Local 1 International Brotherhood of Electrical Workers, AFL-CIO v. Anheuser-Busch, LLC

Filing 11

MEMORANDUM AND ORDER: IT IS HEREBY ORDERED that plaintiff-counterdefendant Anheuser-Busch, LLC's motion for summary judgment (#18) is GRANTED. IT IS FURTHER ORDERED that defendant-counterplaintiff Local 1, International Brotherhood of Electrical Workers, AFL-CIO's motion for summary judgment (#15) is DENIED. IT IS FINALLY ORDERED that plaintiff's motion to expedite is DENIED as moot. Signed by District Judge Stephen N. Limbaugh, Jr on 11/18/16. (CSG)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION

ANHEUSER-BUSCH, LLC,

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Plaintiff-Counterdefendant,
vs.
LOCAL 1, INTERNATIONAL
BROTHERHOOD OF ELECTRICAL
WORKERS, AFL-CIO,
Defendant-Counterplaintiff.

No. 4:16-CV-990 SNLJ

MEMORANDUM and ORDER
Plaintiff-counterdefendant Anheuser-Busch, LLC (“A-B” or “the Company”) and
defendant-counterplaintiff Local 1, International Brotherhood of Electrical Workers,
AFL-CIO (“IBEW Local 1” or “the Union”) are parties to a collective bargaining
agreement pursuant to which they entered arbitration. The Company seeks to vacate the
April 22, 2016 labor arbitration award ordering reinstatement of electrician Gerald Ray
Squalls (“Squalls” or “the Grievant”), who was terminated by the Company on August 3,
2015. The Union seeks an order enforcing the arbitration award. The parties have filed
cross-motions for summary judgment.
I. Background
The following facts are undisputed except where indicated. The Union represents
a bargaining unit of maintenance employees at the Company’s brewery in St. Louis,
Missouri, and the parties’ relationship is covered by a collective bargaining agreement
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(“CBA”). The CBA provides for the filing of a grievance concerning disputes about the
meaning, interpretation, application, and violation of the CBA.
Gerald Squalls worked for the Company as an electrician and was a member of the
bargaining unit represented by the Union. Squalls’s job duties included working with
high voltage and high-speed machinery, including palletizers, a dangerous piece of
equipment with the capacity to crush and kill people. Squalls’s supervisor Russ Mathis
saw Squalls before the start of his July 17, 2015 shift and noticed that Squalls was slow and
struggling to eat a candy bar. Mathis decided Squalls was not fit to work in that condition
and took him to a conference room. Mathis and another supervisor filled out a Suspicion
Observation Checklist, and the Company decided to test Squalls for alcohol. Squalls took
a breathalyzer test and registered a blood alcohol content of 0.206, well above the legal
limit for driving. A urine test for other drugs was negative.
The Company suspended Squalls pending investigation. Squalls said he and a
friend began drinking alcohol1 at 6:30 p.m. on the night of his shift and that he stopped
drinking at 8:30 p.m. because he knew he had to work at 11 p.m.. The Company was
concerned that Squalls did not realize he was impaired and, taking into account that he and
three other employees had been suspended for drinking beer at work in January 2011, the
Company terminated Squalls on August 3, 2015 for violation of its Rule 9, which prohibits
“Being in a condition which makes it impossible for you to perform your work in a
satisfactory manner.”
Central to this case is the meaning and application of the “Beer Drinking
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It is undisputed that Squalls was drinking alcohol that was not beer.
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Memorandum of Understanding” or “Beer Drinking MOU,” which is part of the CBA.
The MOU states as follows:
BEER DRINKING DISCIPLINE
The following progressive discipline shall apply to any employee involved in
the unauthorized consumption of beer on plant premises before, during, or
after the employee’s shift.
First Offense --- a one month suspension without pay.
Second Offense --- a second offense within a four-year period – A
two-month suspension without pay.
Third Offense --- a third offense within a four-year period of having served a
two-month suspension for unauthorized beer consumption shall require
discharge.
It is further understood and agreed that:
1.
The levels of discipline provided above are firm. No arbitrator shall
have the power to reduce the level of discipline unless the arbitrator finds
that the employee is not guilty of consumption of beer on premises.
2.
The above disciplinary program deals with only the unauthorized
consumption of beer on plant premises. The Company’s rules and
disciplinary programs relating to other alcoholic beverages, drugs,
intoxication, theft, and other matters shall in no way be prejudiced by this
Agreement.
3.
Evidential Breath Testing (EBT) --- if reasonable suspicion is
substantiated that an employee has violated the Company’s Alcohol Policy
(requires employer to base suspicion on observable symptoms indicating
intoxication – e.g., appearance, behavior, speech, etc.) then the employee
will be required to submit to an EBT alcohol breath test…
An employee testing positive for alcohol will be referred to the [Employee
Assistance Program (“EAP”)] for evaluation and treatment. Failure to
comply with the EAP treatment program and follow-up recommendations
will result in dismissal…

