UAW v. MI Mech Serv Inc ( 2007 )

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 07a0555n.06
Filed: August 8, 2007
No. 06-2316
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
INTERNATIONAL UNION, )
UNITED AUTOMOBILE, )
AEROSPACE AND )
AGRICULTURAL IMPLEMENT )
WORKERS OF AMERICA, Local ) ON APPEAL FROM THE
174, ) UNITED STATES DISTRICT
) COURT FOR THE EASTERN
Plaintiff-Appellee, ) DISTRICT OF MICHIGAN
)
v. )
) OPINION
MICHIGAN MECHANICAL )
SERVICES, INCORPORATED, )
)
Defendant-Appellant. )
_______________________________________)
Before: KEITH, MOORE, and COLE, Circuit Judges.
KAREN NELSON MOORE, Circuit Judge. Defendant-Appellant Michigan Mechanical
Services, Inc. (“MMSI”) appeals from the district court’s order granting summary judgment to
Plaintiff-Appellee International Union, United Automobile, Aerospace and Agricultural Implement
Workers of America, Local 174 (“the Union”). After receiving information that employees were
using drugs and alcohol while on the job, MMSI ordered five employees, including Richard Hilton
(“Hilton”), to take a drug test. Hilton refused, and MMSI fired him. Hilton filed a grievance, and
an arbitrator determined that MMSI did not have sufficient justification under the collective
bargaining agreement and other relevant contractual provisions to fire Hilton for refusing to take a
drug test. The arbitrator concluded that Hilton should be reinstated with back pay, minus a three-day
disciplinary suspension. MMSI did not reinstate Hilton, and the Union filed suit in the district court
to enforce the arbitrator’s award. The district court granted the Union’s motion for summary
judgment. Because the arbitrator’s decision shows that the arbitrator was at least arguably construing
the relevant contractual provisions, we AFFIRM the judgment of the district court.
I. BACKGROUND
On behalf of its members, the Union negotiated a collective bargaining agreement with
MMSI that took effect April 5, 2003. The Union and MMSI separately negotiated “Personal
Conduct Rules,” which the collective bargaining agreement incorporated by reference. MMSI also
maintained a “Substance Abuse Policy,” a “Disciplinary Action Schedule,” and “General Safety
Rules and Procedures.”1
The Personal Conduct Rules first set forth MMSI’s disciplinary procedures. “The Company
will investigate each violation and decide what discipline is appropriate based on the severity of the
offense, the employee’s past record, and the penalties imposed in similar situations.” Joint Appendix
(“J.A.”) at 138 (Personal Conduct Rules at 1). MMSI follows a progressive discipline policy.
“Progressive discipline generally starts with (1) an oral warning, followed by (2) a written warning,
(3) a final written warning, (4) a 3-day suspension, and (5) discharge.” Id. The Personal Conduct
Rules further state, however, that “[t]he Company will depart from these progressive discipline steps
when it determines that it is appropriate under the circumstances.” Id.
1
It is not clear from the materials in the Joint Appendix whether or how these MMSI policies
are incorporated into the collective bargaining agreement, but neither party argues that they do not
apply to MMSI employees.
2
The Personal Conduct Rules also list a number of “immediate discharge” rules, violation of
which “will usually result in immediate discharge.” Id. The seventh of these immediate discharge
rules is “[i]nsubordination or refusal to follow a direct order from a supervisor, including refusal to
take a required drug test.” J.A. at 139 (Personal Conduct Rules at 2). Notably, the Personal Conduct
Rules mention the existence of the Substance Abuse Policy and the General Safety Rules and
Procedures and then state that “[i]f these rules in any way conflict with these other policies, these
rules govern.” J.A. at 138 (Personal Conduct Rules at 1).
The Substance Abuse Policy, Disciplinary Action Schedule, and General Safety Rules and
Procedures contain related provisions. The Substance Abuse Policy states, in relevant part:
Refusal - All employees who refuse to take a substance screening will be subject to
disciplinary action:
1st refusal - 3 days off
2nd refusal - Voluntary termination.
