United States District Court, W.D. Pennsylvania
June 30, 2004.
INTERNATIONAL UNION OF OPERATING ENGINEERS, LOCAL 66, 66A, B, C, D, O & R, AFL-CIO, Plaintiff,
HECKETT MULTISERV, DIVISION OF HARSCO CORPORATION, Defendant.
The opinion of the court was delivered by: FRANCIS CAIAZZA, Chief Magistrate Judge
MAGISTRATE JUDGE'S REPORT AND RECOMMENDATION
It is respectfully recommended that the Defendant's Motion to
Dismiss (Doc. 3) be denied and the Plaintiff's Motion for Summary
Judgment (Doc. 7) granted. It is further recommended that the
arbitrator's award be vacated, and that this case be remanded for
further arbitration proceedings.
The Plaintiff International Union of Operating Engineers, Local
66, 66A, B, C, D, O & R, AFL-CIO ("the Union") seeks judicial
review of an arbitration award denying the grievance of Reid
Karenbauer ("the Grievant" or "Mr. Karenbauer"). See generally
Compl. (Doc. 1). Mr. Karenbauer, a thirty-nine year employee of
the Defendant Heckett Multiserv ("the Employer," "the Defendant,"
or "Heckett"), was terminated in February 2003 because the
Employer's client, AK Steel ("the Client," "AK" or "AK Steel"),
barred him from its premises. See generally id. at ¶¶ 6, 10(a),
The Union filed a grievance on behalf of Mr. Karenbauer and, in
conformity with the parties' Collective Bargaining Agreement
("the CBA"), the matter proceeded to arbitration. See generally
id. at ¶ 7; see also generally CBA (copy attached as Ex. 1 to
Compl.). On October 17, 2003, arbitrator Matthew M. Franckiewicz
("the Arbitrator") issued an Opinion and Award denying the
grievance. See Arbitrator's Opinion (attached as Ex. 2 to
Compl.). The Arbitrator made the following factual findings,
among others, which are taken as true for the purposes of the
[T]he Employer . . . performs services for AK Steel
on the premises of AK's Butler facility. . . .
Heckett . . . performs services for other companies
at other locations, but the bargaining unit involved
in this case works exclusively at AK's Butler
plant. . . .
[The] Grievant . . . is a 39 year employee with
Heckett . . . [, and he] has no record of prior
discipline or of safety violations.
AK has extensive safety rules for contractors. . . .
For [the] purposes of this case, the pertinent [rule
dictates] . . . that individuals working within the
vicinity of [railroad] tracks are to stay at least
six feet from the nearest rail, or if this is not
feasible, to obtain permission from the yardmaster
and place railing cones and derailers in the vicinity
of the worksite. . . .
In January 2003[, the Employer] dredged dirt and
debris from a ditch on AK[Steel's] property. The
debris was deposited along a roadway that parallels a
plant railroad track. On February 4[, 2003, Mr.]
Karenbauer was assigned to operate a front end loader
to load the debris onto trucks for removal from the
area. [Mr.] Karenbauer's normal assignment was to
`feed' [the Defendant's] slag separator plant, but
the plant was expected to be down during the shift,
so . . . another assignment needed to be found for
When Foreman Rick Eisenhuth assigned [Mr.] Karenbauer
to [remove] the dirt along the road . . ., [the
Grievant] said that he did not want to, [being]
afraid of doing something that would incur the wrath
of AK [Steel]. But [Foreman] Eisenhuth told him it
was his job for the day and if he did not do it, he
would probably be terminated.
On February 4, AK's security department videotaped
the area in which [Mr.] Karenbauer was working.
Apparently the purpose of the taping was observation
of AK . . . employees rather than [the Defendant's],
although this is not completely certain inasmuch as
no AK personnel testified at the arbitration
hearing. . . .
The tape shows [Mr.] Karenbauer at times operating
the front end loader within six feet of the railroad
track, and sometimes over the track. This is a
technical violation of AK's safety procedures. . . .
But it is obvious from the tape that no locomotive
was in the vicinity when the loader came within six
feet or overlapped the track. At one point on the
tape a locomotive passes, at a very slow speed of
perhaps a few miles per hour. When the engine is
visible on the tape, [the Grievant] was well beyond
the six foot area.
It might have been possible for the loader to get
past the debris pile without coming closer than six
feet to the track, but it would have been a tight
squeeze. Further, as a loader scoops material, some
of it is necessarily pushed to the sides, which would
have resulted in some of the dirt being pushed to
within six feet of the track, and it would be
impossible to clean up this dirt without coming
within six feet of the track.
The tape also shows the operator of a Heckett truck
driving along the roadway next to, and within six
feet of, the railroad track. [Heckett] Superintendent
[Roy] Brick [also] acknowledged that, at least before
February 4, , it was common for drivers to come
within six feet of the track while dodging potholes
in the road. No disciplinary action was taken against
the driver, and there is no indication that AK ever
raised this [incident] in its discussions with
Heckett. [Foreman] Eisenhuth acknowledged that he was
aware of employees driving closer than six feet to
the track and did not discipline them.
