United States Court of Appeals
For the First Circuit
No. 02-1064
POLAND SPRING CORPORATION,
Plaintiff, Appellee,
v.
UNITED FOOD AND COMMERCIAL WORKERS INTERNATIONAL UNION,
AFL-CIO-CLC, LOCAL 1445,
Defendant, Appellant.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MAINE
[Hon. D. Brock Hornby, U.S. District Judge]
Before
Boudin, Chief Judge,
Torruella and Lynch, Circuit Judges.
Warren H. Pyle, with whom Lara Sutherlin and Pyle, Rome,
Lichten & Ehrenberg, P.C., were on brief, for appellant.
Richard R. Boisseau, with whom Amy R. Walker and Kilpatrick
Stockton LLP, were on brief, for appellee.
December 24, 2002
TORRUELLA, Circuit Judge. The appellant, United Food and
Commercial Workers International Union AFL-CIO-CLC, Local 1445
("Union") appeals from the district court's summary judgment
vacating an arbitration award that reinstated employee Leo Beaupre
and reduced his discharge to a suspension without pay. Appellee is
the Poland Spring Corporation ("Poland Spring"), which terminated
Beaupre for insubordinate behavior on February 5, 2000. We affirm.
Background Facts
Poland Spring is a bottler of non-carbonated water with
bottling facilities in Maine. In 2000, Leo Beaupre worked for
Poland Spring as a palletizer operator. A palletizer is a machine
that loads cases of bottles onto pallets and wraps the full pallets
in plastic for shipping. As a palletizer operator, Beaupre was
responsible for placing empty pallets on the machine, removing
loaded pallets, and keeping the area around his machine clean.
Since his palletizer was elevated on legs above the floor, this
housekeeping task occasionally required him to remove stray bottles
from under the machine.
The incident which led to Beaupre's termination occurred
on the night shift beginning on February 5, 2000. Beaupre's
supervisor that night was Mike Arsenault, a former co-worker of
Beaupre's who had recently been promoted to a supervisory role. At
some point during the shift, a group of employees got together and
began playfully teasing Arsenault. This group included Beaupre.
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The employees teased Arsenault rather crudely about his recent
promotion, stating in starkly graphic terms how he was promoted for
providing an imaginative variety of sexual favors to the plant
manager, another male.
Arsenault did not appear offended at first. In fact, at
some point Arsenault actually joined in the ribbing, pretending to
call up the plant manager on his radio to tell the manager that he
would be right up to see him. Predictably, this spirit of
jocularity did not last. According to Arsenault, the joking ended
when the group received a radio call, and Arsenault assigned the
employees to various work tasks. Beaupre, in contrast, testified
that Arsenault suddenly "became unglued," stated "[t]hat will be
enough," and ordered everyone back to work.
When the banter ended, Arsenault directed Beaupre and
another worker to go into the filler room and help clean up stray
bottles that were on the floor. Beaupre explained to Arsenault
that due to an asthmatic condition, he could not work in the filler
room where elevated levels of ozone could be present. Arsenault
responded that if Beaupre could not work in the filler room, he
should go clean bottles out from underneath the accumulation table.
The accumulation table is a large table where filled bottles coming
from the filler operation can accumulate if the palletizer
operation is interrupted. The task would require Beaupre to crawl
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under the accumulation table, which stands on legs only a few feet
off the floor.
Beaupre refused to follow this directive from Arsenault,
telling Arsenault that his "crawling days [were] over; it's hard
for me to crawl into bed [and] hard for me to crawl out of bed."
Arsenault then repeated his directive to Beaupre, but Beaupre
continued to refuse to clean out the bottles. According to
Arsenault, he then warned Beaupre that his non-compliance would
constitute an act of insubordination which could result in
Beaupre's termination. Nevertheless, Beaupre again refused to
comply with the order.
Arsenault then directed Beaupre to accompany him to a
conference room. On the way there Beaupre asked Arsenault whether
he was really going to fire Beaupre over a bottle of water, and
also asked Arsenault whether that would make him feel like a man.
Despite the fact that Arsenault had now made it clear to Beaupre
that he could face termination for failure to comply with
Arsenault's directives, he refused to clean up the bottles.
While they were walking toward the conference room,
Arsenault radioed a more experienced supervisor to join them. Also
joining them were two other plant employees who came at Arsenault's
request as witnesses. Once again, the supervisors instructed
Beaupre to go pick up the bottles as directed, and once again
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Beaupre refused to perform the assigned work. Beaupre was
suspended pending investigation, and sent home.
The following day, the Union filed a grievance, alleging
that Arsenault's fraternizing and joking with the plant employees
was unprofessional, and that after being the subject of so much
teasing, Arsenault retaliated by trying "to embarrass [Beaupre] in
front of his peers by making him crawl under a conveyer for one
bottle[.]"
At a post-suspension "Step 2" hearing, Beaupre and the
Union offered two affirmative defenses explaining Beaupre's refusal
to obey a directive. The Union's arguments were rejected, and
following the Step 2 grievance meeting, Poland Spring converted
Beaupre's suspension to a termination of employment.
