Court Opinion

ID: 8935116
Source: CourtListenerOpinion
Date Created: 2022-11-27 07:25:58.119147+00
Date Added: 2024-06-11T17:09:36.207382
License: Public Domain

ALDISERT, Chief Judge,
dissenting.
Douglas Samuels was convicted of stealing from his employer, Jersey Coast Egg Producers, Inc., which had fired him for the theft. He did not appeal the conviction. Yet, according to Arbitrator Pierson, he should not have been fired because he was not guilty and, moreover, the company has to rehire him and award him backpay.
District Judge Thompson said in effect that this was nonsense and refused to enforce the arbitrator’s award. The majority disagree and reverse. I dissent. I would affirm because, like Judge Thompson, I find the arbitrator’s refusal to accept the valid, unappealed judgment of the municipal court a “manifest disregard for the law.” App. at 212a.
I.
The case of Ludwig Honold Manufacturing Co. v. Fletcher, 405 F.2d 1123 (3d Cir.1969), is controlling. Speaking for the court in that opinion, I set forth two fundamental precepts to guide labor arbitrators and the courts that review their awards: first, an arbitrator must never act in “manifest disregard” of general law; second, because the parties have bargained for the arbitrator’s interpretation of the labor contract, the arbitrator’s award will be sustained so long as the interpretation is based on some principles of contract construction and the law of the shop.1 I made clear, however, both in the text of the opinion, and in a footnote, that in addition to cases where the arbitrator totally departed from principles of contract construction, “[a]n award may be vacated where it ... violates a specific command of some law____” 405 F.2d at 1128-29 n. 27 (citing cases). That is precisely what the arbitrator did here.
II.
Here we have a criminal conviction in which Samuels was convicted by proof beyond a reasonable doubt. I cannot conceive of any subsequent civil proceeding before any Article III judge, including a Supreme Court justice, or before any federal magistrate, bankruptcy judge, or state judge, in which the judicial officer would not be bound by the previous determination. The reason for this is that the proof in the criminal proceeding (beyond a reasonable doubt) is a higher burden than the subsequent civil case. The same is not true, however, where the person is acquitted in the criminal proceeding. The judicial officers in the subsequent civil case may reexamine the facts because the burden of proof is of a lesser degree (usually, preponderance of the evidence).
The question then comes, if a U.S. Supreme Court justice is bound by the law of issue preclusion by a previous criminal ease, is there any satisfactory reason to exempt a labor arbitrator from following the same law? I think not. This is not a specialized aspect of interpreting a labor contract. This is not an area calling for knowledge of the law of the industrial shop. This is not a matter that conflicts with the informality of fact determination including the acceptance of hearsay evidence that usually characterizes an arbitration proceeding. There is nothing in familiarly stated reasons for imposing the law of issue preclusion upon judges of courts of record that should exempt labor arbitrators from adhering to this requirement.
Moreover, it would seem that imposing issue preclusion on a labor arbitrator where a criminal case precedes the arbitra*538tion is a matter of a fortiori proportions especially, as here, where an arbitrator has chosen to re-invent the facts of the criminal conviction and the crime under which the employee was charged and found guilty.
III.
It is uncontroverted that Arbitrator Pier-son was informed that Douglas Samuels “did commit the theft of company property on February 27, 1984 as determined by the Voorhees Township Municipal Court.” App. at 44a (emphasis supplied). It is also uncontroverted that the criminal information in that court charged that Samuels
did within the jurisdiction of this court, commit an act of theft upon Jersey Coast Egg Producers by unlawfully taking and exercising control over certain movable property, to wit: one case of eggs valued at $35.00 belonging to another with the intent to deprive the owner thereof; in violation of: NJS 2C:20-3.
App. at 2a. Chapter 20 of the New Jersey Code of Criminal Justice is titled “Theft and Related Offenses”. Section 2C:20-3 provides:
2C:20-3. Theft by unlawful taking or disposition
a. Movable property. A person is guilty of theft if he unlawfully takes, or exercises unlawful control over, movable property of another with purpose to deprive him thereof.
b. Immovable property. A person is guilty of theft if he unlawfully transfers any interest in immovable property of another with purpose to benefit himself or another not entitled thereto.
The transcript of the Municipal Court proceedings reveals:
THE COURT: [T]he testimony of [the witness] is one without interest, and he just impresses this court of having very unemotionally testifying this is what he saw and that is what he said, and that is what he heard.
On the other hand, the testimony of the Defendant, obviously has an interest. His interest is his job, which this Court is not unmindful of, and the implication of the consequences of this action, and he comes to Court and denies each of the allegations and statements by Hartman.
The testimony would seem to indicate that the Defendant did, while making a delivery, take a case of these eggs, and cause it to be passed over to someone else, not on his delivery route, and it would seem to this court that the State has carried its burden beyond a reasonable doubt.
I am saddened by making this decision, his job is on the line. Apparently the Court has no alternative but to enter a finding of Guilty.
App. at 34a.
Notwithstanding that the criminal information was based on the New Jersey criminal statute for theft, the arbitrator commented: “Moreover, the Union maintained that the conviction was for disorderly persons, not theft.” Id. at 171a. As a lawyer, the arbitrator should know that the New Jersey grading criteria for the theft of an amount under $200.00, imposing a sentence equal to that of disorderly persons does not change the legal conclusion of theft. See N.J.Stat.Ann. § 2C:20.2(b) (West 1982).
The majority state that they need not reach the issue of collateral estoppel, assuming arguendo that it would apply, because it would still be the decision of the arbitrator as to whether the “misdemeanor conviction constitutes just cause for dismissal under the terms of the collective bargaining agreement.” I fully agree that the arbitrator has the final say as to the legal conclusion of what constitutes just cause under the collective bargaining agreement. The arbitrator clearly addressed this issue stating that theft would constitute just cause: “Stealing from an employer ... is an offense which, if proven, clearly warrants summary discharge. It is conduct which should not nor cannot be condoned by the parties to the collective bargaining relationship. When it occurs, just cause exists for discharge.” App. at 173(a).
Notwithstanding this clearly proper legal conclusion, the arbitrator instead decided to *539rewrite the factual history of the case before him. Although Samuels was convicted beyond a reasonable doubt of stealing a crate of eggs from his employer, the arbitrator concluded: “[T]his arbitrator has not been convinced that [Samuels] did commit the act of theft on February 27, 1984.” Id.
In my view, a more blatant disregard of the law by an arbitrator is very difficult to imagine. The arbitrator clearly stated that theft constitutes just cause for discharge. But with regard to the factual issue of theft itself, the arbitrator completely ignored a record showing that Samuels had already been convicted of that same theft. This is “manifest disregard” of the law of issue preclusion. This “violates a specific command of some law.” As such, his award should be vacated. Ludwig Honold Mfg. Co. v. Fletcher, 405 F.2d 1123, 1129 (3d Cir.1969).

. My precise language follows:
[T]his means that the interpretation of labor arbitrators must not be disturbed so long as they are not in “manifest disregard" of the law, and that "whether the arbitrators misconstrued a contract” does not open the award to judicial review.
Accordingly, we hold that a labor arbitrator’s award does "draw its essence from the collective bargaining agreement” if the interpretation can in any rational way be derived from the agreement, viewed in the light of its language, its context, and any other indicia of the parties’ intention; only where there is a manifest disregard of the agreement, totally unsupported by principles of contract construction and the law of the shop, may a reviewing court disturb the award.
405 F.2d at 1128 (footnotes omitted).