United States Court of Appeals
For the First Circuit
No. 05-1525
THE MERCY HOSPITAL, INC.,
Plaintiff, Appellant,
v.
MASSACHUSETTS NURSES ASSOCIATION,
Defendant, Appellee.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Michael A. Ponsor, U.S. District Judge]
[Hon. Kenneth P. Neiman, U.S. Magistrate Judge]
Before
Boudin, Chief Judge,
Selya, Circuit Judge,
and Stahl, Senior Circuit Judge.
Edward J. McDonough, Jr., with whom Maurice M. Cahillane and
Egan, Flanagan and Cohen, P.C. were on brief, for appellant.
Mark A. Hickernell, with whom Alan J. McDonald and McDonald &
Associates were on brief, for appellee.
November 21, 2005
SELYA, Circuit Judge. In this case, the district court
confirmed an arbitration award that directed a hospital to
reinstate an intensive-care nurse. The hospital, citing the pains
that must be taken by health-care professionals to restrict the
distribution of controlled substances, appeals on the ground that
the reinstatement order transgresses public policy. After studying
the matter, we agree with the district court that the arbitral
award should be confirmed.
I. BACKGROUND
We start by rehearsing the underlying facts. We then
limn what transpired before the arbitrator and the district court,
respectively.
Plaintiff-appellant Mercy Hospital (the Hospital)
operates an acute care hospital facility in Springfield,
Massachusetts. Defendant-appellee Massachusetts Nurses Association
(the MNA) is the authorized collective bargaining representative of
the nurses who toil there. The Hospital and the MNA are (and were
at all relevant times) parties to a collective bargaining agreement
(CBA). The CBA recognizes the Hospital's right to "discipline or
discharge employees for just cause" and establishes a multi-step
grievance procedure, culminating in binding arbitration, for the
resolution of employment-related disputes between the Hospital and
the nurses.
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The Hospital hired Nancy Dufault as a nurse in 1977. In
the pertinent time frame (2001-2002), Dufault worked the twelve-
hour night shift in the intensive care unit (ICU). Part of her
responsibilities included administration of Ativan, morphine, and
other controlled substances designed to relieve pain or anxiety.
Dufault also served as a preceptor charged with ground-level
oversight of fledgling ICU nurses (orientees).
Over her estimable quarter-century career, Dufault
developed a reputation as an industrious, highly skilled nurse. In
1995, the Hospital gave her a special commendation for her service
as a preceptor. Her last performance evaluation, prepared shortly
before the events in question occurred, describes her as "a very
strong expert critical care nurse" and remarks that she had
exceeded hospital standards in a number of performance areas.
In the fall of 2001, storm clouds gathered. The Hospital
revised its system for administering medication to ICU patients and
installed an Omnicell machine in that unit. The machine functions
as a computerized medicine cabinet. To obtain medication, a nurse
must enter into an electronic keypad her personal code, the
patient's personal code, the type of drug, and the dosage. The
Omnicell processes this information and automatically unlocks the
compartment housing the requested medication.
After administering the medicine to the patient, the
nurse records the time, the identity of the drug, and the dosage in
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a separate database known as SMS. Each night, a patient-specific
medicine administration schedule (MAS) displaying the data entered
into the SMS system is printed out and filed in the patient's
chart. The purpose of this double-entry regime is to enhance the
Hospital's ability to track and correlate requests for and
administration of medications in the ICU.
In June of 2002 a nursing supervisor approached Dufault
about a possible discrepancy in the dual entries for a patient in
her care. The supervisor accepted Dufault's on-the-spot
explanation and allowed the incident to pass without further
inquiry.
The following month, the same supervisor detected what
appeared to be inconsistencies between the Omnicell record and the
MAS of one of Dufault's patients. The supervisor conducted an
independent review of Dufault's entries into the Omnicell and SMS
systems. Based on that review, the supervisor and a nurse who had
assisted her concluded that, on a number of occasions, Dufault had
withdrawn medication from the Omnicell without recording an
offsetting entry for administration in the SMS system. They
related their conclusions to the director of nursing, Mary Brown,
who placed Dufault on administrative leave pending further
investigation.