Steward Curt Bowser testified that for several days,
because of the location of the dirt pile at the time
in an area where the track bows out toward the pile,
the only way to get past was to drive part way over
the track. He stated that the load operator would
necessarily have had to operate over the track in
order to clean mud off the track. He also recalled
that a month after the incident involved in this
case, Superintendent Walt Lasky drove past over the
middle of the track. Bowser has frequently seen
cars[,] trucks and equipment driving or operating
within six feet of the . . . track. He also observed
that in the area of Heckett's slag separation plant
on AK's premises, . . . trucks have to swing out onto
the track, and have done so for years. Other than
[Mr.] Karenbauer and [Foreman] Eisenhuth, no
employees have been disciplined by Heckett, or barred
by AK [Steel] for driving or working in proximity of
On February 4, 2003, AK's yardmaster called Foreman
Eisenhuth and said that the engineer had reported
that Heckett's operator was working close to the
track. . . . [T]he next day[, Eisenhuth] assigned a
different operator who worked on the pile from the
opposite end, without coming closer than six feet to
the track. It would [have] be[en] Eisenhuth's
responsibility to make any track protection
arrangements. The area involved had never previously
On February 5, AK's Director of Transportation Tom
Ayers phoned Heckett Superintendent Brick and said
that he wanted Brick to attend a meeting because of a
[safety] violation. . . . Bill Smith of AK Plant
Safety showed Brick the tape, . . . said the
yardmaster had complained, and asked if Brick was
aware of the situation. Smith told Brick to prepare a
plan of the corrective action he would take, and what
discipline he would impose. [Smith] hinted that a two
day suspension and re-attendance of . . . [a] safety
course for both the employee and the foreman might be
satisfactory, even though AK would discharge its own
employee under such circumstances.
[Superintendent] Brick knew that an AK [Steel]
employee had recently died in an accident and [he]
feared that AK was looking for someone to serve as an
Brick responded the following day . . . that the
operator would be suspended for two days and the
foreman for one day, with re-training and additional
stress on safety. [AK representative] Ayers . . .
said Brick's response was unacceptable, and [that] AK
fired employees for this kind of violation. He
scheduled another meeting for February 7.
AK Works Manager Mark Tabler headed the February 7
meeting. . . . Tabler seemed aware that [Mr.]
Karenbauer was a long term employee, since when Brick
said that the operator did not think he was violating
AK policy, Tabler replied [`]how could he be here so
long and not know.['] . . . [T]here was nothing
[Brick] could say by way of explanation that
satisfied Tabler, and Tabler accused Brick of not
being serious about safety and repeated that
otherwise he would fire both the operator and the
foreman. He told Brick that if he could not bring
himself to do it, he did not take safety seriously
and maybe AK did not need him there. . . .
Heckett issued [Mr.] Karenbauer a notice of
indefinite suspension dated February 8[, stating:]
`you have been suspended indefinitely up to and
including discharge pending the outcome of our
meetings with our customer [AK Steel].'
At [a] February 10 meeting[, AK representative]
Tabler said that he took from [Superintendent]
Brick's . . . remarks that Heckett was lackadaisical
about safety. He went on to say that AK [Steel] was
barring both [Mr.] Karenbauer and Foreman Eisenhuth
from the mill. AK has never reversed its position
regarding the two. It has never given Heckett written
confirmation that the two were barred from its
property. Heckett is willing to reinstate [Mr.]
Karenbauer . . . if AK revokes his disbarment.
AK sent Heckett a letter . . . saying that its
employee's working within six feet of the track . . .
constituted grounds for termination of [their]
agreement, but that AK would not terminate the
agreement if Heckett complied with stated conditions,
including a . . . $79,000 [charge]. Heckett disputed
that any such charge is appropriate, and the matter
remains unresolved between Heckett and AK [Steel].
On February 27[, 2003] Brick issued to [Mr.]
Karenbauer a termination notice. It states[:]
`Indefinite suspension has been changed to a
termination, due to the fact that the employee cannot
maintain his schedule because [he] was barred from
the mill.' The form indicates that [the Grievant] was
ineligible for rehire, with the explanation `employee
was barred from mill's property.'
After his debarment, Heckett assigned [Foreman]
Eisenhuth to fill a vacancy at a different plant (not
owned by AK [Steel]) occasioned by the retirement of
a foreman there.
Heckett has two other bargaining units in the
Pittsburgh area represented by Local 66. The parties
discussed a possible accommodation by employing [Mr.]
Karenbauer at one of those sites, but both collective
bargaining agreements include a provision for an
exclusive hiring hall, so that such an accommodation
would be subject to challenge by a potential employee
who had a higher position on the hiring hall list
than [the Grievant].
See Arbitrator's Opinion at 2-5 (footnotes omitted).
