Steward Holy Family Hospital v. Massachusetts Nurses Assoc.

United States Court of Appeals
For the First Circuit

No. 18-2263

STEWARD HOLY FAMILY HOSPITAL, INC.,

Plaintiff, Appellee,

v.

MASSACHUSETTS NURSES ASSOCIATION,

Defendant, Appellant.

APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Nathaniel M. Gorton, U.S. District Judge]

Before

Torruella, Lynch, and Kayatta,
Circuit Judges.

James F. Lamond, with whom Allison J. Zimmon and McDonald
Lamond Canzoneri were on brief, for appellant.
Joshua D. Nadreau, with whom Joseph W. Ambash and Fisher &
Phillips, LLP were on brief, for appellee.

August 1, 2019
 KAYATTA, Circuit Judge. After Maureen Bean grabbed the

face of a colleague at work, the Steward Holy Family Hospital ("the

Hospital") terminated her employment as a nurse in the medical-

surgical unit. Bean's union, the Massachusetts Nurses Association

("the Union"), then initiated grievance procedures against the

Hospital, arguing that there was not just cause for her termination

under the parties' collective bargaining agreement (CBA). The

parties submitted the dispute to an arbitrator. After establishing

that Bean had engaged in misconduct providing just cause for

discipline, the arbitrator concluded that Bean's termination was

nevertheless unwarranted and ordered that she be reinstated with

backpay. The Hospital initiated this action to vacate the

arbitrator's award, asserting that the arbitrator exceeded his

authority under the parties' CBA. The U.S. District Court for the

District of Massachusetts agreed and entered summary judgment for

the Hospital. We now reverse.

I.

Both parties accept the general proposition that "an

arbitrator's factual findings are not open to judicial challenge."

El Dorado Tech. Servs., Inc. v. Union Gen. de Trabajadores, 961

F.2d 317, 320 (1st Cir. 1992). So, we summarize the facts as they

are presented in the arbitrator's opinion.

This case arose out of confusion surrounding the

granting of vacation requests by nurses within the medical-

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surgical unit of the Hospital. Chris Ouellet, the supervising

nurse in that unit, maintained a policy of resolving competing

vacation requests based on seniority. In January 2016, Ouellet

received vacation requests for the first week of March from Bean,

two more senior nurses, and a junior nurse, Nancy Waterhouse.

Ouellet denied Bean's request but instead offered her the second

week in March, which Bean accepted. Upon inspecting the vacation

calendar in the nurses' break room, Bean discerned that Waterhouse

-- who had submitted an earlier request and had already paid a

deposit on a vacation rental -- had received approval from Ouellet

to take off the first week in March.

Not pleased with this turn of events, Bean called

Waterhouse's home numerous times, leaving multiple voicemails and

requesting that Waterhouse return her calls before the two briefly

"discuss[ed] the vacation situation without rancor." The

following weekend, Bean called and left messages for Waterhouse on

Friday, Saturday, and Sunday to inform her of an upcoming union

meeting that had been calendared to discuss problems related to

scheduling vacations. Waterhouse did not return Bean's calls.

Then, while Waterhouse and Bean were both clocking into work the

following Tuesday, Bean confronted Waterhouse about her unreturned

calls, squeezed Waterhouse's cheek, and, "talking like a baby,

asked if everything worked out with her vacation." Waterhouse

angrily told Bean to "worry about [her] own vacation." Later that

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day, Bean came up behind Waterhouse, ran a finger along her back,

and said, "I didn't mean to upset you back there. We need to do

something about this vacation policy." Waterhouse responded that

she agreed that something needed to be done about the vacation

policy but that she did not appreciate the phone calls or Bean's

grabbing her by the face.

Ten days later, Waterhouse reported the incident to the

Hospital's Human Resources Department. This was not the first

time that Bean's coworkers had reported her for misconduct. Four

years earlier, Ouellet counseled Bean after she "angrily pulled

the ponytail of a colleague." Ouellet again counseled Bean after

she reportedly "demeaned a student nurse and offended [the resident

nurse]." And just one week before the altercation with Waterhouse,

Ouellet gave Bean a verbal warning for "profanely defying

[Ouellet's] directive." Following an investigation into

Waterhouse's allegations, the Hospital terminated Bean. It based

the termination solely on its conclusion that Bean had indeed

grabbed Waterhouse by the face -- an act that the Hospital deemed

an "assault." The Union then initiated grievance proceedings

against the Hospital on Bean's behalf, arguing that Bean was not

guilty of misconduct and, alternatively, that termination was a

disproportionate response to Bean's alleged wrongdoing.

