In the Matter of the Controversy                         

                  Between                                

UFCW UNION LOCAL 480 AFL-CIO                   

                                    Union,                           

                  And                          

SAFEWAY, INC.                                                                                      

                                    Employer.                   

Involving the Termination of Donna Carey                          

_________________________________________              

HEARING DATE: October 30, 1998

 

MICHAEL F. NAUYOKAS
Attorney At Law & Arbitrator
Specializing in Employment and Labor Law
Grosvenor Center, Makai Tower
733 Bishop Street, Suite 2300
Honolulu, Hawaii 96813
Telephone: (808) 538-0553
Facsimile: (808) 531-3860

                                               

ARBITRATION DECISION AND AWARD

INTRODUCTION

            This matter came to arbitration on October 30, 1998 pursuant to Section 23 of the Clerk Division Agreement of the Collective Bargaining Agreement between the United Food and Commercial Workers Union Local 480 of the AFL-CIO CLC (“Union”) and SAFEWAY, INC. (“Employer”).  The Grievant is Ms. Donna Carey.   The parties stipulated that all conditions of

the grievance procedure specified in the agreement were either complied with or waived, and that the matter was properly before the Arbitrator for a final and binding decision.   The Union and the Grievant were represented by Michael D. Nelson, Esq. and the Employer was represented by Jennifer L. Szutu, Esq.  The Employer provided the Arbitrator with a Post-Arbitration Brief. 

Both parties were fully and fairly represented.   Pursuant to the terms of the Agreement there is no transcript of the proceeding.

            By the procedure established by the Agreement:

“. . .The Arbitrator shall determine whether there has been a violation of this Agreement, and, if so, what the remedy should be, which may or may not include back pay and restoration of benefits and privileges in disciplinary cases.  The Decision of the Arbitrator shall be final and binding upon the parties and the employee involved.”

Joint Exhibit 1, Section 23.3

            Per the agreement of the parties, the issues to be decided are:

1)         Was Donna Carey terminated for just cause; and

2)         If not, what is the remedy?

BACKGROUND

            The Employer operates retail grocery operations through the area of Northern California and also in the State of Hawaii, and has, incident to its operations in the State of Hawaii, entered into Collective Bargaining Agreements with the UFCW Local 480, by whom the Grievant is represented.

            The Grievant, Donna Carey, was allegedly employed by the Employer for a period of 21 years, from April of 1977 to the date of her termination on January 6, 1998.  A verification signed by a Donna Lee on April 11, 1977 was introduced into evidence at the hearing.  At the time of her termination Grievant was employed by Safeway as a journeyman food clerk on a full-time basis.

            The Grievance in this matter is based upon the termination which arose from an allegation by the Employer that the Grievant had stolen, or “ripped” a package of Kim Chee[1] from the Employer’s display case on December 28, 1997 at approximately 10:45 AM.  The only witness to the alleged misappropriation of merchandise by the Grievant was a co-worker, informant, Brendon Fernandez, who testified for the Employer at the hearing.

            At the hearing there was testimony by Mr. Fernandez that he observed the Grievant putting the food item in a plastic produce bag, and then placing the item into a black, zippered bag that she was carrying.  Mr. Fernandez testified that after his observation he immediately went to Mike Mazone, the acting store manager, and informed him that he had observed the misappropriation of the Employer’s merchandise by the Grievant.  In addition, Mr. Fernandez also advised another employee prior to going to Mr. Mazone.  Following the incident, Mr. Fernandez provided the Employer with three different and somewhat varied statements, which alleged without verification that he had suspected that Ms. Carey was misappropriating merchandise for several months prior to this incident, but that he had not witnessed her “in the act” of misappropriation.  The last of these statements was dated by Mr. Fernandez as January 7, 1997, which the Arbitrator must assume was actually produced on January 7, 1998 as any other reading would lead to an illogical result. 

            Mr. Fernandez also testified that he had been employed with the Employer for approximately three years, that he had been disciplined for swearing at a co-worker and for absenteeism, and that he hoped to have a future career in food retail management.  On cross-examination, Mr. Fernandez also testified that he did not actually see the Grievant putting the Kim Chee into her bag, but did see her zipping her bag up.

            There was no credible testimony or other evidence presented at the hearing that, other than Mr. Fernandez, anyone ever saw the Grievant with the allegedly misappropriated food item.  Another employee allegedly told of the theft by Mr. Fernandez was “tripping” and did not follow-up.

             On January 12, 1998 the Grievant and the Union were given notice of her termination.

THE EMPLOYER’S POSITION

            It is the Employer’s position that the Grievant’s employment was terminated for just cause as the term was intended to be interpreted in the governing Agreement, and that the Grievant was aware that misappropriation of the Employer’s merchandise was a violation of the Employer’s Rules.