On August 27, 2002, Brown met with Dufault, an MNA
representative, and the two nurses who had conducted the initial
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review. Brown presented Dufault with the Omnicell and SMS
printouts for five different patients and asked her to explain the
inconsistences in her entries. With respect to an instance in
which she had withdrawn eighteen milligrams of Ativan but had made
no record of dispensing such a dose to the patient, Dufault stated
that she had retrieved the unusually large quantity of Ativan so
that she could prepare an intravenous drip bag and avoid having to
return periodically to the Omnicell to obtain the smaller doses
prescribed in the physician's orders. The other four instances
dated back nearly two months, and Dufault complained that, without
forewarning, she could not recall the particulars. She speculated,
however, that incomplete documentation by her and an orientee
probably explained the discrepancies. The meeting ended on that
note.
Brown convened a second meeting two days later. She
regarded Dufault's explanation of the discrepancy involving the
eighteen milligrams of Ativan as implausible; the patient's
intravenous drip had been discontinued several hours before Dufault
withdrew the Ativan, and the physician's orders called for the drug
to be injected rather than administered by intravenous drip.
Dufault stood by her previous account. Brown then presented
Dufault with two more alleged inconsistencies in her entries and
served her with a termination notice. The stated reason for
termination was: "Failure to adhere to the standards of
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narcotic/controlled substance administration — suspected drug
diversion."
Following Dufault's discharge, the MNA filed a grievance
on her behalf. The parties eventually submitted two imbricated
matters to binding arbitration: (i) whether there was just cause
for Dufault's termination and (ii) if not, what consequences should
ensue.
The arbitrator conducted an evidentiary hearing. She
subsequently issued an opinion concluding that the preponderance of
the evidence did not support the claim that Dufault had engaged in
drug diversion but, rather, supported her repeated denials of
culpability. In the arbitrator's view, Dufault's testimony that
the discrepancies were most likely the result of documentation
errors was worthy of belief for four reasons: (i) Dufault and other
nurses testified credibly that they commonly caught up on their SMS
entries during breaks or at the end of their shifts when they could
not always remember the exact medications and dosages administered;
(ii) Dufault's explanation of the probable cause of the
discrepancies had remained consistent throughout the investigation
and the grievance process; (iii) Dufault's testimony that ICU
nurses occasionally deviated from established documentation
protocols had "been more corroborated than rebutted" by the other
evidence in the case; and (iv) there was absolutely no proof to
substantiate the Hospital's accusation that the discrepancies in
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the records were attributable to the diversion of drugs.1 The
arbitrator also found that Dufault had received no formal training
as a preceptor and that the Hospital had no established policy as
to which nurse — the preceptor or the orientee — was responsible
for documenting the medications administered to patients who were
under their joint care.
With specific reference to the Ativan incident, the
arbitrator accepted the testimony of two non-party witnesses that
it was common practice for ICU nurses to prepare intravenous drip
bags well in advance of the time when they would be needed (either
for use during their own or succeeding shifts). The arbitrator
also credited testimony that although it was not good practice, a
nurse might deviate from a doctor's orders and administer
medication intravenously rather than by syringe as a time-saving
device.
On the basis of these findings, the arbitrator concluded
in pertinent part:
The Hospital failed to carry its burden . . .
in this matter. The preponderance of the
evidence in the record supports [Dufault's]
denial of any culpability with respect to the
Hospital's charges of drug diversion. . . .
[Dufault] credibly testified as to what she
believed were the most likely actions she took
(or did not take) with respect to the
narcotics she removed from the Omnicell . . .
1
In this vein, the arbitrator noted that Dufault had submitted
to three drug tests, each of which had proved negative for the
presence of Ativan, morphine, or any other controlled substance.
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. In light of the Hospital's failure to
submit a preponderance of evidence that
contradicts [Dufault's] account, . . . the
termination . . . is found to be without just
cause.
The arbitrator then moved to the remedy question and, taking into
account the idiosyncratic facts of the case, ordered the Hospital
to reinstate Dufault with back pay and without any loss of
seniority.
The Hospital was not pleased. It asked the federal
district court to vacate the award on the ground that reinstating
Dufault would violate public policy. The MNA cross-filed for
confirmation of the award. The district judge referred the case to
a magistrate judge, see 28 U.S.C. § 636(b)(1)(B), who recommended
confirmation. On de novo review, see Fed. R. Civ. P. 72(b), the
district judge adopted the magistrate judge's recommendation and
entered judgment for the MNA.2 This timely appeal ensued.
II. ANALYSIS
Where, as here, the employer and the union have bargained
for an arbitrator's construction of a CBA, a court's authority to
vacate an arbitral award is closely circumscribed. Boston Med.
Ctr. v. SEIU, Local 285, 260 F.3d 16, 21 (1st Cir. 2001); Teamsters
Local Union No. 42 v. Supervalu, Inc., 212 F.3d 59, 65 (1st Cir.
