Procter & Gamble Manufacturing Company, The v. Association of Employees of the St. Louis Plant
MEMORANDUM AND ORDER : IT IS HEREBY ORDERED that Plaintiff's motion for summary judgment ECF No. 22 is DENIED. IT IS FURTHER ORDERED that Defendants motion for summary judgment ECF No. 26 is GRANTED in part. IT IS FURTHER ORDERED that the April 17, 2018 Opinion and Award In the matter of Arbitration between Procter & Gamble, Mfg. Co. and Association of Employees of the St. Louis Plant is CONFIRMED and shall be enforced. IT IS FURTHER ORDERED that Procter & Gamble must immediately rei nstate Nick Hassard with full back pay from April 23, 2018 through the date of reinstatement. P&G must also include 9% interest on the total amount of back payment. IT IS FURTHER ORDERED that the Association of Employees of the St. Louis Plants request for attorney's fees and costs is DENIED. Signed by District Judge Rodney W. Sippel on 9/30/19. (ARL)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
PROCTER & GAMBLE
) Cause No. 4:18 CV 1026 RWS
ASSOCIATION OF EMPLOYEES OF )
THE ST. LOUIS PLANT,
MEMORANDUM & ORDER
This matter is before me on the parties’ cross-motions for summary
judgment. Plaintiff Procter & Gamble (P&G) moves to vacate an arbitration award
(the Award) that reinstated Nick Hassard, an employee who P&G had previously
terminated. P&G argues it is entitled to vacatur of the Award because the
arbitrator exceeded his authority when he ordered P&G to reinstate Hassard.
Defendant Association of Employees of the St. Louis Plant (the Union) moves for
enforcement of the Award and argues that the arbitrator acted within the scope of
his authority when he ordered P&G to reinstate Hassard. The parties do not
dispute the material facts at issue or that summary judgment is proper in this case.
Nick Hassard, a member of the Union, began working at P&G in 2005. On
July 27, 2017, P&G discharged Hassard after a series of disciplinary violations, the
last of which was a third failure to lock out and tag out (LOTO) energy from a
large piece of machinery a couple of days earlier. The final violation arose when
Hassard briefly “broke the plane” of a machine without having followed the proper
LOTO procedure. Based on Hassard’s previous violations, the company moved
Hassard to step four of its four-step Progressive Discipline System (PDS). At step
four of the PDS, an employee is terminated. See Procter & Gamble Manufacturing
Company’s Statement of Uncontroverted Material Facts, ECF No. 24, at ¶ 5 (table
outlining the PDS).
After P&G terminated Hassard, the Union filed a grievance under Article
XIV of the Collective Bargaining Agreement (CBA) that governed the
employment relationship between P&G and Hassard. P&G and the Union did not
resolve the grievance internally. Because the grievance was not resolved, the
grievance was submitted the dispute to a Board of Arbitration (the Board)
according to the procedure in the governing CBA. That procedure sets forth that
P&G and the Union may each appoint one arbitrator to the board, while the third
arbitrator is picked from a rotating panel of arbitrators listed in the CBA. In this
case, the third arbitrator was Josef Rohlik (the Arbitrator), who also drafted the
The question the parties presented to the Board was “the general question of
whether or not the company had cause to terminate [Hassard] and if not what the
remedy should be.” ECF No. 25-3, 21:15-19. After a hearing on December 6,
2017, the Arbitrator submitted his draft Opinion and Award to the arbitrators for
P&G and the Union on April 17, 2018. The Award found that P&G did not have
just cause1 to terminate Hassard, and it ordered P&G to reinstate Hassard without
back pay. The Union’s arbitrator, Michael Reilman, concurred in the Award on
April 23, 2018, making it final and binding on the parties. See CBA, ECF No. 251, at 38 (page 34 in original document) (“The decision of any two of the three
arbitrators shall be final and binding upon the Employer and the Union.”). As of
the cross-filings for summary judgment in this case, P&G has not reinstated
Summary judgment is appropriate when “there is no genuine dispute as to
any material fact and the movant is entitled to judgment as a matter of law.”
Gilkerson v. Nebraska Colocation Centers, LLC, 859 F.3d 1115, 1118 (8th Cir.
Both P&G and the Union have referred to the “cause” inquiry as a “just cause” inquiry. See Pl.