            Further, the Employer argues that the Grievant was aware this conduct could result in disciplinary action including termination.  Moreover there is sufficient evidence a theft or misappropriation took place for the Arbitrator to find that the termination of the Grievant under the circumstances presented here was per se reasonable and that, therefore, the Employer has met the burden of showing Just Cause.

THE UNION’S POSITION

            The Union filed no Post-hearing brief, made no opening statement and produced no witnesses at the hearing.  The closing argument of the Union strongly made the following points:

a)         The Grievant was a long-time employee of the Employer;

b)         The Employer produced only one witness to support the termination;

c)         The one witness produced by the Employer gave inconsistent and sometimes contradictory testimony both at the hearing and in his statements;

d)         The Employer failed to produce the witness who allegedly provided a fair and impartial investigation of the incident, the acting manager, Mike Mazone;

e)         There is no evidence that the Employer provided a fair investigation of the incident that gave the Grievant an opportunity to respond to the charge prior to her termination; and

f)         As a result of the failures of the Employer to provide a fair and impartial investigation, there was not just cause for termination, and therefore Grievant is entitled to reinstatement with back pay and interest.

ESTABLISHING JUST AND PROPER CAUSE

            Section 8.1 of the Agreement between the Union and the Employer provides in pertinent Part:

“8.1     The Employer reserves the right to discharge any employee coming under the jurisdiction of the Agreement for cause such as but not limited to dishonesty, insubordination, incompetency, drinking or being under the influence of alcohol on the job, illegal use of drugs or possession of illegal drugs on the job, and failure to perform work required by the Employer’s safety rules and regulations of the Company house rules which shall be made known to the employees.  The Employer shall not discharge or discriminate against an employee for serving on a committee of the Union or any organization affiliated therewith or for failure to purchase stock, bonds, securities or interest in any partnership, corporation or company.”

            In this matter, pursuant to the Collective Bargaining Agreement, the Employer must show  by a preponderance of the evidence that just cause existed for the termination of the Grievant.  

To satisfy the burden of proof that the Employer’s action was for just cause, the Employer must produce evidence sufficient to satisfy the following standard:

            1.         The employee was forewarned of the consequences of her actions.

            2.         The employer’s rules are reasonably related to business efficiency and the performance the Employer might expect from an employee.

            3.         An effort was made before discharge to determine whether the employee was guilty as charged.

            4.         The investigation was conducted fairly and objectively.

            5.         Substantial evidence of the employee’s guilt was obtained.

            6.         The rule was applied fairly and without discrimination.

            7.         The degree of discipline was reasonably related to the seriousness of the employee’s offense and the employee’s past record.

Enterprise Wire Co., 46 Lab. Arb. (BNA) 359, 362-65 (1966) (C. Daugherty, Arb.); State of Hawaii, 109 Lab. Arb.(BNA) 289 (M. Nauyokas, Arb.)(1997); see also 111 Lab. Arb. (BNA) Ogden Services Corp., 111 Lab. Arb. (BNA) 250 (M. Nauyokas, Arb.)(1998).

ARBITRATOR’S ANALYSIS

            As this is a matter involving a collective bargaining agreement, the burden is upon the Employer to show by a preponderance of the evidence that the Employer properly complied with the seven steps required to sustain the Grievant’s discharge.

            In analyzing the current situation, it is the Arbitrator’s initial impression that the Employer has failed to show just cause in this particular action.  To provide the thorough reasoned opinion and analysis required by the Agreement and the scope of the Arbitrator’s duties, the Arbitrator finds it necessary to analyze the various requirements as they relate to this specific matter and render findings as appropriate.

1.         Was the Grievant forewarned of the consequences of her actions?

            Under the standards laid out in Enterprise Wire, certain offenses such as insubordination, coming to work intoxicated, drinking intoxicating beverages on the job, or theft of the property of the company or of fellow employees are so serious that any employee in an industrial society such as the one in which we live may be expected to be aware of the fact that the conduct is offensive and subject to serious discipline, including termination.[2]

            In reviewing the record, the rather truncated testimony given at the arbitration hearing, the exhibits, and the Post-Arbitration Brief, the Arbitrator must determine whether the Grievant was either aware or should have been aware that employees of the Employer could be terminated for violating the Employer’s rules regarding the misappropriation of merchandise.  At the time of the alleged forbidden act, the Grievant was either aware, or in the exercise of reasonable diligence, should have been aware, that conduct that violated the prohibition against causing loss or harm to the Employer would be subject to disciplinary action, and that such action could include termination.                           

2.         Were the Employer’s rules reasonably related to business efficiency and the performance the Employer might expect from an employee?

