Court Opinion

ID: 11975
Source: CourtListenerOpinion
Date Created: 2010-04-25 06:09:35+00
Date Added: 2024-06-11T08:29:23.114494
License: Public Domain

REVISED
                 United States Court of Appeals,

                            Fifth Circuit.

                            No. 96-40279.

 BRUCE HARDWOOD FLOORS, DIVISION OF TRIANGLE PACIFIC CORPORATION,
Plaintiff-Appellant,

                                  v.

   UBC, SOUTHERN COUNCIL OF INDUSTRIAL WORKERS, LOCAL UNION NO.
2713, Defendant-Appellee.

   UBC, SOUTHERN COUNCIL OF INDUSTRIAL WORKERS, LOCAL UNION NO.
2713, Plaintiff-Appellee,

                                  v.

      BRUCE HARDWOOD FLOORS, A DIVISION OF TRIANGLE PACIFIC
CORPORATION, Defendant-Appellant.

                            Jan. 21, 1997.

Appeal from the United States District Court for the Eastern
District of Texas.

Before BARKSDALE, EMILIO M. GARZA and BENAVIDES, Circuit Judges.

     EMILIO M. GARZA, Circuit Judge:

     Plaintiff Bruce Hardwood Floors ("Bruce") appeals the district

court's grant of summary judgment enforcing an arbitration award in
favor of Defendant UBC, Southern Council of Industrial Workers,

Local Union No. 2713 ("the Union") and the court's award of

attorneys' fees to the Union.      We reverse the district court's

decisions on both issues.

                                  I

     Sheila Dixon, a Dryer Tailer/Grader on a production line in

Bruce's Veneer Department, asked her supervisor for leave from work

to take her truck to her daughter who needed it to go to the
doctor.       Dixon's supervisor approved her request.          However, while

Dixon was absent from work, other employees informed her supervisor

that Dixon actually needed the time off to pay an overdue electric

bill.       When questioned by her supervisor the next day about her

reasons for needing the absence from work, Dixon admitted that she

had fabricated the story about her daughter's doctor appointment.

After conferring with his own supervisor, the plant's personnel

manager, and the plant manager, Dixon's supervisor discharged Dixon

for obtaining time off from work under false pretenses.

       Dixon thereafter filed a grievance contesting her termination.

Her grievance was processed in accordance with the four-step

procedure in the parties' collective bargaining agreement ("CBA").

When       Dixon's   termination    could    not    be   resolved   through     the

grievance       procedure,    the    Union     submitted      the     dispute   to

arbitration.

       The arbitrator held that Bruce should have applied progressive

discipline       provisions    of    the     CBA,    rather    than     discharge

provisions.1         He concluded that Bruce's contention that Dixon's

       1
      The pertinent discharge and progressive discipline
provisions of the CBA are as follows:

               Article 24, Section 2. The Company will take action
               against an employee based upon conduct which warrants
               immediate discharge, or for other conduct, while less
               serious, which initially warrants less severe
               discipline. (a) An employee will be discharged
               immediately without prior warning for the following or
               similar reasons:

                     (16) Stealing, immoral conduct, or any act on the
                     Company premises intended to destroy property or
                     inflict bodily injury.

               (b) An employee will be subject to progressive
               discipline for the following or similar reasons:
conduct warranted discharge under the CBA was "unreasonable," but

found that Dixon had "fabricated her story."2     The arbitrator

               (1) Absenteeism.

               (2) Tardiness.

               (3) Inefficiency or poor work performance.

               (4) Abuse of rest periods and lunch periods.

               (5) Neglecting duty or failing to maintain work
               standards.

          Section 3. In the case of offenses where the
          application of progressive discipline would be
          appropriate as set forth in (b) above, the Company
          shall endeavor to adhere to the following order:

               (a) Verbal warning with written record of warning
               for the first incident.

               (b) Written warning for the second incident.

               (c) Disciplinary suspension of three (3) unpaid
               days for the third incident.

               (d) Discharge for the fourth incident.

               In agreeing to the foregoing, however, the Company
          does not intend to waive the exercise of its right to
          discipline or discharge without following such order in
          any case where it determines that the seriousness of
          the particular offense involved warrants discipline of
          a different order.
     2
      Specifically, the arbitrator concluded:

               The Grievant's conduct was not such that demands
          the supreme industrial penalty of immediate discharge.
          The Company wrongfully attempted to apply the
          referenced provisions of the Collective Bargaining
          Agreement to the Grievant's conduct. The parties
          negotiated a progressive discipline policy which the
          Company failed to follow.

