Merck & Co. v. International Chemical Workers Union Council of the United Food & Commercial Workers Union, Local 94C

UNPUBLISHED

UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

No. 08-1917

MERCK & COMPANY, INCORPORATED,

Plaintiff – Appellee,

v.

INTERNATIONAL CHEMICAL WORKERS UNION COUNCIL OF THE UNITED
FOOD AND COMMERCIAL WORKERS UNION, LOCAL 94C,

Defendant – Appellant.

Appeal from the United States District Court for the Western
District of Virginia, at Harrisonburg. Samuel G. Wilson,
District Judge. (5:07-cv-00114-SGW)

Argued: March 25, 2009 Decided: July 6, 2009

Before MICHAEL, KING, and AGEE, Circuit Judges.

Reversed and remanded by unpublished per curiam opinion.

ARGUED: Jonathan G. Axelrod, BEINS & AXELROD, PC, Washington,
D.C., for Appellant. Joseph Edward Santucci, Jr., MORGAN, LEWIS
& BOCKIUS, LLP, Washington, D.C., for Appellee. ON BRIEF:
Heather S. Gelfuso, MORGAN, LEWIS & BOCKIUS, LLP, Washington,
D.C., for Appellee.

Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:

The International Chemical Workers Union Council of the

United Food and Commercial Workers Union, Local 94C (the

“Union”), appeals from the district court’s adverse decision of

August 12, 2008, awarding summary judgment to Merck & Company,

Incorporated (“Merck”), and vacating an arbitration award in

favor of the Union. See Merck & Co., Inc., v. Int’l Chem.

Workers Union Council of the United Food and Commercial Workers

Union, Local 94C, No. 5:07-cv-00114 (W.D. Va. Aug. 12, 2008)

(the “Memorandum Opinion”). 1 The court ruled that the arbitrator

had exceeded his authority in making the arbitration award,

which required Merck to reinstate one of its employees. As

explained below, we reverse and remand for enforcement of the

award.

I.

A.

On September 7, 2005, Dale Moubray reported to work at

Merck’s Elkton, Virginia, facility under the influence of

alcohol. Moubray, a pipe-fitter/millwright, is represented by

the Union, which is the exclusive collective bargaining

1
The Memorandum Opinion is found at J.A. 151-56.
(Citations herein to “J.A. ___” refer to the contents of the
Joint Appendix filed by the parties in this appeal.)

2
representative for a bargaining unit of production and

maintenance employees at Merck’s Elkton facility. 2 Rather than

terminate Moubray from his employment, Merck imposed a five-day

unpaid disciplinary suspension. Following the suspension, on

September 13, 2005, Merck, Moubray, and a Union representative

entered into a “Return to Work & Last Chance Agreement” (the

“Last Chance Agreement” or the “LCA”). See J.A. 58-59.

The Last Chance Agreement required Moubray to, inter alia,

meet with a representative of Merck’s Employee Assistance Plan

in order to establish a treatment plan. The LCA further obliged

Moubray “to comply with all recommendations and requirements as

established by the Employee Assistance Plan and the Health

Services Department.” J.A. 58. If, at any time, Moubray failed

to comply with these recommendations and requirements, the LCA

provided that he would “be subject to immediate termination and

such termination [would] not be subject to the contractual

grievance and arbitration procedures.” Id. at 59. 3 The LCA

stated, however, “that in the event of a termination, Mr.

Moubray may file a grievance challenging the facts upon which

2
Merck and the Union were signatories to a collective
bargaining agreement in effect from May 1, 2003, through April
30, 2006 (the “CBA”). See J.A. 1-49.
3
The CBA created a governing grievance procedure that
included arbitration of certain disputes. See J.A. 38-39.

3
the Company determined that Mr. Moubray was non-compliant or

otherwise in violation of this Agreement.” Id.

On the following day, September 14, 2005, Martha Sheridan,

a representative of Merck’s employee assistance program, met

with Moubray and decided that he was to participate in a program

offered by an independent entity called the LIFE Recovery

Program (the “Program”). At his first session in the Program,

on September 19, 2005, Moubray executed a patient contract (the

“Program Contract”), agreeing to the following relevant

conditions:

1. I will attend the LIFE Recovery Program . . .
Monday, Tuesday, Thursday . . . . If extraordinary
circumstances prevent my attendance or results in
tardiness, I will notify the staff immediately.

. . .

7. I will follow all relevant patient rules and
regulations as stated in patient handbook. 4

. . .

11. I understand that the following behaviors may
result in premature discharge from the program:

. . .

4
The “patient handbook” of the Program provides, in
relevant part, that “[p]rompt attendance at all scheduled groups
and activities is expected except when excused by your
counselor, doctor, or nurse. You are expected to participate in
and attend all scheduled groups and activities.” J.A. 63.

