F I L E D
United States Court of Appeals
Tenth Circuit
PUBLISH
AUG 2 2000
UNITED STATES COURT OF APPEALS
PATRICK FISHER
Clerk
TENTH CIRCUIT
LOCAL NO. 7 UNITED FOOD AND
COMMERCIAL WORKERS
INTERNATIONAL UNION,
Plaintiff - Appellee,
v. No. 99-1339
KING SOOPERS, INC., a division and
subsidiary of (respectively) Dillon
Companies, Inc., Kroger Company,
Defendant - Appellant.
Appeal from the United States District Court
for the District of Colorado
(D.C. No. 99-B-515)
Emily Fontelle Keimig (Raymond M. Deeny with her on the briefs), Sherman &
Howard, LLC, Colorado Springs, Colorado, for the appellant.
Michael J. Belo, General Counsel, United Food and Commercial Workers Union,
Local No. 7, Wheat Ridge, Colorado, for the appellee.
Before LUCERO, Circuit Judge, McWILLIAMS, Senior Circuit Judge, and
ALLEY, District Judge. *
*
The Honorable Wayne E. Alley, District Judge of the Western District of
Oklahoma, sitting by designation.
LUCERO, Circuit Judge.
This is an appeal from the district court’s grant of summary judgment to
plaintiff-appellee United Food & Commercial Workers International Union, Local
No. 7 (“the Union”) under Section 301 of the Labor Management Relations Act
(“LMRA”), 29 U.S.C. § 185(a). The Union successfully sought to enforce an
arbitrator’s award made pursuant to a collective bargaining agreement (“CBA”)
between the Union and defendant-appellant King Soopers, Inc. We inquire as to
whether the district court erred in holding that the arbitration award drew its
essence from the CBA and was enforceable. Exercising jurisdiction under 28
U.S.C. § 1291, we affirm.
I
The relevant facts in this case are undisputed. In June 1997 Lally Parbhu,
an employee of King Soopers and a Union member, took a leave of absence from
her job as an all-purpose clerk (cashier/checker) at a King Soopers store in order
to visit her ailing father in India. After her return from India in July, she returned
to work but then herself fell ill, and a physician wrote a note requesting that she
be excused from work until August 4, 1997. Without further notifying King
Soopers, however, Parbhu did not return to work on August 4 due to her
continued illness.
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On August 19, 1997, she called the store to check her work schedule and
spoke to the head clerk, who informed her that her employment with King
Soopers had been terminated and that she needed to speak with Joe Hernandez,
the store manager. Several days later, a meeting was held between Parbhu,
Hernandez, and Kim Cordova, a business agent of the Union. At that meeting
Parbhu explained she had not reported for work between August 4 and August 19,
1997, because she was ill, though she acknowledged that she should have
informed store management of her ongoing absence. Following the meeting,
Hernandez suspended her pending further investigation. He consulted with his
supervisor, Anna Martinez, and thereupon terminated Parbhu for violation of
King Soopers’s “no call/no show” policy.
The King Soopers no call/no show policy provides that “[u]nexcused
absences, (i.e., not calling or reporting for work for three (3) consecutive work
days) will be grounds for immediate discharge.” (I Appellant’s App. at 94.)
Article 40, Section 114 of the CBA governing relations between King Soopers
and the Union and employees provides that “no employee who falls within the
bargaining unit shall be discharged without good and sufficient cause.” 1 (Id. at
45.) The CBA nowhere defines “good and sufficient cause” for termination, nor
1
It is undisputed that Parbhu is included in the bargaining unit and
therefore is covered by the CBA.
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does it give examples of conduct rising to the level of “good and sufficient
cause.” Article 6, Section 14 (the “Rights of Management” section) of the CBA
further states that “[t]he Employer retains the right . . . to make necessary
reasonable rules and regulations for the conduct of business, providing that said
rules and regulations are not in conflict with the terms of this Agreement in any
way.” (Id. at 17.)
On September 19, 1997, the Union filed a grievance, protesting the decision
to terminate Parbhu. Pursuant to the CBA’s grievance procedure, which provided
for an arbitrator to interpret the terms of the CBA, the Union and King Soopers
submitted the following question for arbitration:
Was the Grievant, Ms. Lally Parbhu, terminated for good and sufficient
cause? If not, what is the appropriate remedy?
(Id. at 100.)