According to the Arbitrator "[t]he issue, as agreed [upon] by
the parties, [was] whether there [existed] just cause" for the
Grievant's discharge and, "if not[,] what . . . the remedy
[should] be." See id. at 5 (emphasis added). In summarizing the
Defendant's position, the Arbitrator recognized:
"AK Steel should not have barred the Grievant from
its property, it was not [the Defendant's] decision
to do so[,] and there was no collusion in this
the Defendant "did not want to lose [Mr.
Karenbauer] as an employee and is willing to return
him to work if AK [Steel] changes its mind";
both Heckett and the Union "went to bat for the
Grievant to try and keep him employed" and, in the
Defendant's view, "both the Grievant and Heckett were
unjustly punished by AK [Steel]";
"Heckett did not terminate, and would not have
terminated, [Mr.] Karenbauer for violating AK's
the Defendant "terminated him because he could not
get to work, . . . this inability was not Heckett's
decision," and "an employee must come to work if he
is to be employed, and if he cannot, it is a proper
reason to terminate his employment."
See id. at 5-6 ("Position of Management").
As referenced above, the parties charged the Arbitrator with
determining whether Mr. Karenbauer's termination was appropriate
under Section Three of the CBA. See generally Arbitrator's
Opinion at 1-2 (identifying Section 3 as relevant provision);
id. at 5 ("Issue" for arbitration was Section 3's "just cause"
provision). Section Three states:
[Heckett] retains the exclusive right to manage the
business and plant and to direct the working force
subject . . . to the provisions of this Agreement.
The right to manage . . . includes, but is not
limited to, the right to hire, assign work to
employees, suspend, or discharge employees for just
cause, to transfer employees within the Plant, and
to relieve employees from duty because of lack of
See CBA at § 3 (emphasis added).
The Arbitrator came to interpret "just cause" as meaning "the
employer had valid and sufficient business reasons to do what it
did." See Arbitrator's Opinion at 7. He reached this conclusion
based on the following:
If the question is whether AK [Steel] would have had
just cause to discharge an employee under the
circumstances of this case, both parties agree that
it would not, even if for no other reason than that
discharge would be too severe a punishment. . . . A
separate questions remains, however, of whether,
assuming AK would not have had just cause to
discharge . . ., Heckett nonetheless had just cause
for the discharge of its employee. . . .
In my view, this question translates to whether the
just cause standard necessarily equates to an
employee `fault' standard. . . . [W]hile the question
of whether the employer had just cause to discipline
often includes the question of whether the employee
was at fault, the two are not necessarily identical.
The essential question, it seems to me, in any just
cause case is whether the employer had valid and
sufficient business reasons to do what it did.
In some cases, even though an employee is
blameworthy, just cause for discharge is lacking. For
example, a discharge may be reversed or reduced
because of inadequate notice to the employee of the
consequences of the conduct involved, because of more
lenient discipline to other employees for similar
infractions, or because progressive discipline rather
than discharge should have been the course of action.
The current case presents something of the other side
of the coin, a case where there may be valid and
sufficient business reason for discharge even though
the employee is not blameworthy. To my mind[,] the
common situation most closely analogous to the
current one is that of an employee who is not
malingering but is unable to report to work due to
illness or accident. Surely it is not an employee's
fault that he has contracted a disabling disease. But
arbitrators are in accord that where an employee
cannot report to work with sufficient regularity, the
employer is permitted to end his or her
employment. . . .
In the current case the Grievant, like an employee
suffering a medical condition, is unable to report to
work even though not due to any fault [of] his own. . . .
I reach the same conclusion that the Employer is
not required to continue the employment of an
employee who cannot report to work. . . . The current
situation is unlike a case involving an employee
(such as a delivery [person]) who visits many
customers' businesses. In such a case, even if one
customer refuses to admit the employee to its
premises, routes can usually be reconfigured to avoid
the problem. Here, however, there is only one
customer, and all the bargaining unit work is
performed on AK[Steel's] property.*fn1 . . .
Id. at 7-8 (footnotes omitted).
The parties have filed cross-motions testing the legal
sufficiency of the Arbitrator's decision. The briefing on the
motions has come to a close, and the matter is now ripe for
The facts recited in the Arbitrator's Opinion reveal the most
unfortunate of circumstances. The evidence reasonably infers that
the Employer's Client, having recently suffered a fatal workplace
accident, "was looking for someone to serve as an example." See
generally discussion supra. It was this climate that caused
Mr. Karenbauer to recoil when instructed to complete work outside
of his typical job responsibilities, being "afraid of doing
something that would incur the [Client's] wrath." See id.
To avoid the termination of his employment, however, the
Grievant did as he was ordered. See id. (clearing debris "was
[Mr. Karenbauer's] job for the day and if he did not do it, he
would probably be terminated"). In the process he committed a
routine, if technical, safety violation. See, e.g., id. (in
addition to Grievant, tape "show[ed] the operator of a Heckett
truck driving . . . within six feet" of railroad track, "it was
common for drivers to come within six feet of the track," and
employees often "dr[ove] closer than six feet to the track and
did not [receive] discipline"); cf. also generally Arbitrator's
Opinion at 6 (noting Defendant's "concession that . . . [Mr.]