Compl., ECF No. 1, ¶ 2; Def./Counter-Pl. SUMF, ECF No. 28, ¶ 14.
2017) (citing Fed. R. Civ. P. 56(a)). At the summary judgment stage, “[a]ll facts
must be viewed in the light most favorable to the nonmoving party.” Id. The party
seeking summary judgment bears the initial responsibility of informing the court of
the basis of its motion and identifying those 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). 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.
A court’s review of an arbitration award is “extremely limited.” United Food
& Comm. Workers v. Shop ‘N Save Warehouse Foods, Inc., 113 F.3d 893, 894
(8th Cir.1997). Courts 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)).
For example, the court may not disturb the arbitrator’s “view of the facts.”
Alvey, Inc. v. Teamsters Local Union No. 688, 132 F.3d 1209, 1212 (8th
Cir.1997). Indeed, it may not revisit the merits of an award even if it believes the
arbitrator “committed serious error” when interpreting the CBA at issue. United
Paperworkers Int’l Union v. Misco, Inc., 484 U.S. 29, 38 (1987). “An arbitrator’s
award must be enforced as long as he is arguably construing or applying the
collective bargaining agreement rather than dispensing his own brand of industrial
justice.” Homestake Mining Co. v. United Steelworkers of America, 153 F.3d 678,
680 (8th Cir.1998) (internal quotation marks and brackets omitted). That standard
is met as long as the award “draws its essence from” the governing CBA. Int’l
Paper Co. v. United Paperworkers Int’l Union, 215 F.3d 815, 817 (8th Cir.2000).
To determine whether vacatur is warranted in this case, I consider two
issues. First, I review the factual record and the Award to determine whether the
Arbitrator acted within the scope of his authority based on the question the parties
presented to the Board. Second, I evaluate whether the Award is “arguably
construing or applying” the CBA between the parties. Boehringer Ingelheim
Vetmedica, Inc., 739 F.3d at 1139.
a. The Award Did Not Exceed the Scope of the Question Presented
The Parties’ CBA sets forth how arbitrators are to consider the issues
presented to them:
The Board of Arbitration shall confine its consideration to the issue or issues
stipulated jointly in writing by the employer and the Union before the Board
of Arbitration convenes, and they shall neither add to nor subtract from the
written stipulation or the written provisions of this agreement in making a
See CBA, ECF No. 25-1, at 37-38 (pages 33-34 in original document).2 The
question presented to the Board establishes a two-step inquiry: 1) whether the
company had just cause to terminate Hassard, and 2) if the company did not have
cause to terminate Hassard, what should the remedy be?
P&G argues the Award implies that P&G had just cause to terminate
Hassard, and the Arbitrator exceeded his authority when he nonetheless moved to
step two of the inquiry and fashioned an alternate remedy. Initially, as P&G
argues, this case appears similar to N. States Power Co., Minnesota v. Int’l Bhd. of
Elec. Workers, Local 160, 711 F.3d 900 (8th Cir. 2013). In N. States Power Co.,
the Eighth Circuit ruled that an arbitrator who even impliedly found that a
company had “just cause” to terminate an employee exceeded his authority when
he also decided to order the company to reinstate the employee. 711 F.3d at 903
While the parties did not formally stipulate to the issues presented in writing, they agree that
the issues, or question, presented to the Board was “whether or not the company had [just] cause
to terminate [Hassard] and if not what the remedy should be.” ECF No. 25-3, 21:15-19.
(“Having answered the [just cause] question in the affirmative, the arbitrator had
no authority to address the second question or to fashion a remedy different than
the termination.”). However, as I am mindful that “[j]udicial review of the
arbitrator’s ultimate decision is very deferential,” I do not find it warranted to
extend the holding N. States Power Co. to the different set of facts before me in
this case. 711 F.3d at 901. This case is distinct from N. States Power Co. in three
important ways that are central to my ruling.
First, the N. States Power Co. opinion considered a specific CBA provision
that is not at issue in this case. There, the arbitrator was interpreting a CBA that
contained language stating “in the matter of suspension, demotion, or discharge, if
after hearing witnesses, the charges are not sustained . . . the arbitration board may
rule that the employee shall or shall not receive full or partial wages from the
Company.” 711 F.3d at 902 (quoting the CBA at issue). That provision
constrained the arbitrator’s authority in a way not applicable here: the parties in the
case before me do not argue that there is a CBA provision that specifically guides
the Arbitrator’s consideration of the propriety of punishment.
