Filed: Oct. 14, 2004
Latest Update: Mar. 02, 2020
Summary: Opinions of the United 2004 Decisions States Court of Appeals for the Third Circuit 10-14-2004 Citgo Asphalt v. Local 2-991 Precedential or Non-Precedential: Precedential Docket No. 03-1503 Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2004 Recommended Citation "Citgo Asphalt v. Local 2-991" (2004). 2004 Decisions. Paper 170. http://digitalcommons.law.villanova.edu/thirdcircuit_2004/170 This decision is brought to you for free and open access by the Op
Summary: Opinions of the United 2004 Decisions States Court of Appeals for the Third Circuit 10-14-2004 Citgo Asphalt v. Local 2-991 Precedential or Non-Precedential: Precedential Docket No. 03-1503 Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2004 Recommended Citation "Citgo Asphalt v. Local 2-991" (2004). 2004 Decisions. Paper 170. http://digitalcommons.law.villanova.edu/thirdcircuit_2004/170 This decision is brought to you for free and open access by the Opi..
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Opinions of the United
2004 Decisions States Court of Appeals
for the Third Circuit
10-14-2004
Citgo Asphalt v. Local 2-991
Precedential or Non-Precedential: Precedential
Docket No. 03-1503
Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2004
Recommended Citation
"Citgo Asphalt v. Local 2-991" (2004). 2004 Decisions. Paper 170.
http://digitalcommons.law.villanova.edu/thirdcircuit_2004/170
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PRECEDENTIAL
Opinion Filed: October 14, 2004
UNITED STATES COURT OF
APPEALS
FOR THE THIRD CIRCUIT
Ronald H. DeMaria, Esquire
(ARGUED)
McElroy, Deutsch, Mulvaney, LLP
Nos: 03-1503 1300 Mt. Kemble Avenue
Morristown, New Jersey 07962
James J. McGovern III, Esq.
Genova, Burns & Vernoia
CITGO ASPHALT REFINING 354 Eisenhower Parkway
COMPANY, Plaza II, Suite 2575
Appellant Livingston, NJ 07039
v.
Attorneys for Appellant
THE PAPER, ALLIED-INDUSTRIAL,
CHEMICAL, AND ENERGY WORKERS Robert F. Henninger, Esquire
INTERNATIONAL UNION LOCAL NO. (ARGUED)
2-991 Warren J. Borish
Spear, Wilderman, Borish, Endy, Spear
and Runckel
36 Tanner Street, 2nd Floor
On Appeal from the Order of the United Haddonfield, New Jersey 08033
States District
Court for the District of New Jersey Attorneys for Appellee
(Civil Action No. 02-CV-00864)
District Judge: Hon. Joseph E. Irenas OPINION
McKEE, Circuit Judge.
CITGO Asphalt Refining Company
Argued December 18, 2003
appeals the district court’s confirmation of
a labor arbitrator’s decision that CITGO’s
Before: ROTH and M cKee, Circuit
zero tolerance drug abuse policy is
Judges,
unreasonable. For the reasons that follow,
and CUDAHY, Senior Circuit Judge *
we will reverse.
*
The Hon. Richard D. Cudahy, Senior Appeals for the Seventh Circuit, sitting by
Circuit Judge of the United States Court of designation.
I. FACTS them that they were going to
be scheduled for their
CITGO Asphalt Refining Company
physical and requiring them
(“CARCO”) is a New Jersey partnership
to respon d to th e
involved in the oil refining industry.
questionnaires. They were
C I T G O Petrole u m C o r p o r a t i o n
given one or two days
(“CITGO”), is the majority partner of
advance notice of the annual
CARCO. In December 1998, CITGO
physical after they had
announced that it was going to implement
completed the questionnaire.
a new uniform national substance abuse
Other than this drug testing
policy, which included a zero tolerance
as part of the annual
policy (the “policy”), at all of its
physical, there was not
petroleum refining facilities in the nation.
random testing. Under the
The policy was thereafter implemented at
new policy, random testing
more than sixty locations. Local 3-0673
is done immediately after
of the Paper, Allied-Industrial, Chemical
receiving notice.