After reviewing prior arbitration cases involving grievances filed as a result
of a termination decision, the arbitrator in the instant case determined that King
Soopers had not terminated Parbhu for good and sufficient cause, despite the fact
that the no call/no show policy was reasonable. “While it is possible,” he held,
“for violations of the no call/no show rule to be grounds for immediate
termination, Ms. Parbhu’s discharge did not meet the tests of just cause.” (Id. at
111.) He based that determination on the following factors, gleaned from his
review of past arbitration decisions: (1) Termination for a single offense is
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usually restricted to particularly grave breaches of proper conduct such as assault,
fighting, or theft, while for less serious violations such as Parbhu’s progressive
discipline is applied; (2) Parbhu would have likely responded well to progressive
discipline, and there was no reason to apply the severe penalty of termination; (3)
Arbitrators in previous cases gave consideration to mitigating circumstances such
as seniority and prior work history, and because Parbhu had been disciplined only
once previously in the six years she had worked for King Soopers, those
mitigating circumstances should have been considered; (4) It was King Soopers’s
practice to call employees who do not report for work, and the termination
decision in the instant case was made without attempting to contact Parbhu. As a
result, the arbitrator ordered that Parbhu be reinstated with full seniority to her
former position or a comparable one, but because she violated the no call/no show
rule, he ordered that the termination decision be converted to a term of suspension
without pay.
Both the Union and King Soopers thereupon filed suit in United States
District Court for the District of Colorado under Section 301 of the LMRA, 29
U.S.C. § 185(a), the former to enforce the arbitrator’s award and the latter to
vacate it. The Union and King Soopers filed cross-motions for summary
judgment, and the district court granted summary judgment to the Union, ordering
that the arbitrator’s award be enforced. See United Food & Commercial Workers
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Union, Local No. 7 v. King Soopers, Inc., 52 F. Supp.2d 1215 (D. Colo. 1999).
King Soopers now appeals.
II
Our standard of review is well-established: “We review the district court’s
grant of summary judgment de novo, applying the same legal standard used by the
district court.” Simms v. Oklahoma ex rel Dep’t of Mental Health & Substance
Abuse Servs., 165 F.3d 1321, 1326 (10th Cir.), cert. denied, 120 S. Ct. 53 (1999);
see also Fed. R. Civ. P. 56(c).
With respect to our review of arbitral awards in labor disputes, we are
guided by the following standard, “among the narrowest known to the law,”
Litvak Packing Co. v. United Food & Commercial Workers, Local Union No. 7,
886 F.2d 275, 276 (10th Cir. 1989):
The courts are not authorized to reconsider the merits of any award even
though the parties may allege that the award rests on errors of fact or on
misinterpretation of the contract. The refusal of courts to review the merits
of an arbitration award is the proper approach to arbitration under
collective bargaining agreements.
United Paperworkers Int’l Union v. Misco, 484 U.S. 29, 36 (1987) (internal
quotations and citation omitted). “The parties have contracted for an arbitrator to
resolve their disputes, not a court,” Litvak Packing Co., 886 F.2d at 276 (citing
Misco, 484 U.S. at 37-38) (further citation omitted), and thus “so far as the
arbitrator’s decision concerns construction of the contract, the courts have no
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business overruling [the arbitrator] because their interpretation of the contract”
differs, United Steelworkers of Am. v. Enterprise Wheel & Car Corp., 363 U.S.
593, 599 (1960). That policy of exceedingly narrow judicial review is based on
the fact that
the arbitrators under . . . collective [bargaining] agreements are
indispensable agencies in a continuous collective bargaining process. They
sit to settle disputes at the plant level—disputes that require for their
solution knowledge of the custom and practices of a particular factory or of
a particular industry as reflected in particular agreements.
Id. at 596 (footnote omitted). “Nonetheless, an arbitrator is confined to
interpretation and application of the collective bargaining agreement; he does not
sit to dispense his own brand of industrial justice, . . . . his award is legitimate
only so long as it draws its essence from the collective bargaining agreement.”
Id. at 597. That will be the case “as long as the arbitrator is even arguably
construing or applying the contract and acting within the scope of his authority,”
Misco, 484 U.S. at 38. But an award does not draw its essence from the CBA if
it is contrary to the express language of the contract . . . or . . . is so
unfounded in reason and fact, so unconnected with the working and purpose
of the agreement as to manifest an infidelity to the obligation of the
arbitrator . . . . [or] if viewed in the light of its language, its context, and
any other indicia of the parties’ intention, it is without factual support.
Mistletoe Express Serv. v. Motor Expressmen’s Union, 566 F.2d 692, 694 (10th
Cir. 1977) (internal quotations and citations omitted).