Once an employee has had a confirmed positive substance screening, they may not
refuse to take a substance screening at a future date. Refusal will be considered a
voluntary quit.
J.A. at 144 (Substance Abuse Policy). The Disciplinary Action Schedule lists two possible penalties
for “Insubordination, refusal to do as instructed”—discharge or a written warning—“[d]epending
upon the severity of the offense and other facts in the case.” J.A. at 135-36 (Disciplinary Action
Schedule). The Disciplinary Action Schedule also lists discharge as the penalty for “Improper use,
possession or selling of alcohol or a controlled Substance on company property; Reporting to or
working under the influence of either,” id.at 135, as does the General Safety Rules and Procedures,
although neither lists a penalty specifically for a refusal to take a drug test.
In November 2004, Scott Smith (“Smith”), president of MMSI, received an anonymous
phone call reporting that MMSI employees were using drugs and alcohol on the job. Soon thereafter,
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on December 8, 2004, an unnamed MMSI employee told Smith that he had witnessed five MMSI
employees, including Richard Hilton, smoking marijuana on the job, both while those employees
were working on location at customer facilities and while working at MMSI facilities. Smith
decided to have the five employees tested for drugs.
On Friday, December 10, 2004, Smith called four of the five employees to the MMSI
conference room; the fifth was absent from work that day. Smith ordered them to take a drug test.
Two of the four employees present submitted to a drug test at that time, and a third, whose shift had
just ended, took the test later that day after first leaving to pick up his son from school. The fifth
employee, who was absent from work on December 10, took the test on Monday, December 13.
Hilton, however, refused to take the test and left the MMSI facility.
Smith testified that he intended to fire all five employees, but decided first to speak with them
after receiving the results of the drug tests. One employee denied using drugs and tested negative,
and Smith reinstated him. Three other employees admitted using drugs, although at least some of
their drug tests were also negative.2 Because “all showed remorse and promised they would refrain
from future violations,” J.A. at 13 (Arbitration Decision at 2), Smith reinstated them as well, albeit
under the conditions that they serve a probationary period, receive no back pay, subject themselves
to random drug tests, and not retaliate against the unnamed employee who reported them to Smith.
Hilton, however, maintained that he had been falsely accused and that he had a right under the
collective bargaining agreement to refuse the test. Smith fired Hilton, assertedly because Hilton
2
It is not clear from the record which employees, if any, tested positive for drugs. The
arbitrator’s decision states only that “some of the tests were negative,” J.A. at 13 (Arbitration
Decision at 2), and nothing in the record explicitly identifies any particular employees as having
tested positive.
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refused to take the drug test, was defiant, was not remorseful, and was not as good an employee as
the other four employees implicated.
Hilton filed a grievance, arguing that the MMSI Substance Abuse Policy called for only a
three-day suspension for refusing to take a drug test, not termination of employment. Pursuant to
the collective bargaining agreement between MMSI and the Union, Hilton’s grievance was submitted
for arbitration. On August 10, 2005, following a hearing, the arbitrator determined that MMSI did
not have sufficient evidence to conclude that Hilton used marijuana on the job, a determination that
MMSI does not contest on appeal. The arbitrator further determined that MMSI did not have
sufficient justification under the Personal Conduct Rules, Substance Abuse Policy, Disciplinary
Action Schedule, and General Safety Rules and Procedures to fire Hilton for refusing to take a drug
test. The arbitrator concluded that Hilton should be reinstated with back pay, minus a three-day
disciplinary suspension.
On October 21, 2005, the Union filed a complaint in the federal district court, alleging that
MMSI had failed to reinstate Hilton and seeking an order from the district court requiring MMSI to
abide by the arbitrator’s decision. The Union filed a motion for summary judgment, MMSI filed a
response, the Union filed a reply, and MMSI filed a surreply. On September 5, 2006, the district
court entered an order granting the Union’s motion for summary judgment. MMSI timely appealed.
