Opinion ID: 3013720
Heading Depth: 3
Heading Rank: 1

Heading: The arbitrator acted outside the

Text: exclusive province of the arbitrator.” Id. scope of his delegated (citing Misco, 484 U.S. at 36). It is not the court’s “role to draw inferences that the authority and rendered an award that 10 did not draw Company in the absence of a clear abuse of discretion.”4 The arbitrator could its essence from the collective therefore only conclude that the zero bargaining agreement. tolerance policy was unreasonable if he found that CITGO clearly abused its discretion in instituting it. However, the The arbitrator made three separate arbitrator found no abuse of discretion, findings. He agreed that there can be no and this record supports none. The “serious quarrel” with CITGO’s right to arbitrator found that the zero tolerance “make certain that safety concerns are policy was unreasonable simply because paramount and . . . adequately addressed.” he did not believe that giving an employee Second, he agreed that CITGO did have a second chance was inconsistent with the best safety record in the industry and CITGO’s goal of having the best safety “wants to keep it that way.”3 Third, he record in the industry. He wrote: “[I]t has agreed that having the best safety record in not been shown to my satisfaction that the industry “is obviously a legitimate permitting an employee to have a ‘second o b j e c t i v e fo r a ny c om pa ny. ” chance’ would be inconsistent with that Notwithstanding this, he stated: “It has not goal.” Thus, rather than concluding that been shown to my satisfaction that CITGO abused its discretion in adopting a permitting an employee to have a ‘second zero tolerance policy, the arbitrator chance’ would be inconsistent with simply substituted his own judgment for [having the best safety record in the CITGO’s, and declared CITGO’s zero industry].” He concluded his analysis tolerance provision unreasonable. with: “[T]hat being so the arbitrator agrees with the Union that the policy, without However, an arbitrator’s opinion giving a second chance for rehabilitation a n d a w a r d b a s e d o n “ g e n er a l is unreasonable.” considerations of fairness and equity” as opposed to the exact terms of the CBA, However, in finding that the fails to derive its essence from the CBA. absence of a second chance was MidMichigan Reg’l Med. Ctr – Clare v. unreasonable, the arbitrator ignored the Professional Employees Div., 183 F.3d parameters of his inquiry as defined in the 497, 502 (6th Cir. 1999). As we explain CBA. As we noted above, Article XXV, more fully below, the award here § 25.6 of the CBA provides, in relevant comported with the arbitrator’s view of part, that “[t]he arbitrator shall not fairness, but did not draw its essence from substitute his judgment for that of the the CBA. 3 4 As noted, the arbitrator added that he According to CITGO, this “is a very would therefore not “seek to disturb that unusual provision to have in a labor record.” agreement.” CITGO’s Br. at 23. 11 Local 2-991 defends the arbitrator’s that go beyond the four corners of a conclusion by arguing that the parties’ collective bargaining agreement.” Id. submission allowed the arbitrator to go (citations omitted) (emphasis added). beyond the § 25.6 “abuse of discretion” As recited earlier, the agreed-upon standard. We agree that, although the submission read: CBA is the “sole source of the arbitrator’s authority[,] . . . [t]he parties may . . . agree Did CITGO violate Article to allow an arbitrator to go beyond the X X X o f t h e L a b or express terms” of the CBA. High Agreement by improperly Concrete Structures, Inc. v. United implementing its National Electrical, Radio and Machine Workers of Substance Abuse Policy at America, Local 166, 879 F.2d 1215, 1218 the Paulsboro facility on (3d Cir. 1989) (citation omitted). “They October 1, 1999. If not, may do so either by providing in the was the policy collective bargaining agreement for unreasonable? interest arbitration as well as rights arbitration,5 or by agreeing, separately, to submit specific issues to arbitration.” Id. As Local 2-991 sees it, even if the (emphasis added). A submission may be language of the CBA prohibited the “express, may incorporate an antecedent arbitrator from substituting his own grievance, or may be based on other judgment for that of CITGO’s absent an relevant submissions or actions.” Id. at abuse of discretion by CITGO, it is the 1219 (citations omitted). “But however language of the parties’ submission that derived, the terms of the submission may controls the extent of the arbitrator’s empower the arbitrator to resolve disputes authority. Therefore, argues Local 2-991, because the submission required that the arbitrator determine, in the event that he 5 In “interest arbitration,” the parties ask found that the policy did not violate the arbitrator to set new terms and Article XXX (the Future Bargaining conditions of employment, while in “rights Clause) of the CBA, whether the policy arbitration,” the arbitrator is asked to was reasonable, the submission freed the r e s o lv e d i s p u t e s i n v o l v i n g t h e arbitrator from the confines of that interpretation or application of terms and portion of the CBA that prohibited the conditions of employment already agreed arbitrator from substituting his own to in the CBA. Local 801, Int’l judgment for CITGO’s absent an abuse of Brotherhood of Boilermakers, Iron discretion by CITGO. More succinctly, Shipbuilders, Blacksmiths, Forgers and Local 2-991 argues that the broad Helpers, ALF-CIO v. Pennsylvania language of the last sentence of the Shipbuilding Co., 835 F.2d 1045, 1046-47 submission trumped the narrower (3d Cir. 1987). language of § 25.6 of the CBA. 12 According to Local 2-991, the arbitrator arbitrator’s conclusion. 