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Hammermill Paper Co. v. National Labor Relations Board

decided: August 26, 1981.



Before Adams, Rosenn and Higginbotham, Circuit Judges.

Author: Rosenn

This case presents the question whether the National Labor Relations Board should have deferred to, or concurred in, an arbitrator's decision permitting the disciplinary suspension of Thomas Stritzinger, a union steward. Hammermill Paper Company (Hammermill) admittedly enhanced Stritzinger's punishment for his failure, as a union steward, to take affirmative steps to defuse an illegal work stoppage. Although upholding, in part, the enhancement of his punishment, the arbitrator found that Stritzinger had no contractual duty under the circumstances to take such affirmative steps. On September 30, 1980, the Board ordered Hammermill to make Stritzinger whole for the loss of pay he suffered by reason of discrimination in violation of section 8(a)(1) & (3) of the National Labor Relations Act, 29 U.S.C. § 158(a)(1) & (3) (1976). 252 N.L.R.B. 1236 (1980). Hammermill petitioned this court for review, and the Board cross-applied for enforcement under 29 U.S.C. § 160(e) & (f). We enforce the order of the Board and deny the petition for review.


On the bitterly cold night of February 18, 1979, near Erie, Pennsylvania, nine employees of Hammermill, including Stritzinger, were called upon by their supervisors to build and tend a fire under a frozen "jackladder." They refused. Two of the nine, John Hughes and Paul Gallagher, having no record of prior disciplinary problems at the company, were suspended for two weeks without pay. Six of the nine, each having once previously been reprimanded for an unrelated, unexplained absence from work, were discharged. The ninth man, Stritzinger, despite a "clean" personnel record, was discharged on the ground that he had failed "to take affirmative action as a Union Representative in the face of a concerted action" in violation of the collective bargaining agreement.*fn1

The nine employees, believing their refusal to build or tend the fire was justified on grounds of either safety or job jurisdiction, and also believing that Hammermill had improperly enhanced the punishments of the seven fired employees, grieved the discipline to arbitration.

The arbitrator held that the employees had acted improperly in refusing to build and maintain the fire. The arbitrator believed "that the evidence justifies the finding that the men acted in an egregiously improper manner" and that they deserved disciplinary action but not discharge. Although he concluded that the seven dischargees should be returned to work, he also held that they did not deserve any backpay.

In this case, I feel that to award backpay to these employees would be interpreted as a reward for their activity on the night in question. It was not conduct which ought to be rewarded. It was conduct that ought to be condemned in the most stringent of terms. Their return to work is based, in part, on the procedural defects in the method used to discharge them, and in part on the fact that the disparity meted out to the employees involved is just too great and not justified by their prior records. Accordingly, in light of all the testimony and evidence, the conclusion will be that the seven employees should be returned to work without backpay. The arbitrator will not disturb the two weeks suspension given to the two employees.

The effect of this award was to reduce the penalties of the seven fired employees to a suspension of approximately five months.

Although it might have been argued that Hammermill's impulse to enhance the punishment of the "recidivists" was, to some degree, justifiable,*fn2 the arbitrator's award revealed that there was no such justification in Stritzinger's case, outside of a belief that the two-week suspension was an overly lenient punishment for any of the men. The arbitrator found that "there was no reason to single Stritzinger out for differential disciplinary action on the grounds of his stewardship." This finding followed from the arbitrator's interpretation of the labor contract. Under it, he found that although Stritzinger was among those employed on the night of the incident, "(a) steward's jurisdiction is confined to a particular shift, seniority group, and department. But on the evening in question, Stritzinger was not the steward. He was not so regarded."

Thus, the arbitrator apparently concluded that while the employer had no cause for treating Stritzinger more harshly than the other eight men, he believed that a 5-month suspension without backpay was not an inappropriate penalty for any of the men. For this reason, the arbitrator held that the employer did not have just cause to fire Stritzinger and he directed reinstatement, but without backpay. The NLRB's General Counsel apparently disagreed with the denial of backpay and subsequently issued a complaint charging that Stritzinger's discipline had constituted a violation of § 8(a)(3), and requesting the Board to order backpay.