               Considering the evidence adduced at the
          arbitration hearing, and considering the presentations
          made by the parties in their post hearing briefs, the
          Arbitrator has adequate reason to substitute his
          judgement [sic] for that of Company's management.
reinstated Dixon with full seniority and back pay and imposed a

ten-day suspension from work.

      Bruce then filed a complaint in district court seeking vacatur

of the arbitration award. The Union subsequently filed a complaint

seeking enforcement of the award.           The district court consolidated

the   actions    and   the   parties   filed    cross-motions   for   summary

judgment. The district court granted the Union's motion and denied

Bruce's motion, thereby enforcing the arbitration award.3                 The

district court also awarded the Union attorneys' fees.                 Bruce

appeals.

                                       II

          Bruce argues that the arbitrator improperly ignored the terms

of the parties' CBA and that the district court should therefore

have vacated the arbitration award.           Where a party appeals a grant

of summary judgment in a suit to vacate an arbitration award, we

review the district court's ruling de novo.             Houston Lighting &

Power Co. v. International Bhd. of Elec. Workers, Local Union No.

66, 71 F.3d 179, 181 (5th Cir.1995), cert. denied, --- U.S. ----,

117 S. Ct. 52, 136 L. Ed. 2d 16 (1996).           As long as the arbitrator's

decision draws its essence from the collective bargaining agreement

and the arbitrator is not fashioning his own brand of industrial

justice, we will decline to vacate the award.              Id. at 182.     In

applying the "essence" test, we have stated that an arbitration

      3
      In granting the Union's motion for summary judgment to
enforce the arbitration award, the district court found that "the
arbitrator confined his decision and remedy to the interpretation
and application of the collective bargaining agreement" and that
the arbitrator "provide[d] an award which was within the essence
of the collective bargaining agreement."
award "must have a basis that is at least rationally inferable, if

not obviously drawn, from the letter or purpose of the collective

bargaining agreement.... [T]he award must, in some logical way, be

derived from the wording or purpose of the contract."             Executone

Info. Sys., Inc. v. Davis, 26 F.3d 1314, 1325 (5th Cir.1994)

(citation omitted).

         Although we accord an arbitrator's decision considerable

deference    regarding   the   merits   of   the   controversy,    the   CBA

circumscribes his jurisdiction.         Delta Queen Steamboat Co. v.

District 2 Marine Eng'rs Beneficial Ass'n, 889 F.2d 599, 602 (5th

Cir.1989), cert. denied, 498 U.S. 853, 111 S. Ct. 148, 112 L. Ed. 2d
114 (1990).    Where the arbitrator exceeds the express limitations

of his contractual mandate, judicial deference ends and vacatur or

modification of the award is an appropriate remedy.         Id.

         After reviewing both the CBA and the arbitration award, we

conclude that the award is not "derived from the wording or purpose

of the contract."     Executone, 26 F.3d at 1325.      Article 9, § 3 of

the CBA binds an arbitrator to the terms of the contract.           See id.

("No arbitrator shall have authority to add to, amend or depart

from the terms of this written Agreement....").           The arbitrator

found, based on Dixon's own admission, that Dixon lied to obtain

time off from work.      Lying is specifically covered by Article 24,

§ 2(a) of the CBA, which states that an employee will be discharged

immediately for engaging in immoral conduct.4        In refusing to apply

     4
      The dissent criticizes us for interpreting the term
"immoral conduct." We do not. By definition, lying is immoral
conduct—that is, it is inconsistent with principles of morality.
See BLACK'S LAW DICTIONARY 751 (6th Ed.1990).
this provision, the arbitrator exceeded the express limitations of

his contractual mandate.5

         The arbitration award is further undermined by the penalty

imposed.    Nowhere does the CBA provide for a penalty of a ten-day

suspension from work.      Although the Supreme Court has stated that

"[n]ormally, an arbitrator is authorized to disagree with the

sanction imposed for employee misconduct," United Paperworkers

Int'l Union v. Misco, Inc., 484 U.S. 29, 41, 108 S. Ct. 364, 373, 98
L. Ed. 2d 286 (1987), the Court clarified that "[t]he parties, of

course,    may   limit   the   discretion   of   the   arbitrator   in   this

respect...."      Id.    By so doing, it is possible to vest in the

employer complete discretion over terminations which the arbitrator

is not free to usurp.      Delta Queen, 889 F.2d at 602.

     As noted, the CBA in this case prohibits an arbitrator from

adding to, amending or departing from the terms of the agreement.

