Is an Indefinite Suspension for Just Cause? CASE STUDY 12-1 Background On March 30, 2006, David Gates was arrested and charged with felony Conspiracy to Distribute Schedule II Narcotics and Felony Possession of Schedule VI Marijuana. In a letter dated March 31, 2006 Mr. Jamie Calvin, plant manager, wrote to Mr. Gates:- This letter is to inform you that you are suspended until further notice from employment effective this date as a result of your arrest for 1) Conspiracy to Distribute Schedule II Drugs and; 2) Possession of Schedule VI Marijuana-both felonies in the State of Tennessee. Your continued employment status will be determined based upon the disposition of these charges. On April 3, 2006, Mr. Eddie Albert, vice president, Local 345, filed the following Grievance: Step 1. Statement of Grievance: Mr. Gates was suspended on March 31, 2006. The Union asks that Mr. Gates be reinstated and be made whole for all lost wages and benefits. The Grievance was denied and the Union appealed. In a letter dated June 6, 2006, Mr. Gary Folkes, manager employee relations, provided the Company's response: The Company has an obligation to provide a safe work environment for all employees. It is the Company's position that the grievant presents significant risk to both himself and his fellow employees and, therefore, should not be allowed to work until the felony charges against him are resolved by a court of law. Grievance denied. In a letter dated June, 19, 2006, Mr. Joe Blackwater, president, Local 345, responded to Mr. Folkes. He wrote: The Union rejects the Company's answer. Appeal to arbitration. Issue Did the Company violate the Agreement when it indefinitely suspended the Grievant? If so, what is the remedy? Relevant Provisions of the Agreement Article 2-Management Rights The Union agrees that the Company is vested exclusively with the management of the business, including the direction of the working force; the right to plan, direct, and control all plant operations; the right to relieve employees from duty because of lack of work or for any other legitimate reason; the right to establish, change, or introduce new or improved production methods or facilities; and, except as expressly limited by the provisions of this Agreement, the right to hire, promote, suspend, demote, discipline, or discharge employees for just cause. All authority normally exercised by management is and shall remain the exclusive prerogative of the Company, except where such authority is expressly limited by the terms of this Agreement. Article 16-Rules of Conduct For the purpose of plant discipline, the Company shall have the right to make and, after publication thereof, to enforce reasonable factory rules, not otherwise inconsistent with the terms of this Agreement. The purpose of disciplinary action is not to punish, but to discourage repetition of misbehavior by the offender. If the Company should post a new rule that the Union should consider unreasonable, it shall be subject to the grievance procedure. The reasonableness of the following factory rules are agreed to by the parties and shall be subject to the following outlined disciplinary action. NOTE: The Company does not waive its right to make rules during the term of the labor agreement. CATEGORY C: This covers the disciplinary action for offenses listed below: First offense-Discharge ... (10) Conviction of a felony Positions of the Parties The Company: The Company stated that the Union believes the contract somehow obligates the Company to keep Gates in the plant. However, the Company believes that the Contract does not address the issue. An employee convicted of a felony is to be terminated pursuant to Category C (10). Gates was not terminated by the Company; rather he was suspended. The Contract is silent; therefore, the Management 554 Rights Clause of the Contract controls. The Management Rights Clause reads: The Union agrees that the Company is vested exclusively with the management of the business, including the direction of the working force; the right to plan, direct, and control all plant operations; the right to relieve employees from duty because of lack of work or for any other legitimate reason; the right to establish, change, or introduce new or improved production methods or facilities; and, except as expressly limited by the provisions of this Agreement, the right to hire, promote, suspend, demote, discipline, or discharge employees for just cause. Therefore, so long as the suspension was for ‘‘just cause,'' the Grievance must be denied and the suspension must stand. The relevant inquiry is what constitutes ‘‘just cause'' within the parties' relationship and within the context of arbitration legal authority in general. The Company stated that its arbitration history between the parties is long. Many cases that have defined just cause have been arbitrated. Just cause within the parties context is best and most recently defined in the recent grievance over the termination of David DeRoot. In the analysis of just cause, the Arbitrator cited the opinion of Arbitrator McCoy in Stockham Pipe Fittings Co. 1 LA 160 (1945). The opinion defines just cause analysis in the penalty context: The only circumstances under which a penalty imposed by