            The Arbitrator finds that the rule cited in the discharge, specifically, the prohibition against misappropriation of merchandise, was a per se reasonable rule.

            The Employer’s primary business activity was the retail sale of grocery items.  In the Arbitrator’s analysis it is clear upon the basis of the record that this business activity reasonably required rules of the sort that the Grievant was accused of violating.

3.         Was an effort made before the Grievant’s discharge to determine whether she was guilty as charged?                                                                                                            

            The record and testimony in this case is far from clear as to what, if any, efforts were made to determine whether or not the Grievant actually took the food item which was allegedly misappropriated.  The responsible acting manager who allegedly performed the investigation did not testify.  From the testimony and the documentary evidence admitted one cannot determine whether or not the Employer conducted an investigation.

4.         Was the Employer’s investigation conducted fairly and objectively?

            The record is not clear, and no evidence was put forward to show that a fair investigation was conducted.  Generally, the standard for the investigation is that it must be completed by an impartial management representative who considers both the allegation of wrongdoing and the position of the accused prior to making a decision.  No evidence satisfying this requirement was put forward at the hearing, or in the Post-Hearing Brief submitted by the Employer.

            In this case there is no testimony from the investigator as to what precisely the investigation consisted of, or what factors were considered in making the decision to terminate

the Grievant’s employment.

            For these reasons, the Arbitrator determines that the Employer has not satisfied the burden required to get past this step of the analysis.

5.         Was substantial evidence of the Grievant’s guilt obtained?

            The Employer has not satisfactorily complied with the burden of evidence required to show the Grievant’s guilt.  The evidence advanced by the Employer lacks both the quality and the quantity required to support a finding of “substantial evidence.”  The exchange between the Grievant and Mr. Mazone, in the parking lot, which is extensively argued in the Employer’s Post-Hearing Brief, is unsupported by any evidence, testimony or exhibit.  There is no evidence of this exchange before the Arbitrator other than the argument of Counsel contained in the Employer’s Post-Hearing Brief. 

            The only evidence of guilt before the Arbitrator are the inconclusive and inconsistent statements and testimony of Mr. Fernandez.  First, on direct examination, Fernandez testified that he saw the Grievant put the Kim Chee in her bag, then on cross-examination Fernandez testified that he did not actually see the Grievant put the Kim Chee in her bag.  The Arbitrator, therefore, must find the evidence advanced by the Employer to be insufficient to establish the “substantial evidence” of guilt that is required for the Arbitrator to find that the Employer has established Just Cause to uphold this termination.  Therefore this tier of the analysis is not satisfied, and the answer to the question is:  “No”.

6.         Was the rule applied fairly and without discrimination?

            Ms. Janine Wilson credibly testified under oath that there had never been an incident where the Employer found that an employee had misappropriated company property and wasn’t terminated.  The Union produced no evidence to the contrary.  Therefore, the Employer has met its burden of proving that the rule and penalty for violating the rule were applied fairly and without discrimination.

7.         Was the degree of discipline reasonably related to the seriousness of the employee’s offense and the employee’s past record?

             Generally, the Arbitrator may not substitute his own judgement as to the appropriate disciplinary sanction for that of the employer absent compelling evidence that the employer has abused its discretion.  Whirlpool Corp., 58 LA(BNA) 421, 430 (1972).  Likewise under the Enterprise Wire standard, an act of misappropriation of company property, regardless of other mitigating circumstances, is sufficient grounds for immediate discharge.[3]   Therefore, in this matter, termination was not an unreasonable penalty for misappropriation of the Employer’s property had that misappropriation been proven.

            In the current instance, however, three of the other tests of just cause have not been proven in this termination.

AWARD

            On the basis of the record and the stipulations governing this arbitration, the Employer has not shown by a preponderance of the evidence that this termination was for just cause.  On that basis, the Grievant is the prevailing party and the Award is therefore entered in favor of the Grievant.  The Employer is instructed to reinstate the Grievant to her prior position and to compensate her with back pay to the date of her reinstatement and reasonable interest upon that sum, prorated and tied to the interest rate prevailing during the relevant time that the Grievant was out of work.

            DATED:  Honolulu, Hawaii,________________, 1998

____________________________________

                                                                        MICHAEL F. NAUYOKAS
                                                                        Arbitrator
                                                                        733 Bishop Street, Suite 2300
                                                                        Honolulu, Hawaii  96813

STATE OF HAWAII                                  )
                                                                    )           SS
CITY AND COUNTY OF HONOLULU    )

           

            On this ______day of _______, 1998, before me personally appeared Michael F. Nauyokas, to me known to be the person described in and who executed the foregoing instrument and acknowledged that he executed the same as his free act and will.

                                                                  
Lorena A. Y. Leigh
Notary Public, State of Hawaii
My commission expires: _______________