Hence, once the arbitrator found that Dixon fabricated her story,

he was bound to impose the penalty provided by the CBA for that

conduct.     Id at 604 ("If a collective bargaining agreement defines

"proper cause' to include a non-exhaustive list of offenses, an

     5
      The arbitrator concluded that Bruce should have applied the
CBA's progressive discipline policy to Dixon's conduct, but did
not specify which of the five enumerated progressive discipline
offenses incorporated Dixon's lie. Likewise, though the Union
urges that Dixon's conduct deserves progressive discipline
because it is similar to the listed progressive discipline
offenses, it also fails to specify which of the offenses
implicates lying. For our part, we discern no similarity between
lying and absenteeism, tardiness, inefficiency or poor work
performance, abuse of rest periods and lunch periods, or neglect
of duty or failure to maintain work standards. The plain
language of the progressive discipline policy simply does not
support a finding that the policy applies to lying, particularly
in light of the clear applicability of the discharge provisions
to Dixon's conduct.
arbitrator cannot ignore the natural consequence of his finding

that a listed offense was committed."). In fashioning a remedy not

contained in the CBA, despite finding that Dixon committed an

offense covered by the CBA, the arbitrator exceeded his contractual

authority by adding to, amending and/or departing from the terms of

the agreement.   As a result, we vacate the arbitration award.        See

Houston Lighting & Power Co., 71 F.3d at 179 ("[T]he rule in this

circuit, and the emerging trend among other courts of appeals, is

that arbitral action contrary to express contractual provisions

will not be respected.").       Thus, we reverse the district court's

grant of summary judgment in favor of the Union and reinstate

Dixon's    discharge.     See    Container   Prods.,   Inc.   v.   United

Steelworkers of Am., and its Local 5651, 873 F.2d 818, 820 (5th

Cir.1989) (affirming district court order vacating remedy imposed

by arbitrator and reinstating discharge).

                                   III

      Bruce also contends that the district court abused its

discretion in awarding the Union attorneys' fees.         We review an

award of attorneys' fees for an abuse of discretion. International

Union of Elec., Radio and Mach. Workers v. Ingram Mfg. Co., 715
F.2d 886, 893 (5th Cir.1983), cert. denied, 466 U.S. 928, 104 S. Ct.
1711, 80 L. Ed. 2d 184 (1984).         An award of attorneys' fees is

permitted when a party has refused to abide by an arbitration

decision    "without    justification."      International    Ass'n    of

Machinists & Aerospace Workers, Dist. 776 v. Texas Steel Co.

("Texas Steel II"), 639 F.2d 279, 283 (5th Cir. Unit A 1981).

     Because we have concluded that the arbitrator exceeded his
contractual authority, we do not find that Bruce's refusal to abide

by the arbitration decision was without justification.          See id. at

283-84 (explaining that in cases where arbitration award exceeds

power conferred upon arbitrator, challenge is proper and not

without justification).       Hence, we reverse the district court's

award of attorneys' fees to the Union.

                                    IV

     For the foregoing reasons, we REVERSE the district court's

grant of summary judgment in favor of the Union, VACATE the

arbitration award and reinstate Dixon's discharge. In addition, we

REVERSE the district court's award of attorneys' fees to the Union.

     BENAVIDES, Circuit Judge, dissenting:

     I dissent. The majority substitutes its own interpretation of

the collective bargaining agreement ("CBA") for the arbitrator's

interpretation.     In doing so, it disregards fundamental Supreme

Court   precedent   setting    forth     the   deferential   standard      for

reviewing   arbitration   awards.        An    arbitration   award   can   be

overturned only if it fails to draw its essence from the collective

bargaining agreement. See United Steelworkers of Am. v. Enterprise

Wheel & Car Corp., 363 U.S. 593, 597, 80 S. Ct. 1358, 1361, 4
L. Ed. 2d 1424 (1960).      A corollary of this principle is that we

cannot overturn an arbitration award even if "the arbitrator

misread the contract."    United Paperworkers Int'l Union AFL-CIO v.

Misco, Inc., 484 U.S. 29, 36-37, 108 S. Ct. 364, 370, 98 L. Ed. 2d 286

(1987).   "[A]s long as the arbitrator is even arguably construing

or applying the contract and acting within the scope of his

authority, that a court is convinced he committed serious error
does not suffice to overturn his decision."            Misco, 484 U.S. at 38-

39, 108 S. Ct. at 371.