Karenbauer was operating the loader in a safe manner").*fn2
As the parties agree, the Client's response to the safety
violation was both uneven and disproportionate. See, e.g., id.
at 5 (admitting Grievant was "unjustly punished" and
"emphasiz[ing] that Heckett did not terminate, and would not have
terminated, [Mr.] Karenbauer for [the] violat[ion]"). And while
the Defendant complains that it too was unfairly punished, the
fact remains that the Grievant, and the Grievant alone, had been
left to hold the bag. See Arbitrator's Opinion at 4 (noting
that Heckett disputes and has not paid AK Steel's $79,000 charge)
and id. at 5 (Defendant assigned Foreman Eisenhuth "to fill a
vacancy in a different plant").
The consequence visited upon this Grievant, a 39-year employee
of Heckett with no record of prior discipline, reeks of
injustice. As referenced below, however, the law governing the
court's review of the arbitration decision does not permit a
weighing of the equities. Rather, the correct question is whether
the Arbitrator's interpretation of the term "just cause" can
withstand judicial scrutiny. The undersigned respectfully submits
that it cannot.
As Defense counsel hastens to point out, "[j]udicial review of
a labor-arbitration decision pursuant to [a collective
bargaining] agreement is very limited." See Major League
Baseball Players Ass'n v. Garvey, 532 U.S. 504, 509 (2001).
Although various permutations of the relevant standards exist,
the message is clear: in the absence of compelling reasons,
courts should be loath to interfere with the decisions of duly
authorized labor arbitrators. See, e.g., id. ("[c]ourts are not
[permitted] to review the arbitrator's decision on the merits
despite allegations that the decision rests on factual errors or
misinterprets the parties' agreement"; "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"; "[w]hen an arbitrator resolves disputes regarding the
application of a contract, and no dishonesty is alleged, the
arbitrator's improvident, even silly, factfinding does not
provide a basis for . . . refus[ing] to enforce the award"; and
courts "have no business weighing the merits of the grievance
[or] considering whether there is equity in a particular claim")
(citations and internal quotations omitted). Such heightened
deference is necessary to preserve "[t]he federal policy of
settling labor disputes by arbitration." See generally United
Paperworkers Int'l Union, AFL-CIO v. Misco, Inc., 484 U.S. 29,
36, 38 (1987) (policy would be "undermined if courts had the
final say on the merits of . . . awards," thereby jeopardizing
"the speedy resolution of grievances by private mechanisms");
Newark Morning Ledger Co. v. Newark Typographical Union Local
103, 797 F.2d 162, 165 (3rd Cir. 1986) ("frequent judicial
disapproval of the awards of labor arbitrators would tend to
undermine a system of private ordering that is of the highest
importance to the well-being of employer[s] and worker[s] alike")
There comes a point, however, where an arbitrator's ruling is
"so palpably wrong that to allow his decision to stand would
[itself] undermine confidence in the arbitration process." See
Newark, 797 F.2d at 165 n. 3 (citation and internal quotations
omitted). There are almost as many permutations of this competing
principle, ranging from an arbitrator's inability to "dispense
his own brand of industrial justice," to the requirement that his
interpretation "in [some] rational way be derived from the
agreement," to the notion that his decision cannot evidence
"manifest disregard" for, or "infidelity to," the CBA or his
obligations thereunder. See, e.g., Garvey, 532 U.S. at 509;
Major League Umpires Ass'n v. American League of Prof'l Baseball
Clubs, 357 F.3d 272, 280 (3d Cir. 2004); Newark, 797 F.2d at
165 (citations and internal quotations omitted in each).
In the undersigned's view, the enforceability of the
Arbitrator's decision hinges upon which group of standards is
most applicable to his "just cause" interpretation. As Justice
Stevens recently opined, this determination is not an easy one:
It is well settled that an arbitrator does not sit to
dispense his own brand of industrial justice. . . .
Our cases, however, do not provide significant
guidance as to what standards a federal court should
use in assessing whether an arbitrator's behavior is
so untethered to either the agreement of the parties
or the factual record so as to constitute an attempt
to dispense his own brand of industrial justice.
Nor, more importantly, do they tell us how, having
made such a finding, courts should deal with the
extraordinary circumstance in which the
arbitrator['s] own rulings make clear that, more
than being simply erroneous, his finding is
completely inexplicable and borders on the
See Garvey, 532 U.S. at 512 (Stevens, J., dissenting)
(citations and internal quotations omitted, emphasis added).