and Energy Workers International Union
(“PACE”) challenged the policy after it
was implemented at CARCO’s asphalt
(2). Under the old policy,
plant in Savannah, and the challenge
off-duty conduct could not
proceeded to arbitration. The arbitrator
be a violation, but it is . . .
ruled that the policy was proper, valid and
under the new policy.
reasonable in all respects, and issued an
opinion and award denying the Union
grievance in its entirety. The policy was
(3). [Under the old policy]
also challenged at CARCO’s asphalt plant
[ C] a use , suspic ion o r
in Paulsboro, New Jersey, where the
t e c h n ic a l p e r f o rm a n c e
hourly workers are represented by PACE
problems or occurrence of
Local 2-991. There, Local 2-991 argued
an accident or incident or
that the new zero tolerance policy changed
safety violation could
the existing policy as follows:
trigger a drug test as part of
(1). . . .Under the old policy, the annual physical. Under
urine tests for drugs were the new policy, drug testing
given during the annual can be done without any of
physical, with the these prerequisites.
individuals to be given their
p h y s ic a l e x a m s a n d
receiving a w ritten (4). Under the old policy,
questionnaire a week or two employees who tested
before the physical notifying positive during an annual
2
physical were given an that is totally unreasonable.”
opportunity for
The grievances proceeded to
rehabilitation, i.e., a second
arbitration after the parties agreed upon
chance. But, under the new
the following submission:
policy, no employee is given
a second-chance opportunity Did CITGO violate Article
unless they come forward X X X o f t h e L a b or
and admit their drug use Agreement by improperly
prior to any positive drug implementing its National
test, called “self- Substance Abuse Policy at
acknowledgment.” the Paulsboro facility on
October 1, 1999. If not,
was the policy
Local 2-991's Br. at 9-10. unreasonable?
Local 2-991 challenged the new
policy by filing two grievances. One
At the arbitration hearing, the
alleged an “Improper implementation of a
parties stipulated that the Management
‘new’ drug and alcohol policy.” That
Rights Clause (Article III) and the Future
grievance claimed that CARCO violated
Bargaining Clause (Article XXX) in the
the controlling collective bargaining
then current CBA were identical to those
agreement (“CBA”) by not bargaining
contained in every CBA that had been in
over the new policy,1 and that the policy
effect at Paulsboro since 1977. Article III,
violated a provision of the CBA dealing
the Management Rights Clause provides,
with future bargaining. The other
in applicable part, as follows:
grievance alleged that the “Company
implemented a drug and alcohol policy
Except to the extent
1
The collective bargaining relationship expressly abridged by an
between the parties began at Paulsboro in express and sp ecific
the mid-1970s. The first labor contract at provision of this
Paulsboro was negotiated in 1997. Agreement, the Company
CITGO bought the facility in 1991 and reserves and retains all of its
continued both the bargaining relationship Common Law or other
and the CBA. The Paulsboro facility rights to manage the
became a refinery in the late 1970s and is business as such rights
engaged in the processing of crude oil into existed prior to the
asphalt and other products. There were execution of this or any
some 56 bargaining unit members when other previous Agreement
the grievances were filed. with the Union or any other
3
Union. The rights of amending, modifying,
management which are not supplementing or otherwise
abridged by this Agreement, altering in any respect
shall include, but are not whatsoever this Agreement
limited to: . . . make and or any part thereof.
enforce rules for the
maintenance of discipline
and safety, and to suspend, **********
discharge, or otherwise
discipline employees for
just cause. The listing of 25.4. The Union and the
specific rights in this Company both agree that
Agreement is not intended the submission to the
to be nor shall it be arbitrator shall be based on
restrictive of or a waiver of t h e o r i g inal w r i t t e n
any of the rights of grievance submitted in the
management not listed and grievance procedure. . . .
specifically surrendered
herein, whether or not such
rights have been exercised **********
by the Company in the past.
