Royal Ice Cream Company v. Teamsters Local No. 336 , 506 F. App'x 455 ( 2012 )

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 12a1223n.06
No. 12-3271
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
FILED
ROYAL ICE CREAM CO.; MIDTOWN ) Nov 26, 2012
TRANSPORTATION CO., LLC, ) DEBORAH S. HUNT, Clerk
)
Plaintiffs-Appellants, )
) ON APPEAL FROM THE UNITED
v. ) STATES DISTRICT COURT FOR THE
) NORTHERN DISTRICT OF OHIO
TEAMSTERS LOCAL NO. 336, )
)
Defendant-Appellee. )
Before: SUTTON and STRANCH, Circuit Judges; STEEH, District Judge.*
SUTTON, Circuit Judge. Pierre’s Ice Cream and its affiliated companies fired two
employees when their Family and Medical Leave Act leave expired. The union filed grievances on
behalf of the employees, and the matter went to arbitration. After determining that the companies
improperly fired the employees, the arbitrator ordered them reinstated. The district court denied the
companies’ motion to vacate the award. We affirm.
I.
*
The Honorable George C. Steeh, United States District Judge for the Eastern District of
Michigan, sitting by designation.
No. 12-3271
Royal Ice Cream Co., et al. v. Teamsters Local No. 336
Royal Ice Cream makes, and Midtown Transportation distributes, Pierre’s Ice Cream. Before
this dispute arose, Wayne Arndt stacked products in freezers for Royal Ice Cream, and Ralph
Bonness drove a truck for Midtown Transportation.
Arndt and Bonness injured their backs in separate on-the-job incidents, and both of them took
FMLA-eligible leave in August 2009. Arndt’s physician permitted him to return to work with
restrictions on November 23, but certified four days later that he could not perform any work for the
time being. Bonness’s physician initially released him for light duty work in August, but Midtown
became concerned about Bonness’s ability to operate a motor vehicle safely. When the companies
informed both employees that their FMLA leave had expired, the employees requested additional
leaves of absence. At Midtown’s request, Bonness provided a letter from his physician specifying
his injuries and estimating he could return to work in six months. Arndt wanted to see a
neurosurgeon to evaluate his condition but never offered an explanation for taking more time off.
In the meantime, each employee submitted claims with the Ohio Bureau of Workers’ Compensation.
The companies denied the two employees’ requests for additional leave and fired them both.
The union filed grievances, arguing the companies discharged the employees without just cause in
violation of the collective bargaining agreement.
The CBA contains several relevant provisions. Article II says in relevant part:
F. LEAVE OF ABSENCE.
An unpaid leave of absence may be granted at the Company’s discretion upon the following
conditions:
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1. Maximum leave of six (6) months.
2. One (1) leave only every five (5) years.
3. Request must be made in writing three (3) months in advance.
4. No more than one (1) leave granted at one (1) time.
5. Leaves for other employment are prohibited.
6. The Company and the Union agree to comply with the provisions of the Family and
Medical Leave Act of 1993 (FMLA). The Company and the Union further agree that each
shall have the rights, obligations and options provided for under the FMLA when applicable
regardless of any contrary or conflicting contract provision.
G. WORKING WHILE ON LEAVE OF ABSENCE.
. . . Failure to return to work at the expiration of any leave of absence constitutes grounds for
termination. . . .
The CBA allows the companies to discharge employees “for just cause,”Art. V § A(3), disclaims the
companies’ “right to discharge any employee without good and just cause,” id. § C(1), and lists
examples of just cause, id. § C(3). In addition: the CBA counts the “first year of absence due to an
industrial accident . . . as though worked” for the purposes of accruing vacation time, Art. IV § A(6),
and it says that “[i]f an employee is unable to return to work for a period of 365 days, his
employment will be terminated,” Art. XV § B(3).
