Interpreting Collective Bargaining Agreements

Arbitrators have wide latitude in interpreting collective bargaining agreements according to a new Appellate Court opinion to be officially released on January 26, 2016.

In Burr Road Operating Company II, LLC v. New England Health Care Employees Union, District 1199, the parties asked the arbitrator to determine whether an employment discharge was for just cause and, if not, the appropriate remedy. The employer-plaintiff had terminated the grievant (union member) for failing to timely report a claim of abuse of a nursing home patient. The employer had previously issued “final warnings” to the grievant for unrelated conduct. Two other employees were aware of the claim but did not report it. They were not discharged. The grievant grieved her termination and the union took the termination to arbitration pursuant to the collective bargaining agreement.

The arbitrator found there was no just cause because, of the three people that were aware of the claim, only the grievant actually reported it. Though she was late in doing so, the other two employees did not come forward at all. The arbitrator reinstated the grievant.

The employer filed an application to vacate the award and the union filed an application to confirm the award. The trial court denied the employer’s application and granted the union’s. The Appellate Court reversed the reinstatement, finding it contrary to public policy. The Supreme Court reversed and remanded to the Appellate Court to determine whether the trial court improperly denied the employer’s application to vacate the award. The January 26, 2016 decision is the opinion on remand.

Arguments on Appeal

The employer argued that the arbitrator improperly (i) failed to give dispositive weight to the employer’s “final warnings”; and (ii) added a term to the collective bargaining agreement by considering the grievant’s report of the incident a “mitigating factor.”

The employer also had a third argument that the arbitrator improperly added a procedural requirement to the collective bargaining agreement by refusing to consider grievant’s voicemail messages.  The opinion doesn’t really discuss the details. Apparently, the grievant left voicemail messages that the employer claimed contained damaging admissions. The arbitrator declined to consider the messages because the employer didn’t investigate them. The Appellate Court concluded that the third argument involve the same issue as the second argument and did not separately address it.

Appellate Court’s Conclusions

The issue that really was in dispute was whether the arbitrator changed the collective bargaining agreement by interpreting the collective bargaining agreement. The answer, of course, is “no.”

The court noted that the arbitrator was obliged to interpret and apply the agreement, subject to the prohibition on adding, deleting or modifying any of its terms. The court’s review was limited to whether the arbitrator showed “patent infidelity” to his obligation. The court will confirm the award if it “draws its essence” from the agreement.

The agreement permitted termination for “just cause.” But the agreement did not define just cause. Nor did the agreement define “final warning” or require discharge for an employee’s infraction while under a final warning.

Since the agreement didn’t provide the essential definitions, the arbitrator had to provide his own. There was no patent infidelity to the agreement in concluding that it was unjust to discharge an employee for meeting a reporting requirement, albeit untimely, where other employees entirely failed to meet the requirement — and were not discharged. It was not improper for the arbitrator to reject a “final warning” as dispositive because the agreement did not provide for it or make it dispositive.

Impact

If an employer wants a “final warning” to be a dispositive basis for a just cause discharge, it has to be spelled out in the employment agreement.

About the Photo

I finished this post on January 23, 2016, when it was snowing, a lot.