Before the Board, Hammermill attempted to prove that Stritzinger's punishment was justified not on the grounds originally asserted by Hammermill (viz., Stritzinger's failure as steward to affirmatively halt the unauthorized refusal), but on the alternate ground that Stritzinger had instigated or led the refusal.*fn3 However, the ALJ, like the arbitrator, rejected Hammermill's evidence.*fn4 The ALJ declined to defer to the arbitral award itself, however. He held that because the disparity between the sanctions imposed on Stritzinger and the two other men with "clean" records stemmed from Stritzinger's stewardship, Stritzinger's discharge violated § 8(a)(3). Thus, he found that the arbitrator's failure to award Stritzinger back pay was contrary to Board policy.

A panel of the Board, by a 2-1 vote, adopted the ALJ's rulings, findings and conclusions. According to the Board, the arbitrator had "disregarded" the evidence and the Act and had "found that (Hammermill's) treatment of Stritzinger was unrelated to his union affiliation...." (Emphasis added.) Therefore the Board found that the arbitrator had "rejected ... material evidence which was admitted, unchallenged, and formed a primary basis for Stritzinger's discharge and the unfair labor practices alleged." Moreover, even assuming that the arbitrator's reinstatement of Stritzinger did represent an accommodation of National Labor Relations Act (NLRA) policies, the Board held that by not ordering backpay, the arbitrator had rendered an award incompatible with the Board's established policy of restoring the status quo ante wherever possible.


The statutory issue before the Board in this case was not whether Hammermill had just cause to suspend Stritzinger for five months without pay. Rather, the unfair labor practice issue went to the legality, under the NLRA, of Hammermill's admitted motive (and clearly the "but for" cause)*fn5 for enhancing Stritzinger's punishment beyond the two week suspension meted out to the others who, like Stritzinger, had no prior record of disciplinary problems.*fn6 That motive was found by the arbitrator to have no logical or contractual basis. If, as stated by the Board, that motive together with its practical effect, violated section 8(a)(3), then it follows that the objective existence of just cause for Stritzinger's punishment failed to negate the illegality of Hammermill's enhancement of the admittedly lenient punishment. "Despite the concurrent existence of a justifiable cause for discharge, the employer violates the act if anti-union animus was the "real motive.' " Edgewood Nursing Center, Inc. v. NLRB, 581 F.2d 363, 368 (3d Cir. 1978).*fn7

In NLRB v. General Warehouse Corp., 643 F.2d 965 (3d Cir. 1981), we held that it was no abuse of discretion for the Board to reverse the outcome of an arbitral decision that upheld, as a contractual matter, the discharge of an employee, absent "some evidence that the statutory issue has actually been decided." Id. at 969 (emphasis added); see also id. at 975 n.6 (Aldisert, J., dissenting). In that case an employee, Coon, was allegedly discharged for excessive absenteeism, but suspected that the real reason for his discharge was his vehement opposition to the employer on various collective bargaining issues. Coon grieved his discharge to arbitration, raising the issue whether the discharge was actually in retaliation for his concerted union activities. 643 F.2d at 974 n.3 (Aldisert, J., dissenting). However, the arbitrator made no findings on the employer's motive for discharge. Instead, the arbitrator held simply that, in an objective sense, there had been ample just cause for the termination.

Coon then raised the issue of discrimination under § 8(a)(3) before the Board. The Board refused to defer to the arbitrator's award and found that the discharge was discriminatory under § 8(a)(3). This court enforced the Board's order. In doing so, we declined to hold (as the Board had held) that the arbitrator's award had been "clearly repugnant" to the purposes and policies of the NLRA, thus avoiding the question whether the Board was required to defer under NLRB v. Pincus Brothers, Inc.-Maxwell, 620 F.2d 367 (3d Cir. 1980). Instead, we chose to adopt the rule, developed in a line of cases beginning with Monsanto Chemical Co., 130 N.L.R.B. 1097 (1961), that had expanded upon the three criteria for arbitral deferral originally adopted by the Board in Spielberg Manufacturing Co., 112 N.L.R.B. 1080 (1955), and embellished in International Harvester Co., 138 N.L.R.B. 923 (1962), enforced sub nom. Ramsey v. NLRB, 327 F.2d 784 (7th Cir.), cert. denied, 377 U.S. 1003, 84 S. Ct. 1938, 12 L. Ed. 2d 1052 (1964).*fn8

Monsanto Chemical and its progeny*fn9 have devised various formulae to refine the landmark Spielberg test.*fn10 However, central to them all is a notion that where the propriety of employee discipline is upheld under the terms of a collective bargaining agreement, the Board need not reject a complaint under § 8(a)(3), based on the same discipline, unless there is some indication that in deciding the contract issue, the arbitrator had also decided the questions necessary to the resolution of the statutory inquiry.

