B.E. & K. Construction Company v. International Association of Machinists and Aerospace Workers District No. 9

Filing 28

MEMORANDUM AND ORDER : IT IS HEREBY ORDERED that Employer's Motion for Summary Judgment 19 is DENIED. IT IS FURTHER ORDERED that the Union's Motion for Summary Judgment 20 is GRANTED in part and DENIED in part, Employer's Complaint is DISMISSED with prejudice and the Award is CONFIRMED in its entirety.. Signed by District Judge Rodney W. Sippel on 12/2/16. (LGK)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
B. E. & K. CONSTRUCTION
COMPANY,

)
)
)
Plaintiff/
)
Counter-Defendant,
)
)
v.
)
)
INTERNATIONAL ASSOCIATION )
OF MACHINISTS AND
)
AEROSPACE WORKERS
)
DISTRICT NO. 9,
)
)
Defendant/
)
Counter-Plaintiff.
)

Case No. 4:16 CV 1124 RWS

MEMORANDUM AND ORDER
Employer B. E. & K. Construction Company (“Employer”) and Union
International Association of Machinists and Aerospace Workers District No. 9 (the
“Union”) are parties to a collective bargaining agreement (“CBA”). Employer and
the Union agreed to arbitrate a dispute concerning termination of Employer’s
employee, Curtis Goewey (“Goewey”). Employer filed the present lawsuit seeking
to overturn the arbitration award. Employer asserts that the arbitrator exceeded his
authority under the CBA. The parties submitted cross-motions for summary
judgment. Based upon a review of the record before the court, I will uphold the
arbitration award and enter summary judgment in the Union’s favor. However, I

will deny the Union’s accompanying motion for attorneys’ fees and costs.
I.

