Title: Coos-Curry Electric Cooperative and IBEW Local
THE MATTER OF THE GRIEVANCE
WORKERS, LOCAL 659,
ELECTRIC COOPERATIVE, INC.
FOR THE EMPLOYER:
Assistant General Manager
Local #659 Coos-Curry
Electric Cooperative, Inc.
Box 659 P.O.
Port Orford, OR 97465
The union and the employer are parties to a collective bargaining
agreement that provides employees may not be discharged without cause.
The grievant, Ken Kaiser, was terminated in January of 1998 for violating
the employer’s policy against reporting to work under the influence of liquor.
The matter was aggrieved and went to arbitration.
The arbitration award, issued July 30, 1998, sustained the grievance and
reinstated grievant to his former position with full back pay, minus interim
earnings, seniority, and all other rights and benefits he would have been
entitled to had he not been discharged. The
arbitrator retained jurisdiction for sixty days to resolve disputes over the
remedy ordered. The parties
subsequently asked the arbitrator to retain jurisdiction for the purpose of
resolving two specific issues. Written
arguments were filed by the parties, the last of which was received October 14,
The following issues were agreed to by the parties: (1) Whether the
employer should reimburse the grievant for penalty and taxes he incurred for the
early withdrawal of his retirement monies. (2) Whether the employer should
reimburse the grievant for living and travel expenses he incurred while working
at another job.
OF UNION’S ARGUMENT
The union contends that payment of expenses incurred by the grievant
during the time he worked away from home after he was discharged by the employer
is proper because he would not have incurred the expenses otherwise.
What the grievant earned as wages during the time he was not working for
the employer up to his reinstatement was deducted from his back pay; therefore,
the expenses he incurred in making the wages should be paid by the employer.
The expenses the grievant incurred were reasonable.
He shared a motel room and should be reimbursed for his part thereof.
His meal costs and travel from home to the construction work site on
weekends should be reimbursed.
The union also contends the employer should be required to pay all
penalties and taxes the grievant incurred when he made an early withdrawal of
his pension monies. He was required to move the money within six months after he
was terminated. Although he had
other options, the grievant chose to withdraw all his pension funds to protect
his immediate interests and pay off debts.
Further, his new job rendered an income that was varied and required that
he travel. Had he not been
terminated, his use of his pension money would not have been necessary.
OF EMPLOYER’S ARGUMENT
The employer contends that it should not be required to reimburse the
grievant for the taxes and early withdrawal penalty he incurred as a result of
taking a lump sum distribution from the retirement plan.
He had two other options that he could have elected: (1) leave the money
in the plan and receive annuity payments immediately on a deferred bases, or (2)
rollover the lump sum to a qualified plan where there would have been no tax
As a standard practice, a company is not responsible for the income tax
consequences of decisions made by employees on the distribution of pension
funds. The grievant was not forced
by the company to take a distribution resulting in tax liabilities.
Other options were available. The
grievant could have taken the company offer that would have allowed
reinstatement in the plan and reversed the effects of the lump sum distribution
and its tax liability.
The employer also maintains it should not be required to reimburse the
grievant for mileage, meals, and lodging expenses while he worked during the
time he was not with the employer. Traditionally,
employees are responsible for such expenses, with some exceptions. Construction contractors have reimbursed employees for extra
expenses they incur while working on the road.
In calculating the offset to back pay, the contractor’s per diem was
excluded, thereby allowing the grievant reimbursement for the extra amount of
expense he incurred. The grievant
has already been paid for expenses in excess of normal living expenses.
As to the question of whether the grievant is entitled to reimbursement
for the job-related expenses he incurred while working away from his home base
location, it is a well-settled principle in arbitration remedies that such
necessary expenses be allowed. The
remedy ordered in the July 30, 1998 award was a make whole remedy.
The grievant was to be placed in the position he would have been, with
respect to job, seniority, benefits and pay, but for the wrongful act of the
employer. The expenses claimed by
the grievant are reasonable and were necessary for him to fulfill his obligation
to mitigate damages by pursuing employment.
Had he not done so, he could have been denied back pay.
The question of reimbursement for penalties and taxes the grievant
suffered when he made an early withdrawal of his retirement money is
distinguishable from the necessary expense he incurred in maintaining employment
during the time he was not in the employer’s work force.
He clearly had a choice, as the employer argues.
Nothing in the employer’s termination of the grievant required him to
take the option he took. Unlike
job-related expenses, which were necessary because he was obligated to seek and
maintain employment in mitigation of damages, penalties and taxes suffered
because of his early withdrawal of his pension funds were not of the
employer’s doing, and they were incurred because he made a decision that he
did not have to make. He was under
no obligation to make an early withdrawal of the retirement funds.
He was indeed under a stringent obligation to seek and maintain
With respect to the two remedial issues that the parties agreed the
arbitrator was empowered to decide, the following is awarded.
With this award, the arbitrator’s jurisdiction in this matter is ended.
The employer is ordered to reimburse the grievant for all travel, meals,
and lodging expenses he incurred while working away from his home during the
time he was not employed by the employer.
The grievant is not to be reimbursed by the employer for penalties and
taxes he incurred when he made the early withdrawal of his retirement funds.
Dated this ________ day of November 1998.
Jack H. Calhoun