Second, because of the more specific CBA provision in the N. States Power
Co. case, the Eighth Circuit opinion evaluated whether the arbitrator found that the
employer substantiated the charges underlying the punishment, rather than the
propriety of the punishment itself. Finally, the award in N. States Power Co. found
that the employer had “demonstrated justification” for its decision to terminate the
employee, a stronger finding than the Arbitrator in this case made.
The question in this case, which asks whether P&G had just cause to
terminate Hassard, is necessarily a question of the propriety of Hassard’s
termination. This means the question asks not only whether Hassard committed
the violations P&G alleges, but also whether those violations provide just cause to
terminate Hassard in light of the totality of the circumstances. A finding that
Hassard broke the rules as alleged by P&G is not necessarily a finding that P&G
had just cause to terminate him.
Accordingly, the Award took pains to clarify what specifically the arbitrator
found. The Award states “the Company did not abuse its discretion as a matter of
violation of the Agreement, its Rules, and the practice of the Parties.” ECF No. 254, at 14 (underline in original). It also states that the Arbitrator could not conclude
“that P&G could not decide to discharge [Hassard] after the third LOTO
violation.” Id. at 15. These statements affirm that P&G sustained its charge that
Hassard’s actions at work violated the Agreement, P&G’s Rules, and the practice
of the parties. They also affirm that the PDS lists termination as the consequence of
reaching the fourth step in the Progressive Disciplinary System. The question was
not what happens at step four, it is whether P&G had just cause to move Hassard to
step four and terminate him.
Before the Arbitration Board and before me, the Union has not disputed the
factual underpinnings of Hassard’s violations of the Agreement, P&G’s Rules, and
the practice of the parties. See, e.g., Arb. Tr., ECF No. 25-3, at 22:19-25 (“largely
the facts that brought us to this day are not in dispute . . . the union’s never
contested whether or not a violation has occurred.”); Defendant/Counter-Plaintiff’s
Response to Procter & Gamble Manufacturing Company’s Statement of
Uncontroverted Material Facts, ECF No. 32, at ¶ ¶ 6-7 (disputing P&G’s facts on
the basis they are argumentative, not that they are incorrect). But it is different to
find that P&G was correct to allege that Hassard had violated company policies
and procedures, and theoretically could be escalated to step four of the PDS in a
vacuum, and to determine that P&G had just cause to terminate Hassard.
The Arbitrator does not state or imply that Hassard’s violations gave P&G
just cause to escalate Hassard to step four of the PDS and terminate him; the
Award makes clear that the factual inquiry is separate from the inquiry of whether
those facts give the company just cause to terminate Hassard. For example, the
Award observes that when an arbitrator finds a company has not abused its
discretion in the disciplinary process, the arbitrator ordinarily denies the
employee’s (union’s) grievance. However, the Award continues, sometimes a
reversal of the company’s decision is warranted. Award, ECF No. 25-4, at 15.
The Arbitrator “in forty years of arbitration practice encompassing over two
thousand cases has done it three times, and this case is the fourth.” Id. This
statement distinguishes between finding no abuse of discretion “as a matter of
violation of the Agreement, its Rules, and the practice of the Parties,” and
affirmatively finding just cause for termination. Id. at 14.
Both the reasoning and ultimate remedy in the Award make clear the
Arbitrator concluded that P&G did not have just cause to move Hassard to step
four of the PDS and terminate him. Because the Award did not find or imply that
P&G had just cause to terminate Hassard, the Arbitrator did not exceed his
authority when he moved to step two of the two-part question presented and
fashioned an alternate remedy.
b. The Award Drew Its Essence From the CBA
My finding that the Award did not go beyond the question presented informs
my conclusion that the Award does not exceed the Arbitrator’s authority under the
CBA. P&G’s assertion that the Award goes beyond the Arbitrator’s authority is in
part belied by the fact that P&G itself agreed to ask the Board whether the
company had just cause to terminate Hassard. In this case, “it is highly significant
that both parties explicitly asked the arbitrator to find whether” Hassard “was
discharged for sufficient just cause and to determine the appropriate remedy if he
was not. When two parties submit an issue to arbitration, it confers authority upon
the arbitrator to decide that issue.” Local 238 Int’l Bhd. of Teamsters, Chauffeurs,
Warehousemen & Helpers v. Cargill, Inc., 66 F.3d 988, 990–91 (8th Cir. 1995).