Background

The facts in this matter are undisputed. Employer and the Union are parties
to the CBA, which is effective from August 30, 2014 until August 29, 2017.
Employer employed Goewey from October 4, 2008 until February 23, 2015, when
Employer terminated him for alleged acts of dishonesty and insubordination.
Goewey’s employment was subject to the terms of the CBA and he was
represented by the Union. The CBA includes the following relevant provisions
regarding termination and arbitration:
Section 7.1. No employee shall be suspended or discharged without
cause and all dismissals will be subject to the Grievance Procedures
and Arbitration clause set forth in this Agreement.
Section 7.2. The following are representative of the type of serious
misconduct which may result in immediate termination regardless of
the number of prior reprimands: theft, dishonesty; violation of the
drug/alcohol policy; refusal to follow lawful instructions; failure to
perform work as directed after written counseling and an opportunity
to improve; violation of contract provisions, BASF rules, government
regulation, or applicable Federal and/or State Laws; serious
insubordination, security or safety violations or other serious
misconduct…For infractions not involving serious misconduct,
progressive discipline will ordinarily be applied in the following
steps: 1) verbal; 2) written reprimand; 3) unpaid suspension for up to
10 days; 4) termination. Offenses are cumulative and any violation
will result in the next step of discipline (unless serious misconduct
occurs, which will result in termination).
Section 9.2. The decision of the arbitrator shall be final and binding.
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The arbitrator’s authority shall be limited to the express terms of this
Agreement and he shall have no authority to modify or alter this
Agreement. The arbitrator shall have no authority to modify the
discipline imposed unless it was demonstrated that the Company
failed to follow the progressive discipline procedure or did not have
cause under this Agreement to impose either a suspension or
termination.
At the time of the incident at issue, Goewey was employed as an electrician
and instrumentation tech at a plant managed by Employer’s client, BASF
Corporation, in Palmyra, Missouri. Goewey worked the day shift, from 6:30 a.m.
to 2:30 p.m. Because Goewey worked with chemicals, he typically had time to
shower prior to the 2:30 p.m. scheduled end of his workday. In some instances, an
employee could obtain a “holdover,” in which he would clock out later than the
end of his scheduled shift and receive overtime pay for the additional time. For
example, an employee like Goewey who was assigned to work with toxic
chemicals but did not have time to shower before his shift’s scheduled end time
might be granted a holdover.
On February 10, 2015, Goewey attended a training session, which was
scheduled to end at 2:00 p.m. The session ended late, sometime around 2:15 p.m.,
so Goewey asked a foreman who was present, Tom Waite (“Waite”), whether there
would be a holdover. Waite told Goewey that he should clock out at 2:30 p.m.
After leaving the training session, rather than obeying Waite’s instruction, Goewey
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proceeded to seek out a different answer from other supervisors. First, Goewey
tried to contact his direct supervising foreman, Eric Hack (“Hack”), by radio, to
request a holdover, but Hack was unavailable. Next, Goewey requested a holdover
from another foreman, Nathan Quick (“Quick”), who was nearby, but Quick told
Goewey that he did not have authority to approve of a holdover. Finally, Goewey
telephoned supervisor Greg Harris (“Harris”), to whom the foremen report, to
repeat the holdover request, although Goewey did not mention his prior
communications with Waite or Quick. Harris agreed to grant the holdover, so
Goewey clocked out late and received a half-hour of overtime pay. Employer
terminated Goewey on two grounds related to this incident: 1) insubordination, for
not abiding by Waite’s initial directive to clock out at 2:30 p.m.; and 2) dishonesty,
for seeking out other supervisors after receiving Waite’s order and not mentioning
Waite’s order to those supervisors.1
Following Goewey’s termination, the Union filed a grievance. The parties
were unable to come to an initial resolution, so they agreed to arbitrate the matter
pursuant to the terms of the CBA. Employer and the Union mutually selected
Thomas L. Yaeger (the “Arbitrator”) to serve as arbitrator. The parties agreed that
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The arbitration also addressed another incident which occurred on February 6, 2015. Employer
argued that either incident provided cause for Goewey’s termination. The Arbitrator held that
Employer did not have cause to discipline Goewey in connection with the February 6, 2015
incident. Employer has not asked the court to vacate the Award with respect to that finding, so I
have not addressed it.
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the Arbitrator would decide on the following issue: “Was Mr. Goewey terminated
for cause as required by the contract? If not, what is the appropriate remedy?” On
June 8, 2016, following two hearings and the parties’ submission of briefs, the
Arbitrator issued his arbitration award (the “Award”). The Award concluded that
Goewey’s actions in obtaining the holdover constituted “serious misconduct” as
defined by the CBA; however, Employer did not have sufficient cause to discharge
Goewey under the CBA. Citing relevant provisions of the CBA, including
Sections 7.1, 7.2, and 9.2, the Arbitrator agreed that Goewey should be disciplined
for serious misconduct, specifically for his dishonesty and refusal to follow
instructions. The Arbitrator reasoned, however, that the circumstances did not
necessitate or warrant termination, since Section 7.2 of the CBA permissively
provides that serious misconduct “may result in immediate termination” [emphasis
added]. The Arbitrator cited, but did not discuss extensively, the additional
language of Section 7.2 of the CBA, which provides that progressive disciplinary
procedures apply “(unless serious misconduct occurs, which will result in
termination)” [emphasis added]. The Arbitrator also considered additional factors
related to whether Employer generally had cause to terminate Goewey. In
particular, the Award discussed Goewey’s lack of a prior disciplinary record and
the Employer’s relevant disciplinary practice, which did not include any pattern of
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discipline in similar cases. Ultimately, the Arbitrator determined that Goewey’s
misconduct was not so egregious as to provide cause for immediate discharge. The
Award ordered Employer to reinstate Goewey, convert the termination to a fiveday disciplinary suspension, and make him whole for related losses.
Employer requested reconsideration of the Award by the Arbitrator, which
the Arbitrator denied. Employer filed this lawsuit asking the court to vacate the
Award under Section 301 of the Labor Management Relations Act, 29 U.S.C. §
185, arguing that the Arbitrator exceeded his authority by impermissibly ignoring
and modifying the plain language and essence of the CBA. The Union filed a
counterclaim seeking enforcement of the Award and payment of its attorneys’ fees
and costs. Both parties have moved for summary judgment as a matter of law.
II.