6 That failure merely leads to CITGO’s second argument. reviewed the terms of the B. The arbitrator’s decision that the CBA, listened to the zero tolerance policy witn esses’ testi m o n y, is unreasonable is not supported by reviewed the terms of the record. documents submitted, and considered attorney argument. After digesting As recited earlier, “[a]n arbitrator’s all of this evidence, [the award must be enforced so long as it arbitrator] addressed the draws its essence from the collective stipulated issue and found bargaining agreement.” United Industrial that there was no contract Workers v. Government of the Virgin violation. Which brought Islands, 987 F.2d 162, 170 (3d Cir. 1993) the arbitrator to the next (citation and internal quotations omitted). question placed before him “A labor arbitration decision fails to draw by the parties: whether the its essence from the collective bargaining policy was unreasonable. agreement if the arbitrator acted in The arbitrator answered that manifest disregard of the law, or if the question and found the record before the arbitrator reveals no “zero tolerance” portion of support for the arbitrator’ s the policy unreasonable. determination.” Id. (citation omitted) [Thus, according to the (emphasis added). CITGO argues that, union,] [u]nder the circumstances, there can be no doubt that the award is 6 enforceable. Local 2-991's argument seems to establish no standard by which to judge the propriety of the arbitrator’s decision. Local 2-991's Br. at 23. Once the CBA’s “abuse of discretion” standard is jettisoned, the union’s argument would allow the arbitrator to However, assuming arguendo that apply any free-floating standard including the submission trumped the “abuse of his/her own subjective judgment whether discretion” standard in the CBA, it is or not it was supported by the record. nevertheless still apparent that Local 2- This gives the arbitrator almost unfettered 991 has only described what the arbitrator discretion to determine the reasonableness did. The union has not explained either of a challenged policy. The union claims the rationale for, or the basis of, the that the last sentence of the submission did just that. 13 regardless of the scope of the last sentence tolerance policies certainly casts doubt of the submission, the award must still be upon the arbitrator’s focus on Motiva and supported by the record, and this award is Sun Oil, and the arbitrator never explained not. We agree.7 why he elevated the importance of Motiva and Sun Oil refineries over larger ones The arbitrator relied only on two with better safety records. “facts” to support his determination that the zero tolerance policy was The arbitrator also relied upon unreasonable. First, the arbitrator noted provisions of the Omnibus Transportation that neither Motiva nor Sun Oil have zero Employee Testing Act of 1991, 49 U.S.C. tolerance policies at their refineries. § 31306 et seq., and the Department of However, the fact that two companies with Transportation regulations promulgated safety records that are inferior to CITGO’s under it, 49 C.F.R. § 382.101 et seq. That do not have zero tolerance policies does Act and its regulations allow employees a not establish that CITGO acted second chance for rehabilitation. unreasonably in adopting a zero tolerance However, that does not mean that a policy. In fact, considering the stipulated decision to the contrary is unreasonable. catastrophic repercussions of a safety This is especially true when we consider lapse at the Paulsboro plant, and CITGO’s the hazardous nature of CITGO’s superior safety record, one could just as facilities, the need for prompt and readily conclude that it was unreasonable unimpaired action in the event of an for Sun Oil and Motiva not to have a zero emergency, and the exception for tolerance policy. Moreover, the employees who step forward seeking help a r b i t r a tor’s f i n d in g o f th e for a substance abuse problem that CITGO unreasonableness of the zero tolerance has included in its policy.8 Indeed, the policy completely ignores DeLeon’s Supreme Court has noted that the statute unrebutted testimony that the three largest and the regulations at issue leave it to the companies in the industry – Exxon, parties to define appropriate discipline. Marathon and Tosco – have zero The Court explained the backdrop of the tolerance policies exactly like CITGO’s. safety regulations as follows: The undisputed fact that the three largest [W]hen promulgating these companies in the industry have zero 7 8 We do not believe that the arbitrator’s We do not understand how the determination that the zero tolerance arbitrator could conclude on this record policy is unreasonable is supported by the that it is unreasonable for CITGO to adopt record under CITGO’s narrow “abuse of a policy that attempts to pressure impaired discretion” standard” or under Local 2- employees into stepping forward and 991's broader “submission trumps the seeking help before their impairment CBA” standard. results in a catastrophe. 14 regulations, DOT decided employed in safety-sensitive positions not to require employers there, and that impaired employees pose a either to provid e threat to co-workers, the work-place, the rehabilitation or to hold a environment and to the public at large. job open for a driver who Since the Managements Rights has tested positive, on the Clause of the CBA (Article III), expressly basis that such decisions gives CITGO the right “to make and should be left to enforce rules for the maintenance of m anagement/driver discipline and safety” and since CITGO § negotiation. That 25.6 of Article XXV precludes either the determination reflects basic union or CITGO from using the grievance background labor law process to amend the CBA, we are hard- principles, which caution pressed to understand how the arbitrator against interference with could have concluded that the zero labor-management tolerance policy is unreasonable without agreements about substituting his own judgment for appropriate emplo yee CITGO’s and ignoring CITGO’s expressly discipline. reserved right “to make . . . rules for . . . safety.” Eastern Associated Coal Corp. v. United V. CONCLUSION Mine Workers of America, District 17, 531 For the above reasons, we will U.S. 57, 65 (2000) (citations omitted) reverse the district court’s order enforcing (emphasis added). The arbitrator’s award the arbitrator’s decision and award, and here ignores that caution as well as the remand to the district court for an order express reservation of the employer’s vacating the arbitration award. prerogatives as set forth in Article III, the Management Rights Clause. Thus, the fact that Motiva and Sun Oil do not have zero tolerance policies and the fact that a particular federal statute and its implementing regulations allow a second chance, are not sufficient to support a finding that CITGO’s zero tolerance policy is unreasonable. This is especially true given the undisputed evidence that the Paulsboro facility is a hazardous work environment susceptible to explosions, Local 2-991 members are 15