4
 5. Lack of cooperation with program expectations
to the extent of impeding progress (This includes
chronic tardiness or absenteeism).

J.A. 62.

In the weeks following the Program’s first session, Moubray

attended ten of eleven sessions, with a single excused absence

on September 22, 2005. He then missed a session on October 13,

2005, attended sessions on October 17, 2005 and October 24,

2005, and missed sessions on October 18 and October 25, 2005.

Moubray did not, prior to any of the three missed sessions,

notify the Program to explain his absence or request to be

excused. Moubray returned for a session on October 27, 2005,

and met with his Program case manager, Dee Michael. Michael

advised him not to miss the October 31, 2005 session, even

though Moubray requested to be excused from it to take his

godson trick-or-treating. Despite Michael’s warning, Moubray

did not attend the October 31 session. Moubray returned for the

session of November 1, 2005, and was advised that he could not

continue with the Program until he met with Michael. Moubray

called Michael on November 2, 2005, and scheduled an appointment

for the following day. Also on November 2, Sheridan, Merck’s

employee assistance program representative, called Michael to

check on Moubray’s status in the Program. Michael summarized

Moubray’s participation, and on November 3, 2005, sent a

confirming letter to Merck (the “Letter”). Michael’s Letter

5
concluded: “As of today’s date, Mr. Moubray is not in

compliance with our program requirements.” J.A. 69.

Upon Merck’s receipt of the Letter, Sheridan instructed

Moubray not to attend the November 3, 2005 meeting with Michael

because he had been kicked out of the Program. That same day,

Merck notified Moubray by letter that he was out of compliance

with the Last Chance Agreement and was, therefore, being

suspended from employment, with intent to discharge. On

November 14, 2005, Moubray was discharged by Merck.

B.

On November 15, 2005, the Union filed a grievance with

Merck, protesting Moubray’s discharge and seeking his

reinstatement. Merck conducted a grievance hearing on December

16, 2005, and, that same day, denied the Union’s grievance. The

Union then submitted its grievance to arbitration before the

Federal Mediation and Conciliation Service, on whether Moubray

had complied with the terms of the Last Chance Agreement. On

August 8, 2007, the parties participated in an arbitration

hearing conducted by Arbitrator Jeffrey B. Tener (the

“Arbitrator”). Two months later, on October 19, 2006, the

Arbitrator entered an Arbitration Opinion and Award (the

“Award”), 5 concluding that, although Merck was entitled to

5
The Award is found at J.A. 89-109.

6
terminate Moubray if he was out of compliance with the Last

Chance Agreement, “[i]t cannot be concluded that Moubray was not

compliant with the conditions of the last [chance] agreement so

he was not subject to immediate termination.” Award 20. The

Award thus directed Merck to “reinstate [Moubray] to his former

position and to make [him] whole.” Id. When Merck refused to

accept the Award and reinstate Moubray, this litigation ensued.

Two months later, on December 26, 2007, Merck filed its

complaint in the Western District of Virginia, pursuant to § 301

of the Labor Management Relations Act, 29 U.S.C. § 185, seeking

to vacate the Award. Merck alleged that the Arbitrator had

ignored the plain language of the Last Chance Agreement and that

the Award failed to draw its essence from the LCA. The Union

disagreed, and counterclaimed for enforcement of the Award. On

May 1, 2008, the parties filed cross-motions for summary

judgment.

On August 12, 2008, the district court granted summary

judgment to Merck and denied the Union’s cross-motion. See

Memorandum Opinion 1-2. In so ruling, the court recognized the

narrow scope of judicial review for an arbitration award, but

concluded that the Award must be vacated in any event because it

“contradicts the express provisions of the last chance

agreement.” Id. at 5. The court observed that “Moubray plainly

agreed to comply with ‘all’ treatment program ‘requirements’ and

7
recommendations, which unequivocally include punctual

attendance. He also plainly agreed that he was subject to

immediate termination if ‘at any time’ he became noncompliant.”

Id. The Memorandum Opinion observed that “[t]he agreement says

absolutely nothing about expulsion or discharge from the

program. Nor can the agreement be read to mean that Moubray is

in compliance with all program requirements and recommendations

so long as he has not been expelled.” Id. at 5-6. Predicated

on these observations, the court concluded that the Award “does

not draw its essence from the last chance agreement” and must

therefore be vacated. Id. at 6.

On August 18, 2008, the Union filed its timely notice of

appeal, and we possess jurisdiction pursuant to 28 U.S.C.

§ 1291.

II.

