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Gloucester Terminals, LLC v. Teamsters Local Union 929

United States District Court, E.D. Pennsylvania

May 22, 2017

GLOUCESTER TERMINALS, LLC, Petitioner, Counter-Respondent,
v.
TEAMSTERS LOCAL UNION 929, Respondent, Counter-Claimant.

          MEMORANDUM

          Schiller, J.

         When Gloucester Terminals, LLC (“GLT”) fired Gary Akers in April 2016, the Teamsters Local Union 929 (the “Union”) grieved his termination. GLT and the Union failed to resolve the grievance and, pursuant to their collective bargaining agreement (“CBA”), turned to J. Freedley Hunsicker, Jr. (the “Arbitrator”) to arbitrate the dispute. The Arbitrator ruled that GLT had just cause to terminate Akers, but mitigated the penalty to reinstatement without back pay. GLT petitioned the Court to vacate the arbitration award, arguing that the Arbitrator lacked jurisdiction to mitigate the penalty and that his remedy failed to draw its essence from the CBA. The Union counterclaimed to enforce the award.

         GLT and the Union have cross-moved for summary judgment. Although GLT and the Union do not agree about all the facts underpinning this dispute, they do not dispute the facts relevant to a request to vacate or enforce an arbitration award. Because the CBA gives the Arbitrator authority to decide the scope of his jurisdiction, and because the Arbitrator's decision draws its essence from the CBA, the Court will grant partial summary judgment in favor of the Union and will enforce the arbitration award.

         I. BACKGROUND

         GLT is a limited liability company operating in New Jersey, and is an “employer” under the National Labor Relations Act (“NLRA”), 29 U.S.C. § 152(2). (Pet'r's Statement of Undisputed Facts ¶¶ 1-2 [hereinafter “GLT Facts”].) The Union is an unincorporated association operating in Philadelphia, and is a “labor organization” under the NLRA, 29 U.S.C. § 152(5). (Id. ¶¶ 3-4.) At all relevant times, GLT and the Union were subject to a CBA, which outlines a multi-step grievance procedure that culminates in binding arbitration. (Id. Ex. A arts. XIV-XV [hereinafter “CBA”]; Resp't's Statement of Undisputed Facts ¶¶ 1-2 [hereinafter “Union Facts”].)

         Several provisions of the CBA are relevant here. First-and critical to this dispute-the CBA states that the “Arbitrator shall determine any questions of arbitrability.” (CBA art. XV(2).) Second, the CBA bars GLT from discharging any employee without “just cause.” (CBA art. XIII(1).) Third, the CBA recognizes the right of the Union to appoint stewards, and allows stewards to investigate and process grievances without loss of time or pay, subject to the other provisions of the CBA. (CBA art. XI.) Finally, the CBA grants GLT the right to promulgate rules governing employee conduct. (CBA art. XXVI.) Group I, Rule 5 prohibits a worker from being “insubordinate or deliberately fail[ing] to carry out Supervisor's instructions, ” and Group I, Rule 12 prohibits a worker from “[l]eav[ing] the plant or work area during work hours without the permission from the Supervisor.” (GLT Facts ¶¶ 11-12; CBA Schedule E.) Violation of either of these two rules “shall warrant immediate dismissal.” (GLT Facts ¶¶ 9-10; CBA Schedule E.)

         A. GLT Terminates Akers in November 2014

         Akers worked as a warehouseman and Union steward. (GLT Facts ¶ 14; id. Ex. C, at 1 [hereinafter “Arb. Op.”].) In November 2014, GLT terminated Akers for “being insubordinate/deliberately failing to carry out supervisor's instructions and leaving the plant or work area during working hours without the permission from the Supervisor.” (Id. ¶ 15; id Ex. B.)[1] The Union grieved Akers's termination, and agreed to settle the grievance with GLT under the terms of a Last Chance Agreement (“LCA”). (Id. ¶¶ 17-18; id Ex. B [hereinafter “LCA”].)