II. ANALYSIS
A. Standard of Review
We review de novo a district court’s order granting summary judgment in an arbitrated labor
dispute. UAW v. Dana Corp., 278 F.3d 548, 554 (6th Cir. 2002). Summary judgment is proper if
the evidence, taken in the light most favorable to the nonmoving party, shows that there are no
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genuine issues of material fact and that the moving party is entitled to a judgment as a matter of law.
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); FED . R. CIV . P. 56(c).
B. Arguably Construing the Collective Bargaining Agreement
MMSI argues that the arbitrator misinterpreted the collective bargaining agreement, Personal
Conduct Rules, Substance Abuse Policy, Disciplinary Action Schedule, and General Safety Rules
and Procedures in concluding that MMSI did not have sufficient justification to fire Hilton for
refusing to take a drug test. As we have recently clarified, the scope of federal-court review of an
arbitration decision consists of a very limited set of inquiries:
Did the arbitrator act “outside his authority” by resolving a dispute not committed to
arbitration? Did the arbitrator commit fraud, have a conflict of interest or otherwise
act dishonestly in issuing the award? And in resolving any legal or factual disputes
in the case, was the arbitrator “arguably construing or applying the contract”? So
long as the arbitrator does not offend any of these requirements, the request for
judicial intervention should be resisted even though the arbitrator made “serious,”
“improvident” or “silly” errors in resolving the merits of the dispute.
Mich. Family Res., Inc. v. Serv. Employees Int’l Union Local 517M, 475 F.3d 746, 753 (6th Cir.) (en
banc), cert. denied, --- U.S. ---, 127 S. Ct. 2996 (2007). In this case, the first two inquiries are not
at issue. MMSI argues only that the arbitrator misinterpreted the relevant contractual provisions, a
question of law in the context of an arbitrated labor dispute. See MidMichigan Reg’l Med. Ctr.-
Clare v. Prof’l Employees Div. of Local 79, Serv. Employee Int’l Union, 183 F.3d 497, 501 (6th Cir.
1999).
As we explained in Michigan Family Resources, the arbitrator’s award must be upheld so
long as the arbitrator was “arguably construing” the relevant contractual provisions, even if we
believe that the arbitrator’s interpretation was in error. Mich. Family Res., 475 F.3d at 753; see also
Major League Baseball Players Ass’n v. Garvey, 532 U.S. 504, 509 (2001) (“[I]f an arbitrator is
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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.”
(internal quotation marks omitted)). “[I]n most cases, it will suffice to enforce the award that the
arbitrator appeared to be engaged in interpretation, and if there is doubt we will presume that the
arbitrator was doing just that.” Mich. Family Res., 475 F.3d at 753. However, in rare cases, “an
arbitration decision could be so ‘ignor[ant]’ of the contract’s ‘plain language’ as to make implausible
any contention that the arbitrator was construing the contract.” Id. (quoting United Paperworkers
Int’l Union v. Misco, Inc., 484 U.S. 29, 38 (1987)) (alteration in original).
Like the arbitration decision at issue in Michigan Family Resources, the arbitration decision
at issue here “has all the hallmarks of interpretation.” Id. at 754. The arbitrator first discussed the
provisions of the Disciplinary Action Schedule and the General Safety Rules and Procedures related
to possession, use, or sale of drugs, noting that they did not address refusals to take drug tests. Next,
the arbitrator discussed the rule prohibiting insubordination found in the Disciplinary Action
Schedule, stating that the penalty depended on the severity of the offense and reasoning that the
severity of Hilton’s offense did not justify discharge. Finally, the arbitrator discussed the Personal
Conduct Rules and Substance Abuse Policy. He noted that “[t]he Personal Conduct Rules state that
violation of the insubordination rule will generally result in immediate discharge. That suggests that
exceptions to the rule are possible.” J.A. at 18 (Arbitration Decision at 7). Given the possibility of
exceptions, the arbitrator reasoned that discharge was too severe a penalty in light of Hilton’s
reliance on the Substance Abuse Policy’s call for a three-day suspension and the reinstatement of
three employees “who admitted the more serious offense of substance abuse while at work.” J.A.
at 18-19 (Arbitration Decision at 7-8). Like the arbitrator whose decision was at issue in Michigan
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Family Resources, the arbitrator whose decision is at issue here “refer[red] to, quote[d] from and
analyze[d] the pertinent provisions of [the collective bargaining agreement, Personal Conduct Rules,
Substance Abuse Policy, Disciplinary Action Schedule, and General Safety Rules and Procedures],
and at no point d[id] he say anything indicating that he was doing anything other than trying to reach
a good-faith interpretation of [the relevant contractual provisions].” Mich. Family Res., 475 F.3d
at 754.
