Arbitration: Tenth Circuit Backs Arbitrator's Award Reinstating an Accused Sexual Harrasser (Web)

In LB&B Associates Inc. v. International Brotherhood of Electrical Workers, Local No. 113, No. 05-1110, 2006 WL 2474878 (10th Cir. Aug. 29, 2006)(available at http://www.ck10.uscourts.gov/opinions/05/05-1110.pdf), the Tenth U.S. Circuit Court of Appeals upheld an arbitrator's interpretation of a collective bargaining agreement, reinstating an employee with back pay. The Court held that an arbitrator's award is valid as long as it "draws its essence from the collective bargaining agreement." Local No. 7 United Food & Commercial Workers Int'l Union v. King Soopers Inc., 222 F.3d 1223, 1227 (10th Cir. 2000)(quoting United Steelworkers of Am. v. Enter. Wheel & Car Corp., 363 U S. 593, 597 (1960)).

In February 2001, Donald Dukart was terminated by the plaintiff-appellant LB&B for sexually harassing a female employee. Dukart was a member of the defendant-appellee International Brotherhood of Electrical Workers, Local No. 113.

In late 1999, LB&B and Local 113 had entered into a collective bargaining agreement. The CBA contained a provision that stated that the right to "discharge employees for just cause … is vested exclusively in [LB&B]." It also contained a provision specifically mentioning sexual harassment, which stated that "[a]ny employee engaging in sexual harassment … may be subject to immediate discharge."

The CBA also provided that any grievance could be submitted to arbitration. An arbitrator had the authority to "interpret and apply" the CBA but was not permitted to "add, change, or modify" any of its terms.

At Local 113's request, Dukart's discharge was submitted to arbitration. After a hearing, the arbitrator found that Dukart had engaged in sexually harassing conduct, but that termination had not been warranted.

The arbitrator reasoned that: 1) LB&B's policies were not clear as to the "scope of discipline for misconduct," 2) to the extent that these policies conflicted with the "just cause" for termination standard, the CBA took precedence, and 3) "just cause" for termination had not existed in this case due to Dukart's potential for rehabilitation and positive work record.

The arbitrator ordered that Dukart be reinstated with back pay and that LB&B pay for the arbitration, as dictated by the CBA's provision that the losing party bear these costs.

LB&B filed a complaint in the district court to vacate the arbitrator's award. Both parties agreed on the case’s material facts and filed cross-motions for summary judgment. The district court granted summary judgment for Local 113, which the employer appealed.

In reviewing the district court's summary judgment ruling, the circuit court noted that the review standard for an arbitrator's award is "among the narrowest known to the law." Local No. 7, 222 F.3d at 1226. An award is valid unless it is "contrary to the express language of the contract or is so unfounded in reason and fact … as to manifest an infidelity to the obligation of the arbitrator. . . ." Local No. 7, 222 F.3d at 1227 (quoting Mistletoe Express Serv. v. Motor Expressmen's Union, 566 F.2d 692, 694 (10th Cir. 1977)).

LB&B argued that the CBA’s "just cause" and sexual harassment provisions should be interpreted to mean that any sexual harassment is just cause for termination. While the court recognized that this was one way in which the CBA could be interpreted, it found that the arbitrator's CBA interpretation also is plausible. As long as an arbitrator at least "arguably constru[ed]" a CBA, his or her decision must stand. The vourt said that it was irrelevant whether it was the “best” possible interpretation. The arbitrator had interpreted the CBA to provide that an employee engaging in sexual harassment was vulnerable to being discharged, but that the ultimate act of discharge still needed to satisfy the criterion for "just cause."

The Tenth Circuit emphasized that the CBA only stated that an employee "may" be discharged for committing various offenses. It contrasted the CBA in the case at hand with cases in which the CBA had contained provisions definitively providing for immediate discharge upon certain enumerated offenses.

For example, the Court cited Warrior & Gulf Navigation Co. v. United Steelworkers of America, 996 F.2d 279 (11th Cir. 1993). In Warrior, the CBA stated that an employee who failed two drugs tests was "subject to immediate discharge." Id. at 280. The arbitrator held that the fact that the employee in question had twice failed a drug test was not just cause for termination. The court overturned the arbitrator's award on the basis of the CBA having explicitly provided for immediate discharge in the case of a second positive drug test.

The Tenth Circuit, in a 2-1 majority opinion by Senior Circuit Judge David M. Ebel, concluded that when a CBA contains a just cause termination provision but does not explicitly provide that an offense constitutes a just cause, the arbitrator's interpretation should be affirmed. It based this conclusion on: 1) the "profound deference" that is owed to an arbitrator's decision, and 2) the fact that the parties bargained to have their dispute decided by an arbitrator rather than the courts.

The Tenth Circuit panel affirmed the district court’s decision.

Circuit Judge Timothy M. Tymkovich dissented, arguing that the arbitrator's award was contrary to the CBA’s express language. Tymkovich reasoned that sexual harassment was grounds for discharge, and that the CBA specifically vested LB&B with the discretion to terminate for this behavior. Moreover, he noted that, in his opinion, the use of the words "may be subject to" rather than the word "cause" did not create any interpretive difficulties: “The agreement is clear,” wrote Tymkovich, “an employee may be fired for sexual harassment. To find that Dukart engaged in sexual harassment yet could not be terminated at LB&B’s discretion rewrites the manifest intent of the CBA to allow LB&B the power to terminate for harassment.”


--Kimberly Finneran, CPR Intern