These difficulties notwithstanding, the court remains charged
with determining whether the Arbitrator's interpretation of "just
cause" properly may be left to stand The undersigned submits
that it should not, as the Arbitrator's reading cannot "in any
rational way" be derived from the collective bargaining
agreement. Major League Umpires, 357 F.3d at 280; accord
Arco-Polymers, Inc. v. Local 8-74, 671 F.2d 752, 754 (3d Cir.),
cert. denied, 459 U.S. 828 (1982).
In determining whether the Arbitrator's interpretation is in
any way rational, the court looks to the "language" of the CBA,
"its context, and any other indicia of the parties['] intention."
See Arco-Polymers, 671 F.2d at 754 (citations and internal
quotations omitted). The undersigned turns first to the "context"
within which the "just cause" term arises.
Although it seems too obvious to bear repeating, the "just
cause" provision of a labor agreement protects union members from
unjust discipline, up to and including discharge. See, e.g.,
THE COMMON LAW OF THE WORKPLACE § 6.1, p. 157 (Theodore J. St.
Antoine ed., BNA Books 1998) (hereinafter cited and referred to
"St. Antoine") ("[t]he Just Cause Principle" dictates that "[a]n
employer may discipline an employee for just cause") (emphasis
added);*fn3 Roger I. Abrams & Dennis R. Nolan, Toward a
Theory of `Just Cause' in Employee Discipline Cases, 1985 (June)
DUKE L.J. 594, 594-95 (hereinafter, "Abrams & Nolan") ("[j]ust
cause for discipline is the most important principle of labor
relations in the unionized firm," as "[f]ew things are more
significant to employees than limitations on their employer's
power to discipline or discharge them") (emphasis
Implicit in the concept of "discipline" is the notion that the
employee engaged in some sort of affirmative conduct and/or
culpable behavior to warrant the adverse employment action. See,
e.g., Just Born, 2002 WL 31819621 at * 4 ("[i]mplicit in the
concept of just cause for discipline is the requirement of
wrongdoing," and "[i]n the absence of a triggering event
which will support discipline, the grievant's discharge cannot
stand") (citation and internal quotations omitted, emphasis
added); Abrams & Nolan at 602 ("[t]he nature and severity of the
employee's offense . . . will determine what form of discipline
is appropriate," and "[t]he question for the arbitrator is
whether the employee's conduct constituted a sufficiently
serious breach . . . to warrant the discipline imposed")
(emphasis added); St. Antoine at § 6.1, cmt. a ("`discipline'
means any punishment up to and including discharge") (emphasis
It is within these contexts that the parties included the "just
cause" provision of the CBA. The language of the agreement,
moreover, is entirely consistent. Cf. Arco-Polymers, 671 F.2d
Although the Arbitrator made no reference to it, Section Seven
of the CBA specifically addresses the provision containing the
"just cause" requirement, stating:
The [Employer] agrees that, in the exercise of its
rights under Section 3 hereof, an employee shall not
be peremptorily discharged. When the Company
concludes that the employee's conduct may justify
suspension or discharge, the employee shall be
suspended initially . . . and notified in writing
of such suspension, and the reasons therefore,
shall be indicated. When an employee is disciplined
by written suspension . . ., a union representative
will be present if requested by the employee.
During the suspension period, the employee shall,
if so desired, be granted a hearing before the
Plant Superintendent. . . . [Thereafter,] the Company
shall determine whether such suspension shall be
affirmed, modified, extended, revoked, or converted
to a discharge. . . .
See CBA at § 7 (emphasis added).
Section Seven is consonant with the notion that just cause
relates to "discipline" for affirmative and/or culpable conduct.
See generally id. The arbitrator was bound, moreover, "to
interpret the [just cause requirement] in harmony with other
parts of the CBA to give effect to" the entire agreement. See
Mitchell Plastics, Inc. v. Glass, Molders, Pottery, Plastics &
Allied Workers Int'l Union, 946 F. Supp. 401, 405 (W.D.
Pa. 1996) (Cindrich, J.) (emphasis added).
Finally are "other indicia of the parties['] intention," in
this case the actual treatment of Mr. Karenbauer under the CBA.
The Grievant was neither laid off nor immediately terminated
based on "valid and sufficient business reasons" claimed by
Heckett. To the contrary, and fully consistent with the concept
of discipline, the Grievant was suspended for several days
before his "suspension [was] changed to a termination."
Compare generally discussion supra (emphasis added) with
CBA at § 7 (when "employee's conduct may justify suspension
or discharge, the employee shall be suspended initially")
As just seen, the language of the CBA, its context, and other
indicia of the parties' intent paint a clear and consistent
picture. Unfortunately for the Defendant, however, the
Arbitrator's interpretation of "just cause" bears no rational
relationship to the same.