The CBA provides for the use of arbitration to resolve

formal grievances related to the Hospital's "interpretation,

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application, or enforcement" of the CBA. Significantly, however,

the arbitrator's authority to resolve grievances arising under the

CBA is not plenary under the terms of the CBA. The text of the

CBA as it bears on the scope of that authority is as follows:

 Article V, Management Rights

o Section 1: "Except to the extent expressly limited by

this Agreement, the Hospital retains the exclusive

right . . . to discipline and discharge Employees for

just cause . . . [and] to issue, amend and enforce

reasonable work rules and policies not inconsistent with

the provisions of this Agreement."

 Article X, Grievance and Arbitration

o Section 5: "The Arbitrator's authority shall be limited

to the interpretation and application of the parties'

Agreement. No arbitrator shall have the authority to

add to, subtract from, or modify the Agreement in any

respect, or to substitute his/her discretion or judgment

for that of the Hospital."

 Article XXXIII, Discipline and Discharge

o Section 1: "A Nurse who has completed his/her

probationary period and has acquired seniority under

this Agreement shall not be suspended, discharged,

demoted or otherwise disciplined except for just cause.

Discipline may include, but is not limited to,

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 counseling, verbal warnings, written warnings,

suspension and/or termination. The Hospital may utilize

whatever level of discipline it believes is appropriate

depending on the circumstances, but it will make

reasonable efforts to utilize progressive discipline."

 Appendix G

o "All existent policies applicable to bargaining unit

employees are hereby included in this CBA by reference,

except to the extent that the express terms of this

collective bargaining agreement supersede any

contradictory provision of an existing policy."

The parties submitted the following issues to the

arbitrator for resolution: "Was the termination of Maureen Bean

for just cause? . . . If not, what shall be the remedy?" Rejecting

Bean's denial that she had grabbed Waterhouse, the arbitrator

concluded that Bean had engaged in an inappropriate, unconsented

touching "for which there was just cause to impose discipline."

Nevertheless, he then found that Bean's conduct did not warrant

"termination in the first instance, without progressive

discipline." Accordingly, the arbitrator directed the Hospital to

reduce its penalty to a written warning and to reinstate Bean with

backpay.

The Hospital filed suit, arguing that the arbitrator

exceeded the scope of his authority under the CBA in vacating the

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Hospital's decision to terminate Bean and in ordering her

reinstatement. The district court entered summary judgment for

the Hospital, see Steward Holy Family Hosp., Inc. v. Mass. Nurses

Ass'n, 350 F. Supp. 3d 7, 16 (D. Mass. 2018), and this appeal

followed.

II.

"In order to assess whether the arbitrator exceeded his

contractual authority to resolve the parties' dispute, we look

first at the specific provisions of the CBA and the agreement to

arbitrate it contains." Butler Mfg. Co. v. United Steelworkers,

336 F.3d 629, 633 (7th Cir. 2003). Additionally, "an arbitrator's

authority under the CBA may be supplemented by the parties'

submissions." Dorado Beach Hotel Corp. v. Union de Trabajadores

de la Industria Gastronomica de P.R. Local 610, 959 F.2d 2, 4 (1st

Cir. 1992); see also Butler Mfg. Co., 336 F.3d at 633 ("[W]e may

also consult the parties' submissions . . . to see if there was a

post-dispute agreement to submit additional questions to the

arbitrator.").

We have labelled the degree of deference that we afford

an arbitrator's interpretation of the governing arbitration

agreement as "extreme." Salem Hosp. v. Mass. Nurses Ass'n, 449

F.3d 234, 237 (1st Cir. 2006). "If an arbitration award rests on

a plausible interpretation of the underlying contract, we must

uphold it." Id.; see also United Paperworkers Int'l Union v.

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Misco, Inc., 484 U.S. 29, 38 (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."). That said, "[t]he arbitrator cannot . . . ignore the

contract and simply dispense 'his own brand of industrial

justice.'" Kraft Foods, Inc. v. Office & Prof'l Emps. Int'l Union,

Local 1295, 203 F.3d 98, 100 (1st Cir. 2000) (quoting United

Steelworkers v. Enter. Wheel & Car Corp., 363 U.S. 593, 597

(1960)).

