International Longshore and Warehouse Union, Local 142 v. Grand Wailea Resort Hotel & Spa

Filing 29

ORDER (1) DENYING PETITIONER/COUNTER-DEFENDANT'S MOTION FOR SUMMARY JUDGMENT TO VACATE THE ARBITRATION AWARD AND (2) GRANTING RESPONDENT/COUNTERCLAIMANT'S COUNTER-MOTION FOR SUMMARY JUDGMENT TO CONFIRM THE ARBITRATION AWARD re 20 , 23 . Signed by JUDGE ALAN C KAY on 09/10/2013. (eps ) -- For the foregoing reasons, the Court (1) DENIES Petitioner International Longshore and Warehouse Union, Local 142, AFL-CIO's Motion for Summary Judgment to Vacate th e Arbitration Award issued by Arbitrator Riki May Amano on October 3, 2012 in the arbitration entitled "In the Matter of the Arbitration Between ILWU Local 142, AFL-CIO on behalf of Brian Santore, Union v. Grand Wailea Resort and Spa, Employer&q uot; and (2) GRANTS Respondent Grand Wailea's Counter-Motion for Summary Judgment and CONFIRMS the aforementioned Arbitration Award. CERTIFICATE OF SERVICEParticipants registered to receive electro nic notifications received this document electronically at the e-mail address listed on the Notice of Electronic Filing (NEF). Participants not registered to receive electronic notifications were served by first class mail on the date of this docket entry

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
)
)
)
)
Petitioner, )
)
)
vs.
)
GRAND WAILEA RESORT HOTEL & SPA,)
)
Respondent. )
)
)
GRAND WAILEA RESORT HOTEL & SPA,)
)
Counterclaimant,)
)
)
vs.
)
)
INTERNATIONAL LONGSHORE AND
)
WAREHOUSE UNION, LOCAL 142,
)
Counter Defendant.)
)
INTERNATIONAL LONGSHORE AND
WAREHOUSE UNION, LOCAL 142,

Civ. No. 12-00708 ACK-RLP

ORDER (1) DENYING PETITIONER/COUNTER-DEFENDANT’S MOTION FOR
SUMMARY JUDGMENT TO VACATE THE ARBITRATION AWARD AND (2) GRANTING
RESPONDENT/COUNTERCLAIMANT’S COUNTER-MOTION FOR SUMMARY JUDGMENT
TO CONFIRM THE ARBITRATION AWARD
PROCEDURAL BACKGROUND
On December 31, 2012, Petitioner International
Longshore and Warehouse Union, Local 142 (“Petitioner,” “ILWU,”
or “Union”) filed a Petition to Vacate Arbitration Award
(“Petition”) that had been issued in favor of Respondent Grand
Wailea Resort Hotel & Spa (“Respondent” or “Grand Wailea”).

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ECF

No. 1.

The arbitration award had been issued by Judge Riki May

Amano (“Arbitrator”) on October 3, 2012 in the arbitration
entitled “In the Matter of the Arbitration Between ILWU Local
142, AFL-CIO on behalf of Brian Santore, Union v. Grand Wailea
Resort and Spa, Employer” (“Arbitration Award”).

Id. at 2, ¶ 2.

Petitioner also filed a Concise Statement of Facts on December
31, 2012 in support of its Petition (“Petitioner’s CSF”).

ECF

No. 4.
On April 15, 2013, Petitioner filed a Motion for
Summary Judgment regarding its Petition to vacate the Arbitration
Award (“MSJ”).

ECF No. 20.

In its MSJ, Petitioner included a

new Concise Statement of Facts (“Petitioner’s MSJ CSF”) in
addition to referencing the Concise Statement of Facts filed with
the Petition on December 31, 2012.

Id.

On August 9, 2013,

Respondent filed its Opposition to Petitioner’s MSJ and a
Counter-Motion for Summary Judgment to Confirm the Arbitration
Award (“Counter-MSJ”).1/

ECF No. 23.

Respondent also filed a

Concise Statement of Facts in Support of its Counter-MSJ.
No. 24.

ECF

On August 16, 2013, Petitioner filed its Reply to

1/

Under Local Rule 7.9, parties are allowed to file
counter motions raising the same subject matter as the original
motion. In this case, Respondent’s Counter-Motion for Summary
Judgment to confirm the Arbitration Award involves the same
subject matter as Petitioner’s Motion for Summary Judgment to
vacate the Arbitration Award. If the Award should be vacated, it
should not be confirmed; conversely, the Award should be
confirmed if Petitioner cannot establish that the Award should be
vacated.
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Respondent’s Opposition and Counter-MSJ.

ECF No. 26.

On August

23, 2013, Respondent filed its Reply in support of its CounterMSJ.

ECF No. 27.

The Court held a hearing regarding

Petitioner’s MSJ and Respondent’s Counter-MSJ on August 30, 2013.
ECF No. 28.
FACTUAL BACKGROUND2/
Grand Wailea operates a resort hotel and spa located in
Wailea, Hawai#i.

Arbitration Award at 3, Petitioner’s CSF Ex. A,

ECF No. 4; Petitioner’s MSJ at 2, ¶ 2, ECF No. 20.

As part of

its services, the hotel operates a Grand Dining Room that serves
breakfast to approximately 500 guests on a daily basis.

Id.

Servers are assigned to tables in the Grand Dining Room.

Id.

In

order to service large groups of guests, tables assigned to
different servers may be combined to seat the group.

Id.

The

tip is split equally among the number of servers who serve the
group.

Id.

The employees at Grand Wailea are aware of the

practice of sharing tips.

Id.

With respect to combined tables, because only one
server may input an order and complete the transaction at the

2/

Because this Court is required to defer to the
Arbitrator’s findings of fact, the Court primarily draws the
facts of this case from the Arbitration Award. United
Paperworkers Int'l Union, AFL-CIO v. Misco, Inc., 484 U.S. 29,
36, 108 S. Ct. 364, 370, 98 L. Ed. 2d 286 (1987) and Stead Motors
of Walnut Creek v. Auto. Machinists Lodge No. 1173, Int'l Ass'n
of Machinists & Aerospace Workers, 886 F.2d 1200, 1207 (9th Cir.
1989) (en banc).
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register, the server who rings up the order is responsible for
“tipping out” the other servers and bussers.

Id. at 4.

The

server who inputs the order (“tipping server”) “tips out” the
other server (“tipped out server”) by determining the amount of
the tips to be shared among the servers and noting the amount of
tips on a form called the “Daily Record of Tip Outs to Other
Employees” (“Tip Out Sheet”).

The tipping server writes the name

of the tipped out server and the amount of the tip on the Tip Out
Sheet.

Id.

The tipped out server signs the Tip Out Sheet and

inserts his or her employee number to acknowledge that the Sheet
accurately reflects his or her share of the tip.

Id.

Employees

at Grand Wailea understand that a server may not add his or her
name and a tip amount to another server’s Tip Out Sheet without
the tipping server’s knowledge and approval.

Id.

The standard

practice is for the tipping server to give a copy of the guest
bills to the tipped out employee for his or her records.

Id.

Brian Santore and Debbie Hammer were both servers at
Grand Wailea during the time of the incident giving rise to this
litigation.
No. 4.

Arbitration Award at 4, Petitioner’s CSF Ex. A, ECF

On January 12, 2011, Santore and Hammer combined tables

from their respective sections to service two large groups of
customers.

Id.

Hammer was the tipping server because she

processed the orders at the register.

Id.

Hammer testified

that, near the end of her shift, she printed copies of the guest

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bills for the two shared tables and gave them to Santore.

Id.

She also wrote the tip out amount she was giving Santore on one
of the two bills.

Id.

At the end of her shift, she filled out

her Tip Out Sheet to reflect that Santore should receive a tip of
$46.30.

Id. at 5.

While the parties dispute the time when

Santore signed Hammer’s Tip Out Sheet,3/ the Arbitrator
apparently found that Santore had signed the Tip Out Sheet in the
signature box acknowledging that the $46.30 was the correct tip
amount.

Id. at 5-6, Respondent’s CSF Ex. 5, ECF No. 24.
On January 13, 2011, Santore and Hammer did not share

tables.

Id.

Hammer had reported $40.00 on her Tip Out Sheet to

reflect two $20.00 tips to two bussers.

Id. at 6.

Santore

testified that he wrote in a tip amount of $50.00 on Hammer’s Tip
Out Sheet and signed for the tip.

Id.

Santore did not obtain

Hammer’s permission to adjust her Tip Out Sheet.

Id. at 7.

The

Accounting Department crossed out Hammer’s $40.00 tip out total
and entered a figure of $90.00 based on Santore’s actions.
at 7.

Id.

As a result, Santore received $50.00 from Hammer’s

paycheck.

Id. at 10.
In late January or early February 2011, Hammer

discovered that $50.00 was missing from her paycheck for the pay

3/

Santore stated that he had signed Hammer’s Tip Out Sheet
before Hammer listed the amount of the tip owed to Santore.
Arbitration Award at 5, Petitioner’s MSJ Ex. A, ECF No. 4.
Hammer testified that, when she had filled out the Tip Out Sheet,
Santore had not yet signed the sheet. Id.
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period covering January 12 and 13, 2011.