In focusing on whether the Employer "had valid and sufficient
business reasons" for terminating the Grievant, the Arbitrator
completely lost sight of the "discipline" aspect of the just
cause inquiry. Both generally and in this case, the CBA's "just
cause" provision looks to whether the employer's adverse
employment decision was justified in light of the employee's
triggering conduct or culpability. The Arbitrator offered no
reasoned basis for shifting the inquiry to entirely unrelated
matters, i.e., the employer's business interests alone. As a
practical matter, such a shift would provide little (if any) more
protection under the CBA than exists through the at-will
doctrine, as the employer would remain free at any time to
proffer business reasons for termination bearing no relationship
to the employee, his conduct, or those matters within his
control. Cf. generally, e.g., Hanover, 814 A.2d at 294 n. 1
("[the] just cause limitation on discharge" differentiates union
workers from "at-will" employees, who may be terminated "at any
time for any reason"); Sparks v. International Union, United
Auto., Aerospace, & Agric. Implement Workers of Amer., UAW, 1996
WL 487252, *3 (6th Cir. Aug. 26, 1996) ("[i]t would be ironic
indeed if . . . `unjust discharge' was [read] in such a
hyper-technical manner" that it would "constru[e the union]
employment contract as [creating an] at-will relationship")
Unsurprisingly, the reported cases in the Third Circuit and
Pennsylvania uniformly have addressed CBA "just cause" provisions
within the context of discipline, employee conduct and/or
culpability.*fn5 Neither the Arbitrator nor Defense counsel
has identified any jurisprudence to the contrary. Rather, the
Arbitrator relied solely on St. Antoine's hornbook to support his
"business reasons" interpretation. See Arbitrator's Opinion at
7 n. 3 (citing and quoting St. Antoine). A fair reading of the
treatise, however, reveals the contrary.
On the whole, St. Antoine could not be more supportive of the
"discipline for employee conduct/culpability" paradigm. As
previously referenced, the opening passage regarding the "[j]ust
[c]ause [p]rinciple" clarifies that "[a]n employer may
discipline an employee for just cause." See id. at § 6.1,
p. 157 (emphasis added). Thereafter, section upon section
identifies legal precepts harmonious with the "discipline"
paradigm and wholly incongruous with the "business reasons"
§ 6.2: The just cause principle entitles employees to
due process, equal protection, and
individualized consideration of specific mitigating
and aggravating factors. . . .
cmt. b Mitigating factors include an employee's
seniority, good work record, good faith, the absence
of serious harm from the employee's conduct, and,
in appropriate cases, the presence of provocation or
misrepresentation leading to the employee's
misconduct. . . .
cmt. c Aggravating factors include . . . the
seriousness, willfulness, or repetition of the
employee's misconduct and the presence of serious
harm stemming from that misconduct.
§ 6.7: (1) The level of discipline permitted by the
just cause principle will depend on . . . the nature
and consequences of the employee's offense, the
clarity or absence of [work] rules, the length
and quality of the employee's work record, and the
practices of the parties in similar cases.
Discipline must bear some reasonable relation to
the seriousness or the frequency of the
offense. . . .
§ 6.7: (2)(a) Unless otherwise agreed, discipline
for all but the most serious offenses must be
imposed in gradually increasing levels. The primary
object of discipline is to correct rather than to
punish. Thus, for most offenses, employers should
use one or more warnings before suspensions, and
suspensions before discharge. . . .
§ 6.9: (1) The employer bears the burden of proving
just cause for discipline. That includes proof that
the level of discipline imposed was appropriate.
The employer also must also prove any alleged
(2) The employee bears the burden of proving any
affirmative defenses (such as condonation by the
employer, provocation by other employees, or
disparate treatment) and any mitigating
factors. . . .
§ 6.12: It is generally accepted that some level of
procedural due process is owed by employers to
employees in the imposition of discipline or
discharge. . . .
(a)(1) [A]rbitrators in the private sector have
built into the just cause standard procedural due
process protections as part of the `fundamental
fairness' that just cause embodies.*fn6 . . .
§ 6.17: An employee is entitled to be informed of, or
to have a sound basis for understanding, the
disciplinary consequences that will result from
violating policies or work rules in effect at the
employee's place of employment. . . .
cmt. b Another important . . . proposition is that,
in the administration of disciplinary action by an
employer, employees should not have to suffer
disparate treatment, that is, there should be
equal treatment for like offenses.
See St. Antoine at cited sections (emphasis added,
italicization in original).
None of the aforementioned principles can be reconciled with
the "business reasons" interpretation, and the sections above
provide just a sampling of the incompatibility. Turning to the
specific section relied upon by the Arbitrator, the same
conclusion is apparent. Section 6.5 states:
(1) The essence of the just cause principle is the
requirement that an employer must have some
demonstrable reason for imposing discipline. The
reason must concern the employee's ability, work
performance, or conduct, or the employer's legitimate
(2) Ability and performance. An employer may
discipline an employee for failure to meet reasonable
(3) Conduct. An employer may discipline an employee
for violations of stated or generally known and
reasonable work rules and expectations.
(4) Business necessity. Reasons relating to an
employer's legitimate business needs include lack of
work for persons with the employee's skills,
technological or market changes, and business
(5) Just cause is not synonymous with `fault.' An
employee may violate work rules and merit discipline
even if the employer cannot prove the employee
actually intended the violation.