The Collective Bargaining Agreement
The Union submitted a grievance pursuant to the
collective bargaining agreement then in existence between it and
Poland Spring. Article 32 of the agreement is entitled "Discipline
and Discharge" and provides in plain language that insubordination
"shall" constitute just cause for termination. That Article also
provides that a number of offenses may warrant a lower level of
discipline prior to discharge. Insubordination, however, is not
such an offense. The relevant section of Article 32 provides:
Discipline and discharge shall only occur for
just cause. The parties agree that just cause
for discharge shall include, but not be
limited to, the following:
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. . .
8. Insubordination
. . .
Under Article 33, the arbitrator's authority is expressly
limited to the provisions of the Agreement. Accordingly "[t]he
arbitrator shall have no power to alter or modify any of the terms
of this Agreement or to impose on any party a limitation or
obligation not explicitly provided for in this Agreement."
The Arbitrator's Award
The factual findings of the arbitrator are substantially
those previously discussed. Nevertheless, because the primary
issue for our consideration is whether the arbitrator unambiguously
found that Beaupre's February 5 conduct was insubordinate, it is
helpful here to reproduce substantial portions of the arbitrator's
decision.
His discussion of the termination began:
There is little doubt in this case that
absent some persuasive affirmative defense,
[Beaupre] was guilty of the offense of
insubordination on the February 5, 2000 night
shift. Arsenault repeatedly ordered the
grievant to clean out the scrap bottle(s) from
under the accumulation table. The grievant
repeatedly refused to comply with that
directive, even after first Arsenault and then
[another supervisor] made it clear to him that
he could be terminated for so refusing.
The arbitrator then evaluated the two affirmative
defenses raised by the Union. First, the Union argued that
Beaupre's repeated refusals to follow his supervisor's order were
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motivated by a sincerely held concern for his health. The
arbitrator determined that this argument was not credible and that
Beaupre's health was not the reason he refused to clean up the
bottles. The Union alternatively argued that because the order to
clean up the bottles followed so closely upon the sexual banter
between Arsenault and the plant workers, Beaupre believed he might
have been subjected to undue humiliation or embarrassment, or even
risk of sexual assault. The arbitrator determined that this
defense was entirely unpersuasive and that any apprehensions
Beaupre might have had were not reasonable.
Since the arbitrator began his discussion by stating that
"absent some persuasive affirmative defense [Beaupre] was guilty of
the offense of insubordination," one might have expected the
arbitrator to conclude his analysis after rejecting both
affirmative defenses proffered by the Union. Instead, the
arbitrator stated that there was "one remaining issue for
discussion, that being the level of discipline imposed." After
thus declaring that he was now exploring remedial possibilities the
arbitrator broke down the term "insubordination" into two types:
straightforward insubordination, and insubordination in the
presence of mitigating circumstances. The arbitrator reasoned:
[Article 32] may well establish that in
clear, straight-forward cases of
insubordination, without mitigating
considerations, the parties by agreement have
established the per se rule that there is just
cause for termination. However, the language
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of Article 32 does not state that even in the
presence of mitigating circumstances,
insubordination still will necessarily provide
the company with just cause for termination.
On the contrary, where significant mitigating
considerations are present, the culpability of
the employee may be diminished, and summary
termination may no longer be justified. This
more complex fact situation must be considered
under the general, just cause standard set
forth in article 32, giving due weight to the
fact that the parties have agreed that a pure
case of insubordination, without mitigating
considerations, would provide just cause to
terminate.
Having distinguished straightforward insubordination from
insubordination with mitigating circumstances, the arbitrator
placed Beaupre's claim in the latter category. The arbitrator
found that Beaupre's refusal to comply with his supervisor's
directive was mitigated by his supervisor's misconduct, which
"blurred the line between the supervisor and the workers."
According to the arbitrator, once the supervisor joined in the
ribbing and sexual banter, his "improper fraternizing with the
workers created an environment where one of the employees might
think, at least initially, that Arsenault was not acting in his
supervisory capacity, but rather only as one of the guys joking
around on the shop floor." The arbitrator concluded that "it was
unjust for the Company to terminate the grievant for his
insubordinate behavior which immediately followed." Nevertheless,
despite the presence of mitigating circumstances, the arbitrator
concluded that Beaupre's protracted refusal to comply with the
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directive still constituted "insubordinate behavior." The
arbitrator determined that:
[Beaupre] should have been able to figure out
that Arsenault had shifted gears and was now
acting in his supervisory capacity; he should
have promptly followed the directives of the
person he knew to be his supervisor.
Furthermore . . . Arsenault first alone and
then with the assistance of [another
supervisor] gave the grievant clear warning of
the fact that his behavior had become
insubordinate, and gave the grievant numerous
opportunities over an extended period of time
to abandon his initial refusal, and to perform
the work as directed.
Ultimately the arbitrator concluded that while mitigating
circumstances rendered the company's decision to terminate Beaupre
unjust, Beaupre's insubordinate behavior over an extended period of
time warranted a two week suspension without pay.