Id. at 7.

Hammer was

injured and did not return to work until the end of February,
2011.

Id.

After returning to work, Hammer reported the

discrepancy to the Accounting Department.

Id.

The Accounting

Department provided Hammer with a copy of her paperwork.

After

evaluating her records, Hammer believed that Santore had taken a
$50.00 tip from her on January 13, 2011.

Id.

Hammer then reported Santore’s theft to Human Resources
on March 3, 2011 and met with Leah Belmonte, the Assistant
Director of Human Resources.4/

Id. at 7.

After a manager called

Hammer regarding her complaint, Hammer submitted a written
statement to her supervisor.

Id. at 8.

On March 7, 2011, Hammer

met with Belmonte about her statement and complaint.

Id.

After

Hammer met with Belmonte, Hammer also met with Cliff Caesar, the
Director of Human Resources.

Id.

Caesar commenced an investigation on March 8, 2011.
Id.

The Arbitrator specifically found that the investigation

conducted was “objective and fair.”

4/

Id. at 16.

As part of the

Petitioner states that Santore never personally received
a Section 26.f notice informing him of his infraction.
Petitioner’s MSJ CSF at 6, ¶ 30. The Court notes once again that
the Arbitrator does not provide explicit factual findings
regarding a Section 26.f notice. Respondent also submits
evidence from the record that Grand Wailea’s and ILWU’s practice
is for Grand Wailea to submit the 26.f notice to ILWU, who in
turn talks to the employee and gives the employee a copy.
Respondent’s CSF at 6, ¶ 18, ECF No. 24, Arbitration Transcript
at 1149, lines 7-20, Petitioner’s CSF Ex. C, ECF No. 4.
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investigation, Caesar spoke with Hammer and another server at the
Grand Wailea.

Id. at 9.

On March 8, 2011, Caesar met with

Santore and ILWU agent Steven West.

Id.

During the March 8

meeting, Santore acknowledged writing his name and the $50.00 tip
on Hammer’s Tip Out Sheet.

Santore also acknowledged that

Id.

it would be wrong for a server to fill out another employee’s Tip
Out Sheet without that employee’s knowledge and approval.

Id.

After conducting the interviews and reviewing the
records, Caesar concluded that Santore had impermissibly taken
$50.00 from Hammer.

Id. at 11.

Additionally, Santore had

previously been disciplined by the Grand Wailea for grabbing
blueberries from the kitchen with his bare hands in violation of
kitchen and food safety policies.
19, ECF No. 4.

Petitioner’s CSF Ex. E, Ex.

When questioned about his actions, Santore became

aggressive and argumentative, resulting in a four-day suspension.
Arbitration Award at 16, Petitioner’s CSF Ex. A, ECF No. 4;
Petitioner’s CSF Ex. E, Ex. 19, ECF No. 4.

As a result of the

investigation, Grand Wailea terminated Santore’s employment on
March 15, 2011.5/

Respondent’s CSF at 6, ¶ 20, ECF No. 24,

5/

Petitioner also argues that there are facts in the
record that Santore served as a union steward and filed numerous
grievances under the CBA against Grand Wailea. Petitioner’s MSJ
CSF at 2-3, ¶ 6-15, ECF No. 20. Petitioner argues that these
facts prove that Santore was discharged because of his union
activities. See Petitioner’s MSJ at 24-25, ECF No. 20. However,
the Arbitrator found that the Grand Wailea’s investigation
regarding Santore’s misconduct was “objective and fair.”
(continued...)
-7-

Petitioner’s MSJ CSF at 2, ¶ 4, ECF No. 20.

Grand Wailea has

consistently taken a hard stand on theft by terminating the
employment of past employees who committed theft.

Arbitration

Award at 16, Petitioner’s CSF Ex. A, ECF No. 4.
Santore is a member of the ILWU.

Id. at 2.

The ILWU

and Grand Wailea had entered into a collective bargaining
agreement that was effective from April 1, 2008 through March 31,
2013 (“CBA”).

Petitioner’s CSF Ex. B, ECF No. 4.

ILWU

challenged the discharge of Santore, resulting in an arbitration
after the completion of the other stages of the grievance
process.

Id.

After six days of hearings, the Arbitrator issued

her decision on October 3, 2012.

Respondent’s CSF at 6-7, ¶ 22,

ECF No. 24; Arbitration Award at 17, Petitioner’s CSF Ex. A, ECF
No. 4.
The parties stipulated that the Arbitrator would decide
the following issues:
1. Was Brian Santore terminated for just cause under
the CBA?

5/

(...continued)
Arbitration Award at 16, Petitioner’s CSF Ex. A, ECF No. 4.
Moreover, the Arbitrator did not mention any of Petitioner’s
“facts” in her decision. See generally, Arbitration Award,
Petitioner’s CSF Ex. A, ECF No. 4. While the Court mentions
Petitioner’s “facts” to provide context for its analysis in this
order, the Court declines to “supplement” the Arbitrator’s
factual findings by adopting Petitioner’s version of the facts.
See Stead Motors of Walnut Creek, 886 F.2d at 1207 (9th Cir.
1989) (en banc) (holding that a court should not supplement an
arbitrator’s factual findings with its own version of the facts).
-8-

2. If not, what is the appropriate remedy?
Arbitration Award at 17, Petitioner’s CSF Ex. A, ECF
No. 4.
In determining whether or not Grand Wailea terminated
Santore for just cause, the Arbitrator examined Section 26.a of
the CBA, which states in relevant part as follows:
26.a Employees shall be subject to suspension or
discharge by Hotel for insubordination, pilferage,
drunkenness, incompetence, willful failure to perform
work as required, violation of the terms of this
Agreement, failure to observe safety rules and
regulations and Hotel’s house rules and standards,
which shall either be conspicuously posted or placed in
the Associates’ Handbook . . .
Id. at 2.
In conjunction with Section 26.a, the Arbitrator also
examined Grand Wailea’s Team Member Handbook, which prohibits,
inter alia, the following acts:
Theft, attempted theft, removal, or unauthorized
possession of any property without proper approval,
such as food, Company property, property of another
team member or guest.
Misappropriation of Company funds and failure to handle
funds in accordance with established guidelines;
falsifying or altering or making material omissions in
any Company document or record, including but not
limited to, time cards, employment records, guest
checks and tip reports.
Id.

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Based upon the record before her, the Arbitrator issued
findings of fact including the facts as described above and ruled
that Santore had been terminated for just cause.6/

Id.

STANDARD
I. Summary Judgment
A party may move for summary judgment on any claim or
defense - or part of a claim or defense - under Federal Rule of
Civil Procedure (“Rule”) 56.

Summary judgment “should be granted

‘if the movant shows that there is no genuine dispute as to any
material fact and the movant is entitled to judgment as a matter
of law.’”

Maxwell v. Cnty. of San Diego, 697 F.3d 941, 947 (9th

Cir. 2012) (quoting Fed. R. Civ. P. 56(a)).

Under Rule 56, a

“party asserting that a fact cannot be or is genuinely disputed
must support the assertion,” either by “citing to particular
parts of materials in the record” or by “showing that the
materials cited do not establish the absence or presence of a
genuine dispute, or that an adverse party cannot produce
6/

Respondent identifies evidence in the record that,
following his termination from Grand Wailea, Santore filed claims
with various federal (Department of Labor, Equal Employment
Opportunity Commission) and state agencies (Department of Labor
and Industrial Relations, Hawaii Civil Rights Commission)
alleging that his termination was in retaliation for reporting
employer violations of the law. Respondent’s MSJ at 21, n. 8,
ECF No. 23, Arbitration Transcript at 460-465, Petitioner’s CSF
Ex. C, ECF No. 4. The agencies dismissed Santore’s claims after
investigating them. Id. However, the Arbitrator does not
reference these “facts” in her Award, so the Court declines to
“supplement” the Arbitrator’s factual findings with additional
“facts”. See Stead Motors of Walnut Creek, 886 F.2d at 1207.
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admissible evidence to support the fact.” Fed. R. Civ. P.
56(c)(1).
The substantive law determines which facts are
material; “only disputes over facts that might affect the outcome
of the suit under the governing law properly preclude the entry
of summary judgment.”

Nat’l Ass’n of Optometrists & Opticians v.

Harris, 682 F.3d 1144, 1147 (9th Cir. 2012).

“The mere existence

of some alleged factual dispute between the parties will not
defeat an otherwise properly supported motion for summary
judgment; the requirement is that there be no genuine issue of
material fact.”

Scott v. Harris, 550 U.S. 372, 380 (2007)

(citation omitted).
A genuine issue of material fact exists if “a
reasonable jury could return a verdict for the nonmoving party.”
United States v. Arango, 670 F.3d 988, 992 (9th Cir. 2012)
(quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247
(1986)).