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A
As an initial matter, we disagree with King Soopers’s contention that its no
call/no show policy has been incorporated into the CBA and therefore a violation
of that policy always constitutes “good and sufficient cause” for termination
under the CBA. Although the CBA negotiated between King Soopers and the
Union gives King Soopers “the right . . . to make necessary reasonable rules and
regulations for the conduct of business, providing that said rules and regulations
are not in conflict with the terms of [the CBA] in any way,” (Appellant’s App. at
17), the right to make such rules is not the right to equate the violation of such
rules with “good and sufficient cause” for termination. To hold otherwise would
be to allow King Soopers to unilaterally define the meaning of “good and
sufficient cause,” a right which was not contemplated by the CBA and for which
King Soopers must negotiate with the Union.
The Second Circuit was faced with a similar situation in First National
Supermarkets, Inc. v. Retail, Wholesale & Chain Store Food Employees Union
Local 338, 118 F.3d 892 (2d Cir. 1997). In that case, an arbitrator determined
that the violation of a rule promulgated by a supermarket providing for immediate
dismissal for certain conduct did not constitute “just cause” for termination under
a collective bargaining agreement and reversed the supermarket’s termination of
an employee. Id. at 895. As in the present case, the collective bargaining
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agreement in First National Supermarkets required but did not define “just cause”
for termination and gave the supermarket the right to promulgate policies. Id. at
894. The district court upheld the arbitrator’s award, and the Second Circuit
affirmed, holding that because “just cause” was not defined in the collective
bargaining agreement and because “the CBA authorizes the arbitrator to resolve
disputes concerning the interpretation or application of its terms, it remains for
the arbitrator to determine whether a discharge was for ‘just cause.’” Id. at 896
(citation omitted). As for the argument that the supermarket policy was integrated
into the CBA, the Second Circuit categorically rejected that claim:
[The CBA] does indeed give the employer the right to “establish policies”;
it also gives the employer the right to “discharge for just cause.” It does
not, however, provide that any violation of the employer’s established
policies must necessarily constitute “just cause” for discharge.
Id. Rather, the court concluded that if the supermarket “wished to have an
unquestionable right to discharge an employee for any specified conduct, it
needed to negotiate for recognition of that right in the CBA.” Id. (citation
omitted). We agree entirely with the Second Circuit’s reasoning, which compels
the same result in the instant case. The no call/no show policy is not integrated
into the CBA, and therefore we reject King Soopers’s argument that the arbitral
award does not draw its essence from the CBA because it disregards the
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management rights clause. 2 Rather, the arbitral award properly interprets that
clause in conjunction with other provisions of the CBA.
We likewise hold that the arbitrator’s decision to consider the no call/no
show policy as grounds for discipline draws its essence from the CBA, given his
finding that the policy was reasonable and given that it had been promulgated
pursuant to the “Rights of Management” section of the CBA, Article 6, Section
14. Nothing in this opinion should be read as nullifying an arbitrator’s duty to
2
General Drivers, Warehousemen & Helpers Local Union 968 v. Sysco
Food Services, Inc., 838 F.2d 794, 796 n.1, 799 n.4 (5th Cir. 1988), on which
King Soopers relies for the proposition that the no call/no show policy was
integrated into the CBA, is distinguishable on its facts. In Sysco, the CBA
provided that,
[t]he Union recognizes the right of the Company to make and enforce Rules
and Regulations and that violation thereof may be just cause for discipline
or discharge of employees. The only question which may be the subject of
a “grievance” is whether or not the disciplined employee did or did not
engage in the specific conduct which resulted in the disciplinary action.
Id. at 796. Thus, in Sysco, the CBA expressly incorporated the employer’s rules
into its “just cause” provision. The CBA in the instant case contains no such
language, and we will not read such a clause into the CBA absent indications that
such was the intention of the parties. We note that the Fourth Circuit’s opinion in
Mountaineer Gas Co. v. Oil, Chemical & Atomic Workers International Union, 76
F.3d 606, 609-10 (4th Cir. 1996), also cited by King Soopers, relies on General
Drivers for its holding that a rule promulgated unilaterally by the employer is
incorporated into the CBA. See id. at 610. As noted, the CBA in the present case
lacks language specifically permitting the employer to define “good and sufficient
cause” by rule, such as that in General Drivers, and thus Mountaineer Gas, too,
must be distinguished. To the extent Mountaineer Gas can be otherwise
interpreted, it is contrary to the law of our Circuit.