See St. Antoine at § 6.5, pp. 164-65 (emphasis added,
italicization in original).
Admittedly, St. Antoine's subsection regarding "[b]usiness
necessity" may on first blush appear supportive of the
Arbitrator's interpretation. Cf. id. The problem remains,
however, that St. Antoine's discussion of "legitimate business
needs," alone, says nothing whatsoever regarding employee
behavior warranting discipline. As the section discussing
"business necessity" states, "just cause" demands that the
employer "have some demonstrable reason for imposing
discipline," and this concept is emphasized repeatedly
throughout the remainder of St. Antoine. See discussion
supra. Thus, to the extent the Arbitrator relied on the
source's discussion of "business necessity," his reasoning is
fatally inconsistent with the remaining provisions of St. Antoine
and should be rejected as irrational.
Before selling short the learned and "renowned arbitrator
Theodore J. St. Antoine,"*fn7 however, it is only fair to
consider his comments to the "business necessity" subsection:
Normally an employer's actions in response to
business developments such as lack of suitable work
are not considered disciplinary. Other legitimate
business interests may justify formal discipline,
for example, the justified refusal of . . .
customers to work with an individual.
See id. (emphasis and double emphasis added).
As just seen, St. Antoine's commentary essentially takes back
what the "business necessity" discussion appeared to improperly
bestow. See id. ("an employer's actions in response to business
developments . . . are not considered disciplinary") (emphasis
added). Moreover, the parties and the Arbitrator were in
agreement that there existed no basis for disciplining Mr.
Karenbauer, let alone terminating his employment. See, e.g.,
Arbitrator's Opinion at 7-8 (Grievant "is not blameworthy," his
inability to report to work was "not due to any fault on his
part," and Defendant concedes AK Steel should not have barred him
from its premises). Rather, Heckett took "actions in response to
business developments," actions that simply "are not considered
disciplinary." See St. Antoine at § 6.5, cmt. (d), p. 166
(emphasis added).*fn8 If anything, St. Antoine actually
reinforces the distinctions between the "discipline" and
"business reasons" paradigms rather than eroding them.
Even more telling, though, is St. Antoine's comment regarding
customers' "unwilling[ness] to work" with a specific employee.
See id. at § 6.5, cmt. (d). This is precisely the situation
presented here, and St. Antoine contemplates that just cause
exists if the customer's refusal is "justified." See id.
(emphasis added). Once the concept "justifi[cation]" is
reintroduced, the analysis comes full circle and the employee's
conduct and/or culpability again enters the equation. Within the
context of this case, moreover, the Arbitrator's Opinion leaves
no doubt that AK Steel's refusal to work with Mr. Karenbauer was
"[un]justified." See discussions supra (noting Arbitrator's
and Defendant's concessions that AK Steel should not have barred
Grievant from its premises); see also, e.g., Abrams & Nolan at
The Arbitrator also relied heavily on St. Antoine's discussion
of "fault," concluding that "just cause . . . [does not]
necessarily equate to an employee `fault' standard." See
Arbitrator's Opinion at 7 & n. 3. The undersigned agrees that the
concept of "faultless" discipline is recognized in the law. See
St. Antoine at § 6.5(5), p. 165. The deviation between the
Arbitrator's analysis and St. Antoine's, however, stems from the
definition given the word "fault."
The Arbitrator appears to have confused "fault" with the
question of whether the employee has engaged in conduct
warranting discipline. This certainly was not the definition
endorsed by St. Antoine:
Just cause is not synonymous with `fault[,' in that
a]n employee may violate work rules and merit
discipline even if the employer cannot prove the
employee actually intended the violation. . . .
In these cases, . . . discipline may be appropriate
both to determine whether the employee's problems are
voluntary and to give the employee proper
warning. . . .
For example, a consistent inability to produce
satisfactory work might justify discipline even of
employees doing their best. . . . Similarly a
`no-fault' attendance policy may justify discipline
for repeated unexcused absences or tardiness even
though the employee asserts a plausible explanation
for each incident.
See St. Antoine at § 6.5(5) and cmt. thereto (emphasis
It seems fairly obvious that St. Antoine equated the word
"fault" with scienter, or intent. See id. (employee's
violation of work rules may "merit discipline even if the
employer cannot prove the employee actually intended the
violation"). In each illustration, moreover, reference is made to
conduct (intentional or not) warranting the imposition of
discipline. See, e.g., id. (contemplating "violat[ion of] work
rules," "employee problems" and "proper warning[s]," failure
"to produce satisfactory work," and "repeated unexcused absences
or tardiness"). St. Antoine's discussions regarding employee
intent notwithstanding, the Arbitrator's "business reasons"
standard remains irrational under the CBA's language, its
context, and other indicia of the parties' intent.