Legal Standard
a. Summary Judgment

Summary judgment is appropriate if the evidence, viewed in the light most
favorable to the nonmoving party, demonstrates that there is no genuine issue as to
any material fact and that the moving party is entitled to judgment as a matter of
law. Lynn v. Deaconess Medical Center, 160 F.3d 484, 486 (8th Cir. 1998) (citing
Fed. R. Civ. P. 56(c)). The party seeking summary judgment bears the initial
responsibility of informing the court of the basis of its motion and identifying those
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portions of the affidavits, pleadings, depositions, answers to interrogatories, and
admissions on file which it believes demonstrates the absence of a genuine issue of
material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). When such a
motion is made and supported by the movant, the nonmoving party may not rest on
his pleadings but must produce sufficient evidence to support the existence of the
essential elements of his case on which he bears the burden of proof. Id. at 324. In
resisting a properly supported motion for summary judgment, the plaintiff has an
affirmative burden to designate specific facts creating a triable controversy.
Crossley v. Georgia Pacific Corp., 355 F.3d 1112, 1113 (8th Cir. 2004).
b. Arbitration
For actions arising under Section 301 of the Labor Management Relations
Act, 29 U.S.C. § 185, “we review an arbitrator's award to determine whether: (1)
the parties agreed to arbitrate; and (2) the arbitrator had the power to make the
award.” PSC Custom, LP v. United Steel, Paper & Forestry, Rubber, Mfg., Energy,
Allied Indus. & Serv. Workers Int’l Union, Local No, 11-770, 763 F.3d 1005, 1008
(8th Cir. 2014) (quoting Excel Corp. v. United Food & Commercial Workers Int'l
Union, Local 431, 102 F.3d. 1464, 1467 (8th Cir. 1996)). Here, there is no dispute
as to whether the parties agreed to arbitrate, so the sole issue is whether the
Arbitrator had the power to make the Award.
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I must review the Award narrowly. “Judicial review of an arbitrator’s
decision is extremely limited,” and the arbitrator’s award must be accorded “an
extraordinary level of deference.” PSC Custom, 763 F.3d at 1008 (quoting Boise
Cascade Corp. v. Paper Allied–Indus., Chem. & Energy Workers, 309 F.3d 1075,
1080 (8th Cir. 2002)). “We give substantial deference to labor arbitration awards
because federal policy favors the resolution of private labor disputes by arbitration
to which the parties agreed.” Boehringer Ingelheim Vetmedica, Inc. v. United
Food & Commercial Workers, 739 F.3d 1136, 1139 (8th Cir. 2014). “[A]s long as
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.” Id. at 1140 (quoting United
Paperworkers Int'l Union v. Misco, Inc., 484 U.S. 29, 38 (1987)). “Courts are not
authorized to review the arbitrator’s decision on the merits despite allegations that
the decision rests on factual errors or misinterprets the parties’ agreement.” Major
League Baseball Players Ass'n v. Garvey, 532 U.S. 504, 509 (2001). Nevertheless,
the Award is not altogether free from review. An arbitrator “does not sit to
dispense his own brand of industrial justice,” and an arbitration award will be
deemed “legitimate only so long as it draws its essence from the collective
bargaining agreement.” United Steelworkers v. Enter. Wheel & Car Corp., 363
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U.S. 593 (1960). “The arbitrator may not ignore the plain language of the
contract” or “modify unambiguous contract provisions.” Boehringer, 739 F.3d at
1140.
III.