Conversely, “[w]here the record taken as a whole could

not lead a rational trier of fact to find for the nonmoving
party, there is no genuine issue for trial.”

Scott, 550 U.S. at

380.
The moving party has the burden of persuading the court
as to the absence of a genuine issue of material fact.

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Avalos v.

Baca, 596 F.3d 583, 587 (9th Cir. 2010).7/

If the moving party

satisfies its burden, the nonmoving party “must do more than
simply show that there is some metaphysical doubt as to the
material facts.”
Cir. 2010).

Sluimer v. Verity, Inc., 606 F.3d 584, 587 (9th

The nonmoving party must present evidence of a

“genuine issue for trial,” Fed. R. Civ. P. 56(e), that is
“significantly probative or more than merely colorable.”8/

LVRC

Holdings LLC v. Brekka, 581 F.3d 1127, 1137 (9th Cir. 2009)
(citation omitted).

Summary judgment will be granted against a

party who fails to demonstrate facts sufficient to establish “an
element essential to that party’s case and on which that party
will bear the burden of proof at trial.”

Parth v. Pomona Valley

7/

When the party moving for summary judgment would bear
the burden of proof at trial, the movant must present evidence
which would entitle it to a directed verdict if the evidence were
to go uncontroverted at trial. Miller v. Glenn Miller Prods.,
454 F.3d 975, 987 (9th Cir. 2006) (citation omitted). In
contrast, when the nonmoving party would bear the burden of proof
at trial, the party moving for summary judgment may meet its
burden by pointing out the absence of evidence from the nonmoving
party. Id. (citation omitted).
8/

The Ninth Circuit has noted that “Legal memoranda and
oral argument, in the summary-judgment context, are not evidence,
and do not create issues of fact capable of defeating an
otherwise valid motion for summary judgment.” Flaherty v.
Warehousemen, Garage and Service Station Emp. Local Union No.
334, 574 F.2d 484, 486 n.2 (9th Cir. 1978), see also Barcamerica
Intern. USA Trust v. Tyfield Importers, 289 F.3d 589, 593 n.4
(9th Cir. 2002). Additionally, allegations in the plaintiff’s
complaint “do not create an issue against a motion for summary
judgment supported by affidavit.” Flaherty, 574 F.2d at 486 n.2.
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Hosp. Med. Ctr., 630 F.3d 794, 798-99 (9th Cir. 2010) (citation
omitted).
When evaluating a motion for summary judgment, the
court must “view the facts and draw reasonable inferences in the
light most favorable to the party opposing the summary judgment
motion.”

Scott v. Harris, 550 U.S. 372, 378 (2007).

The court

may not, however, weigh conflicting evidence or assess
credibility.

In re Barboza, 545 F.3d 702, 707 (9th Cir. 2008).9/

Accordingly, if “reasonable minds could differ as to the import
of the evidence,” summary judgment will be denied.

Anderson, 477

U.S. at 250–51.
II. Arbitration Award
According to the Ninth Circuit, “because federal labor
policy strongly favors the resolution of labor disputes through
arbitration, [j]udicial scrutiny of an arbitrator's decision is
extremely limited.”

Matthews v. Nat'l Football League Mgmt.

Council, 688 F.3d 1107, 1111 (9th Cir. 2012).

9/

Generally, awards

Nonetheless, a “conclusory, self-serving affidavit” that
lacks detailed facts and supporting evidence may not create a
genuine issue of material fact. F.T.C. v. Neovi, Inc., 604 F.3d
1150, 1159 (9th Cir. 2010). Moreover, “[w]hen opposing parties
tell two different stories, one of which is blatantly
contradicted by the record, so that no reasonable jury could
believe it, a court should not adopt that version of the facts
for purposes of ruling on a motion for summary judgment.” Scott,
550 U.S. at 380. “The general rule in the Ninth Circuit is that
a party cannot create an issue of fact by an affidavit
contradicting his prior deposition testimony.” Yeager v. Bowlin,
693 F.3d 1076, 1080 (9th Cir. 2012).
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are upheld “so long as they represent a plausible interpretation
of the contract.”

Id.

“The courts are not authorized to reconsider the merits
of an award even though the parties may allege that the award
rests on errors of fact or on misinterpretation of the contract.”
United Paperworkers Int'l Union, AFL-CIO v. Misco, Inc., 484 U.S.
29, 36, 108 S. Ct. 364, 370, 98 L. Ed. 2d 286 (1987).
Additionally, “a court is barred from disregarding the
arbitrator’s factual determinations, let alone supplementing them
with its own, or from “correcting” an arbitrator’s erroneous
understanding of the law.”

Stead Motors of Walnut Creek v. Auto.

Machinists Lodge No. 1173, Int'l Ass'n of Machinists & Aerospace
Workers, 886 F.2d 1200, 1207 (9th Cir. 1989) (en banc).
Under the Labor Management Relations Act, an
arbitration award may be vacated for the following reasons:

“(1)

when the award does not draw its essence from the collective
bargaining agreement and the arbitrator is dispensing his own
brand of industrial justice; (2) where the arbitrator exceeds the
boundaries of the issues submitted to him; (3) when the award is
contrary to public policy; or (4) when the award is procured by
fraud.”

S. California Gas Co. v. Util. Workers Union of Am.,

Local 132, AFL-CIO, 265 F.3d 787, 792-93 (9th Cir. 2001).

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DISCUSSION
I.

Whether the Award Draws its Essence from the Collective

Bargaining Agreement
The Supreme Court has held that an arbitrator’s award
is legitimate if it “draws its essence from the collective
bargaining agreement” and does not merely constitute “his own
brand of industrial justice.”
at 370.

Misco, 484 U.S. at 36, 108 S. Ct.

If the arbitrator is even “arguably construing or

applying the contract and acting within the scope of his
authority, that a court is convinced he committed serious error
does not suffice to overturn his decision.”
108 S. Ct. at 371.

Id., 484 U.S. at 38,

In this case, the Arbitration Award indicates

that the Arbitrator attempted to construe and apply the contract
instead of distributing her own brand of industrial justice.
The parties stipulated that the following issues would
be decided by the Arbitrator:

(1) “Was Brian Santore terminated

for just cause under the CBA?” and (2) “If not, what is the
appropriate remedy?”
Ex. A, ECF No. 4.

Arbitration Award at 2, Petitioner’s CSF

The Arbitrator proceeded to examine the CBA’s

provision regarding discharge and the Team Member Handbook’s
definition regarding theft.

See id. at 2.

There is nothing on

the face of the Award to indicate that the Arbitrator substituted
her own brand of industrial justice instead of attempting to
construe the contract before her.
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Instead, Petitioner points to alleged omissions in the
Arbitration Award to argue that the Arbitrator impermissibly
ignored the plain language of the CBA.

Petitioner’s main

contention appears to be that the Arbitrator “failed to outright
consider, let alone acknowledge” certain sections of the CBA,
namely Sections 1(d), 1(f), 26(d), and 26(f).
at 3, ECF No. 26.

Petitioner’s Reply

Petitioner appears to assume that the

Arbitrator’s failure to mention these sections automatically
means that the Arbitrator impermissibly altered, amended, or
modified key provisions of the CBA in violation of Section 28.b.
Id.

The Court is not persuaded that the Arbitrator’s decision

failed to draw its essence from the CBA.
The Court first observes that the parties stipulated to
the two issues set before the Arbitrator, which focused on
whether just cause existed for Santore’s termination based on
theft and the falsification of business records.
Award at 2, Petitioner’s CSF Ex. A, ECF No. 4.

Arbitration

The Arbitrator

identified the CBA provisions and House Rules that she thought
applied to the just cause issue.

Id. at 2.

Judicial review of an arbitrator’s interpretation of
the scope of the issues submitted to him or her is limited and
highly deferential.

Sheet Metal Workers' Int'l Ass'n Local Union

No. 359 v. Madison Indus., Inc. of Arizona, 84 F.3d 1186, 1190
(9th Cir. 1996); Pack Concrete Inc. v. Cunningham, 866 F.2d 283,

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285-86 (9th Cir. 1989); see Southern Cal. Gas Co. v. Utility
Workers Union of America, Local 132, AFL-CIO, 265 F.3d 787, 79294 (9th Cir. 2001).

In this case, the Arbitrator could plausibly

conclude that the Sections identified by Petitioner did not need
to be explicitly addressed in the Award because the stipulated
issues did not reference the content of those Sections.

While

Petitioner argued at the hearing that the Arbitrator was required
to mention Sections 1(d), 1(f), 26(d), and 26(f) because they
were listed in the first grievance; the Court is not required to
adopt Petitioner’s interpretation of issues and requirements of
the CBA.

As Respondent pointed out at the hearing, Petitioner

listed seventeen sections of the CBA in the first grievance but
the parties stipulated to two issues by the time the grievance
reached arbitration.

Compare Petitioner’s Ex. D, Ex. 3, ECF No.