management can be rightfully set aside by an arbitrator are those where discrimination, unfairness, or capricious and arbitrary actions are proved-in other words, where there has been an abuse of discretion. The Arbitrator defined the responsibility of the arbitrator when making a just cause determination: Admittedly, since management is the one saying it had just cause here, it is necessary for an arbitrator to make an objective review of the evidence to make certain that management did not act arbitrarily or capriciously. As to the necessary standard of proof, the Company argued that it was not judging the innocence or guilt of Gates. The Company is not charged with the responsibility of making any determination of the guilt or innocence of the accused felon. The issue in arbitration is not whether the accused felon committed the act. The issue is not whether the grievant was arrested and accused. As to that point, there is no dispute. Gates was arrested and accused of felonies. The proper issue is whether the Company may suspend an accused felon from employment pending the outcome of the felony criminal charges. The Company claimed that the only issue for determination is whether the Company had just cause to suspend the employee. The employee was not charged with a misdemeanor. The employee was charged with a felony, a very serious felony, which involved a very significant amount of drugs. Other employees have reported Gates selling drugs to other persons in the plant, but are not willing to testify in an arbitration hearing. Gates was caught and arrested for possession of about 60 lbs. of marijuana. These arrests generally do not happen by accident. Therefore, the Company has numerous compelling reasons for suspending Gates. The facts of the matter certainly appear as though Gates is a drug dealer. The Company has a legitimate interest in keeping drugs out of its plant. There are obvious concerns in the Company about possible drug usage and sales in the plant. It is certainly not arbitrary or capricious for the Company to keep a suspected and charged drug dealer out of its plant. If Gates is indeed a drug dealer, as it certainly appears he is, then employee safety is another legitimate concern. An employee under the influence of drugs could seriously injure himself, but more importantly, another employee in the plant. An employee under the influence who works in production, drives fork trucks, and operates heavy machinery could cause injury or even death. It is not arbitrary or capricious to keep such a suspected and charged person out of the plant facility pending the resolution of the charges. The Company did not terminate Gates upon the charge; the Company suspended him. The suspension is absolutely a legitimate penalty. The Company stated that the Union argued that an employee Jackie Johnson was allowed to stay in the plant in 1981 or so after a felony charge. The irrelevance of a matter 25 years old notwithstanding, the evidence shows beyond a shadow of a doubt that Johnson was allowed to stay in the plant on a last chance agreement. CHAPTER 12: EMPLOYEE DISCIPLINE 555 Rather than terminate or suspend the employee, the Company allowed him to stay in the plant on a last chance agreement. The Union was a party to that agreement and its non-precedent effect is noted on the face of the documents. Johnson cannot be considered as a precedent, and it is highly suspect for the Union to bring the matter to the attention of an arbitrator and attempt to use as a precedent. Union President Blackwater testified that there have been other persons who have been allowed to stay in the plant (i.e. not suspended) with a pending felony. However, Blackwater was not able to name any persons who were allowed to stay without a last chance agreement. The Company stated that the Union seemed to argue that the Company had placed Johnson on a Last Chance Agreement; therefore, it should be bound to place Gates on a Last Chance Agreement. Such an obvious misunderstanding of the concept of ‘‘Last Chance'' is stunning. In 1981 that, in order to save the job of Johnson, the Union had no arguments with regard to the Company's right to terminate. The Company forfeited its right to terminate Johnson and the Union agreed. Now, 25 years later, the Union is asking the arbitrator to rule that not only did the Company forfeit its right to terminate Johnson in 1981, but it forfeited its right to discipline anyone in regard to a felony, (i.e., it obligated itself to offer Last Chance Agreements to any employees charged with a felony into the future). That assertion is obviously ridiculous. The Last Chance Agreement for Johnson was a modification to the Master Collective Bargaining Agreement and an application to a specific employee (Johnson). The Last Chance Agreement has no effect as precedent, does not change the relation between the parties (except as to the affected employee), and cannot be considered as precedent in an arbitration context. The Last Chance Agreement is a signed written modification of the relationship between the parties; it modifies the Collective Bargaining Agreement as to the particular employee or employees addressed in the Last Chance Agreement. To allow Last Chance Agreements to