Arbitration allows parties to voluntarily agree to resolve a dispute without utilizing the Courts. In the Union context, arbitration is a universal solution to address the validity of terminations. Most arbitrators accept or adopt the concept of “just cause” as the standard – this standard needs to be modified. The only way it will change, however, is if a specific alternative is offered. I propose such language below.
The reason a change is needed can be seen simply by Google-ing the phrase “arbitrator reinstated.” Many arbitration decisions shock the senses. Ask anyone with labor relations experience and they will be able to tell you their best story – my favorite is the arbitrator that decided that a 68 game suspension was appropriate for the NBA’s Latrell Sprewell who merely strangled his manager (coach P.J. Carlisimo) – I think most folks would get fired for similar behavior. The problem was highlighted in a 2nd Circuit decision several years ago where the court took the unusual step of reversing an arbitrator:
[The arbitrator] stated that “[t]he behavior of the Grievant is incomprehensible in light of the facts as testified. It is completely unacceptable in the workplace and the Employer had no option but to terminate the Grievant.” [However], in light of the Grievant’s past good work record, I believe he should be given an opportunity to prove he can be a productive employee. Therefore I will return him to his prior or a similar position with a final warning and on a six-month probationary basis. The time from his discharge until he is returned to work is to be considered a disciplinary suspension.” (399 F.3d 524)
There are many good arbitrators, but the parameters of arbitration need to be better defined to get us out of the vortex of just cause. Ultimately, a better-defined labor agreement is the solution. The following table summarizes the language found at the bottom of this article:
The language provides a reasonable alternative to the current practice in arbitration decisions which can result in employers being saddled with extremely poor employees waiting for the “just cause” standard to be met – a standard that can be unreasonably high.
I have tried to provide a reasonable alternative to the currently accepted language. Of course, one could suggest simply eliminating arbitration altogether – but the likelihood of getting a contract signed with such language is zero. In order to facilitate getting the language in place, here are a few arguments to be put forward to the Union members (many of whom may be brand new to unionization):
1. The language proposed specifically provides that any employee who was unreasonably fired will be reinstated with full back pay without any offsets or requirement that the employee tried to get a job elsewhere. The Company is penalized for unreasonable behavior, as it should be. Terminations will be allowed only where there was evidence of the offense and the decision to terminate was reasonable.
2. With the exception of employees whose termination would be supported by any reasonable person, severance pay will be provided. The greater the evidence against the employee, the smaller the amount of severance. The language assures that even employees who make mistakes will not simply be out on the street with no means of support. The process provides for a review of the decision to terminate, and if it is upheld, payments made to the employee.
3. There is no benefit to the Union or its members to allowing the Company to fail because poor performers cause under-performance. In this competitive economic environment, contributing to the Company’s success provides the best chance of providing long-term stable employment for the families that depend on the paychecks.
4. In many Union environments, employers tend to terminate employees to avoid the risk of setting a precedent that might be used by an arbitrator as justification to reinstate an employee. Ultimately, including the reasonable standard will allow the Company to give some employees a second chance without worrying about the fact that doing so may provide guaranteed employment for a disruptive team member forever.
5. The new language even provides that an employee who was fired for reasonable cause may have some benefit if they agree to sign a release. Although few employees take two bites at the apple, in the context of Union arbitration, it is possible to get three bites: the arbitration, an EEOC claim against the Company, and a DFR charge against the Union. The arbitration will be one place to resolve the issue completely.
This language will not immediately win over Union leaders who will argue to keep the current system. To counterbalance this, I suggest providing a slew of recent local egregious arbitration decisions to each member of the negotiating committee saying:
“I hope the reason our employees joined the Union and are going to be paying dues was not to have these kind of employees working here. Do we really want an employee like . . .
. . . the postal worker that got his job back after being convicted of embezzling funds from the Postal Service?
. . . the Police officer in Texas that got his job back after admitting to having sex with a prostitute when he was sent undercover during a sting operation to stop prostitution?
. . . the pharmacist that got his license back immediately after exiting the Federal penitentiary where he served 3 years for trafficking in child pornography?”
Your best bet is to pull unpublished cases involving the Union that is representing the employees.
Conclusion:
Without a significant change in contract language, arbitrators will revert to the age-old standard of just cause. The proposed language maintains the ability of the Union to protect its members without the Employer being at risk of having to keep employing a detrimental employee. With the severance and release provisions, the Company and the Union will be able to focus on more productive issues rather than spending a significant amount of time arguing about a small number of difficult employees.
