following notice thereof to th e Uni onSteward by written notice by the Union to [Coca

Cola], and if a satisfactory decision is not reached by the Union and [Coca-Cola], it shall be settled a s provided under Article VII of this Agreement

. Su spensionor discharges will be imposed when th e 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 b e considered under Article IV(d). (b) Any controversy arising fr om the interpretation of, or adherence to the terms and provisions of thi s Agreement shall be settled promptly by negotiation s be tweenthe Union and [Coca-Cola]. If no adjustmen t satisfactory to both parties c an be reached in this way, then the matter shall be settled by arbitration

. . . . -3- cause. T here is a grievance procedure, the last step of which i s

2 arbitration. 3

### (emphasis added).
-4-

### Coca-Cola's work rules provide: 4 

### Viola tionof [work] rules will normally result i n progressive discipline. On a first occurrence, a verbal war ning will be issued. Second occurrence within a 1 2 monthperiod will result in a written warning. On a third occurrence, the employee will be given a three (3) day suspension. Finally, a fo urth violation will result in discharge.

. . . Employ ees who are unable to attend work must call an d rep ort their absence 30 minutes prior to the time the y are scheduled to start. "Call in" must be made every da y to the employee's immediate supervisor, unless th e su pervisor specifically tells the employee that a cal l does not have to be made every day (as in the case of a long-term illness).
Inthe event an employee will be late reporting for work , a call will be made to report the intended lateness 3 0 minutes prior to the scheduled starting time.
-5- The Agreement recognizes Coca-Cola's right to make work rules f or its employees, except where this right is specifically limited, modified, or restricte dby the Agreement. Exercising its right to make rules o f conduct, Coca-Cola required any employee who was going to be late or absen t from work to call and notify Coca-Cola thirty mi nutes before his scheduled work t ime. Coca-Cola provided for increasing punishments for eac h
suc cessive violation of its rule within a twelve-month period: a verba l
warn ing for the first; a written warning for the second; a three-da y suspe nsionfor the third; and discharge of the employee for the fourt h 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 hi s sched uled time for work. Before October 1993, Thoreson had worked fo r 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 witho ut calling in, a written warning for his second, and
a three-day suspension for his third. Finally, after Thoreson arrived lat e for work without calling in for the fourth time in less than twelve months , Co ca-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 dis charge went to arbitration as required by the Agreement after the Union and CocaCola failed to settle the dispute themselves. The arbitrator found that betweenOctober 1993 and May 1994 Thoreson had failed four times to call Coca-Cola before his late arrival at work and that Thoreson had no goo d
exc use for his failures. The arbitrator ruled, however, that Coca-Col a should reinstate Thoreson without backpay becaus e Thoreson had a good work record over the seventeen years he worked for Coca-Cola before Octobe r 1993.

Coca-Cola refused to reinstate Thoreson and brought this action i n federal district court to vacate the arbitrator's award. The distric t
cou rt stated that the arbitrator found that Thoreson had violated Coca

Cola's work rules four times without any good excuse for doing so. Th e district court conclu ded that Thoreson's four violations constituted just
cause to d ischarge Thoreson and that the Agreement did not permit th e arbitra tor to order Thoreson's reinstatement after his four unexcuse d violati ons of Coca-Cola's work rules. The district court vacated th e arbitrator's award, and the Union appeals.

Our review of this arbitration awardis exceptionally narrow because Coca-Cola and the Uni on have contracted to have their disputes settled by
an arbitrator, and it is the arbitrator's view of the facts and the meanin g of the Agreement that they have agreed to accept