      The arbitrator in this case construed the CBA in light of the

evidence before him and determined that the company's decision to

terminate Dixon involved an unreasonable construction of the CBA

and that the company should have imposed progressive discipline

instead.   The arbitrator's conclusions are rationally inferable

from the CBA.     No more is required.         Accordingly, I would affirm

the judgment of the district court upholding the award.

      The facts before the arbitrator are somewhat more textured

than the court's opinion reflects.           Dixon's termination arose from

an unpaid 45-minute absence from work.             Her electricity had been

turned off because she had failed to pay her bill.            She planned to

pay the bill at the end of the work day on Friday, after she

received her paycheck.           But during her morning break that day, she

discovered that unless she paid the bill by noon, she would have no

electricity for the entire weekend.            That morning, she asked her

supervisor, Gary Henderson, for an hour off for a personal reason.

Henderson demanded details about why she needed the time.             Instead

of   telling    him    the   undoubtedly     embarrassing   truth   (that   her

electricity had been shut off because she had failed to pay her

bill), she told him that she needed to take her truck to her

daughter who had a doctor's appointment.            Henderson told her that

she could leave, but that it would be an "unexcused absence."               She

clocked out, went to pay the electricity bill, and returned within

45   minutes.         In   the   meantime,   Dixon's   co-workers   told    her

supervisor that she had fabricated the reason for leaving work.
When Dixon returned to work the next day, her time card was

missing, and she was told that she had been discharged.                   At the

time       of   Dixon's   discharge,     the   company   stated    that   it   was

terminating her for obtaining a leave of absence under false

pretenses.6

       Neither the CBA's list of dischargeable offenses nor the list

of offenses for which progressive discipline will be imposed

specifically        covers     Dixon's    misconduct.       Both     lists     are

non-exhaustive and allow punishment of "similar offenses" under

their terms. It was the arbitrator's task to determine whether her

conduct was more closely analogous to a dischargeable offense or a

progressive discipline offense.            The arbitrator evidently decided

that Dixon's misconduct in fabricating a story to get a 45-minute

unpaid break to pay her electricity bill was more akin to a

progressive discipline offense, such as absenteeism or "abuse of

rest period and lunch periods," than to any dischargeable offense

under the CBA.        Thus, the arbitrator determined that the company

should have followed its progressive discipline policy rather than

discharging Dixon.           In reaching this conclusion, the arbitrator

necessarily interpreted the CBA.                It is not our business to

overturn that interpretation, even if we would have decided the

matter differently.

       6
      "Obtaining a leave of absence under false pretenses" is not
listed as a dischargeable offense under the CBA, but rather as a
ground for loss of seniority. Thus, the arbitrator reasonably
concluded that the reason for termination given by the company at
the time of Dixon's discharge did not provide just cause for her
termination. Although the company continues on appeal to assert
this as a just cause for termination, the majority does not rest
its opinion on this provision.
     The     arbitrator        concluded    that     the   company's       attempt      to

characterize       Dixon's     conduct     as   "immoral    conduct"          within   the

meaning      of    Article     24,    Section       2(a)(16)      of     the    CBA    was

unreasonable.           That   section     allows    the   company       to    terminate

employees immediately for "stealing, immoral conduct, or any act on

the Company premises intended to destroy property or inflict bodily

injury."          The   majority     erroneously      states      that     "lying"      is

"specifically covered" by this provision and concludes that this

provision is dispositive.              Lying is not, however, specifically

listed in this provision, nor is immoral conduct expressly defined

by the CBA to include lying.               Instead the majority's conclusion

requires an inferential step, that any lie is "immoral conduct"

justifying immediate termination within the meaning of the CBA. In

other words, the majority interprets the term "immoral conduct" and

comes   to    a     conclusion       different      from   that    reached       by    the

arbitrator.       That is not the court's proper role.                 In reviewing the

arbitrator's construction of the phrase "immoral conduct," the

issue is not what we believe to be moral or immoral conduct in the

philosophical sense.           The issue before the arbitrator was whether

Dixon's conduct rose to the level of "immoral conduct" as that term

is used in the CBA.