P&G “cannot now argue that the arbitrator had no authority to decide an issue it
agreed to submit.” Id. at 991.
P&G’s arguments in favor of vacatur of the Award are targeted at its merits
and reasoning. P&G argues that the Award subtracted from the PDS, disregarded
the actions the company took when deciding to discharge Hassard, balanced
equities when reinstating Hassard, and relied on incorrect facts not in the record.
None of these arguments undermine the authority P&G granted the arbitrator when
it posed the question of whether P&G had just cause to terminate Hassard.
As its central argument, the company contends the Award subtracts from the
CBA because it does not give full effect to the PDS. P&G asserts the PDS is
incorporated into the CBA by reference in Article XVIII. CBA, ECF No. 25-1, at
41 (marked as page 37 on the original document). However, Eighth Circuit case
law “differentiates between explicit contractual language and rules or policies
promulgated under a general management rights clause like the one in the present
case.” Trailmobile Trailer, LLC v. Int’l Union of Elec., Elec., Salaried, Mach. &
Furniture Workers, AFL-CIO, 223 F.3d 744, 748 (8th Cir. 2000). When he
interpreted the language of the CBA, the Arbitrator was not conclusively bound by
the company’s discretionary decisions under its PDS.
Accordingly, the Award clearly references, considers, and interprets the
parties’ arguments in light of the PDS, but it also considers evidence of practice
and the testimony that “ultimately the discipline is a matter of judgment” and
“discretionary.” Award, ECF No. 25-4, at 7; id. at 15. The Award additionally
considers the actual circumstances of Hassard’s third LOTO violation and other
factors that mitigate the severity of the violation, such as Hassard’s overall record
as an employee. Based on the question presented, the CBA, and the evidence
before him, the Arbitrator correctly concluded that he had discretion to reconsider
P&G’s termination decision. The resulting Award rises above the legal
requirement that the “arbitrator is even arguably construing or applying the
contract and acting within the scope of his authority.” Boehringer Ingelheim
Vetmedica, Inc. v. United Food & Commercial Workers, 739 F.3d 1136, 1140 (8th
Cir. 2014) (quoting United Paperworkers Int’l Union v. Misco, Inc., 484 U.S. 29,
P&G argues the Arbitrator inappropriately balanced equities in this case
when he considered additional factors outside of Hassard’s disciplinary violations.
However, the Eighth Circuit has repeatedly upheld arbitration awards where
arbitrators consider factors like the ones the arbitrator considered here. See Tower
Rock Stone Co. v. Quarry & Allied Workers Local No. 830, 918 F. Supp. 2d 902,
908–09 (E.D. Mo. 2013) (collecting cases). In this case, the Award’s discussion of
the various factors that support and detract from the parties’ positions is
appropriately part of the just cause inquiry.
P&G correctly identifies a factual error in the Award: Hassard’s daughter
had not died of a heroin overdose when P&G terminated him. This was a minor
error, as the Award also cited testimony that Hassard was dealing with the stress of
his daughter’s addiction at the time of his termination, even if she had not yet
passed when he was terminated. It did not form a substantial portion of the basis of
the Award. See Award, ECF No. 25-4, at 15 (citing the “factors noted previously
in Finding #2” before mentioning the death of Hassard’s daughter as an additional
factor the Arbitrator considered). Moreover, “courts are not authorized to review
the arbitrator’s decision on the merits despite allegations that the decision rests on
factual errors.” Major League Baseball Players Ass’n v. Garvey, 532 U.S. 504,
For the foregoing reasons, I conclude that the Award drew its essence from
the governing CBA.