Summary Judgment
Poland Spring filed suit in district court to vacate the
arbitration award. The court granted summary judgment, finding
that the award exceeded the arbitrator's authority under the
Agreement. The court held that in the Agreement there is "nothing
about 'clear, straight-forward' cases, 'pure' cases, or 'mitigating
circumstances.'" The court found that under the circumstances, the
arbitrator lacked the authority under Article 32 to reinstate an
insubordinate employee. The Union appealed.
Discussion
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Judicial review of an arbitrator's decision is extremely
narrow and deferential. United Paperworks Intern. Union, AFL-CIO
v. Misco, Inc., 484 U.S. 29, 36 (1987); Keebler Co. v. Truck
Drivers, Local 170, 247 F.3d 8, 10 (1st Cir. 2001). We do not sit
as a court of appeal to hear claims of factual or legal error by an
arbitrator or to consider the merits of an award. Misco, Inc., 484
U.S. at 36-37. We cannot vacate the award because the arbitrator
misreads the contract, where there is room to do so. Id. at 37-38.
Nor are we authorized to reject his honest judgment as to the
appropriate remedy, if the contract gives him the authority to
decide that question. Id. at 38. "[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." Id.
Nevertheless, acknowledging that our role is a limited
one is not the equivalent of granting limitless power to the
arbitrator. Georgia Pacific Co. v. Local 27, United Paperworkers
Int'l Union, 864 F.2d 940, 944 (1st Cir. 1988). The decision to
settle labor-management disputes through arbitration is a wholly
voluntary decision by private parties, grounded on their will as
expressed in the collective bargaining agreement. Id. "Therefore,
the paramount point to be remembered in labor arbitration is that
the power and authority of an arbitrator is totally derived from
the collective bargaining agreement and that he violates his
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obligation to the parties if he substitutes 'his own brand of
industrial justice' for what has been agreed to by the parties in
that contract." Id. (quoting United Steelworkers v. Enterprise
Wheel & Car, 363 U.S. 593, 597 (1960); see also Misco Inc., 484
U.S. at 38. If the language of an agreement is clear and
unequivocal, an arbitrator cannot give it a meaning other than that
expressed by the agreement. Georgia-Pacific Co., 864 F.2d at 944.
In support of the arbitration award, the Union contends
that the arbitrator did not unambiguously find Beaupre guilty of
insubordination as that term is used in Article 32. Instead, it
claims, the arbitrator found that because Beaupre's actions were
mitigated by the horseplay of his supervisor, Beaupre's conduct
should not be treated as insubordination per se, but should rather
be evaluated under the general, "just cause" standard also set
forth in Article 32. That is, since Beaupre's culpability was
lessened by his supervisor's own misconduct, the arbitrator
properly considered Beaupre's misconduct under the flexible "just
cause" provision of Article 32, rather than the "insubordination"
standard of that same section.
We disagree with the Union's selective reading of the
arbitration award. The award unambiguously concluded that
Beaupre's misconduct on the night of February 5, 2000 constituted
insubordination pursuant to Article 32 of the Agreement. The
arbitrator unequivocally found: first, that a clear order was
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repeatedly given to Beaupre; second, that Beaupre fully understood
the consequences of failure to comply with the order and yet
repeatedly refused to do so; and finally, the arbitrator concluded
that Beaupre's refusals to comply with the order constituted acts
of insubordination subject to discipline under Article 32 of the
agreement.
First, it is beyond dispute that the arbitrator found
that Beaupre repeatedly refused to comply with his supervisor's
directives. He concluded that "the grievant declined to follow
this directive from Arsenault. Arsenault repeated his directive to
the grievant, but the grievant continued to refuse to clean out the
bottles from under the accumulation table."
Second, the arbitrator found as a fact that Beaupre fully
understood the consequences of his failure to comply with his
supervisor's directive. After his second refusal of the order,
Beaupre accompanied Arsenault to the conference room for a
disciplinary meeting. On the way there, Beaupre asked Arsenault
whether "he was the man that was going to take the grievant's job
over a bottle of water, and if he did, would that make him feel
like a man." Based on that statement, the arbitrator concluded
that "[c]ertainly, then, the grievant at least by that point
understood that he could face termination for failing to comply
with Arsenault's directive."
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Finally the arbitrator concluded that Beaupre's knowing
refusal to comply with the directive was "insubordinate" within the
meaning of the Agreement. First, the arbitrator twice used the
language "insubordinate behavior" to describe Beaupre's conduct on
the night of February 5, 2000. Second, the portion of the award
concerning Beaupre's culpability begins with the statement that
"[t]here is little doubt in this case that absent some persuasive
affirmative defense, the grievant was guilty of the offense of
insubordination." The award then proceeded to evaluate and reject
the affirmative defenses raised by Beaupre, leaving little doubt
that the arbitrator found Beaupre guilty of insubordination.