We review de novo a district court’s award of summary

judgment. Volvo Trademark Holding Aktiebolaget v. Clark

Machinery Co., 510 F.3d 474, 481 (4th Cir. 2007). Judicial

review of an arbitration award in the collective bargaining

context is “extremely limited,” and “among the narrowest known

to the law.” Long John Silver’s Rests., Inc. v. Cole, 514 F.3d

345, 349 (4th Cir. 2008) (internal quotation marks omitted). A

reviewing court is entitled to “determine only whether the

8
arbitrator did his job — not whether he did it well, correctly,

or reasonably, but simply whether he did it.” Mountaineer Gas

Co. v. Oil, Chem. & Atomic Workers Int’l Union, 76 F.3d 606, 608

(4th Cir. 1996). “[A]s long as the arbitrator is even arguably

construing or applying the contract and acting within the scope

of his authority,” an arbitration award should be sustained,

even if “a court is convinced he committed serious error.”

United Paperworkers Int’l Union v. Misco, Inc., 484 U.S. 29, 38

(1987).

III.

A.

Under the deferential standard applicable here, an

arbitration award must be sustained if it “draws its essence”

from the parties’ agreement. United Steelworkers of Am. v.

Enter. Wheel & Car Corp., 363 U.S. 593, 597 (1960). An

arbitration award draws its essence from the agreement so long

as “[t]he arbitrator [does] not ignore the plain language of the

contract.” United Paperworkers Int’l Union v. Misco, Inc., 484

U.S. 29, 38 (1987); Norfolk & W. Ry. Co. v. Transp. Commc’ns

Int’l Union, 17 F.3d 696, 700 (4th Cir. 1994) (observing that

“an award that ignores the plain and unambiguous language of the

arbitration contract does not ‘draw its essence’ from the

agreement”). Notwithstanding this deferential mandate, “[a]n

9
arbitrator does not have carte blanche . . . to ‘dispense his

own brand of industrial justice.’” U.S. Postal Serv. v. Am.

Postal Workers Union, 204 F.3d 523, 527 (4th Cir. 2000) (quoting

Enter. Wheel, 363 U.S. at 597). Rather, “an arbitrator is

confined to interpretation and application of the parties’

agreement.” Id. (internal quotation marks omitted). In

resolving a labor dispute, an arbitrator may be called upon to

make factual findings or to interpret the applicable agreement.

See Misco, Inc., 484 U.S. at 38. So long as an arbitrator does

so within the confines of the controlling agreement and his

interpretation of the agreement is not “wholly baseless and

without reason,” Norfolk & W. Ry. Co., 17 F.3d at 700, “the

courts have no business overruling [an arbitrator] because their

interpretation of the contract is different from [the

arbitrator’s],” U.S. Postal Serv., 204 F.3d at 527 (internal

quotation marks omitted).

B.

In this proceeding, the parties agree that the underlying

arbitration proceedings were governed by the discharge

provisions of the Last Chance Agreement. Cf. Coca-Cola Bottling

Co. v. Teamsters Local Union No. 688, 959 F.2d 1438, 1441 (8th

Cir. 1992) (concluding that comparable last chance agreement

superseded collective bargaining agreement). The LCA provided

for Moubray’s immediate termination — without recourse to the

10
grievance and arbitration procedures established in the CBA —

“[i]f at any time Mr. Moubray [became] non-compliant with the

conditions of this Agreement.” J.A. 59. The Union was

authorized to dispute, however, “the facts upon which the

Company determined that Mr. Moubray was non-compliant or

otherwise in violation of this Agreement.” Id. Pursuant to the

LCA’s authorization, the Union challenged and arbitrated the

issue of whether Moubray had complied with the terms of the LCA.

The parties do not dispute that the termination of Moubray was

properly arbitrable. They also do not dispute the fact that the

Arbitrator possessed authority to consider and make an award

concerning the matter. Rather, Merck argues that the Award of

reinstatement does not draw its essence from the LCA.

Accordingly, the terms of the LCA, and the Arbitrator’s view of

those terms, are controlling here.

The Last Chance Agreement required that Moubray “comply

with all recommendations and requirements as established by the

Employee Assistance Plan and the Health Services Department.”

J.A. 58. In making the Award, however, the Arbitrator

determined that “[t]here is no evidence that either the Plan or

the [Health Services] Department established any requirements or

had any recommendations other than those of the LIFE Recovery

Program.” Award 18. As such, the Award incorporated the

requirements of the Program into the Last Chance Agreement,

11
concluding that “it is the requirements of that program which

are controlling in this case.” Id.

The Program, in turn, imposed attendance requirements on

Moubray and specified conditions for his continued participation

therein. Moubray was required to attend sessions three evenings

per week and to notify staff if “extraordinary circumstances”

prevented his attendance, and the patient handbook of the

Program provided that “[p]rompt attendance at all scheduled

groups and activities is expected except when excused by [a]

counselor, doctor, or nurse.” J.A. 62-63.

