ARBITRATION OVER OFF-DUTY FELONY

Out of Jail & Out of Job?

International Association of Machinists and Aerospace Workers, Local Lodge No. 1349, and Bard Manufacturing Company

AI Summary of Opinion of Arbitrator E FRANK CORNELIUS, PhD, JD — July 7, 1988

Background

The Company manufactures air-conditioning and heating equipment at its Bryan, Ohio plant. Grievant was employed there as an air-conditioner assembler and had been employed since 1978. He was a member of the Union, which represented the Company's production and maintenance employees under a collective bargaining agreement dated January 24, 1987.

On June 18, 1987, the Bryan Times reported that Grievant had pleaded guilty to a felony charge of gross sexual imposition. The Company thereafter contacted the County Prosecutor and eventually obtained the court's Journal Entry formally recording the conviction.

The Company's Work Rules provided that violation of specified rules could result in immediate suspension and final disciplinary action, "up to and including discharge," depending upon Management's judgment of the seriousness of the offense and other relevant factors. Rule 9 prohibited "arrest and conviction of felony charge."

Upon receiving the Journal Entry, the Company discharged Grievant effective July 9, 1987. The discharge memorandum stated simply that he was discharged for violation of Rule 9 because he had pleaded guilty to a felony.

The Union grieved the discharge. Grievant was subsequently sentenced to two years in prison, served until December 7, 1987, and was then released on probation. After the grievance procedure was completed, the Union elected arbitration.

Technical and Procedural Issues

Let us dispense early on with the Union's technical and procedural objections.

The Union first argues that Grievant was never "arrested" within the meaning of Ohio law because he voluntarily surrendered and pleaded guilty. That argument has little merit. The question before the arbitrator is not what the word "arrest" might mean in a criminal proceeding, but what the parties intended by the phrase "arrest and conviction" in their collective bargaining agreement.

The Work Rule was not drafted by a lawyer, nor was the language separately negotiated. It was apparently adopted from rules used at another plant. Its practical meaning must therefore be determined in the context of industrial relations.

Surely the parties intended the rule to reach an employee who was actually convicted of a felony, rather than an employee who happened to be arrested and thereafter exonerated. Grievant pleaded guilty, was found guilty, and was convicted. Thus, whatever may be said about the word "arrest," there is no technical escape from Rule 9.

The Union also contends that Grievant was denied Union representation. The evidence, however, does not establish a violation of the Agreement. The CBA required that a discharged employee receive a written reason for discharge and permitted a fifteen-minute conference with a Union representative before leaving the premises. Grievant in fact conferred with the Shop Steward for the full fifteen minutes.

Nor was the Company conducting an investigation of the misconduct at the time of the discharge. The decision had already been made. The real question, therefore, is not whether Grievant was denied representation during an interrogation, but whether the Company complied with the substantive requirements of its own Work Rules.

The Work Rules

The Work Rules contain fourteen separate categories of misconduct. They range from reporting for work under the influence of alcohol or drugs to theft, fighting, weapons violations, insubordination, felony conviction, falsification of records, immoral or indecent conduct on Company premises, and sleeping during working hours.

The first thing to be noted is that there are obvious degrees of violation of each of these rules.

An employee might merely have liquor on his breath or he might be dead drunk. He might possess a harmless item or a dangerous weapon. He might engage in conduct of comparatively little consequence or conduct of considerable gravity.

The parties themselves recognized these distinctions. The introductory paragraph expressly provides that Management's disciplinary action depends upon its judgment of the "seriousness of the offense and other relevant factors."

Accordingly, Management cannot adopt a per se rule that every violation of every category automatically requires discharge. The seriousness of the particular violation must be considered.

The Company's Action

The Company's discharge notice stated merely that Grievant was being discharged because he had been convicted of a felony. It did not identify the particular offense.

At arbitration, the arbitrator was provided with very little information concerning the underlying crime. Indeed, the parties ultimately stipulated that whatever the offense was, it had nothing to do with the workplace.

This is important.