Discussion
a. Waiver of Mandatory Termination Argument

The Arbitrator found that Goewey committed serious misconduct by acting
dishonestly and failing to follow instructions, but concluded that Employer did not
have cause to terminate Goewey under the CBA. Employer now asserts, for the
first time, that the Award should be vacated because the Arbitrator did not find that
“serious misconduct” necessitated immediate termination. Employer did not raise
this argument during arbitration. By not presenting this position during arbitration,
Employer waived its ability to argue that the Arbitrator’s ultimate factor-based
interpretation and application of the CBA exceeded his authority. “In general,
federal courts do not permit a party to withhold an issue or argument during
arbitration and then, upon losing, raise it to the reviewing court.” Boehringer, 739
F.3d at 1140. “[O]nce the parties have gone beyond their promise to arbitrate and
have actually submitted an issue to an arbiter, we must look both to their contract
and to the submission of the issue to the arbitrator to determine his authority.” PSC
Custom, 763 F.3d at 1010 (quoting John Morrell & Co. v. Local Union 304A of
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the United Food & Commercial Workers, 913 F.2d 544, 561 (8th Cir. 1990)).
Here, the parties stipulated that the Arbitrator would decide on the following
statement of issue: “Was Mr. Goewey terminated for cause as required by the
contract? If not, what is the appropriate remedy?” Employer expressly agreed to
this “for cause” analysis. Moreover, it does not appear that Employer clearly
presented any argument to the Arbitrator in favor of mandatory termination, but
instead made factor-based arguments in accordance with the stipulated issue of
whether cause for termination existed. For example, Employer’s post-hearing brief
for the Arbitrator failed to quote or discuss the allegedly mandatory “will result”
language from Section 7.2 of the CBA. Employer’s brief also argued that “the
penalty for dishonesty and/or serious insubordination, according to the parties’
Agreement can be termination of employment,” suggesting that the CBA
permitted, but did not require, termination under the circumstances. By stipulating
to the issue for decision and failing to present argument in favor of mandatory
termination to the Arbitrator, Employer waived the opportunity to challenge the
Arbitrator’s focus upon the agreed-upon issue and scope. “Having requested that
the arbitrator determine whether [Goewey] was terminated for just cause,
[Employer] cannot now be heard to complain that the arbitrator performed that
very analysis.” Bureau of Engraving v. Graphic Commc'n Int'l Union, Local 1B,
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284 F.3d 821, 825 (8th Cir. 2002).
b. Arbitrator’s Interpretative Authority
Even if Employer did not waive its ability to challenge the Arbitrator’s
analysis, I must accord extreme deference to the Award. Employer argues that the
Arbitrator ignored and effectively modified plain language of the CBA, which
mandates discharge in cases of serious misconduct. The Award should be upheld,
however, because Arbitrator acted within the scope of his authority in interpreting
and applying the terms and essence of the CBA. “[T]he 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.” Alcan
Packaging Co. v. Graphic Commc’n Conference, Int’l Bhd. of Teamsters & Local
Union No. 77–P, 729 F.3d 839 (8th Cir. 2013) (quoting Misco, 484 U.S. at 38).
“A mere ambiguity in the opinion accompanying an award, which permits the
inference that the arbitrator may have exceeded his authority, is not reason for
refusing to enforce the award.” PSC Custom, 763 F.3d at 1008 (quoting United
Steelworkers, 363 U.S. at 598).
Regardless of whether the Arbitrator made a mistake in interpreting the CBA
or whether I disagree with the result, the Award will stand if the CBA was
susceptible to construction. “We cannot interfere with the arbitrator’s award
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‘unless it can be said with positive assurance that the contract is not susceptible of
the arbitrator’s interpretation.’” PSC Custom, 763 F.3d at 1008 (quoting Kewanee
Mach. Div. v. Local Union No. 21, Int'l Bhd. of Teamsters, 593 F.2d 314, 318 (8th
Cir.1979)). Here, the CBA presents at least two potential interrelated ambiguities
which were subject to the Arbitrator’s reasonable interpretation: (a) whether
termination for serious misconduct is mandatory or permissive, and (b) whether
CBA provisions concerning general cause for termination should be considered
alongside the specific language of Section 7.2 of the CBA. The Award specifically
cites the relevant language of Sections 7.1 and 7.2 of the CBA, demonstrating that
the Arbitrator did not ignore or attempt to modify any plain language of the CBA.
Although the Award focuses upon the permissive “may” provision found in
Section 7.2 of the CBA (“[t]he following are representative of the type of serious
misconduct which may result in immediate termination”), the Award also cites the
arguably mandatory “will result” language found in Section 7.2 of the CBA
(progressive disciplinary procedures apply “(unless serious misconduct occurs,
which will result in termination)”), suggesting that the Arbitrator was aware of and
considered both provisions in constructing the CBA. As a result, the Arbitrator
modified the penalty rather than the terms of the CBA, consistent with his
authority.
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The Arbitrator appears to have broadly analyzed the terms and essence of
the CBA in making a factor-based for cause determination. “It was for the
arbitrator to harmonize any discordant provisions within the contract relating to the
discretionary authority granted management and the just-cause requirements
limiting that authority.” Trailmobile Trailer, LLC v. Int’l Union of Electronic,
Electrical, Salaried, Machine & Furniture Workers, AFL-CIO, 223 F.3d 744, 747
(8th Cir. 2000). As previously noted, Section 7.2 of the CBA provides examples
of serious misconduct and a progressive discipline procedure. This specific
language may be read in connection with the general for cause standards of the
CBA, including: (i) Section 7.1, which states that “[n]o employee shall be
suspended or discharged without cause,” and (ii) Section 9.2, which grants the
Arbitrator the authority to modify disciplinary penalties if the Arbitrator finds that
the Employer did not have cause to impose a termination. The Award provides
adequate reasoning for the Arbitrator’s conclusion that Employer did not establish
sufficient cause for termination under the terms and essence of the CBA.
The Eighth Circuit has accorded extreme deference to arbitrator’s awards in
similar cases concerning termination of employees. See, e.g., PSC Custom, 763
F.3d 1005 (court reinstated arbitrator’s decision to modify penalty where
termination was mandated by collective bargaining agreement, but parties
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stipulated to just cause analysis and arbitrator determined that just cause for
termination did not exist); Boehringer, 739 F.3d 1136 (employer was precluded
from challenging arbitrator’s silence on alleged unambiguous discharge mandate
since employer had not presented argument on provision at issue; collective
bargaining agreement did not included unambiguous exception to the just cause
analysis); Bureau of Engraving, 284 F.3d 821 (arbitrator had authority to depart
from specific contract language suggesting termination for absenteeism was
mandatory in light of general for cause language of agreement and parties’ for
cause framing of the issue); Trailmobile, 223 F.3d 744 (arbitrator had authority to
reconcile contract provisions, including a general for cause provision, where nonmandatory rule stated that employee “may” be discharged for actions at issue);
Local 238 Int’l Bhd. Of Teamsters, Chauffeurs, Warehousemen & Helpers v.
Cargill Inc., 66 F.3d 988 (8th Cir. 1995) (upholding arbitrator’s determination that
there was not sufficient just cause for discharge based upon interpretation of
discordant policy provisions). Overall, these cases suggest that the Award should
be upheld.
Employer has not demonstrated that the Arbitrator exceeded his authority in
making the Award. As a result, I must defer to the Arbitrator’s reasoned
interpretation of the terms and essence of the CBA by upholding the Award.
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c.