Upon reaching the conclusion that Beaupre's conduct was
insubordinate, the arbitrator was "barred from further inquiry
because such additional probing constituted 'ignor[ing] the plain
language of the contract.'" Georgia-Pacific Corp. v. Local 27
United Paperworkers Int'l Union, 864 F.2d 940, 945 (1st Cir. 1988)
(quoting Misco, Inc., 429 U.S. at 38). This Court has long held
that once 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. See Georgia-Pacific, 864 F.2d at 945; S.D.
Warren Co. v. United Paperworkers' Int'l Union, 845 F.2d 3, 8 (1st
Cir. 1988); Metro Chevrolet, Inc. v. Unión de Tronquistas de Puerto
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Rico, 835 F.2d 3, 5 (1st Cir. 1987). The rationale for this line
of cases is simple: contractual provisions like the insubordination
clause of Article 32 are bargained for and inserted precisely to
take discretion away from arbitrators charged with enforcing the
collective bargaining agreement. Cf. Georgia-Pacific Corp, 864
F.2d at 945 ("'[A]n arbitrator does not have unfettered discretion.
He may not impose a remedy which directly contradicts the express
language of the collective bargaining agreement.'") (quoting
Bruno's Inc. v. United Food & Com. Wkrs. Int'l Union, Local 1657,
858 F.2d 1529, 1531 (11th Cir. 1988)). Consequently, the plain
language of Articles 32 and 33 left nothing to the arbitrator's
discretion except to determine whether or not Beaupre's conduct was
insubordinate.
In Georgia-Pacific, this Court held that nearly identical
contract language gave the employer the right to discharge, leaving
an arbitrator no discretion to fashion a remedy different from the
parties' agreed-upon level of discipline. 864 F.2d at 942, 946.1
1
In Georgia-Pacific, the agreement in issue provided that:
Any employee may be discharged for just cause.
Without limiting the generality of the
foregoing some of the causes for immediate
discharge are:
. . .
(5) dishonesty
. . . Georgia-Pacific, 864 F.2d at 942.
The arbitrator in Georgia-Pacific found that an employee had
engaged in an act of dishonesty subjecting him to discipline.
However, the arbitrator then overruled the company's decision to
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Evaluating the agreement in Georgia-Pacific, we determined: (1)
that the agreement specifying that committing an offense of
dishonesty subjected an employee to immediate discharge was
unambiguous on its face; (2) that the parties inserted the
provision "precisely [to remove] optional choice on the part of the
arbitrator;" and (3) that the arbitrator had no discretion to
impose another form of discipline once he found dishonesty. Id. at
945-46.
By enumerating offenses that are subject to immediate
discharge and distinguishing those offenses from other forms of
misconduct that warrant a warning prior to discharge, the parties
manifested their intent to remove from the arbitrator's discretion
the power to fashion his own remedy for those offenses expressly
subjected to automatic discharge. See S.D. Warren Co., 845 F.2d at
7-8 (finding that the purpose of an automatic discharge provision
in a collective bargaining agreement reflects the parties' intent
to "remov[e] from the arbitrator the authority to determine a
remedy once she concludes that a certain rule has been breached").
If the parties intended mitigating circumstances to affect whether
terminate the employee, based in part upon the employee's overall
employment record. This Court found that the arbitrator had no
discretion to impose his own remedy once he found that the employee
was guilty of dishonesty. Looking at the agreement, we concluded
that "[i]t is difficult to imagine how one could use the English
language to state more clearly that dishonesty leads to immediate
discharge than is stated in [the agreement]." Id. at 946 (citation
and quotation omitted).
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insubordination constitutes just cause for termination, then they
would have expressed their intent in the contract. Because we find
that the arbitrator determined that Beaupre was guilty of
insubordination, his decision to fashion a separate remedy due to
mitigating circumstances impermissibly substituted his own notions
of industrial justice over those established by the contract. Id.;
accord Misco, 484 U.S. at 38.2
2
The Union asserts that instead of applying Georgia-Pacific, our
analysis ought to be guided by Keebler Co. v. Truck Drivers, Local
170, 247 F.3d 8 (1st Cir. 2001) (holding that an arbitrator's
decision that conduct did not constitute gross insubordination drew
its essence from the contract) and Crafts Precision Industries Inc.
v. Lodge No. 1836, 889 F.2d 1184 (1st Cir. 1989) (upholding an
arbitrator's determination that some types of insubordination
warrant discharge while other less serious instances may warrant
only suspension). We disagree. There are two key issues
distinguishing this case from the rule of law established in
Keebler and Crafts Precision.
First, as we explained in Keebler, Keebler does not apply where,
as is the case here, "the arbitrator unambiguously found that the
grievant had committed conduct listed in his employment agreement
as grounds for termination." Keebler, 247 F.3d at 14 n.2.