Pincus Brothers provides an example of a case in which such an indication was present. There, we dealt with a dismissal precipitated by an employee's distribution of a leaflet. Both the arbitrator and Board treated the dismissal on this ground. The only question was whether dismissal for distributing that particular leaflet was permissible under the law of the shop and the NLRA. By finding that the leafletting was justifiable grounds for dismissal, the arbitrator at least arguably concluded that the leafletting was unprotected both by the NLRA and the law of the shop. For this reason the Board did not, and could not have, upset the arbitral decision simply by applying the rule grounded in Monsanto.

As Pincus illustrates, the employer's motives for disciplinary action will themselves often be ambiguous. At arbitration the employer and the employee will each attempt to convince the arbitrator that the "real" reasons for discipline were, or were not, justified under the law of the shop, which may, as in Pincus, encompass congruent statutory and contractual issues. Thus, when the arbitrator finds that the employer had "just cause" to discipline the employee, his award is typically at least "susceptible" to the interpretation that "there is no causal connection of any anti-union bias and the loss of the job." Edgewood Nursing Center, Inc. v. NLRB, 581 F.2d at 368. Because the absence of such a causal connection would remove the 8(a)(3) taint from the employer's acts, the Board may then be obliged to defer to the award under the standard of Douglas Aircraft Co. v. NLRB, 609 F.2d 352 (9th Cir. 1979), specifically approved by this court in Pincus : "If the reasoning behind an award is susceptible of two interpretations, one permissible and one impermissible, it is simply not true that the award was "clearly repugnant' to the Act." 609 F.2d at 354.

An arbitrator's award may also evince resolution of unfair labor practice issues when the collective bargaining agreement, whose terms it is the arbitrator's duty to construe, expressly prohibits discriminatory discharges based on union activity. See, Gulf States Asphalt Co., 200 N.L.R.B. 938, 939 n.11, 940 n.12 (1972); Airco Industrial Gases Pacific, 195 N.L.R.B. 676, 677 (Member Kennedy, dissenting).

On the other hand, the Board has determined that where a disciplined employee fails even to raise the unfair labor practice issue in the arbitral proceeding, subsequent Board inquiry into that issue will not be limited by an arbitral award favorable to the employer. Suburban Motor Freight, Inc., 247 N.L.R.B. No. 2, 103 L.R.R.M. 1113 (Jan. 8, 1980). But failure to raise the statutory issue before the arbitrator is not a sine qua non for refusal to defer even assuming compliance with the three Spielberg criteria. Though the discharged employee may vigorously argue the issue of anti-union discrimination to the arbitrator, it is not unheard of for an arbitrator to specifically disclaim any intent to decide the issue of discriminatory motive, and base an award solely on the existence of objective grounds for discipline. Monsanto Chemical was such a case. There, having heard evidence and arguments on the unfair labor practice issues, the arbitrator stated:

"I have given a good deal of thought to the dilemma which arises out of the dual jurisdiction over the essence of the unfair labor practice charges. Because the NLRB has exclusive jurisdiction in the event of a conflict, and because I believe the case can be decided on other grounds, I have chosen to ignore for purposes of decision the allegations herein contained that Till's Union activities played a part in his discharge."

130 N.L.R.B. at 1099. A similar approach was evidenced by the arbitrator's award in Kalamazoo Typographical Union Local 122, 193 N.L.R.B. 1065, 1074 (1971). See also Note, The NLRB and Deference to Arbitration, 77 Yale L.J. 1191, 1204-05 (1968).

It is thus inevitable that the ground upon which the arbitrator acts be subjected to some scrutiny before the Board or a court can conclude that the award disposes of the statutory issue raised before the Board. After all, the Board defers not because the arbitrator could have reached and decided unfair labor practice issues in a grievance arbitration, but because in the very process of deciding the contractual issue, the arbitrator may necessarily dispose of the question whether the employee's legitimate rights under § 7 of the NLRA were interfered with impermissibly, within the meaning of § 8(a).*fn11 Thus in a case where the statutory issue viz., the identity of the "but for" cause for discipline and the contractual issue viz., the existence or nonexistence of an objective justification for discipline are evidently separate and distinct, and it clearly appears that only the latter has been treated by the arbitrator, the rationale for deferral necessarily evaporates. In General Warehouse, for instance, there was a dispute over the impetus for Coon's dismissal, but the arbitrator's finding of "objective" just cause seemed to indicate to us that the ...

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