         Under the LCA, GLT reinstated Akers with a three day suspension. (Id. ¶ 19; LCA.) The LCA also provided a framework for any relevant future disputes: any subsequent violation by Akers of certain GLT rules would result in immediate termination, and if the Union grieved the termination, the Arbitrator would only have jurisdiction to determine whether Akers violated the rules. (GLT Facts ¶¶ 20-21; LCA.) As stated in the LCA:

With this agreed-upon clarification of the relevant provisions of the contract, [GLT], the Union and Mr. Akers agree that any subsequent violation by him of the rules governing leaving his assignment without a supervisor's permission will result in immediate termination. Should the Union elect to challenge that termination in arbitration, the arbitrator shall have jurisdiction only to determine whether the offense took place and shall not have jurisdiction to reduce the penalty, however, if [GLT] cannot prove that Mr. Akers did not [sic] violate the terms of this Agreement, the arbitrator shall have jurisdiction to reinstate Mr. Akers and make him whole.

(GLT Facts ¶¶ 20-21; LCA.)

         B. GLT Terminates Akers in April 2016

         A year and a half later, GLT assigned Akers to work mandatory overtime on or about April 7, 2016, which is allowed under the CBA. (GLT Facts ¶¶ 7, 22; Union Facts ¶ 4; CBA arts. VIII, X.) Akers did not, however, work the mandatory overtime on April 7. (GLT Facts ¶ 23; Union Facts ¶ 5.) Although GLT and the Union dispute whether Akers received permission to leave, the Arbitrator concluded that “there is no evidence that anyone gave express and final permission for Akers to leave early.” (Arb. Op. at 6.) The next day, GLT terminated Akers for violating two rules: Group I, Rule 5 (insubordination) and Group I, Rule 12 (leaving a plant or work area during work hours without permission from a supervisor). (Id. at 1; GLT Facts ¶¶ 26- 27; Union Facts ¶ 6.)

         The Union again grieved Akers's termination. (GLT Facts ¶¶ 28-29; Union Facts ¶ 7.) Unable to resolve the dispute, GLT and the Union turned to final and binding arbitration. (GLT Facts ¶¶ 30-31; Union Facts ¶ 8.) The Arbitrator conducted a hearing in August 2016, during which both GLT and the Union presented testimony. (GLT Facts ¶¶ 32-35; Union Facts ¶¶ 9- 13.) The Arbitrator issued his opinion a month later. (Arb. Op. at 1.)

         C. The Arbitration Opinion

         As identified by the Arbitrator, the issue in this case was “whether [GLT] had just cause for the discharge” of Akers in April 2016. (Id.) The Arbitrator outlined arguments from both sides; as relates to the LCA, GLT claimed that Akers had violated the LCA, while the Union argued that GLT could not rely on the LCA as grounds for discharge because it was not cited as a basis for discharge and because it arose in a different context. (Id. at 2-4.) After summarizing all the evidence, the Arbitrator concluded that GLT “has proved that Akers left assigned mandatory overtime without his supervisor's permission and has met its burden of just cause” under the CBA. (Id. at 6.)

         Instead of affirming the termination, however, the Arbitrator chose to mitigate the penalty to reinstatement without back pay. (Id. at 7.) The Arbitrator concluded that “there was some confusion among [GLT] supervisors as to [GLT's] right to enforce by immediate discharge [the rules prohibiting leaving without permission].” (Id.) The Arbitrator specifically referenced an incident that took place one week before Akers's termination, during which five employees refused to work mandatory overtime. (Id. at 5.) Several of these employees were terminated, but two were not “because it appeared they weren't aware . . . that leaving early might lead to their dismissal.” (Id.) He found that GLT “could have more effectively communicated its position the consequences [sic] of leaving early, ” and as a result, “some employees were unaware that going home without permission could cost their job.” (Id.) Due to this confusion, and “based on the facts in this case, and in this case only, the discharge penalty should be mitigated.” (Id. at 7.)

         In the section of his opinion discussing the case and his conclusions, the Arbitrator mentioned the LCA only once:

Akers was not reasonable in leaving early without permission. He was aware that [GLT] was upset and was ready to enforce its right to require overtime by discharge as it had the previous week. While it is not a basis for his termination, the very fact that leaving work early, albeit for other reasons, almost cost Akers his job ...

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