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consider a reasonable company policy promulgated pursuant to that company’s
rights under a collective bargaining agreement. But the weight the arbitrator
decides to accord that policy, as discussed below, is not a matter for judicial
review. 3
B
With regard to whether the arbitrator’s award otherwise drew its “essence”
from the CBA, in the present case, the terms of the agreement were ambiguous,
nowhere defining “good and sufficient cause.” Under our precedent, “[i]t is a
well-recognized principle that, except where expressly limited by a labor
agreement, an arbitrator may consider and rely upon extrinsic evidence, including
negotiating and contractual history of the parties, evidence of past practices, and
the common law of the shop, when interpreting ambiguous provisions.”
Champion Boxed Beef Co. v. Local No. 7 United Food & Commercial Workers
Int’l Union, 24 F.3d 86, 88-89 (10th Cir. 1994). Indeed, the very nature of the
arbitrator’s role in settling disputes under collective bargaining agreements is to
3
The instant case is thus distinguishable from Conoco, Inc. v. Oil,
Chemical & Atomic Workers International Union, Nos. 87-1482, 86-1639, 1988
WL 163062, at *3 (10th Cir. Sept. 12, 1988) (unpublished), cited by appellant, in
which “the arbitrator failed to address or in any way distinguish the established
rules of conduct which directly conflicted with the basis of his decision.” In the
present case the arbitrator did not ignore the no call/no show policy and
specifically evaluated the appropriateness of termination and other disciplinary
measures in light of the policy and the circumstances of Parbhu’s case.
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examine such practices. See Enterprise Wheel & Car Corp., 363 U.S. at 596.
Specifically, in Champion Boxed Beef Co., 24 F.3d at 88 (citing United
Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574, 581-82 (1960)),
we upheld an arbitrator’s award reinstating an employee terminated for
insubordination based in part on the arbitrator’s consideration of “testimony
concerning the Company’s current practice . . . when other employees have balked
at accepting work assignments.” See also Mistletoe Express Serv., 566 F.2d at
695 (“In a proper case an arbitrator, in reliance on custom or usage in an industry,
may construe a ‘just cause’ provision of a labor contract to include a progressive
discipline requirement and may determine that certain conduct is ‘just cause’ for
discipline but not for discharge.”). That is precisely what the arbitrator did in the
present case. He reviewed termination and disciplinary practices, which in his
judgment compelled the conclusion that termination was too severe a penalty for
Parbhu’s breach of the no call/no show policy, although the breach of that policy
was deserving of disciplinary measures. 4 There is no question but that the
4
Contrary to appellant’s contention, the fact that the arbitrator considered
the no call/no show policy as grounds for discipline in this case but not for
termination did not nullify the management rights section of the CBA or add new
terms or conditions to that agreement. As discussed, the fact that the CBA is
ambiguous as to the meaning of “good and sufficient cause” and provides for
arbitration indicates the parties’ intention to have that term interpreted by the
arbitrator, and none of the arbitrator’s methods for evaluating the grievance are
contrary to the terms of the CBA.
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arbitrator’s determination drew its essence from the CBA, “and we cannot
substitute our interpretation of the contract for [the arbitrator’s].” Litvak Packing
Co., 886 F.2d at 276.
Appellant mistakenly relies on our decisions in International Union of
Operating Engineers, AFL-CIO, Local No. 670 v. Kerr-McGee Refining Corp.,
618 F.2d 657, 659-60 (10th Cir. 1980), and Mistletoe Express Service, 566 F.2d
at 695, for the proposition that the arbitrator’s examination of extraneous
evidence—specifically, evidence of past practice regarding progressive
discipline—is inappropriate. Mistletoe Express Service and Kerr-McGee
involved situations in which the agreements at issue expressly provided for
certain conduct as just cause for discharge, and the arbitrators substituted their
own views for express language in the collective bargaining agreements. See
Kerr-McGee, 618 F.2d at 658-60; Mistletoe Express Serv., 566 F.2d at 694-95. In
the present case, by contrast, the term “good and sufficient cause” was not
defined in the CBA. The arbitrator was acting well within the scope of his
authority and the essence of the CBA in reaching his result.
III
The judgment of the district court is AFFIRMED.
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Local No. 7 United Food & Commercial Workers International Union v. King Soopers, Inc.
Court: Court of Appeals for the Tenth Circuit
Date filed: 2000-08-02
Citations: 222 F.3d 1223
Copy CitationsCombined Opinion