In making the Award, the Arbitrator agreed with these

conditions, but nevertheless concluded that “the evidence still

does not support the conclusion that Moubray was not in

compliance with the program requirements.” Award 19. Although

the Program Contract specified that certain behavior — such as

chronic absenteeism — “may result in premature discharge from

the program,” the Arbitrator explained in the Award that the

evidence was “clear” that Moubray had not been discharged from

the Program as of November 3, 2005. See id. The Award observed

that the Letter, “upon which the Company relied so heavily and

which states that ‘As of today’s date, Mr. Moubray is not in

compliance with our program requirements’” also specified that

Moubray “was told he would not be allowed back into the group

until he first met with me.” Id. (quoting J.A. 69). Thus,

12
although Michael concluded that Moubray was not in compliance

with the Program’s requirements, he had not been discharged from

the Program. See id. Accordingly, the Award concluded that the

“LIFE Recovery Program was not consistent,” and, although it

reported to Merck that Moubray was not in compliance with its

requirements, Moubray had not been discharged from it.

Finally, the Arbitrator emphasized in the Award that

“Moubray did not know or believe that he was not in compliance

nor did he have any reason to suspect that he was not in

compliance.” Award 19. Importantly, the Arbitrator found that

Moubray had credibly testified that he and the other

participants in the Program had been advised that they could

make up sessions if they missed them. See id. at 20. The Award

explained that the evidence corroborated Moubray’s testimony, in

that he had not been discharged from the Program and had been

permitted to make up earlier sessions that had been missed.

Thus, the Award concluded, “it was reasonable for [Moubray] to

believe that he was able to miss sessions and to make them up. .

. . He had no reason to believe he was not in compliance with

the requirements of the program.” Id.

We agree with the district court that the Award considered

Moubray’s continued participation in the Program — or the

absence of a discharge from the Program — to be synonymous with

his compliance with the Program’s requirements. We also agree

13
with the court that the Arbitrator relied, in part, on Moubray’s

subjective belief concerning his compliance with the Program

requirements in concluding that Moubray had complied with the

LCA. Notwithstanding these shortcomings, however, the Award

must be sustained. See Misco, Inc., 484 U.S. at 38 (explaining

that award should be sustained despite “serious error,” so long

as arbitrator “is even arguably construing or applying the

contract and acting within the scope of his authority”).

Although the terms of the LCA — requiring Moubray to

“comply with all recommendations and requirements as established

by the Employee Assistance Plan and the Health Services

Department” — are plain and unambiguous, these terms alone are

insufficient to resolve the issue presented to the Arbitrator.

As the Award recognized, the Program established the only

relevant recommendations and requirements, but applied them

inconsistently. Thus, the Program required Moubray to

unequivocally attend three weekly sessions, but statements of

the Program staff contradicted this attendance requirement.

And, although the Program established attendance requirements,

it also provided for exceptions — such as an excuse by a

counselor, doctor, or nurse. Importantly, the Program Contract

itself specified the consequences of violating it. Rather than

immediate expulsion for an unexcused absence, the Program

Contract provided that “chronic tardiness or absenteeism” “may

14
result in premature discharge from the program.” J.A. 62

(emphasis added). Although the district court concluded that

this provision “unequivocally include[d] punctual attendance,”

Memorandum Opinion 5, such language provides sufficient

flexibility to justify the Arbitrator’s interpretation of it.

Rather than “ignor[ing] the plain language of the contract,” the

Arbitrator confined himself “to interpretation and application

of the parties’ agreement,” U.S. Postal Serv., 204 F.3d at 527,

and we must defer to his interpretation of the Program’s

requirements.

In these circumstances, it was entirely plausible for the

Arbitrator to conclude that Moubray was yet in compliance with

the “requirements” of the Program. See Norfolk & W. Ry. Co., 17

F.3d at 700 (explaining that where arbitrator confines himself

to plain language of contract, arbitration award should be

confirmed unless “wholly baseless and completely without

reason”). The Arbitrator interpreted the LCA by looking to and

applying the requirements of the Program. He carefully examined

the Program’s documents and explained his view of what was

required. Even if we were to disagree with the Arbitrator’s

interpretation and reasoning, we cannot conclude that his

reasoning is wholly baseless or completely without reason. Put

simply, we are entitled to “determine only whether the

arbitrator did his job — not whether he did it well, correctly,

15
or reasonably, but simply whether he did it.” Mountaineer Gas

Co. v. Oil, Chem. & Atomic Workers Int’l Union, 76 F.3d 606, 608

(4th Cir. 1996). Accordingly, the Award “draws its essence”

from the Last Chance Agreement and, as a result, we must reverse

the ruling of the district court and direct enforcement of the

Award.

IV.

Pursuant to the foregoing, we reverse the district court

and remand for enforcement of the Award.

REVERSED AND REMANDED

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