25.6. The power and
authority of the arbitrator
Article XXV of the CBA, entitled: shall be strictly limited to
“Grievance Procedure and Arbitration,” determining the meaning
provides, in relevant part, as follows: and interpretation of the
explicit terms of this
25.1. Grievances are
Agreement as herein
defined as alleged violations
expressly set forth. The
of express and specific
arbitrator shall not have
provisions of this
authority to add or to
Agreement occurring during
subtract from or modify any
the term of this Agreement
of said terms, or to limit or
or any renewal or extension
impair any Common Law or
thereof. . . . Neither the
other right of the Company,
Union nor an employee
or to establish or change any
shall use or attempt to use
wage or rate of pay. .. . The
the grievance procedure as a
parties agree that the power
m e a n s o f c h a n gi n g ,
and jurisdiction of any
4
arbitrator chosen hereunder any attachments hereto
shall be limited to deciding during the term hereof.
whether there has been a
violation of a provision of
this Agreement. The The parties also stipulated that:
a r b i t r a t o r s h a l l n ot
(1). The Paulsboro refinery
substitute his judgment for
is a hazardous work
that of the Company in the
environment that can
absence of a clear abuse of
explode and poses a
discretion. The arbitrator
potential threat to workers,
shall not be empowered,
the environment, and to the
and shall have no
public at large.
jurisdiction, to base his
Award on any alleged
practices or oral
(2). The bargaining unit
understandings which are
positions affected by the
not incorporated in writing
drug testing policy are
in this Agreement. . . .
safety sensitive (as defined
in [Department of
Transportation]
Article XXX, the Future Bargaining
regulations).
Clause, provides:
(3). The duties of the
The parties acknowledge
bargaining unit employees
that, during the negotiations
are such that their attempts
which resulted in this
to perform while in a state
Agr eement and any
of drug impairment may
attachments hereto, each
pose a threat to co-workers,
had the unlimited right and
to the workplace, to the
opportunity to make
environment, and to the
demands and proposals with
public at large.
respect to any subject . . .
not removed from the area
of collective bargaining . .
(4). All employees
.and therefore each waives
(management and
the right to further
bargaining unit employees
bargaining on any subject
alike) at Paulsboro play a
not covered or covered
critical role in both
under this Agreement and
5
preventing accidents and the bargaining unit and only
minimizing the effects of two people have ever been
accidents. disciplined in two years.
(5). The speed in (2). Motiva never requested
responding to a dangerous a zero tolerance program.
condition is critical to
limiting potential damage
and injury. (3). Motiva’s safety record,
unlike CITGO’s, is just
“industry standard.”
In addition, Owen Haynes, a CARCO
employee for 30 years and Local 2-991
President for approximately 12 years, (4). Motiva, like CITGO,
testified that Paulsboro is a “potentially needed a standardized
dangerous work environment,” and Mike policy, company-wide.
Drager, the manager of the Paulsboro
facility, testified about “toxic and deadly”
gases at the refinery. (5). The policy was adopted
by “consensus,” not through
CITGO contends that the only
negotiations.
evidence Local 2-991 offered to support
its grievance that the Policy was
unreasonable was the testimony of Eric
(6). Both employees
Hamilton, the president of the PACE local
disciplined under Motiva’s
at a company called “Motiva,” and the
p o l i c y w e r e “repeat
testimony of Timothy Koladi, the
offenders.” Both violated
chairman of the union grievance
the policy a second time
committee at Sun Oil. Both men testified
after not being disciplined
that the substance abuse policies at their
for an initial violation, and
respective facilities included random drug
both were detected by
testing. They also testified that the
random testing.
Motiva and Sun Oil policies are virtually
identical to the CITGO policy except for
CITGO’s zero tolerance provision.
As to the policy at Sun, Oil, Koladi
Hamilton testified as follows testified:
regarding the policy at Motiva:
(1). There are 384 people in
(1). There are 525
6
employees in one During his testimony, DeLeon gave
bargaining unit and 550 specific reasons for a zero tolerance
employees in the other. provision. He testified that CITGO’s
safety record is the best in the industry, a
fact not challenged by Local 2-991, and
(2). That in the ten years that CITGO wanted to maintain its record.
since 1990, only four to six He explained that, in CITGO’s judgment,
employees have been offering a second chance “sends a
disciplined under the policy message to employees that it’s okay to do
and they too were all second drugs until you get caught. . . . [T]hat was
offenders, after having been a very strong feeling, . . . .” DeLeon also
given a “first chance” explained that the zero tolerance policy
without discipline. does not apply if an employee comes
forward and identifies him/herself as a
person with a substance abuse problem.
