Was a hospital dietary assistant properly discharged for sweeping up spilled potatoes and placing them on a sanitary table? His union grieved and an arbitrator said no, but the employer appealed the case all the way to the Sixth Circuit. Oakwood Healthcare, Inc. v. Oakwood Hosp. Emps. Local 2568, 203 LRRM 3285, 2015 BL 187924 (6th Cir. 2015).

The case illustrates how courts will often defer to labor arbitrators even when the contract language isn’t clear about the arbitrator’s authority and when it seems pretty obvious that the employee committed a substantial violation.

The employee was responsible for cleaning the kitchen at a hospital in Dearborn, Michigan, which had a labor contract with his union.

In July 2012 a hospital cook fatefully spilled potatoes on the floor.

The employee swept up the potatoes, along with debris from the floor, and he placed them on a sanitary food preparation table.

The cook, who was not amused, told the employee that he was immature. The cook may have called him an “asshole” as well, according to the court.

A supervisor later confronted the employee, the supervisor showed him a surveillance video of the incident, and the employee confessed.

The hospital then fired the employee for a “major work rule violation,” namely an alleged failure “to fulfill the responsibilities of the job to an extent that might reasonably or does cause injury to a patient, visitor, or other employee.”

The union arbitrated the discharge grievance, and an arbitrator agreed that the employee had violated a major work rule.

But the arbitrator reinstated the employee based on several mitigating factors. These included the employee’s ten years of service, a positive performance evaluation and two certificates of appreciation.

The arbitrator also conditioned reinstatement on the employee’s attendance of an anger management class.

The hospital sued to vacate the award, and the U.S. District Court for the Eastern District of Michigan found that the arbitrator exceeded his authority. Oakwood Healthcare, Inc. v. Oakwood Hosp. Emps. Local 2568, 200 LRRM 3234, 2014 BL 216186 (E.D. Mich. 2014).

In particular, the district court held that the arbitrator did have authority to determine whether the employee violated a major work rule, but the arbitrator didn’t have authority to modify the degree of discipline imposed once he found a violation.

The union appealed, and the Sixth Circuit, in an unpublished opinion, reversed.

No Small Potatoes

The Sixth Circuit first addressed the district court’s conclusion that the arbitrator exceeded his authority.

The court looked to the management-rights clause of the labor contract, which says that the employer “shall have free hand to manage and operate its Hospital.”

The problem was that the hospital’s free hand was “subject only to the condition that it shall not do so in any manner which is inconsistent with this Agreement.”

The court noted that the contract doesn’t say whether an arbitrator has authority under its “just and proper cause” standard to evaluate the degree of discipline. It also found that the contract doesn’t clearly say that the sole issue for arbitration is whether a work rule was violated.

Given the ambiguity, the Sixth Circuit resolved doubts in favor of arbitration.

Next the court discussed the argument that the award violated a purported dominant public policy against food contamination at hospitals.

Assuming that such a policy existed, the court found that the hospital had not shown that the employee’s reinstatement violated it.

The court reasoned that the arbitrator reinstated the employee after an unpaid suspension of 15 months, conditioned his return on attending the anger class and didn’t award him any back pay. The employee had arguably been duly chastened.

If the hospital wanted a “free hand” to impose discipline for careless potato handling, it could have bargained for contract language that would have limited the arbitrator to deciding whether a work rule violation occurred.

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