Second, the language of the collective bargaining agreements
involved in both Keebler and Crafts Precision was substantially
more open and ambiguous than the contract language in Georgia-
Pacific, Warren and the instant case. As we explained in Crafts
Precision, the question of whether an arbitrator exceeded his
authority will often turn on whether the agreement delegated open-
ended discretion to the arbitrator, or instead, whether the
agreement expressly provided that certain types misconduct shall
constitute just cause for discharge. Crafts Precision, 889 F.2 at
1185; compare Keebler, 247 F.3d at 12-13 (noting that the agreement
expressly required arbitrator to distinguish between gross
insubordination, which would be subject to immediate discharge,
from less serious instances of insubordination, which would not);
and Craft Precision, 889 F.2d at 1185-86 (noting that the agreement
vested the employer and arbitrator with the discretion to
distinguish conduct that "may result in suspension" from conduct
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Lastly, the Union argues that because the collective
bargaining agreement did not define the term insubordination, it
was necessary for the arbitrator to devise a definition of
insubordination and determine whether the actions of Beaupre were
those which constitute insubordination warranting termination under
the Agreement. According to this argument, when the arbitrator
distinguished between straightforward insubordination and
insubordination in the presence of mitigating circumstances, this
was precisely the type of interpretive analysis arbitrators are
regularly called on to do. Consequently, rather than fashioning a
separate remedy at odds with the one provided in the contract, the
arbitrator merely clarified the latently ambiguous term
insubordination and determined that the conduct involved here was
simply too minor to constitute insubordination as that term was
intended by the parties.
Were it in fact true that the arbitrator was merely
interpreting the term insubordination, this argument might have
that warrants discharge) with Georgia-Pacific, 864 F.2d at 942
(involving a contract which provided that any "employee may be
discharged for just cause" and then expressly listed dishonesty as
"one of the causes for immediate discharge"). The language in the
instant agreement is nearly-identical to that of Georgia-Pacific in
that it enumerates misconduct which may warrant discharge without
warning. That is, it provides that "just cause for discharge shall
include . . . insubordination." (Emphasis added). Unlike Keebler
and Crafts-Precision, the instant agreement lacks any language that
would authorize an arbitrator to distinguish between degrees of
insubordination, or permit an arbitrator to select from a variety
of disciplinary remedies.
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some merit. After all, the Union correctly asserts that
arbitrators have significant discretion to interpret the terms of
a collective bargaining agreement. It is up to the arbitrator to
decide whether a given pattern of conduct constitutes
insubordination. Furthermore, the term insubordination is not
defined in the agreement and is obviously susceptible to multiple
interpretations. Thus, the arbitrator here certainly would have
been free to decide that Beaupre's conduct was simply too minor to
rise to the level of insubordination as that term is used in the
contract.
Nevertheless, in this case it cannot be said that the
arbitrator's mitigating circumstances analysis was merely part of
an interpretation of the term insubordination. First, the
arbitrator never debated the meaning of the term insubordination,
and concluded that Beaupre was guilty of "insubordinate behavior"
that "extended over a lengthy period of time." Second, the
arbitrator did not begin his mitigating circumstances analysis
until after he had established Beaupre's culpability and stated
that there was only "one remaining issue for discussion, that
being the level of discipline imposed." Clearly, the mitigation
section of the award only arose when the arbitrator was considering
his remedial options, and not when he was supposedly engaged in an
interpretation of the term insubordination.
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Beaupre's situation is a regrettable one. His
supervisor's misconduct undoubtedly temporarily blurred the line
separating supervisor and employee, and in so doing, created a
scenario in which Beaupre, insulted and hurt by Arsenault's sudden
transformation from "one of the guys" to stern company supervisor,
felt justified in refusing the order. Nevertheless, Beaupre's
defiance outlasted the confusion caused by Arsenault's horseplay.
He repeatedly refused a company directive even after that directive
had become a formal warning delivered repeatedly by two
supervisors. The arbitrator deemed this conduct insubordinate,
and, having done so, lacked the contractual authority to mitigate
the disciplinary action provided by the collective bargaining
agreement. Consequently, the arbitration award is unenforceable
and the district court's judgment is affirmed.
Affirmed. No costs are imposed.
"Concurrence follows"
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BOUDIN, Chief Judge (Concurring). Leo Beaupre, then an
employee of Poland Spring Corp. at its facility in Maine, refused
in February 2000 several direct instructions from two supervisors
to pick up some bottles scattered under a table. The company's
contract with Beaupre's union provides that "[d]iscipline and
discharge shall occur only for just cause. The parties agree that
just cause for discharge shall include, but not be limited to, the
following: . . . Insubordination . . . ." After a warning, Beaupre
was discharged, and the union sought arbitration pursuant to the
contract.
In due course, the arbitrator found that Beaupre had
clearly violated direct orders from his superiors even after he was
advised that this could be a firing offense, and the arbitrator
found unsupported several excuses offered for Beaupre's refusals
(e.g., health concerns). However, the arbitrator ruled that under
the contract "mitigating considerations" permitted the arbitrator
to conclude that termination was too severe a penalty; finding
mitigation here -- for example, tasteless jokes by Beaupre's direct
supervisor -- the arbitrator ruled that the penalty should be
reduced to two weeks' suspension without pay.
Affirming the district court, the panel majority now
holds that the arbitrator exceeded his authority in directing
Beaupre's reinstatement. It is common ground that the arbitrator
is bound by provisions of the contract but also that the arbitrator
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can construe the contract. See United Paperworkers Int'l Union v.