John DeLeon, CITGO’s Manager He also explained that CITGO’s medical
of Human Resources and Labor Relations, director was on the team that designed the
testified in defense of CITGO’s Policy and program, and added that the only union in
explained the steps CITGO took in the country that had challenged the
designing its national substance abuse program was the union at the Savannah,
policy. DeLeon testified that CITGO Georgia, asphalt plant. As noted, the
reviewed the practices of other companies Savannah arbitration resulted in an award
in the industry and patterned much of its which found that the CITGO Policy was
policy after the Omnibus Transportation reasonable in all respects. The president
Employee Testing Act of 1991, 49 U.S.C. of Local 2-991 testified that the Savannah
§ 31306 et seq. DeLeon also explained plant is virtually identical to the Paulsboro
that, because a uniform policy was needed, facility.
all aspects of the program including
The arbitrator found “no
random testing, zero tolerance, etc. apply
contractual breach by [CITGO] with
to all employees, from the president of
respect to its unilateral adoption and
CITGO down. He further explained that
implementation of a substance abuse
the policy was implemented nationwide,
program in 1999.” He also found that the
including all facilities where there was
mandatory, random testing procedure was
union representation, and that he did not
both proper and reasonable. However, he
know of a major refinery that did not have
sustained the local’s challenge to the zero
random testing. According to DeLeon,
tolerance policy. The arbitrator ruled that
Tosco, Marathon and Exxon, three major
part of the Policy was unreasonable. He
companies in the industry, also had zero
explained:
tolerance substance abuse polices.
DeLeon’s testimony was unrebutted. [T]here can be no serious
7
quarrel with the right of a legitimate objective for any
company in this type of company, it has not been
industry to make certain that shown to my satisfaction
s a f e t y c o n c e r n s a re that permitting an employee
paramount and should be to have a “second chance”
adequately addressed. . . . would be inconsistent with
Indeed, it was recited that that goal. That being so, the
CITGO has the best safety Arbitrator agrees with the
record in the industry and Union that the Policy,
wants to keep it that way. I without giving a second
therefore will not seek to chance for rehabilitation, is
disturb that record. unreasonable to that extent
However, there are specific and to that extent only. This
areas of the Policy that are is especially so where the
troubling to me. . . . DOT regulations permit
second chance or
rehabilitation opportunities.
While the Union argued that I therefore find that the
mandatory random testing Policy should be modified
should be declared in that regard.
unreasonable, the Arbitrator
cannot agree with that
position. Having said that, Thus, “[t]he arbitrator . . . sustained [the
I do nevertheless understand policy] as written except where it does not
and appreciate the Union’s permit a (sic) employee second-chance or
argument with respect to rehabilitation opportunities.” App. at 473.
employees who test positive The arbitrator held that the policy
as the result of random (including CARCO’s right to conduct
testing not being given a random drug testing), was reasonable,
second chance under the except for the so-called “zero tolerance”
Policy. The facts reveal that provision. . . .
this is contrary to the
II. DISTRICT COURT
policies in place at the
PROCEEDINGS
Motiva refinery in Delaware
City, Delaware, and at the CARCO filed a complaint in the
Sun refinery in Marcus district court challenging the arbitration
Hook. While the Arbitrator
fully acknowledges that the
best safety record in the
industry is obviously a
8
opinion and award.2 CARCO alleged that standard the district court should have
the arbitrator: (1) exceeded the power and applied. Exxon Shipping Co. v. Exxon
authority given to him by the parties; (2) Seaman’s Union, 73 F.3d 1287, 1291 (3d
rendered an award which did not draw its Cir. 1996) (“Exxon III”).
essence from the labor agreement; (3)
Courts play a very limited role in
ignored the plain language imposing
reviewing the decision of an arbitrator
limitations on his authority; (4) rendered
appointed pursuant to a collective
an award which was not totally supported
bargaining agre em ent. Un ited
by the record; and (5) failed to apply the
Paperworkers International Union, AFL-
standard of review set forth in the CBA.