2
For simplicity's sake, we do not distinguish hereafter
between the magistrate judge and the district judge but, rather,
take an institutional view and refer to the determinations below as
those of the district court. See, e.g., United States v.
Maldonado, 356 F.3d 130, 134 n.1 (1st Cir. 2004).
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2000). Thus, a party who challenges an arbitrator's award in the
labor-management context must be prepared to undertake a steep
uphill climb. Typically, the challenge will fail if the award
"draws its essence from the collective bargaining agreement" rather
than from the arbitrator's "own brand of industrial justice." USW
v. Enter. Wheel & Car Corp., 363 U.S. 593, 597 (1960). "[A]s long
as the arbitrator is even arguably construing or applying the
contract," the fact that he or she may have made a mistake — even
a serious mistake — will not afford a basis for defenestrating the
award. United Paperworkers Int'l Union v. Misco, Inc., 484 U.S.
29, 38 (1987). That remains true whether the mistake concerns a
matter of fact or a matter of law. Id.
There are, however, a few exceptions to the general rule
that the arbitrator has the last word. See 9 U.S.C. § 10(a)
(codifying certain exceptions); Supervalu, 212 F.3d at 66
(discussing other exceptions). One such exception, which traces
its roots to the common law doctrine that courts may refuse to
enforce illegal contracts, holds that a court may vacate an
arbitral award that violates public policy. W.R. Grace & Co. v.
Local Union 759, Int'l Union of United Rubber Workers, 461 U.S.
757, 766 (1983). This exception is narrow. The mere fact that
"general considerations of supposed public interests" might be
offended by an arbitral award is not enough to make the exception
available. Id. (citation and internal quotation marks omitted).
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Rather, the award must violate an "explicit . . . well defined and
dominant" public policy, as ascertained "by reference to . . . laws
and legal precedents." Id. (citations and internal quotation marks
omitted).
In the context of an arbitration award that reinstates a
fired employee, the question is not whether the charged conduct
offends public policy or whether some remedy short of unconditional
reinstatement (say, a probationary period or a suspension without
pay) might have been preferable. Rather, the sole question is
whether the award itself — the order for reinstatement — gives
offense. See E. Assoc'd Coal Corp. v. UMW, Dist. 17, 531 U.S. 57,
62-63 (2000). We turn, then, to that question and ask whether the
order to reinstate Dufault as an ICU nurse contravenes some
explicit, well-defined, and dominant public policy as ascertained
by reference to the positive law of Massachusetts (which, of
course, includes applicable federal law). See id.
This inquiry is not free-form. In determining whether
Dufault's reinstatement contravenes Massachusetts's declared public
policy, we cannot forget that the parties, through the collective
bargaining process, chose arbitration as the preferred means of
resolving workplace disputes. Accordingly, we must read the
pertinent statutes and regulations "in light of background labor
law policy that favors determination of disciplinary questions
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through arbitration when chosen as a result of labor-management
negotiation." Id. at 65.
The Hospital relies on federal and state statutes and a
state regulatory scheme to undergird its claim that Massachusetts
has an explicit, well-defined, and dominant public policy in favor
of restricting the distribution of controlled substances. See
generally 21 U.S.C. §§ 801-971; Mass. Gen. Laws ch. 94C. It notes
that these provisions collectively establish strict controls on the
handling of controlled substances and evince a strong concern for
preventing the unauthorized distribution of such substances by
health-care professionals. Zeroing in on the facts of this case,
the Hospital emphasizes that the state's regulations governing the
licensure of nurses set out strict standards of conduct with
respect to the administration of controlled substances. See 244
Mass. Code Regs. 9.03. Pertinently, those regulations require
nurses to (i) comply with the Controlled Substances Act, Mass. Gen.
Laws ch. 94C; (ii) maintain the security of controlled substances;
(iii) refrain from unlawfully obtaining or possessing controlled
substances; (iv) administer drugs only as prescribed; and (v)
document the handling, administration, and destruction of
controlled substances. 244 Mass. Code Regs. 9.03(6)(a)(8), (35),
(37), (38), (39).
Building on this elaborate foundation, the Hospital
asserts that Dufault breached the regulations by diverting drugs
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away from patients, by failing properly to document the
dispensation of medications, and by administering Ativan through a
medium other than that prescribed in the physician's orders.
Consequently, the Hospital says, the arbitrator's award offends
public policy because it reinstates a serial regulatory violator to
a highly sensitive position.