4 with Arbitration Award at 2, Petitioner’s CSF Ex. A, ECF No. 4.
Petitioner cannot now decide at this late date to cherry pick
certain Sections from the first grievance to overturn the
Arbitrator’s Award.
Additionally, Supreme Court and Ninth Circuit case law
explicitly holds that an arbitrator’s failure to set forth his or
her reasoning or the fact that ambiguity may exist in his or her
reasoning is not a reason for vacatur.

See United Steelworkers

of Am. v. Enter. Wheel & Car Corp., 363 U.S. 593, 597-98, 80 S.
Ct. 1358, 1361, 4 L. Ed. 2d 1424 (1960) and Bosack v. Soward, 586

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F.3d 1096, 1104 (9th Cir. 2009) (citing Wilko v. Swan, 346 U.S.
427, 436, 74 S.Ct. 182, 98 L.Ed. 168 (1953), overruled in part on
other grounds by Rodriguez de Quijas v. Shearson/Am. Express,
Inc., 490 U.S. 477, 109 S.Ct. 1917, 104 L.Ed.2d 526 (1989)).
Arbitrators are not required to give the reasons for their award.
Id.

In this case, there is nothing to suggest that, on its face,

the Award directly conflicts with the CBA.

See Sheet Metal

Workers' Int'l Ass'n Local Union No. 359 v. Madison Indus., Inc.
of Arizona, 84 F.3d 1186, 1190 (9th Cir. 1996) (“As long as the
award “draws its essence” from the contract, meaning that on its
face it is a plausible interpretation of the contract, then the
courts must enforce it.”).
Regarding Section 1.d, Petitioner’s arguments that the
Arbitrator ignored the CBA’s prohibition on anti-union animus is
in reality a factual challenge.

The language in Section 1.d

states that the “Hotel will not discourage participation in the
Union or promote or finance any competing labor organization.”
CBA at 1, Petitioner’s CSF Ex. B, ECF No. 4.

The Arbitrator’s

Award states that the CBA allows Grand Wailea to discharge
Santore for theft and falsification of business records; this
conclusion does not conflict with or otherwise re-write Section
1.d.

Moreover, the Arbitrator could have considered and

concluded that there was no anti-union animus without explicitly
setting forth her reasoning in her decision.

-18-

See United

Steelworkers of Am. v. Enter. Wheel & Car Corp., 363 U.S. at
597-98 and Bosack, 586 F.3d at 1104.
Instead, the crux of Petitioner’s argument is that the
Arbitrator should have found that Santore was discharged on the
basis of his union activities instead of finding that Santore was
discharged because of theft and falsification of business
records.

See Petitioner’s MSJ at 16, ECF No. 20 (arguing that

the Arbitrator ignored “extensive testimony and evidence the
Union presented” on anti-union animus).

However, the Arbitrator

made explicit factual findings that Grand Wailea discharged
Santore as a result of the investigation regarding his theft and
falsification of business records.

Arbitration Award at 15,

Petitioner’s CSF Ex. A, ECF No. 4.

As noted previously, the

Arbitrator also found that the Grand Wailea’s investigation
regarding Santore’s misconduct was “objective and fair.”
16.

Id. at

This Court is not authorized to vacate the Award based upon

a reconsideration of the merits, nor is the Court allowed to
vacate the Award even if the Arbitrator committed an error in her
fact-finding.

See Misco, 484 U.S. at 36, 108 S. Ct. at 370.

Accordingly, the Court declines to vacate the Award because of
Petitioner’s factual dispute with the Arbitrator.
Petitioner’s arguments regarding Section 1.f also fail
for various reasons.

Section 1.f states as follows:

“Hotel

agrees that it will not practice favoritism or partiality to any

-19-

employee in the administration and application of this Agreement.
Any claim of favoritism or granted special privileges to any
employee in violation of the Agreement shall be promptly
addressed.”

CBA at 1, Petitioner’s CSF Ex. B, ECF No. 4.

The

Arbitrator’s Award does not contain any interpretation of the CBA
allowing Grand Wailea to favor certain employees over others.
Instead, Petitioner argues that the Arbitrator should have found
that Grand Wailea treated Hammer more favorably than Santore
because, according to Petitioner’s interpretation of the facts,
Hammer also committed theft.

Petitioner’s MSJ at 16, ECF No. 20.

The Court notes that Santore had a prior record of suspension and
that he admitted to taking the $50.00 and falsifying records;
whereas Petitioner claims that Hammer failed to give Santore
$2.51, which was disputed at the arbitration.

See Arbitration

Award at 9-10, 16, Petitioner’s CSF Ex. A, ECF No. 4;
Respondent’s Opp. at 29-30, ECF No. 23; Arbitration Transcript at
1241-1243, Petitioner’s CSF Ex. C, ECF No. 4.

Petitioner’s

argument is a factual dispute and does not indicate that the
Arbitrator decided not to apply the CBA.

See Bosack v. Soward,

586 F.3d 1096, 1104 (9th Cir. 2009) (holding that appellant’s
disagreement over arbitrator’s factual findings or lack thereof
did not constitute grounds for vacating the award).
Additionally, both parties agreed at the hearing that
there is no evidence in the record that a grievance or formal

-20-

complaint was filed against Hammer.

As a result, it is

questionable whether or not the issue was properly before the
Arbitrator.

As mentioned above, assuming but not finding that

the Arbitrator did not consider Plaintiff’s allegations of theft
by Hammer, the Arbitrator had the discretion to conclude that the
favoritism provision did not fall within the scope of the issues
before her.

See supra at 16-17.

In Southern California Gas Co., the Ninth Circuit
upheld an arbitrator’s decision that two employees’ drug tests
were improperly administered, even though the arbitrator also
found that the employees had in fact been using illegal drugs.
265 F.3d at 792-93.

The employer argued that the award did not

draw its essence from the collective bargaining agreement because
the agreement allowed the employer to terminate employees for
taking illegal drugs.

Id.

The Ninth Circuit observed that the

issue of whether or not the employees actually took the drugs was
not the issue submitted to the arbitrator - instead, the issue
submitted involved whether the employer had followed proper drug
testing procedures.

Id.

Because the arbitrator’s decision on

the issue submitted drew its essence from the agreement, the
award was upheld despite other factual findings that would
support termination under other provisions of the agreement.

Id.

In this case, the issue submitted to the Arbitrator
involved whether Grand Wailea had just cause to discharge Santore

-21-

based on theft and the falsification of business records.
Arbitration Award at 2, Petitioner’s CSF Ex. A, ECF No. 4.

The

Arbitrator was not requested to determine whether Grand Wailea
violated Section 1.f of the CBA.

Id.

Grand Wailea also points out that the alleged $2.51
shortfall to Santore was not identified until after the
arbitration commenced, which occurred some time after Santore was
discharged.

Respondent’s Opp. at 29, ECF No. 23.

Petitioner

replies by arguing that Grand Wailea did not respond to
Petitioner’s discovery request in October of 2011; as a result,
Hammer’s checks were not entered into the record until the
arbitration.

Petitioner’s Reply at 9, ECF No. 26.

Even if the $2.51 had been discovered in October of
2011, the Arbitrator was not required to consider Hammer’s
alleged theft because the Arbitrator may decline to examine posttermination evidence.

See Aramark Facility Servs. v. Serv.

Employees Int'l Union, Local 1877, AFL CIO, 530 F.3d 817, 830
(9th Cir. 2008).

In this case, Santore was discharged on March

15, 2011; the Arbitrator was not required to evaluate the issue
of the $2.51 discrepancy in Hammer’s checks that arose after this
date.

See id.

While Petitioner argues that Grand Wailea should

have evaluated a greater number of Hammer’s tip records as a part
of the investigation; the Court observes that the Arbitrator
concluded that the investigation was “objective and fair.”

-22-

Arbitration Award at 16, Petitioner’s CSF Ex. A, ECF No. 4.

The

Court defers to the Arbitrator’s factual finding regarding the
investigation.

And again, the Arbitrator might have considered

the aforesaid facts regarding the $2.51 claim and concluded in
favor of Grand Wailea without explicitly setting forth her
reasoning.

See United Steelworkers of Am. v. Enter. Wheel & Car

Corp., 363 U.S. at 597-98 and Bosack, 586 F.3d at 1104.

As a

result, the Court declines to vacate the Award based upon
Petitioner’s favoritism argument.
Petitioner next argues that the Arbitration Award
conflicts with the house rules because there was no published or
written policy on tip sharing, and Grand Wailea was required to
notify Petitioner of proposed changes in the rules.
MSJ at 16-17, ECF No. 20.

Petitioner’s

However, the issue before the

Arbitrator was not whether Grand Wailea made an impermissible
rule change, but whether Santore committed theft and falsified
business records.

See Arbitration Award at 2, 13-14,

Petitioner’s CSF Ex. A, ECF No. 4.

The Southern California Gas

Co. case explained above also applies to Petitioner’s argument
regarding a written house rule.
at 792-94).

See supra at 21 (citing 265 F.3d

In this case, the Arbitrator was not required to

determine whether or not Grand Wailea created or changed a house
rule.