The Hospital suggests that the Supreme Court's command

that we uphold an arbitrator's decision so long as "the arbitrator

is even arguably construing or applying the contract and acting

within the scope of his authority," Misco, Inc., 484 U.S. at 38,

denotes a disjunctive test whereby a reviewing court only reaches

the "arguably construing or applying" (i.e., "plausibility")

inquiry after first determining that the arbitrator acted within

the scope of his authority. In this proffered, disjunctive

formulation of our standard of review, the Hospital appears to

conflate the standard by which we review questions of arbitrability

with that which we use to address the question presented in this

case -- that is, whether the arbitrator acted within the scope of

the authority granted to him under the parties' agreement. Compare

Grand Wireless, Inc. v. Verizon Wireless, Inc., 748 F.3d 1, 7 (1st

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Cir. 2014) ("'Unless the parties clearly and unmistakably provide

otherwise,' the court must resolve a disagreement among the parties

as to whether an arbitration clause applies to a particular

dispute." (citation omitted) (quoting AT&T Techs., Inc. v.

Commc'ns Workers, 475 U.S. 643, 649 (1986))), with Salem Hosp.,

449 F.3d at 238 (observing that in reviewing an arbitrator's

interpretation of her own authority under the parties' agreement,

we ask "whether the arbitrator had a plausible basis for her

determination"). While we acknowledge that it might sometimes be

difficult to determine whether a challenge to an arbitration award

poses a question of arbitrability or a question of whether the

arbitrator acted within the scope of his delegated authority, see

Oxford Health Plans LLC v. Sutter, 569 U.S. 564, 569 n.2 (2013)

(noting that the plaintiff might have alternatively challenged the

arbitration award on the basis of arbitrability), the Hospital

itself frames the question at hand as a challenge to the manner in

which the arbitrator elected to resolve the admittedly arbitrable

dispute as exceeding the scope of his authority under the terms of

the CBA. This question is governed by our normal, deferential

plausibility standard. See, e.g., id. at 568-69; N. New England

Tel. Operations LLC v. Local 2327, Int'l Bhd. of Elec. Workers,

735 F.3d 15, 21 (1st Cir. 2013); Salem Hosp., 449 F.3d at 238;

Poland Spring Corp. v. United Food & Commercial Workers Int'l

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Union, Local 1445, 314 F.3d 29, 33 (1st Cir. 2002); Dorado Beach

Hotel Corp., 959 F.2d at 4–5.

In finding that the CBA invites no plausible

interpretation that would have allowed the arbitrator to reject

the Hospital's chosen penalty of termination, the district court

-- like the Hospital -- relied on two basic arguments. First, it

pointed to the fact that the CBA incorporated a policy that deemed

threatening or intimidating conduct to be just cause for

termination. Second, it relied on the CBA's reservation to the

Hospital of certain rights in connection with employee discipline.

We consider each argument in turn.

A.

Appendix G of the CBA incorporates into the parties'

agreement "[a]ll existent policies applicable to bargaining unit

employees." The district court first looked to one such policy,

the "Disciplinary Action Policy," which categorizes employee

infractions within three groups and provides appropriate

disciplinary responses based on the severity of the offense and

the employee's history of misconduct. Group III includes the most

serious employee infractions, such as reporting to work under the

influence of alcohol, possessing weapons on hospital property

without permission, and theft, and it also includes the less

pellucid offense of "[t]hreatening, intimidating, or coercing

fellow employees on the premises at any time for any purpose."

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This latter offense, in turn, refers to the Hospital's "Zero

Tolerance for Disrespect" policy, which provides that the Hospital

"will not tolerate verbal, written or physical conduct by anyone

who works or practices at [the Hospital]" that "[c]reates an

intimidating, offensive or hostile environment" or "[d]isrupts the

operation of the [H]ospital or individuals working therein." While

Group I1 and Group II2 offenses provide for a scheme of progressive

discipline -- beginning with a verbal or written warning, including

a final written warning, and ending with termination -- the only

recommended penalty for a Group III offense is "immediate

termination."

The district court then observed that once the

arbitrator concluded that Bean's conduct "constituted a 'civil

battery'" -- a finding the court deemed "consistent with the

Hospital's determination that Bean had engaged in a Group III

offense for which immediate termination was justified" -- the

arbitrator's "role was fulfilled" and he was not at liberty to

1 Group I includes infractions such as "[a]bsenteeism,"
"[l]oitering during work hours," and "[o]ther minor inappropriate
behavior." The policy provides for a verbal warning, a written
warning, a final written warning, and termination for a first,
second, third, and fourth Group I offense, respectively.
2 Group II includes offenses such as "[o]bscene or
inappropriate language," "[s]ubstantial interference with work of
other employees," and "[o]ther inappropriate behavior." The
policy provides for a written warning, a final written warning,
and termination for a first, second, and third Group II offense,
respectively.