The principal problem with this line of argument is that
it ignores the arbitrator's resolution of disputed issues. With a
few limited exceptions not relevant here, an inquiring court is
bound by an arbitrator's findings of fact. See El Dorado Tech.
Servs., Inc. v. Union Gen. De Trabajadores, 961 F.2d 317, 320 (1st
Cir. 1992). Once due deference is accorded to the arbitrator's
factual findings here, the Hospital's argument withers.
The Hospital suggests that the arbitrator glossed over
Dufault's unauthorized diversion of drugs and that even accidental
diversion is serious business. After stuffing this straw man, the
Hospital proceeds to shred it, telling us that because Dufault
improperly diverted drugs in contravention of the state regulatory
scheme, reinstating her to a sensitive position violates public
policy. This construct overlooks that the arbitrator, far from
glossing over the discrepancies in the Omnicell and SMS records,
explicitly found that the Hospital had failed to prove that Dufault
diverted any drugs away from patients. Thus, even if the mandated
reinstatement of a nurse found to have deliberately diverted drugs
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might violate an explicit, well-defined, and dominant public policy
— and we intimate no view as to whether such a policy has been
established — the mandated reinstatement of a nurse who has been
exonerated of all charges of intentional drug diversion, such as
Dufault, plainly would not. Cf. Misco, 484 U.S. at 44 (refusing to
vacate a reinstatement order when the employer had failed to prove
its allegations of employee misconduct).
The Hospital's attempts to tease a violation of public
policy out of Dufault's documentation errors and her use of an
unauthorized method of administering Ativan are equally
unconvincing. It argues that failure properly to account for
controlled substances, even if not deliberate, is nevertheless a
grave matter. While we agree with that premise — Dufault's conduct
seems to have violated the Massachusetts nursing regulations, see,
e.g., 244 Mass. Code Regs. 9.03(38)-(39) — we do not accept the
Hospital's conclusion that this fact somehow undermines the
reinstatement order. After all, this appeal tests only whether the
reinstatement award, on the facts as found by the arbitrator,
contravenes an explicit, well-defined, and dominant public policy.
See E. Assoc'd Coal, 531 U.S. at 62-63. Once the issue is framed
in that manner, it becomes nose-on-the-face plain that the Hospital
has failed to establish any barrier at all to Dufault's
reinstatement.
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Indeed, the Hospital has not identified a single
iteration of positive law that prohibits the reinstatement of a
nurse who, without causing injury to patients, made a few
documentation errors or deviated slightly from doctors' orders on
a single occasion in a long and distinguished career. This failure
strongly suggests that the reinstatement order does not violate
public policy. See id. at 66 (relying heavily on the fact that the
reinstatement order did not violate a "specific provision of any
law or regulation" in concluding that the order did not run
contrary to public policy); Boston Med. Ctr., 260 F.3d at 25
(similar).
To be sure, there is reason to believe that an employer
is not invariably required to point to a specific provision of
positive law in order to bring a case within the ambit of the
public policy exception. See E. Assoc'd Coal, 531 U.S. at 63
(dictum). But cf. id. at 67-69 (Scalia, J., concurring)
(questioning this view). In a prior case in which a reinstatement
order did not breach a specific provision of positive law, we
required the employer to show that the reinstatement order subsumed
employee conduct so egregious that resumed employment would offend
some deep-rooted public policy. See Boston Med. Ctr., 260 F.3d at
25. That precedent does not advance the Hospital's cause.
In endeavoring to make the showing that Boston Medical
Center requires, an employer cannot relitigate the facts as found
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by the arbitrator. See Misco, 484 U.S. at 44-45. In this case,
based largely on the testimony of the Hospital's own witnesses, the
arbitrator found that Dufault was a competent, hard-working nurse
who had exceeded her employer's standards for many years; that
neither Dufault's documentation bevues nor the single instance of
her improper administration of Ativan had caused any harm to
patients; that her explanation for the discrepancies in the records
was credible; and that, in all events, there was no evidence of
missing medication, let alone drug diversion. The arbitrator did
not find that Dufault posed a risk of harm to patients, that she
was incapable of properly documenting the administration of
medication, or that she had displayed a pattern of failing to
comply with doctors' orders.
We are constrained to credit the various parts of this
factual assessment.3 El Dorado Tech. Servs., 961 F.2d at 320.