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That MOU was in place because it was once acceptable for Company employees to
drink beer while working. When that practice stopped, the MOU’s progressive discipline
program was put into place to ease employees into the new practice.
The Union filed a grievance challenging Squalls’s discharge on August 10, 2015.
The Company denied the grievance, and, pursuant to the CBA, the unresolved grievance
was submitted to arbitration before a labor arbitrator chosen by the parties, Terry Bethel.
A hearing was held on March 3, 2016, and Arbitrator Bethel issued his award on April 20,
2016. An amended award was issued on April 22, 2016 to reserve jurisdiction to resolve
remedial disputes. The award directed the Company to reinstate Squalls and pay him lost
wages and benefits excluding 30 days, which represented a suspension. The Arbitrator
further ordered the Company to reinstate Squalls no later than June 2, 2016, which it did
not do. The Arbitrator later concluded that the Company had not advanced a good faith
reason for its failure to reinstate Squalls and ordered the Company to pay interest on
Squalls’s backpay until he was reinstated.
The Company filed this lawsuit seeking an order vacating the award, and the Union
counterclaimed seeking to enforce the award. The parties have filed cross-motions for
summary judgment.
II.

Legal Standard
Pursuant to Federal Rule of Civil Procedure 56(c), a district court may grant a

motion for summary judgment if all of the information before the court demonstrates that
Athere is no genuine issue as to material fact and the moving party is entitled to judgment as
a matter of law.@ Poller v. Columbia Broadcasting System, Inc., 368 U.S. 464, 467
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(1962). In this action to vacate an arbitration award, brought under Section 301 of the
Labor Management Relations Act, 29 U.S.C. § 185, the Court must defer to the arbitrator’s
interpretation of the CBA except in limited circumstances. See United Paperworkers Int’l
Union v. Misco, Inc., 484 U.S. 29, 38 (1987). “The arbitrator may not ignore the plain
language of the contract; but the parties having authorized the arbitrator to give meaning to
the language of the agreement, a court should not reject an award on the ground that the
arbitrator misread the contract.” Id. “Only when an arbitrator issues an award that does
not ‘draw its essence from the contract,’ because it reflects instead the arbitrator’s ‘own
notions of industrial justice,’ may a court vacate an arbitrator’s decision.” Alcan
Packaging Co. v. Graphic Commc’n Conference, Int’l Bhd. of Teamsters & Local Union
No. 77-P, 729 F.3d 839, 841 (8th Cir. 2013), as corrected (Oct. 30, 2013) (quoting Misco,
484 U.S. at 38).
III.