CIO v. Misco, Inc., 484 U.S. 29, 36
Local 2-991 filed an answer and
(1987). “When the parties include an
counterclaim to enforce the award in its
arbitration clause in their [CBA], they
entirety. In time, cross-motions for
choose to have disputes concerning
summary judgment were filed and the
constructions of the contract resolved by
district court thereafter entered an order
an arbitrator.” W.R. Grace and Co. v.
granting Local 2-991's motion for
Local Union 759, International Union of
confirmation of the award in its entirety.
the United Rubber, Cork, Linoleum and
This appeal followed. The arbitrator’s
Plastic Workers of America, 461 U.S. 757,
rejection of the zero tolerance provision of
764 (1983). Consequently, we “are not
the policy is the only issue on appeal.
authorized to reconsider the merits of an
III. STANDARD OF REVIEW award even though the parties may allege
that the award rests on errors of fact or on
We exercise plenary review of the
misinterpretation of the contract.” United
district court’s confirmation of a labor
Paperworkers Union v. Misco, Inc., 484
arbitration award and apply the same
U.S. at 36. This follows from the fact that
the arbitrator’s judgment was bargained
for by the parties. United Steelworkers of
2
The district court had subject matter America v. American Manufacturing Co.,
jurisdiction pursuant to Section 301(a) of 363 U.S. 564, 568 (1960). “Full-blown
the Labor Management Relations Act, 29 judicial review of labor arbitrators’
U.S.C. § 185(a), which provides: “Suits decisions would annul the bargain of the
for violation of contracts between an parties for an arbitrator’s construction of
employer and a labor organization their [CBA]” and replace it with the
representing employees in an industry court’s con struc tion. Stroehmann
affecting commerce as defined in this Bakeries, Inc. v. Local 776, International
chapter, or between any such labor Brotherhood of Teamsters,
969 F.2d 1436,
organizations, may be brought in any 1441 (3d Cir. 1992) (citing United
district court of the United States having Steelworkers of America v. Enterprise
jurisdiction of the parties, without respect Wheel and Car Corp.,
363 U.S. 593, 599
to the amount in controversy . . . .”
9
(1960)). factfinder did not.” Id.
Therefore, we do not review an Nevertheless, “[a]n arbitrator has
arbitrator’s award for legal error. Exxon the authority to decide only the issues
III, 73 F.3d at 1295. “[A]s long as the actually submitted.” Matteson v. Ryder
arbitrator’s award draws its essence from System Inc.,
99 F.3d 108, 112 (3d Cir.
the [CBA] and is not merely [the 1996) (citation omitted). “It is the
arbitrator’s] own brand of industrial responsibility of the arbitrator in the first
justice, the award is legitimate.” Misco, instance to interpret the scope of
the
484 U.S. at 370 (citation and internal parties’ submission, but it is within the
quotations omitted). “[O]nly where there courts’ province to review an arbitrator’s
is a manifest disregard of the agreement, interpretation.”
Id. at 113 (citation
totally unsupported by the principles of omitted). Although our review of an
contract construction and the law of the arbitration award is “highly deferential[,]”
shop, may a reviewing court disturb the
id. we do not “simply . . . rubber stamp
award.” Exxon
III, 73 F.3d at 1295 [arbitrators’] interpretations and decisions
(citations and internal quotations omitted). . . . .”
Id. (citation and internal quotations
Accordingly, the award stands “even if the omitted).
court finds the basis for it to be ambiguous
IV. DISCUSSION
or disagrees with its conclusions under the
law.” Stroehman Bakeries, Inc., v. Local As noted above, the only issue
776, 969 F.2d at 1441 (citation omitted). before us is the propriety of the arbitrator’s
determination that CITGO’s zero tolerance
Therefore, a court can only vacate
policy is unreasonable. CITGO makes two
an arbitrator’s award “if it is entirely
separate, yet closely related, arguments in
unsupported by the record or if it reflects a
support of its challenge to that portion of
manifest disregard of the agreement.”
