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Peco Foods, Inc. v. Retail Wholesale And Department Store Union Mid-South Council

United States District Court, N.D. Alabama, Western Division

June 19, 2017

PECO FOODS, INC., Plaintiff,


          L. Scott Coogler United States District Judge.

         Before the Court are Plaintiff Peco Foods, Inc.'s (“Peco”) Motion for Summary Judgment (Doc. 15), and Defendant Retail Wholesale and Department Store Union Mid-South Council's (“RWDSU” or “the Union”) Motion for Summary Judgment (Doc. 17). This action arises out of the termination of a Peco employee, and the subsequent arbitration proceeding. Peco filed this action seeking the vacatur of the arbitrator's awards, and RWDSU has counterclaimed, seeking the enforcement of the awards. For the reasons stated below, Plaintiff's motion is due to be denied. Defendant's motion is due to be granted.

         I. Background

         Larry Richardson (“Richardson”) was employed by Peco and supervised by Rodney Forte (“Forte”). On January 21, 2015, Forte held a safety meeting, where he reminded the employees that throwing ice was prohibited during work hours. (Doc. 17 at 2.) Richardson responded by saying “I don't throw ice, I throw lead.” (Id.) Recalling a recent workplace shooting at another business, Forte reported the statement to his supervisor. Stephen Johnston (“Johnston”), Peco's Complex Human Resources Director, launched an investigation, which included questioning Richardson about the statement. Richardson did not provide an explanation for his conduct, only stating “I know what other people think I mean, but I don't know what I mean.” (Pl. Ex. 1 at 11.) Johnston sent Richardson home for the day, but he was paid as if he had finished his workday. On January 22, 2015, Johnston contacted Steve Conley (“Conley”), the Corporate Human Resource Director, with a recommendation that Richardson be terminated for making a threatening comment. Conley approved the termination.

         Richardson was a member of RWDSU, which had a collective bargaining agreement (“CBA”) with Peco. The CBA gives Peco the right “to manage its own business, including but not limited to the right . . . to discipline and discharge employees for just cause.” (CBA at 2.) It also provides for a grievance and arbitration procedure as “the exclusive means for the disposition of all grievances” arising out of a “dispute, claim or complaint.” (Id. at 8.) According to the CBA, grievances are “limited to matters of interpretation or application of express provisions of [the CBA], and they shall be processed as promptly as possible in accordance with the . . . steps, time limits and conditions” set out in the agreement. (Id.)

         The procedural requirements for grievances, as set forth in the CBA, include a condition that RWDSU “shall give written notice to [Peco] of its intent [to take a grievance to arbitration] within fifteen (15) calendar days of the expiration of the time limit or the date of [Peco's] answer” to the grievance. (Id. at 9.) Next, “the parties shall . . . attempt to select an impartial arbitrator.” (Id.) Further, the CBA states that “[t]he grievance shall be considered settled if not appealed to a higher step within an established time limit and shall not be the subject of any further proceeding.” (Id.) However, that “provision may be waived in specific instances by mutual written agreement of the parties.” (Id.) The CBA goes on to define the power of the arbitrator, stating

The Jurisdiction and authority of the arbitrator and his opinion and award shall be exclusively limited to the interpretation and specific application of the written provisions of this agreement. The arbitrator shall have no power to add to, subtract from, or modify the terms of this Agreement, or any supplementary agreements, nor rule on any matter except on grievances occurring while this Agreement is in full force and effect between the parties. The arbitrator shall be bound by the facts and arguments submitted to him and may not go beyond the articles and sections of this Agreement, or established past practices, in rendering his opinion and award.

(Id. at 10.) Lastly, “[t]he opinion and award of the arbitrator shall be final and binding upon the parties when rendered upon a matter within the authority to the arbitrator and within the scope of matters subject to arbitration as provided in [the CBA].” (Id.)

         In response to Richardson's termination, RWDSU filed a grievance on his behalf on January 30, 2015. Johnston denied the grievance on February 23, 2015. Then, on March 23, 2015, RWDSU sent Peco a letter requesting arbitration of the grievance. The Union submitted an arbitration request to the Federal Mediation and Conciliation Service (“FMCS”), and Peco received a list of possible arbitrators on March 25, 2015, and another one on February 25, 2016. Peco and RWDSU selected an arbitrator on March 21, 2016. A hearing was held on May 17, 2016. Both parties appeared at this proceeding and had the opportunity to present evidence. Peco argued that the arbitrator did not have jurisdiction to decide the grievance because “it did not demand arbitration of Peco's decision within the proscribed time period of the [CBA].” (Pl. Ex. 1 at 9.) It also argued that it “was within its broad right . . . to terminate Richardson for cause, ” because, even if the comment was a joke, it violated Peco's “no horseplay and practical jokes rule.” (Id. at 9, 12.) Lastly, Peco argued that “Richardson [was] not entitled to any back pay because he did not mitigate his damages by making a good faith effort to obtain replacement employment and the Union did not prosecute the request for a hearing in an efficient and reasonable manner.” (Id. at 9.)

         In contrast, RWDSU argued that the arbitrator did have jurisdiction to decide the grievance, claiming that Peco waived the timeliness requirement because despite multiple discussions about resolution over a fifteen-month period, Peco “waited until its opening statements at the hearing to raise a challenge to the Grievance's procedural arbitrability.” (Id. at 25) RWDSU also claimed that Peco did not have just cause for terminating Richardson, because his comment was not threatening, and did not violate any of Peco's policies.

         In his award, the arbitrator decided that Peco “accepted the Grievance and waive[d] its challenge to the Grievance[‘s] procedural arbitrability.” (Id. at 36.) The arbitrator held that the grievance was therefore arbitrable, and that he had jurisdiction over the merits. He also found that Richardson's statement was not a threat and that Peco's argument that he had violated a rule against horseplay was untimely, because it was not raised before the arbitration hearing. Therefore, Peco did not have just cause for terminating Richardson. Based on Richardson's testimony that “he received unemployment compensation for a period of time and worked for an American Thrift store, ” the arbitrator found that Richardson was entitled to back pay for “the difference between (1) his unemployment compensation for the period of time he received it and his usual pay at Peco and (2) his pay at the thrift shop and what he would have earned had he not been terminated.” (Id. at 44.)

         However, he left it up to the parties to decide if Richardson was entitled to back pay for the period of time during which he did not receive unemployment compensation or work at the thrift store. Peco was ordered to “reinstate Larry Richardson to his former job, restore his seniority, and make him whole for his losses.” (Id. at 44-45.) The arbitrator retained jurisdiction over the matter for sixty days after his decision, in order to resolve any remaining disputes. On September 12, 2016, RWDSU invoked the arbitrator's jurisdiction in order to resolve the remaining issue-whether Richardson was entitled for back pay for the periods when he did not work for the thrift store or receive unemployment compensation. In a supplemental arbitration award on September 12, 2016, the arbitrator held that “Richardson failed to make a ‘reasonable good faith effort of seeking other employment' during these other periods [when he was not working for the thrift store and did not receive unemployment compensation] and is not entitled to any additional compensation.” (Doc. 19-5 at 2.) Peco filed this action on August 18, 2016, seeking to vacate the arbitrator's award. On September 13, 2016, RWDSU counterclaimed, seeking enforcement of the award.

         II. Standard of Review

         Summary judgment is appropriate “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). A fact is “material” if it “might affect the outcome of the suit under the governing law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). There is a “genuine dispute” as to a material fact “if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Id. The ...

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