After the companies denied the grievances, the matter proceeded to binding arbitration
between the union and the companies, as called for under the CBA. See Art. XI. The arbitrator,
William J. Miller, Jr., held a hearing and issued a written opinion in favor of the union. According
to the arbitrator, most of Article II §§ F and G do not apply to leave that follows work-related
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injuries, and the companies’ incomplete knowledge of the employees’ injuries meant the companies
lacked good cause to fire the employees. Arb. Op. (R.12-3) at 39–42. The arbitrator ordered the
companies to reinstate Arndt and Bonness and to compensate them for their losses. Id. at 43.
The companies sued the union, seeking to vacate the arbitration award. The union
counterclaimed, seeking to enforce the award. The district court upheld the award.
II.
In challenging the district court’s decision, the companies face a steep climb. Review of an
arbitration award is “one of the narrowest standards of judicial review in all of American
jurisprudence.” Uhl v. Komatsu Forklift Co., 512 F.3d 294, 305 (6th Cir. 2008) (internal quotation
marks omitted). Only in three types of “procedural aberration” will we upset an award: if the
arbitrator “act[s] outside his authority by resolving a dispute not committed to arbitration”; commits
fraud, maintains a conflict of interest or “otherwise act[s] dishonestly”; or does not “arguably
constru[e] or apply[] the contract” in settling the dispute. Mich. Family Res., Inc. v. SEIU Local
517M, 475 F.3d 746, 753 (6th Cir. 2007) (en banc) (internal quotation marks omitted); see Major
League Baseball Players Ass’n v. Garvey, 532 U.S. 504, 509 (2001).
The companies do not allege that the arbitrator resolved a dispute not subject to arbitration.
Nor do they allege that the arbitrator acted fraudulently, with a conflict of interest or dishonestly.
They instead argue that the arbitrator “did not even arguably construe” the CBA in reaching his
decision and thus “[e]xceeded” his arbitral authority. Br. at 18; Equitable Res., Inc. v. United Steel,
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Local 8-512, 621 F.3d 538, 546–47 (6th Cir. 2010). That is not an easy argument to win. Yes, an
arbitral award may be “so untethered to the terms of the agreement” as to “cast doubt on whether the
arbitrator indeed was engaged in interpretation.” Mich. Family Res., 475 F.3d at 753 (internal
quotation marks omitted). But that will be the most “rare” and “most egregious” of cases. Id. So
long as “the arbitrator appeared to be engaged in interpretation” and did not “dispense his own brand
of industrial justice,” he has arguably construed the CBA—and that suffices to uphold the award,
whether we agree with the arbitrator’s ruling or not. Id. at 751, 753 (internal quotation marks
omitted).
The arbitrator’s 43-page opinion satisfies this modest standard. To start, the arbitrator
construed the key section of the CBA—Article V—which discusses discharge for “just cause,” see,
e.g., Arb. Op. at 26, and which “requires a full and fair investigation” of the employees’ records,
including consideration of mitigating factors. Id. at 29. The companies, the arbitrator reasoned, did
not investigate Arndt’s or Bonness’s injuries or discuss the injuries with them, and they did not
consider the employees’ otherwise strong records: 30 and 13 years of productive service for the
companies. Id. at 29–30. Nor, he added, did the companies warn Arndt or Bonness that the
companies were considering firing them, thus depriving the employees of an “opportunity to
advocate for their jobs.” Id. at 29. Nor, before firing the employees, did the companies obtain a final
word about the employees’ conditions from their physicians and the Bureau. Id. at 39–42. Taking
all of these considerations together, the arbitrator concluded, the companies lacked good cause to
fire Arndt and Bonness without knowing whether and when they might be “medically able to work,”
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id. at 39, and without giving them a chance to oppose the firing. See MGM Grand Detroit, LLC v.
Int’l Union, No. 11-1915, 2012 U.S. App. LEXIS 17800, at *8–9 (6th Cir. Aug. 20, 2012) (“The
arbitrator arguably interpreted the collective bargaining agreement when he held that the term ‘just
cause’ as used in the agreement encompassed both substantive and procedural components.”); see
also Coolidge v. Riverdale Local Sch. Dist., 797 N.E.2d 61, 70–71 (Ohio 2003); Bickers v. W. & S.