     The arbitrator evidently concluded that Dixon's fabrication,

though it demonstrated "poor judgment," did not rise to the level

of "immoral conduct" within the meaning of this offense.                                An

arbitrator has discretion to decide whether particular conduct

constitutes a dischargeable offense within the meaning of a CBA, as

the First Circuit aptly explained in Georgia-Pacific Corp. v. Local
27, United Paperworkers Int'l Union, 864 F.2d 940 (1st Cir.1988)

(holding that where the arbitrator found that an employee committed

an offense listed as a ground for discharge, he lacked discretion

to order the employee's reinstatement). The CBA in Georgia-Pacific

provided that "dishonesty" was an offense for which an employee

could be discharged.      Id. at 945.      As the court explained, "It is

... up to an arbitrator to decide whether a given pattern of

conduct amounts to dishonesty.            For example, an arbitrator may

decide that stealing a company pencil does not amount to dishonesty

for purposes of immediate discharge."         Id. at 945 n. 2.   Similarly,

in this case, it was up to the arbitrator to decide whether Dixon's

conduct rose to the level of "immoral conduct" for the purposes of

immediate discharge.      I fail to see how the arbitrator could be

compelled   to    find   that   Dixon's    action   was   immoral   conduct,

especially when the CBA itself specifically lists "obtaining a

leave of absence under false pretenses" as a ground for loss of

seniority, but not as a ground for discharge.

     The arbitrator's apparent interpretation of "immoral conduct"

also draws support from the context in which the phrase appears.

It is a fundamental canon of construction that a word is known by

its company.     Applying this principle, "immoral conduct" should be

construed in relation to the other offenses listed with it in

Section 2(a)(16):     "stealing" and "any act on the Company premises

intended to destroy property or inflict bodily injury."                 The

arbitrator could have concluded that immoral conduct in this

context does not encompass any act that violates the Golden Rule,

but only conduct that rises to the serious level of stealing or
intentional infliction of property damage or personal injury.

Although     this   court    may   not     agree   with      the   arbitrator's

interpretation and indeed may be convinced that the interpretation

was a "serious error," it may not overturn the award simply because

it disagrees.

       The   company   and   the   court   rely    heavily    on   Delta    Queen

Steamboat Co. v. District 2 Marine Eng'rs Beneficial Ass'n, 889
F.2d 599 (5th Cir.1989), cert. denied, 498 U.S. 853, 111 S. Ct. 148,

112 L. Ed. 2d 114 (1990).        This case is easily distinguished from

Delta Queen. In that case, the CBA expressly listed "carelessness"

as a ground for discharge, and the arbitrator expressly found that

the discharged riverboat captain was "grossly careless."                   Id. at

601.    In that circumstance, we held that the arbitrator, having

found that the riverboat captain had committed a dischargeable

offense, was not free to ignore the terms of the CBA.                      If the

arbitrator in this case had made an express finding that Dixon

engaged in immoral conduct, then, of course, he could not ignore

the terms of Article 24, Section 2, which makes immoral conduct a

dischargeable offense.       But he made no such finding.

       The majority further suggests that the fact that the remedy

imposed by the arbitrator, a ten-day suspension, is not provided

for by the CBA agreement somehow undermines the arbitrator's

decision that the company lacked just cause to terminate Dixon.

But appropriate discipline for the offense is a distinct question

from whether the termination was with just cause.                  The parties'

submission of two questions to the arbitrator ("Was the Grievant,

Sheila Dixon, discharged for just cause?              If not, what is the
remedy?") underscores the separateness of the two inquiries.         That

the arbitrator imposed a harsher punishment on Dixon than would be

available to the company under the CBA does not undermine the

arbitrator's decision on the termination question.        Further, it is

difficult to see how the company can complain of the imposition of

a punishment more severe than that which it would have been able to

impose under the CBA's progressive discipline policy.          A three-day

unpaid   suspension   is   the   most   severe   progressive   discipline

provided for by the CBA, short of termination.        At oral argument,

the company in essence conceded that if it lacked just cause to

terminate Dixon, it does not seek a remand for the purpose of

imposing a lesser punishment on Dixon under the CBA's progressive

discipline policy.

     The arbitrator was charged with deciding whether the company

had just cause to discharge Dixon.        To do so, he had to evaluate

Dixon's particular conduct and determine whether that conduct fell

within the CBA's discharge provision.       He concluded that, plotted

on a spectrum of bad behavior, Dixon's actions fell closer to

absenteeism or abuse of a rest period than to stealing, immoral

conduct, or intentional infliction of personal injury or property

damage. Unlike the majority, I would not overturn the arbitrator's

decision merely because I do not agree with its outcome.         Clearly,

his decision drew its essence from the CBA.          I would affirm the

judgment of the district court, including the award of attorney's

fees.    See International Ass'n of Machinists & Aerospace Workers,

Dist. 776 v. Texas Steel Co., 639 F.2d 279, 283 (5th Cir. Unit A

1981).    The district court did not clearly err in concluding that
the company's challenge to the arbitrator's award was "without

justification."

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