SAMPLE LANGUAGE
Article X – Arbitration of Discharge Matters:
No employee will be fired unless the decision to end their employment is reasonable, but there will be some occasions where a decision to terminate is disputed by the Union. The Company and the Union agree that running an efficient operation is necessary to enable the Company to provide long-term job stability for the members of the bargaining unit. The Company recognizes and respects the Union’s obligation to defend its members on those occasions where serious disciplinary action has been taken. The following section outlines the authority for arbitrators hearing discharge matters under this Agreement.
A. Statements of Declaration by the Arbitrator
The arbitrator shall agree or disagree with each of the following statements. The remedy shall be based on the answer to those questions. The arbitrator of the discharge matter shall have no authority to modify the available remedies, but may calculate the remedy in accordance with the formula provided.
The arbitrator will agree or disagree with each statement:
1. The discharge was done, in whole or in part, in retaliation for contractually or legally allowable Union activity by the employee or specifically to subvert the intent of this Agreement.
2. The discharge was done, in whole or in part, in retaliation for the employee making a good faith report of a violation of a law, including but not limited to OSHA, Sarbanes-Oxley, state and federal Wage and Hour, USERRA, etc.
3. The discharge was wholly unreasonable for the offense(s) as alleged. In making this determination, I am not considering the past disciplinary practices of this Company – I have determined that no reasonable person could discharge an employee for the reasons the Company put forward.
4. There is no credible evidence to support the Company’s contention that any violation of Company policy was committed.
5. The preponderance of the evidence supports a determination that the offense and/or violation of policy occurred.
6. Although not necessarily proven beyond a reasonable doubt, there is at least a high likelihood that the offense(s) and/or violation of policy did occur.
7. The violation was proven beyond a reasonable doubt.
8. Although not for just cause as traditionally defined, the discharge was for reasonable cause taking into consideration the offense(s), previous offenses by this employee, the employee’s work history, and the past practice of the Company with regard to similar offenses.
9. The discharge was for just cause taking into consideration the offense(s), previous offenses by this employee, the employee’s work history, and the past practice of the Company with regard to similar offenses.
B. Unreasonable Discharges – Reinstatement plus Full Back pay
If the arbitrator agrees with any of the first 4 statements, the following remedies will be provided to the discharged employee:
•The discharge shall be voided and the employee will be reinstated with any discipline removed from the file;
•Back-pay for all time lost including benefits will be calculated by making a determination of how much the employee would have earned without any offsets for unemployment or other work income;
C. Just Cause Discharges – Upheld With No Back pay or Severance
If the arbitrator agrees with the 9th statement, the employee’s discharge is upheld with no award for back pay.
D. Offenses Proven without Reasonable Cause for Discharge – Reinstatement with Limited Back Pay
If the arbitrator agrees with statements 5, 6 or 7 (concluding that the offense occurred) and concludes that the discharge was not wholly unreasonable, but does NOT conclude that discharge was for reasonable or just cause, then the employee will be reinstated with back pay, but the amount of back pay will be:
* lost wages, but limited to no more than 10 weeks pay before offsets,
* offset by any vacation or paid time off received by the employee upon discharge,
* offset by any unemployment received, and
* offset by any income earned by the employee during the time off.
The arbitrator shall not have the authority to alter the back pay amount except as specifically provided above. In addition, a letter will be placed in the employee’s personnel file indicating that the employee was determined to have committed the offense (noting the arbitrators answers to each statement). The arbitrator of the discharge shall have no authority to pass judgment on what the discipline should have been.
D. Offenses Proven with Reasonable Cause for Discharge – Company Option of Reinstatement with Limited Back Pay or Severance
If the arbitrator concludes that reasonable cause for the termination exists (statement #8), the Company will have the option of reinstating or paying the remedy offered below. The Company will meet with the Union but an offer to reinstate (whether offered or not, with or without any back pay) shall not be subject to any further grievances.
Statement #5: Preponderance of the Evidence: The employee will be awarded severance pay equal to the amount of limited back pay, subject to the limitations and offsets above, plus 3 additional months of severance.
Statement #6: High Likelihood: The employee will be awarded severance pay equal to the amount of limited back pay, subject to the limitations and offsets above, plus 2 additional months of severance.
Statement #7: Beyond a Reasonable Doubt: The employee will be awarded severance pay equal to the amount of limited back pay, subject to the limitations and offsets above, plus 1 additional month of severance.
If the employee is entitled to and offered a remedy under this section, the employee will be required to sign a standard form general release agreement to receive the remedy. The release will provide that the Company and the Union are both released from any cause of action that the employee might have regarding their discharge and the prosecuting of the employees claim. The employee will not be permitted to benefit under the terms of this Agreement and then pursue additional remedies from the Company or the Union.
May 16, 2009