the arbitrator’s determination. First,
Exxon III, 73 F.3d at 1291 (citation and
CITGO contends that the arbitrator acted
internal quotations omitted). “An
outside the scope of his authority and
arbitrator’s decision need be neither wise
rendered an award that did not draw its
nor internally consistent.” Id. at 1297.
essence from the CBA. Second, it
The decision is “subject to a standard of
contends that the arbitrator’s determination
only minimal rationality.” Id.
that the zero tolerance policy is
It follows that a reviewing court unreasonable is not supported by the
must defer to the arbitrator’s factual record. We will address each contention in
findings. Id. “[F]indings of fact and turn.
inferences to be drawn therefrom are the
A. The arbitrator acted outside the
exclusive province of the arbitrator.” Id.
scope of his delegated
(citing
Misco, 484 U.S. at 36). It is not the
court’s “role to draw inferences that the authority and rendered an award that
10
did not draw Company in the absence of a clear abuse
of discretion.”4 The arbitrator could
its essence from the collective
therefore only conclude that the zero
bargaining agreement.
tolerance policy was unreasonable if he
found that CITGO clearly abused its
discretion in instituting it. However, the
The arbitrator made three separate
arbitrator found no abuse of discretion,
findings. He agreed that there can be no
and this record supports none. The
“serious quarrel” with CITGO’s right to
arbitrator found that the zero tolerance
“make certain that safety concerns are
policy was unreasonable simply because
paramount and . . . adequately addressed.”
he did not believe that giving an employee
Second, he agreed that CITGO did have
a second chance was inconsistent with
the best safety record in the industry and
CITGO’s goal of having the best safety
“wants to keep it that way.”3 Third, he
record in the industry. He wrote: “[I]t has
agreed that having the best safety record in
not been shown to my satisfaction that
the industry “is obviously a legitimate
permitting an employee to have a ‘second
o b j e c t i v e fo r a ny c om pa ny. ”
chance’ would be inconsistent with that
Notwithstanding this, he stated: “It has not
goal.” Thus, rather than concluding that
been shown to my satisfaction that
CITGO abused its discretion in adopting a
permitting an employee to have a ‘second
zero tolerance policy, the arbitrator
chance’ would be inconsistent with
simply substituted his own judgment for
[having the best safety record in the
CITGO’s, and declared CITGO’s zero
industry].” He concluded his analysis
tolerance provision unreasonable.
with: “[T]hat being so the arbitrator agrees
with the Union that the policy, without However, an arbitrator’s opinion
giving a second chance for rehabilitation a n d a w a r d b a s e d o n “ g e n er a l
is unreasonable.” considerations of fairness and equity” as
opposed to the exact terms of the CBA,
However, in finding that the
fails to derive its essence from the CBA.
absence of a second chance was
MidMichigan Reg’l Med. Ctr – Clare v.
unreasonable, the arbitrator ignored the
Professional Employees Div., 183 F.3d
parameters of his inquiry as defined in the
497, 502 (6th Cir. 1999). As we explain
CBA. As we noted above, Article XXV,
more fully below, the award here
§ 25.6 of the CBA provides, in relevant
comported with the arbitrator’s view of
part, that “[t]he arbitrator shall not
fairness, but did not draw its essence from
substitute his judgment for that of the
the CBA.
3 4
As noted, the arbitrator added that he According to CITGO, this “is a very
would therefore not “seek to disturb that unusual provision to have in a labor
record.” agreement.” CITGO’s Br. at 23.
11
Local 2-991 defends the arbitrator’s that go beyond the four corners of a
conclusion by arguing that the parties’ collective bargaining agreement.” Id.
submission allowed the arbitrator to go (citations omitted) (emphasis added).
beyond the § 25.6 “abuse of discretion”
As recited earlier, the agreed-upon
standard. We agree that, although the
submission read:
CBA is the “sole source of the arbitrator’s
authority[,] . . . [t]he parties may . . . agree Did CITGO violate Article
to allow an arbitrator to go beyond the X X X o f t h e L a b or
express terms” of the CBA. High Agreement by improperly
Concrete Structures, Inc. v. United implementing its National
Electrical, Radio and Machine Workers of Substance Abuse Policy at
America, Local 166, 879 F.2d 1215, 1218 the Paulsboro facility on
(3d Cir. 1989) (citation omitted). “They October 1, 1999. If not,
may do so either by providing in the was the policy
collective bargaining agreement for unreasonable?
interest arbitration as well as rights
arbitration,5 or by agreeing, separately, to
submit specific issues to arbitration.”