Life Ins. Co., 879 N.E.2d 201, 205 (Ohio 2007) (clarifying Coolidge and stating that statutory
provision requiring just cause for discharge of teachers barred discharge of teachers pursuing
workers’ compensation claims).
The arbitrator likewise responded to the companies’ arguments—above all their argument
that they were entitled to fire Arndt and Bonness under Article II § F, which gives the companies
discretion to grant “unpaid leave[s] of absence,” and under Article II § G, which notes that “[f]ailure
to return to work at the expiration of any leave of absence constitutes grounds for termination.”
These sections do not apply to work-related injuries, the arbitrator reasoned, because Article II § F(3)
mentions that a “[r]equest” for leave “must be made in writing three (3) months in advance,” a
requirement that makes little sense if applied to “spontaneous . . . work related accidents.” Arb. Op.
at 27. The arbitrator also listed other sections of the CBA that bolstered his interpretation. Article
IV § A(6), for example, discusses vacation accrual for employees suffering a “year of absence due
to an industrial accident,” and Article XV § B(3) states that “[i]f an employee is unable to return to
work for a period of 365 days, his employment will be terminated.” See Arb. Op. at 27–28. These
provisions imply, or so the arbitrator could plausibly think, that employees with work-related injuries
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may stay on unpaid leave for at least one year, suggesting that the Article II § F(1) six-month-leave
limitation does not apply to such injuries.
Faced with these ambiguities in the CBA and the oddities with the companies’ interpretation,
the arbitrator also considered testimony regarding the companies’ past conduct. That testimony
indicated that the CBA permits an employee with a work-related injury “to be off at least one year
for a Worker’s Comp[ensation] injury.” See Arb. Hearing (R.12-2) at 188 (testimony of Michael
Klingbeil, Union president); Arb. Op. at 28. The testimony also indicated that, before the time
period affected by these requests, the companies had not required an employee to request an Article
II § F leave for a work-related injury in the prior 33 years. Arb. Hearing at 193–94. The arbitrator
accordingly interpreted Article II § F to apply to “discretionary leave” but not to leave “for a work
related injury.” Arb. Op. at 42. On that view, the companies had no automatic authority to fire
Arndt and Bonness but had to identify “good cause” for doing so.
This reasoning “arguably constru[es]” the CBA. Mich. Family Res., 475 F.3d at 753. It
construes the “good cause” standard in Article V, and it reconciles Article II § F with conflicting
sections. That does not make the arbitrator’s interpretation right, and it does not mean we would
have construed the CBA in the same way. But that does not matter. Whether we agree with the
arbitrator’s reasoning, or disagree with it, is beside the point. “Otherwise, every error would be
grounds for judicial intervention, which is inconsistent with the Supreme Court’s insistence that we
must tolerate ‘serious,’ ‘improvident’ and ‘silly’ legal and factual arbitral errors.” Mich. Family
Res., 475 F.3d at 756. What matters is that it is not “implausible . . . that the arbitrator was
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construing the contract.” Id. at 753. His conclusions reflect a “good-faith attempt to interpret” the
CBA and as a result survive our “exceedingly deferential” review. Titan Tire Corp. v. United
Steelworkers of Am., Local 890L, 656 F.3d 368, 374–75 (6th Cir. 2011) (internal quotation marks
omitted).
The companies complain that the arbitrator overlooked Art. II § F(6), which reserves the
companies’ and employees’ rights under the FMLA. But it is by no means clear what that provision
means. In particular, it does not directly answer the question whether other provisions of the CBA
permit the companies to fire someone merely for failing to return to work at the end of FMLA leave.
The companies also complain that the arbitrator overlooked Art. II § G, which provides that
“[f]ailure to return to work at the expiration of any leave of absence constitutes grounds for
termination.” But the arbitrator had no need to dwell on this provision once he found that the
companies impermissibly denied leave to Arndt and Bonness. Of course, all of this goes only to the
merits of, not the process underlying, the arbitration award. Neither of these objections shows that
the arbitrator failed to ground his award in an interpretation of the CBA.
III.
For these reasons, we affirm.
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