Discussion
The Company seeks an order vacating the Arbitration Award because, it says, the

Arbitrator based his award on something other than the CBA, displacing the Company’s
rule that an employee is subject to discharge for “[b]eing in a condition which makes it
impossible for [the employer] to perform [his] work in a satisfactory manner.” It is not
disputed that Squalls’s blood alcohol level tested at 0.206, more than twice the legal limit
for driving, more than two hours after Squalls drove to work. It is also undisputed that
Squalls became intoxicated by drinking alcohol (not beer) before arriving on Company
premises. The Company said that it terminated Squalls because Squalls was apparently
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unaware of his impaired state despite the high blood alcohol level; because Squalls said he
had drunk alcohol before his shift on other occasions; and because Squalls had been
suspended pursuant to the Beer Drinking MOU in January 2011 for drinking beer on plant
premises.
The Union observes that there is no “alcohol policy” that applies generally to
bargaining unit employees like Squalls except the last two paragraphs of the Beer Drinking
MOU. The MOU states that the “following progressive discipline shall apply to any
employee involved in the unauthorized consumption of beer on plant premises” and, below
the progressive discipline description, that the “above disciplinary program deals with only
the unauthorized consumption of beer on plant premises.” The last two paragraphs of the
MOU discuss Evidential Breath Testing (“EBT”) and note that if the Company has
“substantiated” “reasonable suspicion” that “an employee has violated the Company’s
Alcohol Policy,” then the employee must submit to a breath test. If the employee tests
positive for alcohol, then the employee will be referred to the “Employee Assistance
Program” “for evaluation and treatment.” If the employee fails to comply with the EAP
program or follow-up recommendations, the employee will be terminated.
Unlike the first part of the MOU, those last two paragraphs do not mention beer
drinking on Company property, and the Union contends that they apply generally to
employees testing positive for alcohol at work. The Union therefore says that although
employees should know that reporting for work intoxicated is prohibited, the Beer
Drinking MOU communicates that employees would be referred to EAP, not terminated, if
such an event occurs.

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The Arbitrator found that those two last paragraphs apply in cases where there is
reasonable suspicion that someone found drinking beer on Company property is impaired,
but that did “not mean there is no similar program for non-beer drinking employees who
drank before work.” (#1-5 at 9.) The Beer Drinking MOU states that “The Company’s
rules and disciplinary procedures relating to other alcoholic beverages…[and] intoxication
…shall in no way be prejudiced by this Agreement.” Thus, the question the Arbitrator
asked was “whether the Company had identified ‘rules and disciplinary procedures’
dealing with intoxication as a result of drinking off Company premises,” and, more
precisely, “whether the Company’s alcohol policy for intoxication due to off-premises
drinking permits the Company to discharge an employee for a first positive alcohol test.”
Notably, the Company does have an “alcohol policy” delineated in the Personnel
Policies and Procedures for Salaried Employees which encourages employees to seek EAP
assistance before an alcohol problem “interferes with job performance.” Unlike the Beer
Drinking MOU, that policy says nothing about referring employees to EAP when they test
positive at work; it does say that violation of the policy can result in termination of
employment. However, the Arbitrator found there was no evidence that that policy,
which was explicitly for salaried employees, was ever distributed to bargaining unit
employees such as Squalls. Further, the Arbitrator concluded that the next-to-last
paragraph of the MOU (numbered Paragraph 3) --- which invokes the “Alcohol Policy”
and allows testing in case of observable intoxication symptoms --- suggests that at the time
the parties agreed to the MOU, they recognized there was a Company Alcohol Policy that
applied to bargaining unit employees, and that Policy involves referral to EAP for a first