The Work Rules required Management to exercise judgment concerning the seriousness of the offense and other relevant factors. "Judgment" means just that—a reasoned business decision based upon an objective investigation of the facts and conscientious consideration of the circumstances. It does not mean a reflex reaction based upon whim, caprice, prejudice, or moralizing.

The evidence indicates that the Company conducted little or no investigation beyond contacting the prosecutor. There was no meaningful inquiry into the circumstances surrounding the offense, its relationship to the workplace, its effect upon the Company's operations, or the likely consequences of reinstatement.

The Company was not required to interview Grievant or the Union. It was entitled to conduct its own investigation. But where there is little evidence that any investigation occurred, the Company's refusal even to meet with Grievant or the Union, despite requests for such a meeting, reinforces the conclusion that Management did not make the reasoned judgment required by the Work Rules.

The speed with which the discharge followed receipt of the Journal Entry strongly suggests that the decision to discharge had already been made.

Off-Duty Conduct

The more substantial question is whether an employer may discharge an employee for serious criminal conduct occurring away from the workplace.

The answer is not necessarily no.

The answer is that there must be some reasonable and discernible relationship between the off-duty misconduct and the employment relationship.

Arbitration authorities have recognized several circumstances in which off-duty conduct may justify discharge: where the conduct damages the Company's reputation or product; where it renders the employee unable to perform his job or report to work; or where it creates such difficulties that other employees are unwilling or unable to work with him.

The principle is a simple one. The employment relationship does not make the employer the guardian of every aspect of an employee's private life. On the other hand, where private misconduct injuriously affects the employer's business, the employer has a legitimate interest in taking appropriate action.

The connection must, however, be reasonable and discernible. Mere speculation that the employer might somehow be embarrassed is insufficient.

The cases cited by the parties illustrate both sides of the principle.

In Armco Steel, an employee convicted of serious sexual misconduct was reinstated because there was no evidence that his conviction would adversely affect plant operations, morale, or the Company's reputation. The offense and imprisonment were relevant only insofar as they affected the employment relationship.

In Babcock & Wilcox, an employee convicted of contributing to the delinquency of a minor was likewise reinstated because there was no demonstrated connection between the off-duty conduct and his employment.

On the other hand, in Gas Service Co., discharge was sustained where the employee's extensive off-duty activities had a direct bearing upon his job as an installer who entered customers' homes. There the employer had conducted an extensive investigation and demonstrated a substantial relationship between the employee's conduct and the Company's business.

Similarly, in Robertshaw Controls, discharge was sustained where the employee's criminal conduct was closely connected to the small community in which the plant operated and where the families of the employees were directly implicated in the misconduct.

These cases do not establish a categorical rule. They demonstrate the proposition that each case depends upon its own facts.

This Case

The present case is materially different from those in which a substantial nexus has been established.

The Company does not operate a school, child-care facility, or other enterprise in which the nature of the offense would itself establish a logical connection to the Company's business.

Grievant is an assembler in a manufacturing plant. He does not regularly enter customers' homes. Nor was there evidence that his conduct endangered customers, damaged the Company's reputation, impaired his ability to perform his job, or created an intolerable working environment.

There was vague testimony that three employees expressed disgust concerning the conviction. None was called to testify, and there was no substantial evidence that Grievant's return would disrupt plant operations.

The Company attempted in its post-hearing brief to supply additional and highly inflammatory details concerning the offense. Those matters, however, were not established in the hearing record.

Parties are entitled to present evidence and to challenge the evidence presented by their opponents. It is not proper to introduce disputed factual material for the first time in a post-hearing brief, when the opposing party has had no opportunity to object, cross-examine, or rebut it.

More importantly, the arbitrator did not know the true facts concerning the offense. The only established fact was the statutory conviction.

Nor should the arbitrator's own moral judgment determine the case.

The State of Ohio has already made the criminal judgment. Grievant was convicted and imprisoned. The function of the arbitrator is different. The question here is whether the Company proved that the conviction had the requisite relationship to the employment relationship.

Arbitrators are hired to make legal and business judgments, not moral judgments. If the parties desired a moral judgment, they presumably would have hired a priest.