See Arbitration Award at 2, Petitioner’s CSF Ex. A, ECF

No. 4.

The Arbitrator’s Award drew its essence from the CBA

-23-

because the Arbitrator construed the CBA’s provision on theft and
falsification of business records.

Id. at 15.

In any event, the

Court observes that Santore did not refute the existence of the
rule; he “acknowledged that it is never appropriate to write on
someone else’s tip-out sheet without their approval.”
Arbitration Award at 16, Petitioner’s CSF Ex. A, ECF No. 4.
Moreover, the Arbitrator might have considered Petitioner’s house
rule argument and concluded in favor of Grand Wailea without
explicitly setting forth her reasoning.

See United Steelworkers

of Am. v. Enter. Wheel & Car Corp., 363 U.S. at 597-98 and
Bosack, 586 F.3d at 1104.

Accordingly, the Court rejects

Petitioner’s argument.
Petitioner also asserts that the Arbitrator ignored
Section 26.d, which states that the arbitrator “may” reduce, set
aside, or change a discharge or suspension if such discharge or
suspension was “improper or excessive.”
CSF Ex. B, ECF No. 4.

CBA at 27, Petitioner’s

The Court rejects this argument because

the Arbitrator explicitly found that “the degree of discipline in
Santore’s case was appropriate,” not improper or excessive.
Arbitration Award at 16, Petitioner’s CSF Ex. A, ECF No. 4.

The

Court is required to defer to the Arbitrator’s factual findings
regarding the appropriate discipline of employees.10/

10/

See Stead

The Court also observes that Petitioner merely asserts
that the Arbitrator erred with respect to Section 26.d and does
(continued...)
-24-

Motors of Walnut Creek, 886 F.2d at 1213 (noting that an
arbitrator has “broad authority to determine appropriate
punishments and remedies”) (citing Misco, 484 U.S. at 41, 108 S.
Ct. at 372).
Lastly, Petitioner alleges that the Arbitrator ignored
Section 26.f when she did not mention whether or not Brian
Santore received notice of his infraction before meeting with
Caesar on March 8, 2011.

Petitioner’s MSJ at 13, ECF No. 20.

Section 26.f states as follows:

“When a responsible management

official at the facility receives information of an infraction
allegedly committed by an employee, such official shall notify
such employee and a Union designated representative within fortyeight (48) hours, excluding Saturdays, Sundays, and holidays that
the case is being investigated and disciplinary action may be
taken.”

CBA at 27, Petitioner’s CSF Ex. B, ECF No. 4.

According

to the Arbitrator, Hammer went to Human Resources to report the
incident at an unknown time on Thursday, March 3, 2011.11/

Under

10/

(...continued)
not provide any explanation or citations to legal sources in its
briefs to support the assertion. See generally, Petitioner’s MSJ
at 15-29, ECF No. 20.
11/

The Arbitrator did not make a finding of fact regarding
the time when Hammer reported the incident. Arbitration Award at
7, Petitioner’s CSF Ex. A, ECF No. 4.
-25-

Petitioner’s interpretation, Grand Wailea had until sometime on
Monday, March 7 in order to give Santore the required notice.12/
As mentioned above, an Arbitrator need not provide the
reasons for an award.

See United Steelworkers of Am. v. Enter.

Wheel & Car Corp., 363 U.S. 593, 597-98, 80 S. Ct. 1358, 1361, 4
L. Ed. 2d 1424 (1960).

Instead, the Court need only determine

whether the “arbitrator’s solution can be rationally derived from
some plausible theory of the general framework or intent of the
agreement.”

Tristar Pictures, Inc. v. Dir.'s Guild of Am., Inc.,

160 F.3d 537, 540 (9th Cir. 1998).
In this case, Section 26.f does not require that the
notice be written.

CBA at 27, Petitioner’s CSF Ex. B, ECF No. 4.

Nor does Section 26.f require the notice to contain a particular
level of specificity regarding the alleged infraction.

See id.

Petitioner urges this Court to find that the Arbitrator erred by
not issuing a finding of fact that Santore failed to receive a
Section 26.f notice or that the notice was insufficient.
Petitioner’s MSJ at 13-14, ECF No. 20.

While the Arbitrator did

not explicitly mention her findings regarding notice, she did
conclude that the investigation was “objective and fair.”

12/

The Court takes judicial notice that March 3, 2011 is a
Thursday, which is when Hammer met with Belmonte, the Assistant
Director of Human Resources. Because Section 26.f excludes
Saturdays and Sundays within the 48 hour period, Monday, March 7
appears to be the deadline, assuming that Belmonte from Human
Resources is a “responsible management official” as contemplated
by the CBA. CBA at 7, Petitioner’s CSF Ex. B, ECF No. 4.
-26-

Arbitration Award at 16, Petitioner’s CSF Ex. A, ECF No. 4.

This

Court is not authorized to consider the merits of the award as to
whether or not Grand Wailea violated Section 26.f or whether the
Arbitrator erred by concluding that notice had been given.

See

Misco, 484 U.S. at 39, see also Stead Motors of Walnut Creek, 886
F.2d at 1207 n. 7 (holding that it would be improper for a
district court to make a factual finding contrary to the implicit
findings of the arbitrator).
In Misco, an arbitrator ruled that a company was
required to reinstate an employee because the evidence “was
insufficient to prove” that the employee had possessed or used
illegal drugs on company property.

Misco, 484 U.S. at 33-34.

The company argued that the arbitrator committed “grievous error”
by failing to find that the employee had in fact used drugs on
company property.

Id. at 39.

While the court of appeals vacated

the arbitration award after adopting the company’s position, the
Supreme Court reversed the court of appeals, noting that
“improvident, even silly, factfinding” is not a basis for
vacating an arbitration award.

Id.

In this case, even if the

Arbitrator committed an error of fact in determining whether
Santore received notice, the Court is not authorized to vacate
the Award on this basis.
As another argument in support of upholding the Award,
Respondent argues that the Arbitrator could plausibly interpret

-27-

the CBA to allow Grand Wailea to notify the employee by means of
transmitting the 26.f notice to the Union.
17, ECF No. 23.

Respondent’s Opp. at

The CBA does not require Grand Wailea to

personally hand a notice to the employee.
Petitioner’s CSF Ex. B, ECF No. 4.

See CBA at 27,

Respondent cites to the

arbitrator’s decision in In re Reed Tool Co., 115 LA 1057
(Bankston, 2001) for the proposition that an arbitrator may use
evidence of past practice “to indicate the proper interpretation
of ambiguous contract language.”

In re Reed Tool Co., 115 LA at

1061; see also Univ. of Hawai#i Professional Assembly v.
Cayetano, 183 F.3d 1096, 1102 (9th Cir 1999) (“In construing a
collective bargaining agreement, not only the language of the
agreement is considered, but also past interpretations and past
practices are probative.”).

In this case, an agent of ILWU

agreed that it was the “practice” of ILWU to discuss the Section
26.f notice with an employee and to give the employee a copy.
See Petitioner’s CSF Ex. C at 1149, lines 7-20, ECF No. 4.

The

parties do not dispute that the ILWU received a Section 26.f
notice for Santore.

See Petitioner’s MSJ at 14, ECF No. 20;

Respondent’s Opp. at 30, ECF No. 23.

Thus, the Arbitrator could

have determined that the ILWU and the employee were notified of
the alleged infraction as contemplated by Section 26.f by means
of Grand Wailea’s and ILWU’s “practice.”

Such an interpretation

is plausible regardless of whether the Court would have adopted a

-28-

different interpretation of the CBA.13/

See Aloha Motors, Inc. v.

ILWU Local #142, 530 F.2d 848, 849 (9th Cir. 1976) (holding that
an arbitrator’s award must be upheld because the arbitrator’s
interpretation was plausible, even if the court would have
interpreted the agreement differently).
The Court also identifies two other CBA interpretations
by which the “arbitrator’s solution can be rationally derived
from some plausible theory of the general framework or intent of
the agreement.”

Tristar Pictures, Inc., 160 F.3d at 540.

First,

Section 26.f has a list of exceptions with respect to the 48 Hour
notice, including a section stating that “the 48-hour notice
shall not be applicable nor construed to apply to situations
involving ongoing investigations of employee conduct.”
27, ¶ 26.f, Petitioner’s CSF Ex. B, ECF No. 4.

CBA at

The Agreement

does not define what constitutes an “ongoing investigation.”
generally, id.

See

It is possible that the Arbitrator may have

13/

The Court observes that the CBA also contains an Exhibit
“B” - Letter of Understanding dated May 27, 2009 that constitutes
an addendum to the terms of the CBA. See Respondent’s CSF Ex. 3,
ECF No. 24-4 at page 48 of 75. In the Letter of Understanding,
paragraph 13 states that as follows: “Section 26.f is hereby
clarified that notification to the employee of an investigation
into misconduct shall occur prior to the end of the second shift
after the employee returns to work.” Id. Neither party has
discussed the effect of this paragraph on the 48-hour
requirement. See generally, Petitioner’s MSJ, ECF No. 20, and
Respondent’s Opp., ECF No. 23. The Court notes that the record
does not indicate if Santore had been notified prior to the end
of his second shift. In any event, the addendum does not
indicate that the Arbitrator erred with respect to Section 26.f.
-29-

concluded that Caesar’s investigation constituted an “ongoing
investigation[] of employee conduct” that fell within an
exception to Section 26.f’s requirements.
The Arbitrator also could have reached her solution if
she considered Caesar to qualify as the “responsible management
official” identified in Section 26.f.