serve as a precedent would be to terminate the use of Last Chance Agreements and would thereby defeat the beneficial purpose served through the use of Last Chance Agreements. The Company stated that the evidence collected by the police showed Joe Stone, a friend of Gates from his hometown, called Gates and told Gates to pick up a package at the house of Gates's girlfriend Teresa Clem. Gates told the police that Stone was having the package delivered to the house of Clem because Stone had no fixed address; Stone was ‘‘somewhat of a drifter.'' Gates told police that he and Stone were friends from years ago in Kentucky. Gates said he did not know what was in the package when he picked it up at his girlfriend's house. Gates testified that he had introduced Stone to his girlfriend a couple of years ago. The Company asked: ‘‘Why would Stone have a package delivered 2 ½ hours drive away? Why would Stone not have the package delivered to Gates's house if he expected Gates to pick the package up for him?'' The story is obviously disingenuous on its face. The Company concluded: The Company suspended David Gates because Gates was charged with a felony. Gates was not charged with just any felony. He was charged with a drug-related felony. The Company has received numerous complaints about drug usage and sales in the plant. The circumstances of Gates's case appear beyond much doubt that he is guilty, but that is not for the Company to determine, nor has the Company made a determination on his guilt or innocence. The Company's only concern is keeping an accused drug dealer out of its plant. The Company's only charges do not contemplate a small amount of marijuana for his own personal use. Gates's charges involve approximately sixty (60) pounds of marijuana. The amount alone makes it obvious that Gates is apparently a drug dealer and had designs on selling a great deal of marijuana. It would be irresponsible of the Company to allow someone such as the accused in its plant until the conclusion of the criminal issues,-just as it would be irresponsible for the Company to allow an accused murderer or rapist to work pending the outcome of the charges. The newspaper article exhibit references a street value of $90,000 for the marijuana retrieved. The Company has a legitimate business reason due to safety and preventing illegal activity in its plant to keep Gates out of the plant on suspension until resolution of the charges. For all of the foregoing reasons this grievance must be denied. 556 PART 3: ADMINISTERING THE LABOR AGREEMENT The Union: The Union argued that Gates had already been disciplined for a long period of time (nine months by the date of the arbitration hearing) and Gates should be presumed innocent until proven guilty. The Union claimed that Rule 10, Category C requires ‘‘conviction of a felony.'' Gates had not been convicted. Gates was arrested and charged, but not convicted. In fact, Gates had a good work record. Mr. Colbert, plant manager, testified that Gates had no performance issues. The Union stated that the Company had allowed other employees who were convicted of felonies to continue to work. The Union presented a document which involved Jackie Johnson who was convicted of a felony and who was allowed to continue to work at the Company. In addition, Mr. Blackwater, president, Local No. 345, identified other similarly situated employees-Marvin Holden, Bob Cooper, and Troy Lode-who were convicted of felonies, but who were allowed to continue to work. The Union stated that Gates tested negative for illegal drugs in his system. Gates's personal locker and vehicle had been searched and no illegal drugs were found. The Union stated that Mr. Colbert made the decision to permanently suspend Gates. Mr. Colbert said that if the charge is reduced or the Grievant is found not guilty, the Company knows that Gates will be brought back to work and made whole for any losses. The Union contended that Gates agreed to go to his girlfriend's house to receive the package. Gates did not open the package, but put it in the back of his truck. Gates told the police that the package was not his, and he did not know the package contained drugs. The Union stated that Gates cooperated with the police in order to secure the arrest of Stone, the addressee of the package containing the illegal drugs. The Union stated that Gates knew Stone as a childhood friend in Kentucky. However, Stone was a drifter who lived in Kentucky and who had an address in West Virginia. The Union concluded that Gates did not violate Rule 10 of Category C, there was no just cause for this indefinite suspension, and Gates should be reinstated and made whole for any losses.
Questions
1. Which party has the burden of proof in this case? Why?
2. What is the rule about off-duty conduct in regard to employee discipline?
3. What type of evidence are the e-mails received from employees about Gates's on-duty behavior? Should this evidence be considered by the arbitrator? Why or why not?
4. Should the Company's offer to pay back pay and to restore seniority and benefits if Gates is found not guilty be considered by the arbitrator? Why or why not?
5. You be the arbitrator. Should the Grievance be sustained or denied? Explain your reasoning.