Attorneys’ Fees

The Union has also requested an award of its attorneys’ fees and costs for
this matter. Section 301 of the Labor-Management Relations Act of 1947 does not
provide a statutory basis for the recovery of attorneys’ fees, but the Eighth Circuit
will authorize an award of attorneys’ fees for an action brought under Section 301
if the losing party “acted in bad faith, vexatiously, wantonly, or for oppressive
reasons.” American Fed’n of Musicians, Local 2–197, AFL-CIO, v. The St. Louis
Symphony Soc’y, 203 F.3d 1079, 1082 (8th Cir. 2000). A court may factually
determine that bad faith exists where a party’s claim is totally without merit,
“frivolous, unreasonable, or groundless, or [where the party] continued to litigate
after it clearly became so.” Actors’ Equity Ass’n v. Am. Dinner Theatre Inst., 802
F.2d 1038, 1042 (8th Cir.1986) (quoting Christiansburg Garment Co. v. EEOC,
434 U.S. 412, 421–22 (1978)). In this case, Employer presented argument based
upon legal and factual reasoning and the Union has not demonstrated requisite bad
faith on the part of Employer. As such, I will deny the Union’s motion for
attorneys’ fees and costs.
For the foregoing reasons, and based upon the record before the Court, I
conclude that the Award shall be upheld. Employer’s Motion for Summary
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Judgment shall be denied, and the Union’s Motion for Summary Judgment with
respect to enforcement of the Award shall be granted. The Union’s motion for
attorneys’ fees and costs shall be denied.
Accordingly,
IT IS HEREBY ORDERED that Employer’s Motion for Summary
Judgment [19] is DENIED.
IT IS FURTHER ORDERED that the Union’s Motion for Summary
Judgment [20] is GRANTED in part and DENIED in part, Employer's Complaint
is DISMISSED with prejudice and the Award is CONFIRMED in its entirety.

______________________________
RODNEY W. SIPPEL
UNITED STATES DISTRICT JUDGE
Dated this 2nd day of December, 2016.

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