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positive alcohol test. In contrast, the Policy for salaried employees does not include a
referral to EAP for the same conduct.
As the Arbitrator concluded:
The most reasonable interpretation of the MOU is that beer drinking without
intoxication is covered by a three step progression schedule beginning with a
one month suspension and ending with discharge. But when there is
reasonable suspicion to test employees, the Beer Drinking MOU invokes the
Company’s Alcohol Policy and treats employees accordingly. This does
not mean that the MOU itself creates a non-beer drinking testing policy that
can result in referral to EAP; rather, once a beer drinking employee is
determined to be intoxicated on Company property, the parties intended for
the already existing Company Alcohol Policy to kick in. And, the Beer
Drinking MOU recognizes that the Company Alcohol Policy that applies
generally to bargaining unit employees includes a referral to EAP. This is
consistent with the Illegal Drug Testing provisions in Article XXIX, which
says that an employee who tests positive for [drugs] will be “referred to the
[EAP]” and then will be subject to unannounced tests, with a subsequent
positive test result resulting in termination.
(#1-5 at 10.) Furthermore, the Arbitrator found that the Company had applied such a
policy to other employees --- that there were two cases in which an employee was referred
to EAP for testing over the legal limit, even though (according to the Arbitrator) there was
no indication that the employees had been drinking beer on Company property. The
Arbitrator also found it significant that the Company had apparently never discharged a
bargaining unit employee for a first positive alcohol test at work.
Ultimately, the Arbitrator found that the Beer Drinking MOU invokes an “Alcohol
Policy” that “applies to bargaining unit employees who were intoxicated when they
reported to work” and that the “Policy includes a referral to EAP for a first positive alcohol
test and follow-up testing over a four year period.” (#1-5 at 12.) On all this, the
Arbitrator concluded that the Company did not have just cause for discharging Mr. Squalls.
Instead, the Arbitrator determined that Squalls should have been retained as an employee
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and referred to EAP. Inexplicably, he also directed the Company to reinstate Squalls with
a 30-day unpaid suspension and to pay backpay for all but the 30-day suspension period, as
if the Beer Drinking Discipline was to be applied even though no beer drinking was
involved. In any event, because Squalls said he attended counseling after his suspension
and discharge, the Arbitrator ordered that the Company could require evidence showing
that Squalls’s counseling was substantially in compliance with the usual EAP evaluations
and treatment plans.
The Court must vacate the Arbitrator’s Award. The MOU painstakingly applied
by the Arbitrator explicitly states that it applies to employees who drank beer on Company
premises. The memorandum is titled “Beer Drinking Discipline.” Its first sentence says
the discipline applies to beer drinking on plant premises. The first sentence of the MOU’s
numbered Paragraph 2 states “The above disciplinary program deals with only the
unauthorized consumption of beer on plant premises.” The second sentence of Paragraph
2 explicitly recognizes that discipline for other alcohol-related situations is to be applied
independently of the MOU: “rules and disciplinary programs relating to other alcoholic
beverages, drugs, intoxication, theft, and other matters shall in no way be prejudiced by
this Agreement.” The Arbitrator, however, determined that even though the MOU
applied to beer drinking on premises, that did “not mean there is no similar program for
non-beer drinking employees who drank before work.” (#1-5 at 9.) That is, the
Arbitrator decided to apply the Beer Drinking MOU to Union employees who arrive at