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prescribe a lesser form of discipline. Steward Holy Family

Hospital, Inc., 350 F. Supp. 3d at 14–15. The Hospital parrots

this reasoning on appeal.

We cannot accept this logic because we do not read the

arbitrator's decision as concluding that Bean's offense was a Group

III offense. The decision does not expressly assign Bean's offense

to any single Group. Nevertheless, the arbitrator did expressly

find that Bean's act "was not so serious that it justified

termination in the first instance" and that it called for

progressive discipline, including a written warning and a final

warning, prior to termination. Only Groups I and II call for

proceeding in this manner.

The Hospital contends that the classification of Bean's

infraction as a Group III offense is nevertheless "inescapable,"

constituting an "intentional tort" of just the sort referred to in

the Hospital's "Zero Tolerance for Disrespect" policy. In other

words, the Hospital would have us deem implausible any reading of

this policy that would classify Bean's offense as a non-Group III

offense. We cannot agree. The Hospital's Disciplinary Action

Policy by its terms provides "guidelines" and "examples" that would

warrant a recommended penalty of immediate termination. And some

of the descriptions of qualifying conduct listed in the

Disciplinary Action Policy are quite vague, leaving the arbitrator

significant discretion to interpret their meaning and determine

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whether they encompass Bean's infraction. See, e.g., Poland Spring

Corp., 314 F.3d at 36 ("[A]rbitrators have significant discretion

to interpret the terms of a collective bargaining agreement.");

id. at 37 (Boudin, J., concurring) ("Here, the arbitrator could

permissibly have read the contract to mean that some acts of

disobedience constitute 'insubordination' within the meaning of

the contract and that other, less severe acts -- although literally

disobedience -- do not."); Ga.-Pac. Corp. v. Local 27, United

Paperworkers Int'l Union, 864 F.2d 940, 945 n.2 (1st Cir. 1988)

("Although the collective bargaining agreement in this case

authorizes immediate discharge for dishonesty, it does not define

that term. It is thus up to an arbitrator to decide whether a

given pattern of conduct amounts to dishonesty.").

The Hospital argues that Bean's conduct necessarily

falls under the Group III offense of "[t]hreatening" or

"intimidating" a "fellow employee[] on the premises at any time

for any purpose." But the arbitrator found that while "Ms.

Waterhouse understandably felt mildly bullied and upset by the[ir]

interaction," nothing in the record indicated that "[Bean]

intended harm or that Ms. Waterhouse was placed in fear." Indeed,

Monica Messina, the only third-party witness to the incident,

described the cheek squeeze as a "friendly gesture." And in light

of the quite serious offenses listed in Group III -- such as the

"[u]nauthorized possession of weapons on hospital property,"

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"[t]heft," and "[r]eporting to work under the influence of alcohol

or any other substance" -- an arbitrator could have plausibly

interpreted Bean's conduct as not amounting to the same level of

seriousness as the other offenses listed in that category. For

similar reasons, nothing in the record compels the conclusion that

Bean's conduct "[c]reate[d] an intimidating, offensive or hostile

environment" or "[d]isrupt[ed] the operation of the [H]ospital or

individuals working therein" so as to trigger the Hospital's Zero

Tolerance Policy. In short, even assuming that the arbitrator

could not overrule a decision by the Hospital to terminate an

employee for committing a Group III offense, nothing in the CBA or

the incorporated policies inarguably required that the arbitrator

classify Bean's conduct as a Group III offense. Hence, the

Hospital's argument that the arbitrator exceeded his authority by

misapplying the CBA and rejecting its recommended penalty of

termination for a Group III offense fails.

B.

More ambitiously, the Hospital argues that the CBA

generally insulated the Hospital's choice of discipline from

arbitral review once the arbitrator concluded that just cause

existed for discipline of some type, Group III or not. In its

view, "[h]aving concluded that [Bean] was guilty of the misconduct

for which she had been terminated, the arbitrator lacked the

authority to modify the discipline." In support of this reading,

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the Hospital points to Article X, section 5 and Article XXXIII,

section 1 of the CBA (both set forth above).