Section 26.f requires the

“responsible management official” to notify the employee and the
union of an alleged infraction, but the CBA does not define
“responsible management official.”

See CBA at 27, ¶ 26.f,

Petitioner’s CSF Ex. B, ECF No. 4.

In her factual findings, the

Arbitrator noted that Caesar, the Director of Human Resources,
commenced the investigation into Santore’s conduct.
Award at 8, Petitioner’s CSF Ex. A, ECF No. 4.

Arbitration

The Arbitrator

also noted that Caesar “made the decision” that Santore’s offense
warranted termination.

Id. at 15.

With these facts, the

Arbitrator could have concluded that Caesar was the “responsible
management official” contemplated by Section 26.f.

With respect

to the 48-hour notice, the Arbitrator indicated that Caesar
received the information regarding Hammer’s complaint and met
with Hammer after she met with Belmonte on March 7, 2011.

Id.

The Arbitrator also found that Caesar met with Santore and ILWU
agent Steve West on March 8, 2011, the day after he received
Hammer’s information.

Id. at 9.

If Caesar constitutes the

“responsible management official,” then Caesar’s meeting with

-30-

Santore met the notice requirement because notice was provided
within 48 hours after Caesar received Hammer’s information.

See

id.
Petitioner argues that this Court should adopt an
interpretation of Section 26.f requiring Grand Wailea to
personally transmit a written Section 26.f notice directly to an
employee.

Petitioner’s Reply at 4, ECF No. 26.

However, the

Court declines to vacate the Award on the basis of Petitioner’s
interpretation of the agreement even though the Arbitrator did
not explicitly refer to Section 26.f.
The Ninth Circuit has stated that “[a]n award is
legitimate if it draws its essence from the agreement and only
when the arbitrator’s words manifest an infidelity to this
obligation may the courts refuse enforcement of the award.”
Aloha Motors, 530 F.2d at 849 (emphasis added), see also Arch of
Illinois, Div. of Apogee Coal Corp. v. Dist. 12, United Mine
Workers of Am., 85 F.3d 1289, 1293 (7th Cir. 1996) (“before we
reject an award because of language in the arbitrator's opinion,
the opinion must unambiguously reflect that the arbitrator based
his decision on noncontractual grounds”).
In this case, the Arbitration Award does not contain
any terms or words that contradict the plain language of the CBA.
Because the Award “represents a plausible interpretation of the
contract in the context of the parties’ conduct,” the Court

-31-

declines to adopt an interpretation that would create doubt as to
the legitimacy of the Arbitrator’s Award.

See Aloha Motors, 530

F.2d at 849, see also Arch of Illinois, 85 F.3d at 1293 (holding
that ambiguity in arbitrator’s opinion prevented the court from
concluding that the arbitrator failed to interpret the
agreement), Pan American Airways Corp. v. Air Line Pilots Assoc.,
Int’l, 206 F. Supp. 2d 12, 19 (D. D.C. 2002) (“A federal court
does not have authority to adopt a different interpretation or
choose a competing construction from that of the arbitrator.”).
The four cases cited by Petitioner do not convince the
Court to vacate the Award.

See Petitioner’s Reply at 6-7 (citing

United Food & Commercial Workers Union, Local 1119 v. United
Markets, Inc., 784 F.2d 1413 (9th Cir. 1986), Federated Employers
of Nevada v. Teamsters Local No. 631, 600 F.2d 1263 (9th Cir.
1979), Mountaineer Gas Co. v. Oil, Chemical, & Atomic Workers
Int’l Union, 76 F.3d 606 (4th Cir. 1996), and United States
Postal Service v. American Postal Workers Union, 204 F.3d 523
(4th Cir. 2000).

In each of Petitioner’s cited cases, the

arbitrator’s award is distinguishable from the case before this
Court because on its face the award contained an explicit factual
finding or a remedy that conflicted with the plain language of
the agreements.
In United Food & Commercial Workers Union, a collective
bargaining agreement stated that a company would “no longer” be

-32-

able to use a classification if the company violated the
agreement twice.

784 F.2d at 1414.

Notwithstanding the

prohibition and the arbitrator’s factual finding that the company
had violated the agreement twice before, the arbitrator stated in
his award that the company could use the classification unless a
third violation occurred.

Id. at 1415-16.

Accordingly, the

Ninth Circuit concluded that the arbitrator’s award itself
conflicted with the agreement.
In Federated Employers of Nevada, the agreement at
issue stated that the arbitrator had to “select as his award
either the last offer made by the Employers or the last offer
made by the Union . . . with no modification or compromise in any
fashion.”

600 F.2d at 1264.

However, the arbitrator issued an

award that was not the last offer made by the Employer or the
Union.

Id.

As a result, the Ninth Circuit vacated the award

because on its face it conflicted with the plain language of the
agreement.
In both Mountaineer Gas Co. and United States Postal
Service, the arbitrator’s award contained findings of fact
mandating a particular result under the agreement, but the
arbitrators did not follow the result set forth in the agreement.
See Mountaineer Gas Co., 76 F.3d 606 (requiring discharge after a
positive drug test) and United States Postal Service, 204 F.3d
523 (barring probationary employees from filing grievances).

-33-

In contrast to the above cases, the Arbitrator’s Award
in this case does not contain a remedy that conflicts with the
terms of the CBA, nor do the factual findings in the Award
mandate a result under the CBA that the Arbitrator disregarded.
See generally, Arbitration Award, Petitioner’s CSF Ex. A, ECF No.
4.

As noted above, Petitioner disagrees with the Arbitrator’s

conclusions because of differences in the interpretation of the
facts, but Petitioner does not identify parts of the Award that
on its face directly conflict with the CBA.
Court may not vacate the Award.

As a result, the

See United Steelworkers of Am.

v. Enter. Wheel & Car Corp., 363 U.S. 593, 597-98, 80 S. Ct.
1358, 1361, 4 L. Ed. 2d 1424 (1960) (holding that an award should
be upheld unless the “arbitrator's words manifest an infidelity”
to the obligation of construing the agreement), Association of
Western Pulp & Paper Worker, Local 78 v. Rexam Graphic, Inc., 221
F.3d 1085, 1091 (9th Cir. 2000) (“when a CBA can be read in a
manner consistent with the arbitrator’s interpretation, it is not
the job of the courts to second-guess arbitrators”).
Accordingly, the Court DENIES Petitioner’s MSJ to vacate the
Award on the basis that the Award fails to draw its essence from
the collective bargaining agreement.
II.

Whether the Arbitrator Exhibited a “Manifest Disregard of

the Law” in the Award

-34-

Petitioner argues that the Arbitrator exceeded her
authority by recognizing the applicable standard of law in her
decision and then ignoring the standard.
11, ECF No. 20.

Petitioner’s MSJ at 10-

In the Award, the Arbitrator references Carroll

R. Daugherty’s seven-factor test used to determine whether an
employer has just cause to discipline an employee (“Just Cause
Test”).

See Arbitration Award at 14, Petitioner’s CSF Ex. A, ECF

No. 4.

Petitioner alleges that the Arbitrator disregarded two of

the factors as explained below.
A. Whether the Arbitrator Manifestly Disregarded the Law
Regarding the Employer’s Fair and Objective Application of
the Rules Barring Theft and Falsification of Business
Records
Petitioner specifically argues that the Arbitrator
erred when she applied the law for the sixth factor of the Just
Cause Test, which states as follows:

“Has the employer applied

the rule fairly and without discrimination?”
at 14, Petitioner’s CSF Ex. A, ECF No. 4.

Arbitration Award

According to

Petitioner, the Arbitrator manifestly disregarded the law because
Hammer should have given Santore $48.81 instead of $46.30; in
other words, Hammer owed Santore $2.51 in tips from another guest
check.

Petitioner’s MSJ at 6, ECF No. 20.

In Petitioner’s view,

Hammer committed a theft of $2.51 from Santore, and Grand Wailea
did not apply the rule against theft fairly because Hammer
-35-

retained her job while Santore was discharged for the “same
offense” of theft.

Id. at 11-12.

According to the Ninth Circuit, manifest disregard of
the law constitutes more than “an error in the law” or “a failure
on the part of the arbitrators to understand or apply the law.”
Lagstein v. Certain Underwriters at Lloyd's, London, 607 F.3d
634, 641 (9th Cir. 2010).

Instead, the record must indicate that

the arbitrator “recognized the applicable law and then ignored
it.”

Id.