Id. As Local 2-991 sees it, even if the
(emphasis added). A submission may be language of the CBA prohibited the
“express, may incorporate an antecedent arbitrator from substituting his own
grievance, or may be based on other judgment for that of CITGO’s absent an
relevant submissions or actions.”
Id. at abuse of discretion by CITGO, it is the
1219 (citations omitted). “But however language of the parties’ submission that
derived, the terms of the submission may controls the extent of the arbitrator’s
empower the arbitrator to resolve disputes authority. Therefore, argues Local 2-991,
because the submission required that the
arbitrator determine, in the event that he
5
In “interest arbitration,” the parties ask
found that the policy did not violate
the arbitrator to set new terms and
Article XXX (the Future Bargaining
conditions of employment, while in “rights
Clause) of the CBA, whether the policy
arbitration,” the arbitrator is asked to
was reasonable, the submission freed the
r e s o lv e d i s p u t e s i n v o l v i n g t h e
arbitrator from the confines of that
interpretation or application of terms and
portion of the CBA that prohibited the
conditions of employment already agreed
arbitrator from substituting his own
to in the CBA. Local 801, Int’l
judgment for CITGO’s absent an abuse of
Brotherhood of Boilermakers, Iron
discretion by CITGO. More succinctly,
Shipbuilders, Blacksmiths, Forgers and
Local 2-991 argues that the broad
Helpers, ALF-CIO v. Pennsylvania
language of the last sentence of the
Shipbuilding Co., 835 F.2d 1045, 1046-47
submission trumped the narrower
(3d Cir. 1987).
language of § 25.6 of the CBA.
12
According to Local 2-991, the arbitrator arbitrator’s conclusion. 6 That failure
merely leads to CITGO’s second argument.
reviewed the terms of the B. The arbitrator’s decision that the
CBA, listened to the zero tolerance policy
witn esses’ testi m o n y,
is unreasonable is not supported by
reviewed the terms of
the record.
documents submitted, and
considered attorney
argument. After digesting
As recited earlier, “[a]n arbitrator’s
all of this evidence, [the
award must be enforced so long as it
arbitrator] addressed the
draws its essence from the collective
stipulated issue and found
bargaining agreement.” United Industrial
that there was no contract
Workers v. Government of the Virgin
violation. Which brought
Islands, 987 F.2d 162, 170 (3d Cir. 1993)
the arbitrator to the next
(citation and internal quotations omitted).
question placed before him
“A labor arbitration decision fails to draw
by the parties: whether the
its essence from the collective bargaining
policy was unreasonable.
agreement if the arbitrator acted in
The arbitrator answered that
manifest disregard of the law, or if the
question and found the
record before the arbitrator reveals no
“zero tolerance” portion of
support for the arbitrator’ s
the policy unreasonable.
determination.” Id. (citation omitted)
[Thus, according to the
(emphasis added). CITGO argues that,
union,] [u]nder the
circumstances, there can be
no doubt that the award is
6
enforceable. Local 2-991's argument seems to
establish no standard by which to judge
the propriety of the arbitrator’s decision.
Local 2-991's Br. at 23. Once the CBA’s “abuse of discretion”
standard is jettisoned, the union’s
argument would allow the arbitrator to
However, assuming arguendo that apply any free-floating standard including
the submission trumped the “abuse of his/her own subjective judgment whether
discretion” standard in the CBA, it is or not it was supported by the record.
nevertheless still apparent that Local 2- This gives the arbitrator almost unfettered
991 has only described what the arbitrator discretion to determine the reasonableness
did. The union has not explained either of a challenged policy. The union claims
the rationale for, or the basis of, the that the last sentence of the submission did
just that.
13
regardless of the scope of the last sentence tolerance policies certainly casts doubt
of the submission, the award must still be upon the arbitrator’s focus on Motiva and
supported by the record, and this award is Sun Oil, and the arbitrator never explained
not. We agree.7 why he elevated the importance of Motiva
and Sun Oil refineries over larger ones
The arbitrator relied only on two
with better safety records.