Misco, Inc., 484 U.S. 29, 38 (1987). In effect, the arbitrator
takes over the court's role of initial construction; but there
remains a vaguely defined limit: a reviewing court may still
conclude that the arbitrator is re-writing the terms instead of
construing them. See id.
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. "Insubordination" is not defined in the contract nor is it
self-defining and, reading the provision in context, a judge (and
even more surely an arbitrator) would be likely to exclude trivial
disobedience, such as a refusal to light the supervisor's
cigarette. Consider that lack of cleanliness is also listed as a
basis for discharge under this contract, but certainly a smudge on
a nose would not qualify for discharge. So, taking account of the
severity of the disobedience is, within broad limits, surely a part
of the arbitrator's authority.
Viewed de novo, it is a more difficult question whether
the present contract can be read to limit management's right to
discharge an insubordinate employee where there exist "mitigating
considerations." Of course, lack of the severity of disobedience
could be viewed as a mitigating consideration; but the arbitrator's
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claim in this case is not focused on lack of severity. Rather, he
claimed and exercised a broader mandate to take into account
anything that might equitably bear on whether a discharge for
disobedience seemed fair and proportionate.
Most judges, interpreting this contract for themselves,
would probably reject this latter reading. Taking the contract as
a whole, it explicitly reserves disciplinary authority to
management, save as constrained by other provisions. Most judges
would likely take the "just cause" provision quoted above as
licensing management to discharge an employee who was patently
"insubordinate," even if he had served the company loyally for a
decade and had a sick wife at home and a child in college. The
contract does not say that discharge for insubordination is
permitted only where "just" or "fair."
Even so, the parties in this case empowered an arbitrator
to interpret the contract and that includes the power to adopt
readings that a judge might reject if no arbitrator were involved.
Does this include a reading that allows the arbitrator to say that
disobedience is "insubordination" if there are adequate "mitigating
considerations" that have nothing to do with whether the
disobedience was clear, deliberate, and pertinent to the employee's
duties? This is a stretch of language, to be sure, but whether it
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goes too far to be a permissible arbitrator reading is something
about which reasonable judges might differ.3
This debatable issue has been resolved in this circuit.
In two different cases, this court has ruled that contracts,
similarly structured as that at issue here, give management a right
to discharge an employee guilty of a listed offense, and that an
arbitrator cannot mitigate the penalty because of ameliorative
circumstances. See Georgia-Pacific Corp. v. Local 27, United
Paperworkers Int'l Union, 864 F.2d 940 (1st Cir. 1988); S.D. Warren
Co. v. United Paperworkers' Int'l Union, 845 F.2d 3 (1st Cir.),
cert. denied, 488 U.S. 992 (1988).
In S.D. Warren, 845 F.2d at 6, the contract reserved to
management "sole" authority to discipline, subject to appended
rules; and the appended rules said that "[v]iolations" of specified
rules were "causes for discharge," including "[p]ossession" of
marijuana on company property. The discharged employees had
possessed marijuana at the plant, but the arbitrator ruled that the
sanction was too severe. Id. The Warren decision held that the
arbitrator had exceeded his power. Id. at 8.
3
For example, immediate consideration of "fairness" might push in
one direction; in the other, the long-term cost of unpredictability
leading in turn to increased difficulty in negotiating even more
detailed provisions. Another factor, which might cut either way,
might be the practice in the industry. Yet another would be how
far the particular equities urged still had some connection with
the statutory language.
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A similar conclusion was reached in Georgia-Pacific, 864
F.2d at 942-43: the contract permitted discharge for "dishonesty,"
and the employee had reported himself unable to work for medical
reasons and had instead participated in a golf tournament. The
arbitrator ordered reinstatement based on the employee's many years
of service. Id. at 944. Again, the court held that the arbitrator
was improperly rewriting the contract. Id. at 946. Thereafter,
this court several times acknowledged that S.D. Warren/Georgia-
Pacific were the rule even in cases where the court managed to
distinguish those cases on their facts. E.g., Keebler Co. v. Truck
Drivers, Local 170, 247 F.3d 8, 13-14 & n.2 (1st Cir. 2001); Crafts
Precision Indus., Inc. v. Lodge No. 1836, Int'l Ass'n of
Machinists, 889 F.2d 1184, 1185-86 (1st Cir. 1989).
Based on first principles and Supreme Court precedent,
the dissenting opinion in this case argues (in substance) that S.D.
Warren and Georgia-Pacific were mistaken. The first principles,
themselves derived from Supreme Court precedent, are inevitably
quite general statements about the scope of and limits to
arbitrator authority; some language helps Beaupre, some helps the
company, and none of it in a debatable case like this one would be
decisive if we were deciding this case without any governing
circuit precedent.