For all of the reasons stated above, the Arbitrator's
interpretation of "just cause" flies in the face of the CBA, the
law of the Third Circuit and Pennsylvania,*fn10 and the
treatise he cites in support thereof. See generally discussions
supra. The "business reasons" standard ignores fundamental
underpinnings of the just cause principle, including the concepts
of discipline,*fn11 due process, the individualized
consideration of mitigating and aggravating factors, the need for
proportionality, equal protection, and the prohibition of
See discussions supra.
In sum, the Arbitrator's interpretation cannot "in any rational
way" be derived from the collective bargaining agreement. See
Major League Umpires, Arco-Polymers.*fn12 The denial of
Mr. Karenbauer's grievance was not supported by the Arbitrator's
analysis, and the arbitration award should be vacated.
In a case where "the arbitrator's award may properly be
vacated, the appropriate remedy is to remand the case for further
arbitration proceedings." See Garvey, 532 U.S. at 511
(citation omitted). In light of the analyses above, coupled with
the Arbitrator's and the Defendant's concessions, the undersigned
questions what properly remains for the Arbitrator to decide, at
least with respect to liability. Nevertheless, the Supreme Court
has made clear that remand is the most appropriate course of
action. See id. (rejecting suggestion that remand "is limited
to cases where the arbitrator's errors are procedural") (citation
On remand, the arbitration proceedings should revisit the "just
cause" issue, as consistent with recommendations stated
above.*fn13 The remaining analysis should not be taxing,
given the parties' and the Arbitrator's agreement that Mr.
Karenbauer should not have been terminated for his technical
violation of AK Steel's safety rule. See generally discussions
supra. Stated differently, by conceding that the Grievant's
conduct did not warrant discipline, the Defendant essentially has
admitted that "just cause" (as rationally construed) was lacking.
See Arbitrator's Opinion at 5-6 (summarizing Defendant's
admissions that "AK Steel should not have barred the Grievant
from its property," Grievant "[was] unjustly punished," and
Heckett "would not have terminated" him "for violating AK's
safety rules"); cf. also generally Parilla v. IAP Worldwide
Servs., VI, Inc., 368 F.3d 269, 275 (3d Cir. 2004) ("[j]udicial
admissions are formal . . . stipulations by the party or its
counsel . . . that are binding . . . for the purpose of the case
in which the admissions are made[,] including appeals")
(citations and internal quotations omitted).
Finally, the undersigned notes that AK Steel's apparent refusal
to allow Mr. Karenbauer onto its premises has no proper bearing
on whether there existed just cause for discipline. Regardless of
whether AK's decision has or will impede the Employer's ability
to find Mr. Karenbauer other work, Heckett owed the Grievant a
contractual duty to not discipline him in the absence of just
cause. Cf., e.g., Verland Found., Inc. v. United Steelworkers
of Amer., 1993 WL 388675, *5 (W.D. Pa. Jul. 14, 1993) (Lee, J.)
(CBA imposes on employer "[a] contractual obligation to establish
just cause for disciplinary action against an employee")
(citation and internal quotations omitted).
In the end, applying the just cause provision in this case
would appear to pose an overarching question: who, between the
Employer and its thirty-nine year employee Mr. Karenbauer, should
bear the consequences of AK Steel's uneven and disproportionate
response to a routine, technical safety violation? In light of
the Defendant's having placed the Grievant in this
predicament,*fn14 AK Steel's being the Employer's client,
Heckett's apparent willingness to more emphatically resist
unreasonable client demands when its own finances are
threatened,*fn15 and, most importantly, the Defendant's
contractual obligation not to discipline the Grievant without
"just cause," the court should have little difficulty concluding
that AK Steel is Heckett's problem, not the Grievant's.*fn16
The District Court should vacate the Arbitrator's award and
remand the case for further proceedings. In light of this
recommendation, the Defendant's request for attorneys' fees under
Federal Rule 11 obviously should be denied. Cf. Def.'s Mem.
(Doc. 4) at 8-10 (arguing Plaintiff should have withdrawn case
upon being warned by Defense counsel it was "meritless").
The Plaintiff likewise has requested the payment of attorney
fees and costs. See generally Compl. at Wherefore clause. In
moving for summary judgment, however, counsel has failed to
identify legal authority supporting the request for fees. See
generally Pl.'s Mem. (Doc. 8) (remaining silent regarding
Plaintiff's request for costs and attorney's fees). Assuming such
relief is within the court's discretion, moreover, this simply is
not an appropriate case for fee shifting. Cf. generally
discussion supra (noting that determination on merits "[wa]s
not an easy one"). Thus, the Plaintiff's request should be
The Defendant's Motion to Dismiss (Doc. 3) should be denied,
the Plaintiff's Motion for Summary Judgment (Doc. 7) granted, the
Arbitrator's award vacated, and the case remanded for further
In accordance with the Magistrates Act,
28 U.S.C. § 636(b)(1)(B) and (C), and Rule 72.1.4(B) of the Local Rules for
Magistrates, objections to this report and recommendation are due
by July 16, 2004. Responses to objections are due by July 26,