Specifically, the record must indicate that the

arbitrator (1) was “aware of the law,” and (2) “intentionally
disregarded it.”

Bosack, 586 F.3d at 1104.

In this case, the

Award does not show that the Arbitrator intentionally disregarded
the law.
First, the Arbitrator specifically noted that there
were several incidents of employees who had been terminated for
violating the rule prohibiting theft.
Petitioner’s CSF Ex. A, ECF No. 4.

Arbitration Award at 14,

The Arbitrator’s

consideration of these other theft incidents indicates that she
did not disregard the rule.
Second, the Court observes that Petitioner’s arguments
are virtually identical to the CBA Section 1.f favoritism
arguments discussed above in Section I of this order.
Section I, supra at 19-23.

See

As a result, the Court’s analysis in

Section I concluding that (1) the issue was not properly before

-36-

the Arbitrator, (2) that the Arbitrator need not consider posttermination evidence, (3) that Petitioner’s arguments
impermissibly challenge the factual findings of the Arbitrator,
and (4) that the Arbitrator need not state her reasoning in the
Award applies with equal force to this section.

Id.

Accordingly, the Court DENIES Petitioner’s MSJ to vacate the
Award on the basis that the Arbitrator disregarded the sixth
factor of the Just Cause Test.
B. Whether the Arbitrator Manifestly Disregarded the Law
Regarding the Employer’s Investigation
Petitioner also argues that the Arbitrator manifestly
disregarded the law regarding the fourth factor of the Just Cause
Test, which is stated as follows:

“Was employer’s investigation

conducted fairly and objectively?”

Petitioner’s MSJ at 13, ECF

No. 20 (citing Arbitration Award at 14, Petitioner’s CSF Ex. A,
ECF No. 4).

Petitioner argues that the investigation was not

“conducted fairly” because Santore was not given notice within
the 48-hour time frame specified by the CBA in Section 26.f.
at 13.

Id.

However, as the Court mentioned previously, the

Arbitrator concluded that the investigation was “objective and
fair.”
4.

Arbitration Award at 16, Petitioner’s CSF Ex. A, ECF No.

The Court is not inclined to overturn the Arbitrator’s

factual finding.

-37-

The Court once again notes that the Arbitrator did not
explain her reasoning regarding Section 26.f’s notice
requirements.

The Ninth Circuit has observed that an arbitrator

is not required to explain his or her reasoning supporting an
award.

Bosack, 586 F.3d at 1104 (citing Wilko v. Swan, 346 U.S.

427, 436, 74 S.Ct. 182, 98 L.Ed. 168 (1953), overruled in part on
other grounds by Rodriguez de Quijas v. Shearson/Am. Express,
Inc., 490 U.S. 477, 109 S.Ct. 1917, 104 L. Ed. 2d 526 (1989)).
Furthermore, the Ninth Circuit has held that, in cases where
arbitrators do not provide explanations, “it is all but
impossible to determine whether they acted with manifest
disregard for the law.”

Id. at 1104.

In this case, it is not

clear that the Arbitrator ignored the law merely because of her
lack of discussion about Section 26.f.
In the Arbitration Award, the Arbitrator examined facts
about the fairness of the investigation such as Grand Wailea’s
evaluation of written statements, interviews with witnesses, and
allowing Santore to explain his side of the story.

Arbitration

Award at 15-16, Petitioner’s CSF Ex. A, ECF No. 4.

Her

examination of these facts indicates that she at least attempted
to apply the law to the case before her instead of disregard it.
See Bosack, 586 F.3d at 1104.

As the Court noted in Section I,

both parties agree that the Grand Wailea gave the ILWU a Section
26.f notice for Santore.

See Petitioner’s MSJ at 14, ECF No. 20;

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Respondent’s Opp. at 30, ECF No. 23.

Additionally, the record

contains evidence that an agent of ILWU agreed that it was the
“practice” of ILWU to discuss the Section 26.f notice with an
employee and to give the employee a copy.
Ex. C at 1149, lines 7-20, ECF No. 4.

See Petitioner’s CSF

The Arbitrator does not

indicate in her decision that Section 26.f had been violated, and
she was not required to disclose her reasoning regarding the
Section.

The Court is not allowed to interpret the Arbitrator’s

silence as a manifest disregard of the law.

See Bosack, 586 F.3d

at 1104 (holding that failure to make an explicit finding does
not warrant vacatur, and that there must be evidence that the
arbitrator “intentionally” disregarded the law).
Petitioner urges the Court to find that the Grand
Wailea did not personally notify Santore before the March 8, 2011
meeting, and as a result, Section 26.f was violated.
Petitioner’s MSJ at 13, ECF No. 20.

See

However, the Court declines

to do so because the Court should not reconsider the merits of
the Award.

See Misco, 484 U.S. at 36, 108 S. Ct. at 370.

As

previously discussed in Section I, the Arbitrator could have used
a different interpretation of Section 26.f than Petitioner’s
interpretation.

See Section I, supra at 25-30.

Although the

Arbitration Award does not provide an explicit explanation, it is
also possible that the Arbitrator could have disagreed with
Petitioner and decided that, based on the facts before her,

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Santore received notice that met the requirements of Section
26.f.

As noted above, the Arbitrator’s silence on this specific

matter does not meet Petitioner’s burden of showing that she
disregarded the law.

See Bosack, 586 F.3d at 1104.

There must

be some evidence of her intentional disregard for the law, and
Petitioner’s arguments about factual disputes does not support a
conclusion that the Arbitrator disregard the law or that such
disregard was intentional.

Therefore, the Court DENIES

Petitioner’s MSJ to vacate the Arbitration Award on the grounds
that the Arbitrator manifestly disregarded the law.
III.

Whether the Arbitrator’s Award Violates Explicit, Well-

Defined, and Dominant Public Policies Prohibiting Anti-Union
Animus
In order to vacate an arbitration award on public
policy grounds, a court must find that (1) “an explicit, well
defined and dominant public policy exists” and (2) “the policy is
one that specifically militates against the relief ordered by the
arbitrator.”

Matthews v. Nat'l Football League Mgmt. Council,

688 F.3d 1107, 1111 (9th Cir. 2012).

The public policy “must be

ascertained by reference to the laws and legal precedents and not
from general considerations of supposed public interests.”

Id.

Additionally, the alleged policy violation must be “clearly
shown.”

Aramark Facility Servs. v. Serv. Employees Int'l Union,

Local 1877, AFL CIO, 530 F.3d 817, 823 (9th Cir. 2008).
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Furthermore, the Court must “focus on the award itself, not the
behavior or conduct of the party in question.”
Co., 265 F.3d at 795.

S. California Gas

In this case, the question is whether the

Arbitrator’s Award, which allows for discharge when an employee
commits theft and falsifies business records, is barred because
of a specific public policy.

See id.

Petitioner argues that the Award violates explicit,
well-defined, and dominant federal and state public policies
against “retaliatory discharge for anti-union animus and
whistleblowing.”

Petitioner’s MSJ at 18, ECF No. 20.

Petitioner

cites to the National Labor Relations Act (“NLRA”), 29 U.S.C. §
158(a)(1) and (3) for the proposition that there is a public
policy prohibiting discharge for anti-union animus.

Id. at 19.

Petitioner also cites to Hawai#i Revised Statutes § 378-62, which
prohibits an employer from discharging an employee for reporting
violations or suspected violations of the law to a public body.
Petitioner’s MSJ at 22, ECF No. 20.
Assuming arguendo that Petitioner’s identified policies
are explicit and well-defined, the Court concludes that the Award
does not violate these policies.

The Award on its face allows

Grand Wailea to discharge Santore for theft and for falsifying
business records; the Award does not allow Grand Wailea to
discharge Santore because of his union or whistleblowing
activities.

Arbitration Award at 14-16, Petitioner’s CSF Ex. A,

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ECF No. 4.

There is no public policy that “militates against the

relief ordered by the arbitrator,” namely, the Arbitrator’s
conclusion that Grand Wailea may discharge an employee for theft
and falsifying business records.

Matthews, 688 F.3d at 1111.

In National Labor Relations Board v. Magnusen, the
Ninth Circuit reversed an NLRB order requiring reinstatement of
an employee who, inter alia, stole from his employer.
643, 646 (9th Cir. 1975).

523 F.2d

The Ninth Circuit specifically held

that requiring reinstatement with backpay of an employee who
committed theft “would not effectuate the policies of the
[NLRA].”

Id.

The Ninth Circuit also cited cases from other

circuits holding that an employer may discharge an employee for
theft even if the employee was involved in union activities.

Id.