Rehabilitation

There is also evidence bearing upon Grievant's conduct since his release from prison.

His parole officer reported that Grievant had cooperated with supervision, attended counseling, obtained employment, committed no further known criminal activity, and was attempting to reunite with his family. Grievant testified personally and appeared contrite and repentant. These matters do not erase the conviction. They do, however, bear upon whether reinstatement would create a present problem for the Company.

Burden of Proof

In general, the burden of proving justification for discharge rests upon the employer.

That burden is particularly important where the alleged misconduct occurred outside the workplace. In such circumstances the employer must demonstrate how the conduct adversely affects the employment relationship. The employer need not produce every possible customer, employee, or member of the community as a witness. Such a requirement would defeat the very purpose of protecting the Company's legitimate interests. But there must be evidence, together with common logic, establishing a nexus between the misconduct and the workplace.

The Company has not carried that burden here.

Remedy

It cannot seriously be disputed that Grievant violated Work Rule 9. The Company therefore had authority to suspend him immediately. It also was entitled to take a reasonable period of time to investigate the matter and could reasonably have waited for sentencing before determining the appropriate discipline. Consequently, Grievant is not entitled to back pay for the period immediately following his discharge.

The situation is different after January 14, 1988, when the grievance procedure had reached Step 4 and the Company had the opportunity to make the required determination concerning the relationship between the misconduct and the employment.

Nevertheless, an award of back pay would not be appropriate.

Arbitrators who have ordered reinstatement in cases involving serious criminal misconduct have generally been reluctant to award back pay. That reluctance is understandable. Reinstatement restores the employment relationship; back pay would provide an additional economic benefit despite the fact that Grievant was convicted of a serious crime and spent substantial time in prison. Moreover, Grievant had obtained other employment, making the extent of any actual wage loss uncertain.

AWARD

The grievance is sustained in part and denied in part, as more particularly set forth above. Grievant shall be reinstated without loss of seniority, but without back pay.

DATED: July 7, 1988

E. Frank Cornelius, PhD,JD Arbitrator

The central holding in one sentence

The opinion does not hold that an employee's off-duty felony can never justify discharge; rather, it holds that where a CBA requires Management to consider the seriousness of the offense and other relevant factors, an employer cannot automatically discharge an employee merely because he has been convicted of a felony—particularly where the offense occurred away from work and the employer fails to establish a reasonable, discernible connection between the misconduct and the employment relationship.

The complete Scribd opinion

Bard Mfg Co, 91 LA 193, 1988 WL 1639681, 15 LAIS 4277 (Cornelius Arb 1988) [7-7-88]

Cited In:

a. Alpha Beta Co, 91 LA 1225, 1227 (Wilmoth Arb 1988)

b. Virgin Islands Dept of Health, 97 LA 500, 502 n 5; 91-2 ARB ¶ 8543 (Watkins Arb 1991) @ 5668 n 5

c. Dept of Health, Government of the Virgin Islands v United Industrial Service Transportation Professional and Government Workers of North America, 93-1 ARB ¶ 3203 (Watkins Arb 1992) @ 4077 n 2

d.  Bi-State Development Agency, 105 LA 319, 323; 1995 WL 18037522 (Bailey Arb 1995)

e.       East Mfg Co v UBT Local 24, 00-2 ARB ¶ 3487 (Oberstein Arb 2000) @ 5941

f.       Elkouri & Elkouri, How Arbitration Works (ABA/Bloomberg BNA 6^th ed 2003) @ 374, n 157 & 941, n 79

g.      Elkouri & Elkouri, How Arbitration Works (ABA/Bloomberg BNA 7^th ed 2012) @ 8-42, n 189 & 15-12, n 50

h.       Elkouri & Elkouri, How Arbitration Works (ABA/Bloomberg BNA 8^th ed 2016) @ 8-42, n 199 & 15-13, n 56

i.         Norman Brand & Melissa Biren, Eds, Discipline and Discharge in Arbitration (ABA/ Bloomberg BNA 2^nd ed 2008) @ 42 n 73, 46 n 100, 53 n 158