Moreover, it does not appear that the language of the relevant contractual provisions so
clearly dictated a different outcome “as to make implausible any contention that the arbitrator was
construing the contract.” Id. at 753. As the arbitrator noted, the Personal Conduct Rules state that
a violation of an immediate discharge rule will “usually” and “generally” result in immediate
discharge, not always. J.A. at 138 (Personal Conduct Rules at 1). This language, together with the
provisions of the Substance Abuse Policy and Disciplinary Action Schedule calling for multiple
possible penalties and the less severe penalties imposed upon three other employees for arguably
more serious conduct, support the arbitrator’s conclusion that discharge was not mandatory and may
not have been justified in Hilton’s situation.
MMSI argues that the Personal Conduct Rules do provide for exceptions, but that those
exceptions are in MMSI’s sole discretion because the Personal Conduct Rules state that “[t]he
Company will depart from these progressive discipline steps when it determines that it is appropriate
under the circumstances.” J.A. at 138 (Personal Conduct Rules at 1) (emphasis added). However,
the Personal Conduct Rules also arguably limited MMSI’s discretion, stating that “[t]he Company
will investigate each violation and decide what discipline is appropriate based on the severity of the
offense, the employee’s past record, and the penalties imposed in similar situations.” J.A. at 138
8
(Personal Conduct Rules at 1); cf. Bruce Hardwood Floors v. S. Council of Indus. Workers, 8 F.3d
1104, 1108 (6th Cir. 1993) (concluding, before our decision en banc in Michigan Family Resources,
that two clauses that “provide[d] for potential alternative remedies” and another clause that required
the employer to take into account mitigating or aggravating circumstances “created sufficient basis
for the arbitrator to conclude that he had the authority to review the penalty imposed”). The
arbitrator here explicitly took into account the severity of the offense and the penalties imposed in
the arguably similar situations of the three other employees, exactly what the Personal Conduct Rules
required MMSI to take into account.
Furthermore, even if we were to accept MMSI’s argument that, under the Personal Conduct
Rules, exceptions are in MMSI’s sole discretion and cannot be ordered by the arbitrator, the relevant
contractual provisions still do not so clearly dictate a different outcome as to call into question the
arbitrator’s decision. By maintaining the Substance Abuse Policy’s provision calling for a three-day
suspension for an employee’s first refusal to take a drug test, MMSI could be said to have exercised
its discretion and to have made a blanket exception to its immediate discharge rule for refusing to
take a drug test. Although the Personal Conduct Rules govern if they conflict with the Substance
Abuse Policy, there is arguably no conflict—the Personal Conduct Rules allow for exceptions, and
the Substance Abuse Policy could be read to set forth one set of exceptions. Of course, we need not
decide whether this possible interpretation would be correct. Given the possibility of such an
interpretation, it can hardly be said that the relevant language is so clear that it is “implausible . . .
that the arbitrator was construing the contract,” Mich. Family Res., 475 F.3d at 753, in concluding
that discharge was not justified in part because Hilton relied on the Substance Abuse Policy.
Because the arbitrator was at least arguably construing the relevant provisions of the collective
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bargaining agreement, Personal Conduct Rules, Substance Abuse Policy, Disciplinary Action
Schedule, and General Safety Rules and Procedures in reaching his decision, we must uphold the
arbitrator’s award.
III. CONCLUSION
Because the arbitrator’s decision shows that the arbitrator was at least arguably construing
the relevant contractual provisions, we AFFIRM the judgment of the district court.
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