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As for the Supreme Court's holdings, only Misco has facts
arguably close to our own.4 In Misco, 484 U.S. at 41-42, the Court
said that an arbitrator could impose a lesser remedy than
discharge, arguably in a situation not too far from our own. But
the Court's rationale is somewhat cryptic and turned in some
measure on a peculiar stipulation of the parties that the issue in
dispute was the existence of "just cause," which was said to be
open to arbitral determination. Id. Read evenhandedly, Misco is
of some help to Beaupre but also could itself be distinguished.
But this panel is not free to resolve this case based on
first principles or a reading of Misco favorable to Beaupre. S.D.
Warren was decided after Misco -- indeed, on remand after an
earlier S.D. Warren decision had been vacated by the Supreme Court
for reconsideration in light of Misco. S.D. Warren, 845 F.3d at 4.
The decision in S.D. Warren is expressly a determination that
neither Misco nor first principles preclude the decision by this
court in S.D. Warren -- a decision that pretty clearly embraces our
own facts.
4
Other decisions include Eastern Associated Coal Corp. v. United
Mine Workers, 531 U.S. 57 (2000), and Major League Baseball Players
Ass'n v. Garvey, 532 U.S. 504 (2001). In Eastern, 531 U.S. at 60,
67, the Court affirmed the arbitrator's award because the
arbitrator did not find "just cause" for discharge, and the
parties, by agreement, entrusted the remedial decision to the
arbitrator. In Garvey, 532 U.S. at 510, the Court held that an
arbitrator's award could not be set aside because of a court's
disagreement with the arbitrator's factual findings.
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If our own case were before us as the first one to arise
after Misco, its proper disposition would present a difficult and
interesting issue. But the rule that binds successor panels, which
serves to make law predictable, is decisive for me. United States
v. Wogan, 938 F.2d 1446, 1449 (1st Cir.), cert. denied, 502 U.S.
969 (1991).
"Dissent follows"
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LYNCH, Circuit Judge (Dissenting). The arbitrator
interpreted Article 32 of the collective bargaining agreement to
say the type of insubordination meant to be encompassed within the
"just cause" for termination was insubordination without any
mitigating circumstances. The majority says that this
interpretation exceeded the arbitrator's scope of authority. I
disagree, and so, with respect, I dissent.
I do agree that this case can be distinguished from
Keebler Co. v. Truck Drivers, Local 170, 247 F.3d 8 (1st Cir. 2001)
and Crafts Precision Industries, Inc. v. Lodge No. 1836,
International Ass'n of Machinists, 889 F.2d 1184 (1st Cir. 1989),
on the grounds given by the majority. I also agree that the
district court could reasonably have concluded that it was bound to
reverse the arbitrator under Georgia-Pacific Corp. v. Local 27,
United Paperworkers International Union, 864 F.2d 940 (1st Cir.
1988), or S.D. Warren Co. v. United Paperworkers' International
Union, 845 F.2d 3 (1st Cir.), cert. denied, 488 U.S. 992 (1988).
Nonetheless, developments in the law of judicial review of arbitral
awards make me doubt that Georgia-Pacific is good law now.
Under that evolving law, I think we are required to
affirm the arbitrator's award.5 The majority relies on language
5
Alternatively, remand to the arbitrator would be preferable to
reversal. "[W]here the basis for an arbitrator's decision is
unclear, but the arbitrator's opinion suggests that the decision
does not draw its essence from the collective bargaining agreement,
remand is appropriate to have the arbitrator clarify the basis for
-27-
from United Steelworkers of America v. Enterprise Wheel & Car
Corp., 363 U.S. 593, 597 (1960), exempting awards that are merely
"[the arbitrator's] own brand of industrial justice" from a general
policy of judicial deference. This qualification was reiterated in
United Paperworkers International Union v. Misco, Inc., 484 U.S.
29, 36 (1987). In Misco, however, the Court went on to emphasize
language which the majority recites at the outset, but overlooks in
its reasoning: "But as 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." Id. at 38. The Misco
Court then reversed the court of appeals decision to overturn an
arbitral award for misreading the evidence. Id. at 45.
The Supreme Court has continued to mandate judicial
deference to arbitral awards in subsequent decisions. In Eastern
Associated Coal Corp. v. United Mine Workers, 531 U.S. 57 (2000),
the Court again reversed a decision overturning an arbitral award.
In Eastern, the arbitrator had ordered reinstatement of an employee
who had been fired for failing a random drug test. The arbitrator
reasoned that mitigating circumstances -- including a long
his or her decision." Young Radiator Co. v. Int'l Union, UAW, 734
F.2d 321, 326 n.5 (7th Cir. 1984); see also Labor Relations Div. of
Constr. Indus. of Mass., Inc. v. Int'l Bhd. of Teamsters, 29 F.3d
742, 747 (1st Cir. 1994)(remand appropriate when arbitrator may
have exceeded his authority); Randall v. Lodge No. 1076, Int'l
Ass'n of Machinists, 648 F.2d 462, 468 (7th Cir. 1981)(same).
-28-
employment history and stress caused by family problems --
outweighed the admitted drug use. Id. at 60, 67. The lower courts
had set aside the award on public policy grounds, a reason rejected
by the Supreme Court.
Last year, the Court strongly reaffirmed the high
standard required for judicial interference in arbitral decisions.