“facts” to support his determination that
the zero tolerance policy was The arbitrator also relied upon
unreasonable. First, the arbitrator noted provisions of the Omnibus Transportation
that neither Motiva nor Sun Oil have zero Employee Testing Act of 1991, 49 U.S.C.
tolerance policies at their refineries. § 31306 et seq., and the Department of
However, the fact that two companies with Transportation regulations promulgated
safety records that are inferior to CITGO’s under it, 49 C.F.R. § 382.101 et seq. That
do not have zero tolerance policies does Act and its regulations allow employees a
not establish that CITGO acted second chance for rehabilitation.
unreasonably in adopting a zero tolerance However, that does not mean that a
policy. In fact, considering the stipulated decision to the contrary is unreasonable.
catastrophic repercussions of a safety This is especially true when we consider
lapse at the Paulsboro plant, and CITGO’s the hazardous nature of CITGO’s
superior safety record, one could just as facilities, the need for prompt and
readily conclude that it was unreasonable unimpaired action in the event of an
for Sun Oil and Motiva not to have a zero emergency, and the exception for
tolerance policy. Moreover, the employees who step forward seeking help
a r b i t r a tor’s f i n d in g o f th e for a substance abuse problem that CITGO
unreasonableness of the zero tolerance has included in its policy.8 Indeed, the
policy completely ignores DeLeon’s Supreme Court has noted that the statute
unrebutted testimony that the three largest and the regulations at issue leave it to the
companies in the industry – Exxon, parties to define appropriate discipline.
Marathon and Tosco – have zero The Court explained the backdrop of the
tolerance policies exactly like CITGO’s. safety regulations as follows:
The undisputed fact that the three largest
[W]hen promulgating these
companies in the industry have zero
7 8
We do not believe that the arbitrator’s We do not understand how the
determination that the zero tolerance arbitrator could conclude on this record
policy is unreasonable is supported by the that it is unreasonable for CITGO to adopt
record under CITGO’s narrow “abuse of a policy that attempts to pressure impaired
discretion” standard” or under Local 2- employees into stepping forward and
991's broader “submission trumps the seeking help before their impairment
CBA” standard. results in a catastrophe.
14
regulations, DOT decided employed in safety-sensitive positions
not to require employers there, and that impaired employees pose a
either to provid e threat to co-workers, the work-place, the
rehabilitation or to hold a environment and to the public at large.
job open for a driver who
Since the Managements Rights
has tested positive, on the
Clause of the CBA (Article III), expressly
basis that such decisions
gives CITGO the right “to make and
should be left to
enforce rules for the maintenance of
m anagement/driver
discipline and safety” and since CITGO §
negotiation. That
25.6 of Article XXV precludes either the
determination reflects basic
union or CITGO from using the grievance
background labor law
process to amend the CBA, we are hard-
principles, which caution
pressed to understand how the arbitrator
against interference with
could have concluded that the zero
labor-management
tolerance policy is unreasonable without
agreements about
substituting his own judgment for
appropriate emplo yee
CITGO’s and ignoring CITGO’s expressly
discipline.
reserved right “to make . . . rules for . . .
safety.”
Eastern Associated Coal Corp. v. United V. CONCLUSION
Mine Workers of America, District 17, 531
For the above reasons, we will
U.S. 57, 65 (2000) (citations omitted)
reverse the district court’s order enforcing
(emphasis added). The arbitrator’s award
the arbitrator’s decision and award, and
here ignores that caution as well as the
remand to the district court for an order
express reservation of the employer’s
vacating the arbitration award.
prerogatives as set forth in Article III, the
Management Rights Clause.
Thus, the fact that Motiva and Sun
Oil do not have zero tolerance policies and
the fact that a particular federal statute and
its implementing regulations allow a
second chance, are not sufficient to
support a finding that CITGO’s zero
tolerance policy is unreasonable. This is
especially true given the undisputed
evidence that the Paulsboro facility is a
hazardous work environment susceptible
to explosions, Local 2-991 members are
15