. See United Paperworkers Int'l Union v. Misco, Inc. , 484

### -7-

U.S. 29, 37-38 (1987). We must enforce the arbi trator'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 o f industrial justice and his award is legitimate only so long as it draws it s 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 Thoresonbecause 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 th e entirety of the applicable contract provisions. The Agreement gives CocaCola the ability to adopt and enforce work rules and to discipline an d discha rge employees, and makes clear that these management rights exis t except as specifically limited, relinquished, modified or restricted by th e Agreement. Thus, while the Agreement gives Coca -Cola the right to enforce work rules and to discharge employees, it also provides that Coca-Col a "shall not discharge any employee after he has been placed on the seniorit y list without just cause." These provisions of t he 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, cons idered the tension that may exist between the right to discipline and contrac t provisions requiring just cause for discharge. In Chauffeurs, Teamsters & Helpers Local Union No. 878 v. Coca-Cola Bottl ing 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 ha d no foundation in the collective bargaining agreement. Like the

### -8-

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 th e specific terms of the contract, and provided that the company coul d "disch arge or otherwise discipline employees for cause determined to b e just by the [company]." Id. at 719. The Chauffeurs case specificall y inv olved the issue of whether "just cause" was ambiguous as to it s proced ural implications, and determined that interpretation by a n arbitrator was approp riate. Id. at 719-20. Chauffeurs is instructive in that i t examines the relationship between specific provisions of th e 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 dischargedfor refusing to submit to a drug and alcohol test. Th e company's drug and alcohol policy, which the collective bargainin g agreement incorporate d by reference, stated that any employee who refused
a test would be discharged. Id. at 989-90. The collective bargainin g agreement also stated that the company could not discharge an employe e without j ust cause. Id. at 990. An arbitrator reinstated the employe e bec ause he concluded that there was insufficient cause to discharge th e employee. Id. at 989. After considering these facts we stated:
[T]here is an inherent tension or ambiguity betweenthe portion of the drug and alcohol policy which provides that if "testing is refused, the employee . . . will be terminated," and th e pro visionin the collective bargaining agreement submittin g drug and alcohol policy disputes to grievance and arbitration. Ha rmonizing these discordant provisions was clearly a matte r 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

### -9-

41, as follows:
[T]houghthe arbitrator's decision must draw its essence from the agreement, he `is to bring his informed judgmen t to bear in order to r each a fair solution of a problem. This i s 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 wor k rules adopted by Coca-Cola are based on this provision in the Agreement. Discharge, however, is limited by the clear statement that Coca-Cola "shal l not discharge any emp loyee . . . without just cause." Arbitration of the issue of discharge un der 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 Agr eement 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 tensio n betw eenthe right to enforce work rules specifying discharge, and t o discharge only for just cause, these were issues to be resolved by th e arbitrato r. Cargill , 66 F.3d at 990. The fact that we, the distric t court, or Coca-Cola may disagree with the arbitrator's arguabl e interpretation of the Agreement is of no consequence, because Coca-Cola an d 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 appliedthe 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 vio lation 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 Theatri cal Co. v. St. Louis Theatrical Brotherhood Local 6 , 715 F .2d 405 (8th Cir. 1983). The collective bargaining agreements i n those cases, however, are substantially different from the one before us. In Ulry-Talbert , the company fired an employee for dishonesty in falsifyin g his w ork records. 330 F.2d at 563. The agreement gave the company th e right to discharge and discipline employees, but also provided that regula r employees may be disc harged for proper cause. Id. Immediately following the "pr oper cause" provision, the agreement listed conduct, includin g dishones ty, 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 wri tten 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 th e Company's complaint against the employee is not supported by the facts, an d that the management has acted arbitrarily and inbad faith or in violation of the express terms of this Agreement." Id. Because the agreement i n Ulry -Talbert specifically modified the requirement of proper cause fo r discha rge by stating dishonesty "shall be grounds for discharge," an d limite d the arbitrator to deciding whether the company's complaint wa s 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 companydischarged an employee for an unauthorized work stoppage. Th e collec tive bargaining agreement in St. Louis Theatrical stated that an y empl oyee discharged for participating in an unauthorized work stoppag e "shall have no recourse to any other provisions of this Agreement except as to the fact of par ticipation." 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 th e discharge was an excessive penalty exceeded his

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aut hority. Id. at 408-09. Again, because the agreement in St. Loui s Theatrical limited th e arbitrator's authority in a way that the agreement in this case does not, St. Louis Theatrical give s 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.