In Major League Baseball Players Ass'n v. Garvey, 532 U.S. 504
(2001), the Court overturned the Ninth Circuit's reversal of an
arbitral award. The Ninth Circuit had found reversal warranted
because the arbitrator "dispensed his own brand of industrial
justice," id. at 507, in refusing to consider evidence supporting
Garvey's claim. The court of appeals labelled the arbitrator's
finding "completely inexplicable" and "border[ing] on the
irrational." Garvey v. Roberts, 203 F.3d 580, 590 (9th Cir. 2000).
Nonetheless, the Supreme Court responded by reiterating its
holdings in Misco and Eastern:
Courts are not authorized to review the
arbitrator's decision on the merits despite
allegations that the decision rests on factual
errors or misinterprets the parties'
agreement. We recently reiterated that if an
"arbitrator is even arguably construing or
applying the contract and acting within the
scope of his authority," the fact that "a
court is convinced he committed serious error
does not suffice to overturn his decision."
532 U.S. at 509 (citations omitted). Moreover, the Court went on
to conclude that the error alleged -- ignoring important evidence
-- did not even rise to the standard of serious error: "The
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arbitrator's analysis may have been unpersuasive to the Court of
Appeals, but his decision hardly qualifies as serious error, let
alone irrational or inexplicable error. And, as we have said, any
such error would not justify the actions taken by the court." Id.
at 511 n.2. In short, the court of appeals may not substitute its
own contractual interpretation for the arbitrator's, without
showing more than "serious error." That is not the case here.
The majority finds that the arbitrator exceeded his
authority in interpreting the collective bargaining agreement and
in his decision to reinstate Beaupre. But the agreement gives him
precisely that authority. The arbitrator's authority is set forth
in Article 33, which governs grievance and arbitration. The
presentation of a grievance is required to resolve "differences ...
as to the meaning or application of the provisions of the
Agreement." Any dispute after the third step of the grievance
process is submitted to the arbitrator. It is true that Article 33
contains a restriction: "The arbitrator shall have no power to
alter or modify any of the terms of this Agreement or to impose on
any party a limitation or obligation not explicitly provided for in
this Agreement." Even with such a restriction, it is commonplace
that an arbitrator has authority to construe the terms of the
agreement he is enforcing. See, e.g., Steelworkers, 363 U.S. at
599 ("As we [have] emphasized, the question of interpretation of
the collective bargaining agreement is a question for the
-30-
arbitrator. It is the arbitrator's construction which was
bargained for; and so far as the arbitrator's decision concerns
construction of the contract, the courts have no business
overruling him because their interpretation of the contract is
different from his."). I see nothing in this clause which
prohibits the arbitrator from construing the agreement, as he has
done here.
The majority also overestimates the restrictions placed
on arbitrators' ability to fashion a remedy. The majority holds
that "once 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." Opinion at 12-13. The majority takes this to
mean that once the arbitrator found insubordination in this case,
he had no discretion as to remedy -- he was bound to uphold the
employee's termination. But this view overlooks well-established
law granting the arbitrator the same level of freedom in crafting
a remedy as he has in contractual interpretation. "[W]here it is
contemplated that the arbitrator will determine remedies for
contract violations that he finds, courts have no authority to
disagree with his honest judgment in that respect." Misco, 484
U.S. at 38. In Misco, it was the use or possession of controlled
substances on company property which was listed as cause for
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discharge. The arbitrator's authority was limited to
interpretation and application of terms in the contract.
Nonetheless, the Court upheld the arbitrator's reinstatement of an
employee terminated for drug use on company property. Id. at 35.
The remedy of reinstatement, under a contractual regime similar to
the one at issue here, was within the power of the arbitrator to
fashion.
Admittedly, this result -- which I believe to be mandated
by Supreme Court precedent -- poses some problems. It is not
entirely satisfactory to say to employers that they can draft the
collective bargaining agreement to clearly restrict the arbitrator
from exercising the authority that the arbitrator applied here.
The realities of what happens at the bargaining table may make this
illusory. Article 32 was admirably drafted to give management some
flexibility and give workers the protection that not every instance
of insubordination must mean termination. It can be questioned why
the price of that flexibility should be to permit an arbitrator to
second guess management's judgment to be less forgiving of an
employee's disobedience of a direct order. Here, the employer's
unforgiving attitude is not irrational. Beaupre was asked several
times, including by a more mature and senior supervisor, to comply
with Arsenault's directive. But that is not the question for the
court.
-32-
Instead, under the law that the Supreme Court has
crafted, we must defer to the arbitrator so long as he is "even
arguably construing or applying the contract and acting within the
scope of his authority." Misco, 484 U.S. at 36. I think we must
defer to the award. The majority's decision is thoughtful, well-
written, and sensitive. The majority and I simply have a good
faith disagreement about the law. To the extent Georgia-Pacific
and S.D. Warren are taken to control the outcome of this case, I
think it time for this court to disavow both of those cases as
inconsistent with Supreme Court precedent. With regret, I find
myself in dissent.
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