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work intoxicated, despite the clearly stated language that limits its application “to any
employee involved in the unauthorized consumption of beer on plant premises.”2
The law requires this Court to enforce awards in which the arbitrator “at least
arguably construed the relevant provision of the contract.” Alcan, 729 F.3d at 843.
Although “arguably construed” is a low threshold, this Court’s review is not a rubber
stamp. Eighth Circuit precedent is instructive. In Coca-Cola, an arbitration award was
vacated because the arbitrator relied on a “just cause” analysis under the parties’ CBA
where a superseding “last chance” agreement between the company and the grievant
should have been applied. Coca-Cola Bottling Co. of St. Louis v. Teamsters Local Union
No. 688, 959 F.2d 1438, 1442 (8th Cir. 1992). Here, the Company fired Squalls for
violating Rule 9, which prohibits employees from being “in a condition which makes it
impossible for [the employees] to perform [their] work in a satisfactory manner.” The
Union did not dispute that Squalls had violated Rule 9, but the Union argued that the Beer
Drinking MOU should apply to save Squalls from termination. As in Coca-Cola, where
the arbitrator applied irrelevant “just cause” terms where a “last chance agreement” should
have been applied, the Arbitrator here applied the irrelevant Beer Drinking MOU where
the CBA otherwise would not have limited the Company’s authority.
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The Arbitrator supported the Award by noting that two other Company employees had
been referred to EAP after alcohol-related incidents. Testimony at the hearing established that
both of those employees were disciplined for consuming beer on the Company’s premises, and
they were therefore disciplined pursuant to the Beer Drinking MOU. The Arbitrator apparently
discounts that testimony and states that his own review of documents not discussed at the hearing
suggests the employees drank alcohol before arriving at work. Indeed, those documents are
susceptible to the interpretation that the employees drank alcohol before arriving at work, despite
some indications that they were explicitly treated per the MOU. Although even the Arbitrator
appears to acknowledge the evidence is uncertain as to those employees, they are not the subject of
this lawsuit. It is undisputed that Squalls consumed alcohol --- not beer --- off the premises.
Therefore the MOU does not apply to Squalls’s conduct.
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Other arbitration awards have been vacated where, as here, “the arbitrator himself
finds the contract terms to be clear but nevertheless enters an award contrary to those
terms.” Keebler Co. v. Milk Drivers & Dairy Employees Union, Local No. 471, 80 F.3d
284, 288 n.4 (8th Cir. 1996). In Keebler, the Eighth Circuit reversed a district court and
ordered an award vacated where the arbitrator made conclusions “under the clear terms” of
that CBA but then imposed a “new obligation” on the company. Id. at 288; see also
Inter-City Gas Corp. v. Boise Cascade Corp., 845 F.2d 184, 187 (8th Cir. 1988)
(“Although the arbitrator may interpret ambiguous language, the arbitrator may not
disregard or modify unambiguous contract provisions.”). Here, the Arbitrator stated that
“the last two paragraphs detail the treatment of an employee who became intoxicated
drinking beer at work,” but the Arbitrator then went on to apply the MOU language (and
discipline) to Squalls, who had been drinking other alcohol at home, stating that those two
paragraphs do “not mean there is no similar program for non-beer drinking employees who
drank before work.” The Beer Drinking MOU says what it says. The Arbitrator
recognized that it applies only to beer drinking employees, but he still applied the
memorandum’s discipline to Squalls’s conduct, right down to the month-long suspension
called for under the beer-drinking progressive discipline plan. Although this Court is
mindful of the Eighth Circuit’s recent admonition that “we do not review whether the
arbitrator ‘correctly’ construed the Collective Bargaining Agreement,” NFL Players
Assoc. v. NFL, 831 F.3d 985, 993 (8th Cir. 2016), the arbitrator “may not ignore the plain
language of the contract,” Misco, 484 U.S. at 38, and he “does not sit to dispense his own
brand of industrial justice.” United Steelworkers v. Enterprise Wheel & Car Corp., 363
U.S. 593, 597 (1960). Where the arbitrator’s words “manifest an infidelity to this
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obligation” to draw the award’s “essence from the” CBA, the court has “no choice” but to
refuse to enforce the award. Id. The Union couches the Arbitrator’s decision as having,
“at a minimum, ‘arguably construed’ and applied the Company’s Alcohol Policy referred
to in the CBA” (#22 at 3), but that Policy is referred to in the MOU, and the MOU is --- by
terms the Arbitrator himself recognized --- not applicable under the undisputed facts of this
case. In short, the MOU for Beer Drinking Discipline applies only to beer drinking on
Company premises. The Court cannot ignore the Arbitrator’s application of that wholly
inapplicable MOU. See Coca-Cola, 959 F.2d at 1442; Keebler Co., 80 F.3d at 288 n.4;
Inter-City Gas Corp., 845 F.2d at 187. The Arbitration Award will be vacated.
Accordingly,
IT IS HEREBY ORDERED that plaintiff-counterdefendant Anheuser-Busch,
LLC’s motion for summary judgment (#18) is GRANTED.
IT IS FURTHER ORDERED that defendant-counterplaintiff Local 1,
International Brotherhood of Electrical Workers, AFL-CIO’s motion for summary
judgment (#15) is DENIED.
IT IS FINALLY ORDERED that plaintiff’s motion to expedite is DENIED as
moot.
Dated this

18th

day of November, 2016.

STEPHEN N. LIMBAUGH, JR.
UNITED STATES DISTRICT JUDGE

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