On Appeal from the United States District Court for the District of New Jersey. (D.C. No. 91-1657).
Before: Mansmann, Hutchinson and Garth, Circuit Judges.
This appeal presents for our review the question of the effect to be given a clause in a collective bargaining agreement which reserved to the employer's discretion the right to demote and ultimately to discharge an employee who failed to perform assigned duties properly or who failed to meet the qualifications of his job. The district court ruled against the employer and granted the Union's motion to compel arbitration. We reverse.
Trap Rock Industries, Inc. ("Trap Rock") is engaged in the quarrying industry and was the employer of Freddy Torres, a member of Local 825 of the International Union of Operating Engineers, AFL-CIO ("Union"). The Union is the exclusive bargaining representative for certain of Trap Rock's employees, including, as stated, Freddy Torres.
On June 1, 1990, the Union and Trap Rock entered into a collective bargaining agreement ("CBA") covering the three year period from June 1, 1990 through May 31, 1993. Among its several provisions, the CBA includes two complementary clauses that are pertinent to Trap Rock's appeal. Article III, paragraph 6, the "Reservation Clause," provides:
The Employer reserves the right, which right shall not be subject to Arbitration, to determine the qualifications of any Employee covered hereunder and if, in the Employer's opinion, the Employee does not meet the qualifications or fails to perform his duties properly, then the Employer can Discharge or demote the Employee, whichever the Employer desires. The Employer will notify the Emplolyee [sic] and Union of such action.
The "Arbitration Clause," Article VII, paragraph C, provides for binding arbitration in other particular instances where disputes between Trap Rock and the Union have not been resolved through an internal grievance procedure. This provision expressly limits the arbitrator's jurisdictional reach:
the Arbitrator's powers are limited as follows:
He shall have no power to add to, or subtract from, or modify any of the terms of any Agreement. . . .
He shall have no power to substitute his discretion for the Employer's discretion in cases where the Employer is given the discretion by this Agreement or by any supplementary Agreement, except that where he finds a disciplinary layoff or discharge is in violation of this Agreement, then he may make appropriate modifications of the penalty.
Freddy Torres was employed as a truck driver at Trap Rock's open pit quarry in Pennington, New Jersey. Among his duties, Torres was required to drive a 29-ton, 6-wheel "haul truck" on steep, unpaved dirt roads into the quarry, where the truck was loaded with stone. Torres then drove the laden truck, often weighing in excess of 150,000 pounds, to a "stone crusher," into which the rock was deposited.
Over a period of fourteen months, Torres received several written and verbal warnings from his supervisor regarding his failure to perform his duties properly. Specifically, Torres was warned for excessive absenteeism, (A. 29); for reading a newspaper in his truck at the primary "crusher," (A. 29; 32; 33); for failing to stop his truck at a designated point before downshifting to first gear and for shifting to reverse while moving forward, (A. 30, 33-34); and for sustaining a gash in a truck tire after driving over a large, sharp-edged rock. (A. 34; see A. 30).
On October 26, 1990, Torres was demoted to the job of "laborer." (A. 30). Torres' supervisor determined that Torres' work was "defective," (A. 35); that he failed to perform his truck driving duties properly and failed to meet the qualifications for being a truck driver, (A. 20); and that "for the safety of Fred Torres and the other Employees and the wear ...