c. Attorney’s Fees
The Union seeks attorney’s fees from P&G. “Section 301 of the LaborManagement Relations Act does not authorize an award of attorneys’ fees to the
prevailing party.” Actors’ Equity Ass’n v. Am. Dinner Theatre Inst., 802 F.2d
1038, 1043 (8th Cir. 1986) (citing 29 U.S.C. § 185). However, the Eighth Circuit
has recognized that in “exceptional circumstances,” such as where a party litigates
in bad faith, fees may be appropriate. United Elec., Radio & Mach. Workers of
Am., Local 1139 v. Litton Microwave Cooking Prod., Litton Sys., Inc., 704 F.2d
393, 400 (8th Cir. 1983), on reh’g, 728 F.2d 970 (8th Cir. 1984). An “unjustified
refusal to abide by an arbitrator’s award may constitute bad faith for the purpose of
awarding attorneys’ fees.” Int’l Union, United Auto. Workers v. United Farm
Tools, Inc., Speedy Mfg. Div., 762 F.2d 76, 77 (8th Cir.1985).
I cannot conclude that P&G filed this action in bad faith. Its claims were not
ultimately successful, but they were not “frivolous, unreasonable or groundless.”
Actors’ Equity Assoc., 802 F.2d at 1042. Especially in light of the Eighth Circuit’s
holding N. States Power Co., Minnesota v. Int’l Bhd. of Elec. Workers, Local 160,
711 F.3d 900 (8th Cir. 2013), P&G’s decision to move to vacate the Award was
based on a good faith disagreement, and an award of attorneys’ fees is not
d. Prejudgment Interest
The Union seeks prejudgment interest for Hassard from the date of the
Award. “As a general rule, prejudgment interest is to be awarded when the amount
of the underlying liability is reasonably capable of ascertainment and the relief
granted would otherwise fall short of making the claimant whole because he or she
has been denied the use of money which was legally due.” Stroh Container Co. v.
Delphi Indus., Inc., 783 F.2d 743, 752 (8th Cir. 1986) (citing Behlar v. Smith, 719
F.2d 950, 954 (8th Cir.1983)).
Here, the underlying liability is reasonably capable of ascertainment,
because it is based on the specific date range that runs from the date the Award
became binding through Hassard’s reinstatement. The Award became binding on
April 23, 2018, when Union arbitrator Michael Reilman submitted his concurrence
to the Arbitrator. Absent prejudgment interest, I find that this order would fall
short of making Hassard whole. I will award prejudgment interest.
Federal law does not specify what rate of prejudgment interest I should
order; I have discretion to set a prejudgment interest rate when enforcing an
arbitration award. Though I am not bound by Missouri state law in this case, I find
that Missouri’s general prejudgment interest rate of 9% per annum is reasonable in
light of the circumstances. See RSMo. § 408.020 (providing for “interest at the rate
of nine percent per annum, when no other rate is agreed upon, for all moneys after
they become due and payable”). An award of prejudgment interest compensates
Hassard for the true costs he incurred when P&G refused to reinstate him as
required by the Award. See Stroh Container Co., 783 F.2d at 752 (citing General
Facilities, Inc. v. National Marine Service, Inc., 664 F.2d 672, 674 (8th Cir.1981)).
The Arbitrator clearly intended to separate his abuse-of-discretion inquiry
from his finding against just cause for termination. He also had authority under the
CBA to determine the appropriate remedy in this case, and his remedy drew its
essence from the CBA. I conclude that the Award must be enforced, and Hassard
must be reinstated with back pay and prejudgment interest.
IT IS HEREBY ORDERED that Plaintiff’s motion for summary judgment
[ECF No. 22] is DENIED.
IT IS FURTHER ORDERED that Defendant’s motion for summary
judgment [ECF No. 26] is GRANTED in part.
IT IS FURTHER ORDERED that the April 17, 2018 Opinion and Award
In the matter of Arbitration between Procter & Gamble, Mfg. Co. and Association
of Employees of the St. Louis Plant is CONFIRMED and shall be enforced.
IT IS FURTHER ORDERED that Procter & Gamble must immediately
reinstate Nick Hassard with full back pay from April 23, 2018 through the date of
reinstatement. P&G must also include 9% interest on the total amount of back
IT IS FURTHER ORDERED that the Association of Employees of the St.
Louis Plant’s request for attorney’s fees and costs is DENIED.
RODNEY W. SIPPEL
UNITED STATES DISTRICT JUDGE
Dated this 30th day of September, 2019.
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