Doing so, we find no principled basis for concluding that Dufault's
underlying conduct was such as to render her reinstatement
offensive to public policy. See MidMich. Reg'l Med. Ctr. — Clare
v. Prof'l Employees Div. of Local 79, SEIU, 183 F.3d 497, 504 (6th
Cir. 1999) ("Even highly skilled professionals err on occasion, and
we think it clear that it cannot violate . . . public policy . . .
3
We note, in passing, that this assessment does not seem to be
chimerical. During the pendency of this appeal, the Massachusetts
Board of Registration in Nursing dismissed the Hospital's complaint
against Dufault for insufficient evidence.
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to contract to retain a nurse guilty of committing some acts of
carelessness.").
In arguing for the opposite result, the Hospital relies
on a trio of decisions that vacated reinstatement awards under the
public policy exception. See Russell Mem'l Hosp. Ass'n v. USW, 720
F. Supp. 583 (E.D. Mich. 1989); City of Boston v. Boston Police
Patrolmen's Ass'n, 824 N.E.2d 855 (Mass. 2005); Ill. Nurses Ass'n
v. Bd. of Trs. of Univ. of Ill., 741 N.E.2d 1014 (Ill. 2001). A
court must be wary of reliance on precedents which, like these
three decisions, involve state policies different than the one at
issue. See Boston Med. Ctr., 260 F.3d at 25 n.7 (disregarding the
plaintiff's citation of "conclusions of other courts that the
public policies of other states forbid the reinstatement of an
employee" in factually dissimilar cases). At any rate, the cases
cited by the Hospital are readily distinguishable. In each of
them, the affected employee committed acts far more blameworthy
than those that the arbitrator attributed to Dufault. See Russell
Mem'l Hosp., 720 F. Supp. at 587 (involving a nurse who was guilty
of negligence and insubordination and who had "a propensity for
misconduct"); Boston Police, 824 N.E.2d at 859 (involving a police
officer who had intentionally filed false charges and then
committed perjury); Ill. Nurses, 741 N.E.2d at 1023-24 (involving
an "inattentive . . . [and] . . . below average" nurse who had
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endangered the lives of two patients, intentionally falsified a
patient's chart, and provided negligent care).
A much more instructive case is Boston Medical Center, in
which an arbitrator ordered the reinstatement of a nurse whose
slipshod care had resulted in a patient's death. 260 F.3d at 18-
20. Relying on the nurse's unblemished ten-year work record and
the arbitrator's finding that she had not "willfully or callously
provided substandard care," we concluded that the reinstatement
order did not transgress Massachusetts's public policy. Id. at 25.
The facts in the instant case are considerably more favorable to
the employee than the facts in Boston Medical Center; after all,
the arbitrator determined not only that Dufault had achieved an
exemplary twenty-five-year nursing career but also that her
relatively minor miscues had not threatened the welfare of any
patients.
Our refusal to vacate the reinstatement order in Boston
Medical Center adumbrates the result we must reach here: upholding
the district court's confirmation of the arbitrator's reinstatement
order. While a single documentation or dispensing error may
contravene the state's nursing regulations, not every such error or
set of errors necessarily furnishes just cause for termination of
a nurse's employment. Context is important. Here, the nature of
the errors, the employee's history, the lack of any harm to
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patients, and the other circumstances as found by the arbitrator
persuade us that reinstatement is not an affront to public policy.4
III. CONCLUSION
We need go no further. In this matter, the arbitrator
supportably found that the Hospital had cashiered Dufault without
just cause and ordered her reinstatement. The Hospital's attempt
to upset that award is unavailing: although an employer may secure
vacation of an arbitrator's reinstatement order in the rare case in
which the employer can show that the order itself transgresses an
explicit, well-defined, and dominant public policy, the Hospital
has wholly failed to bring this case within the isthmian confines
of that doctrine.
We understand and appreciate the Hospital's concern with
accountability for dangerous drugs. Each case, however, must be
judged on its own facts. Here, the arbitrator appears to have
weighed that concern in the balance. Given the idiosyncratic facts
of the case, we are not at liberty to disturb her decision. What
may transpire in different circumstances or if Dufault proves to be
a repeat offender is, of course, an open question.
4
At oral argument in this court, the Hospital suggested for
the first time that the arbitrator erred in not imposing some
lesser penalty once she found discharge unwarranted. This argument
was not made in the district court and is, therefore, not properly
before us. See United States v. Zannino, 895 F.2d 1, 17 (1st Cir.
1990). In all events, the sole question raised by this appeal is
whether the reinstatement order offends public policy. That does
not encompass the question of whether the imposition of some remedy
short of unconditional reinstatement might have been desirable.
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Affirmed.
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