(citing N.L.R.B. v. Com. Foods, Inc., 506 F.2d 1065 (4th Cir.
1974) (holding that employees who were illegally fired for
engaging in union activities should not be reinstated to their
jobs if on rehearing the Board determined that the employees
stole from their employer), N.L.R.B. v. Breitling, 378 F.2d 663
(10th Cir. 1967) (holding that employer could discharge employee
for theft), and N.L.R.B. v. Big Three Welding Equipment Co., 359
F.2d 77 (5th Cir. 1966) (holding that NLRB could not order
reinstatement of employees who committed theft)), see also
N.L.R.B. v. Brookshire Grocery Co., 919 F.2d 359 (5th Cir. 1990)
(holding that employer could discharge employee under the NLRA

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for taking company papers) and 6 West Limited Corp. v. N.L.R.B.,
237 F.3d 767, 778 (7th Cir. 2001) (holding that employer’s
discharge of employee did not violate NLRA because “companies
must be able to discharge a thief or an untruthful employee”).
In this case, the Arbitrator specifically found that
Grand Wailea could legitimately terminate Santore’s employment
because (1) Santore had intentionally taken Hammer’s property,
(2) Santore had knowingly falsified Hammer’s Tip Out Sheet, and
(3) Santore had a prior record of a four-day suspension for
grabbing food with his bare hands in violation of food safety
policies and exhibiting hostility when his actions were
challenged.
No. 4.

Arbitration Award at 16, Petitioner’s CSF Ex. A, ECF

Petitioner does not contest the Arbitrator’s finding that

Santore did in fact falsify Hammer’s Tip Out Sheet and take
$50.00 from Hammer; these facts undercut all of Petitioner’s
arguments that Grand Wailea terminated Santore for an
illegitimate reason.

Participation in union activities does not

insulate an employee from the consequences of stealing or
falsifying records.

See, e.g., Magnusen, 523 F.2d 643.

The

Court therefore concludes that the Arbitrator’s Award allowing
Grand Wailea to discharge Santore for theft did not violate
public policy.
Petitioner once again attempts to raise a factual
challenge by arguing that the theft and the falsification of

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records was a “pretext” and that the real reason for the
discharge was anti-union animus.

Petitioner’s MSJ at 23-25, ECF

No. 20, Petitioner’s Reply at 11, ECF No. 26.

Petitioner argues

that it is not asking the Court to “substitute its factual
judgments for the arbitrator,” but the Court disagrees with
Petitioner’s description of its argument.
11, ECF No. 26.

Petitioner’s Reply at

For instance, Petitioner argues that Hammer’s

delay in bringing her complaint supports a finding of pretext
because the complaint occurred around the time that a corrective
action form regarding Santore’s work attendance was issued.
Petitioner’s MSJ at 26, ECF No. 20.

However, the Arbitrator made

express findings of fact that Hammer’s delay in bringing her
complaint resulted from her injury and her absence from work
until the end of February 2011.

Arbitration Award at 7,

Petitioner’s CSF Ex. A, ECF No. 4.

The resolution of this

factual matter has already been decided by the Arbitrator and
will not be disturbed by this Court.

Misco, 484 U.S. at 36, 108

S. Ct. at 370.
The Court also observes that, in order to vacate the
Award based upon Petitioner’s public policy argument, the Court
would need to find that (1) Grand Wailea’s discharge of Santore
for theft and falsifying records was pretextual and (2) that the
reason for Santore’s discharge was in reality anti-union animus
or whistleblowing activities.

Both of these factual conclusions

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would cast doubt on the Arbitrator’s finding that Grand Wailea’s
decision “to terminate Santore is no different” from its previous
terminations of employees who committed theft.
at 16, Petitioner’s CSF Ex. A, ECF No. 4.

Arbitration Award

The Court is not

allowed to make such findings to vacate an arbitration award.
See Stead Motors of Walnut Creek, 886 F.2d at 1207 n. 7 (holding
that it would be improper for a district court to make a factual
finding contrary to the implicit findings of the arbitrator) and
General Teamsters v. Mitchell Bros. Truck Lines, 682 F.2d 763,
767 (9th Cir. 1982) (holding that the court should not
redetermine the merits of a grievance by determining facts and
applying the law).
Petitioner also argues that the Arbitrator “erred by
failing to confront whether or not Santore was terminated for his
union activity.”

Petitioner’s Reply at 11, ECF No. 26.

However,

the Arbitrator’s explicit factual findings regarding the reason
for Santore’s discharge provide ample support for concluding that
the cause was not anti-union animus or whistleblowing activities.
Arbitration Award at 16, Petitioner’s CSF Ex. A, ECF No. 4.

Even

if Petitioner’s characterization of the Arbitrator’s silence
about anti-union animus and whistleblowing is correct, this Court
may not set aside the Award because a lack of explanation or
reasoning does not provide grounds to vacate an arbitration

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award.

See Enter. Wheel & Car Corp., 363 U.S. at 597-98, 80 S.

Ct. at 1361 and Bosack, 586 F.3d at 1104.
Petitioner cites to several cases where the NLRB found
that the employer’s discharge of an employee for reason of theft
was a pretext for firing the employee because of union
activities.

Petitioner’s MSJ at 20-22, ECF No. 20.

However,

these decisions are all distinguishable from the present case
because the fact-finders in those cases concluded that the
employees were fired for conducting union activities, not because
of theft.

See Midnight Rose Hotel & Casino, Inc., 343 NLRB 1003,

1004 (2004),14/ N.L.R.B. v. United Mineral & Chemical Corp., 391
F.2d 829, 833 (2d Cir. 1968),15/ and N.L.R.B. v. Quick Shop
Markets, Inc., 416 F.2d 601, 605 (7th Cir. 1969).16/

The

14/

In Midnight Rose Hotel, the administrative law judge
concluded that the employee had not committed theft. Midnight
Rose Hotel & Casino, Inc., 343 NLRB at 1004.
15/

In United Mineral & Chemical Corp., the Second Circuit
stated that the fact-finder could validly conclude based on
witness testimony that the theft had not occurred. 391 F.2d at
833. In this case, the facts are clearly different because the
Arbitrator relied upon Santore’s own admission that he had
improperly signed Hammer’s Tip Out Sheet to obtain $50.00 from
Hammer. Arbitration Award at 15, Petitioner’s CSF Ex. A, ECF No.
4.
16/

In Quick Shop Markets, the Seventh Circuit agreed with
the fact-finder’s conclusion regarding pretext and noted that the
employer did not care to investigate or determine the identity of
the employee responsible for the cash shortages. 416 F.2d at 605.
In contrast, Grand Wailea did investigate and identify that
Santore was the person who took $50 from Hammer’s paycheck.
Arbitration Award at 15, Petitioner’s CSF Ex. A, ECF No. 4.
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reviewing courts in each case upheld the fact-finder’s
conclusions, which this Court is required to do when reviewing an
arbitration award.

Misco, 484 U.S. at 36, 108 S. Ct. at 370.

In

this case, the Arbitrator made a factual finding that the
discharge occurred because of the theft and falsification of
business records instead of Santore’s union and whistleblowing
activities, and this Court will not second-guess her conclusion.
Accordingly, Petitioner’s Motion for Summary Judgment to vacate
the Award on the basis of public policy violations is DENIED.
IV.

Whether This Court Should Grant Respondent Grand Wailea’s

Counter-Motion for Summary Judgment and Confirm the Arbitration
Award
Respondent Grand Wailea moves for this Court to confirm
the Arbitration Award under 9 U.S.C. § 9, which states in
relevant part that a party to an arbitration may apply to the
court for an order confirming the award.

The court “must grant

such order unless the award is vacated, modified, or corrected.”
9 U.S.C. § 9.

For the reasons set forth above, the Court

concludes that Petitioner fails to raise a genuine issue of
material fact as to whether this Court should vacate the
Arbitration Award.

Additionally, neither party has argued that

the Award should be modified or corrected under 9 U.S.C. § 11.
Accordingly, the Court GRANTS Respondent Grand Wailea’s CounterMotion for Summary Judgment and confirms the Arbitration Award.
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CONCLUSION
For the foregoing reasons, the Court (1) DENIES
Petitioner International Longshore and Warehouse Union, Local
142, AFL-CIO’s Motion for Summary Judgment to Vacate the
Arbitration Award issued by Arbitrator Riki May Amano on October
3, 2012 in the arbitration entitled “In the Matter of the
Arbitration Between ILWU Local 142, AFL-CIO on behalf of Brian
Santore, Union v. Grand Wailea Resort and Spa, Employer” and (2)
GRANTS Respondent Grand Wailea’s Counter-Motion for Summary
Judgment and CONFIRMS the aforementioned Arbitration Award.
IT IS SO ORDERED.
DATED:

Honolulu, Hawai#i, September 10, 2013.

________________________________
Alan C. Kay
Sr. United States District Judge

INTERNATIONAL LONGSHORE AND WAREHOUSE UNION, LOCAL 142 v. GRAND WAILEA RESORT
HOTEL & SPA, Civ. No. 12-00708 ACK-RLP: ORDER (1) DENYING
PETITIONER/COUNTER-DEFENDANT’S MOTION FOR SUMMARY JUDGMENT TO VACATE THE
ARBITRATION AWARD AND (2) GRANTING RESPONDENT/COUNTERCLAIMANT’S MOTION FOR
SUMMARY JUDGMENT TO CONFIRM THE ARBITRATION AWARD.

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