We find the foregoing provisions too ambiguous to

shackle the arbitrator in this way. The Hospital certainly

retained the exclusive right to discipline and discharge even

tenured, non-probationary nurses, but it could only do so for "just

cause." Similarly, while the CBA states that the "Hospital may

utilize whatever level of discipline it believes is appropriate,"

the Hospital acknowledges on appeal that the CBA expressly

conditions this right on the Hospital making "reasonable efforts

to utilize progressive discipline." The Hospital's reliance on

the provision that prohibited the arbitrator from "substitut[ing]"

his discretion for that of the hospital fails for the same reason.

The Hospital's discretion was already limited by just cause and

its promise to make "reasonable efforts to utilize progressive

discipline." In the words of the Hospital's brief: "In Article

XXXIII of the CBA, the parties agreed that the Hospital has the

right to 'utilize whatever level of discipline it believes is

appropriate depending on the circumstances,' provided that it

makes reasonable efforts to use progressive discipline" (emphasis

added). And, as we have already explained, Appendix G to the CBA

incorporates the Disciplinary Action Policy, which identifies

progressive forms of discipline in a manner that omits discharge

as an option in many situations, plausibly including the situation

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presented here. One must strain too hard to find no plausible

construction of this language that would allow an arbitrator to

conclude that the Hospital impermissibly forewent the use of

progressive discipline in this case.

The CBA itself provides further support for the

conclusion that the Hospital's reserved right to discipline

workplace misconduct is conditioned on notions of just cause and

its use of progressive discipline, the reasonableness of which is

subject to arbitral review. Article XI, section 5 addresses one

particular type of employee misconduct not at issue here:

violations of the contract's "no strike" provisions. The language

in that section plainly says what the Hospital would have us read

the more general discipline and discharge provisions as saying for

all misconduct: "[A]n arbitrator may consider only whether the

employee engaged in conduct which violates the provisions of this

Article . . . [and] shall not have the authority to modify the

degree of discipline imposed."3 The fact that the same CBA eschews

3 Article XI, section 5 reads in its entirety: "Any Nurse
who engages in any conduct which violates the provisions of this
Article shall be subject to discipline up to and including
immediate discharge. In an arbitration concerning the discipline
or discharge of an employee for violating the provisions of this
Article, an arbitrator may consider only whether the employee
engaged in conduct which violates the provisions of this Article.
If the Arbitrator concludes that the employee engaged in any
conduct which violates the provisions of this Article, such
violation shall constitute just cause, and the grievance shall be
denied. The Arbitrator shall not have the authority to modify the
degree of discipline imposed."

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such simple and plain language regarding discipline for other

conduct (such as Bean's) supports the arbitrator's assumption that

his authority was not so limited.

The Hospital also seeks haven in three prior cases in

which we have stricken arbitral awards. See Poland Spring Corp.,

314 F.3d at 31, 34–35 ("[O]nce an arbitrator finds that an employee

has committed an act specifically listed in the collective

bargaining agreement as providing just cause for termination, the

arbitrator is not free to fashion a separate remedy apart from the

one provided by the parties' agreement."); Ga.-Pac. Corp., 864

F.2d at 945–46 (concluding that once the arbitrator found that the

employee had committed an act of dishonesty for which the agreement

imposed immediate discharge as a sanction, "the arbitrator was

barred from further inquiry"); S.D. Warren Co. v. United

Paperworkers' Int'l Union, AFL-CIO, Local 1069, 845 F.2d 3, 7–8

(1st Cir. 1988) (finding that the arbitrator was not even arguably

construing or applying the agreement when "the contract plainly

state[d] that the company ha[d] the sole right to discharge

employees for the violation which admittedly occurred," but the

arbitrator nevertheless ordered a reduced penalty). We disagree

with the Hospital that this case is analogous to these earlier

precedents. Here, the CBA did not inarguably grant the employer

the right to terminate a tenured, non-probationary nurse for the

type of conduct at issue without first following the parties'

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agreement that the Hospital would make reasonable efforts to use

progressive discipline.

Because we find that the arbitrator did not exceed the

scope of his authority under the CBA in determining that Bean's

conduct did not fall within a Group III offense and ordering a

lesser form of discipline in accordance with the CBA and the

Hospital's own disciplinary policies, we need not address the

Union's alternative argument that the parties' submissions

expanded the scope of the arbitrators' authority to order a less

severe form of discipline. Nor does the Hospital present us with

any argument that the arbitrator selected the wrong level of

discipline in view of Bean's prior infractions.

III.

For the foregoing reasons, we reverse the district

court's entry of summary judgment for the Hospital, and we remand

for proceedings consistent with this opinion.

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