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Title: Bell & Howell Co and IMMCO Employees Association 
Date: April 24, 1999
Arbitrator: Perry Zirkel
Citation: 1999 NAC 109

HEARING

            The hearing in this matter was held in Allentown , Pennsylvania, on February 4 and 5, 1999.  The spokesperson for Bell & Howell Mail Processing Systems (hereinafter  the "Company") was attorney James A. Mills.  The spokesperson for the IMMCO Employees Association (hereinafter the "Union") was attorney Quintes D. Taglioli.  The witnesses for the Company were its former facilities manager Christopher Reed; RMA senior security consultant Kile Unterzuber; maintenance employees Larry Jones, William Holden, and Gordon Shively; facility supervisor Fred Bass; and human relations manager Barbara Dota.  The Union's sole witness was the grievant, John Fonseca  The joint exhibits were the collective bargaining agreement (J-1), the grievance packet (J-2A&B), the discharge letter (J-3), and the plant layout (J-4).  The Company's 16 exhibits included the 3/24/98 RMA report (C-1), the 4/8/98 Ontrack report (C-2);.the 4/14/98 meeting's notes (C-3); the 4/15/98 meetings' notes (C-6 thru C-9); the 5/6/98 meeting's minutes (C-12), the 1/8/99 RMA final report (C-13); and various phone logs (C-15 & C-16).  Per the parties' agreement, posthearing briefs were submitted by 3/24/99, when the hearing closed. 

 

 

FACTS

            The Company manufactures mail processing machines at its Allentown plant.  The production and maintenance employees are represented by the Union.

            On 9/22/80, the Company hired John Fonseca as a primary assembler.  After successful bids as an electrical worker in production, a technical troubleshooter, and electrician in maintenance, he became a maintenance technician.  In this role, his duties included repairing and upgrading PCs[1] and installing wiring, servers, and communications lines for the Company's network, but the priority was on repairing manufacturing equipment that broke down.  Among the maintenance team, the division of duties was as follows: technical - him; electrical - Larry Jones; general - William Holden and Gordon Shively.  All of them except Shively were on the day shift, which went from 6 am to 2:30 pm.[2]

            Fonseca's supervisor from approximately 1994 until August 1997 was Doug Blick, the facilities manager at the Allentown plant.  In approximately 1994, the Company provided Blick with a new personal computer (hereinafter referred to as the "Blick PC") for his office, and Blick gave the team his old computer (hereinafter referred to as the "maintenance PC") for use in their work area for the purposes of energy management and maintenance information.

            Blick allowed Fonseca to use the Blick PC as well as the maintenance PC.  The Blick computer had access, via a dual booting procedure, to the Company's intranet, or network, which was established in 1995-96.[3]  The maintenance PC, apparently with Blick's permission, had access, via a second, personal password, to Fonseca's personal Internet account, which provided unlimited for a flat fee.  The other maintenance employees, who were not computer savvy, used the Internet account to a negligible extent and only with Fonseca's direct assistance.

            On or about 8/15/97, Blick left the Company, and Fred Bass, a facility and safety supervisor based at the Company's Raleigh/Durham, North Carolina, plant, provided interim coverage of the maintenance department in Allentown.  He used the Blick PC for the limited periods that he was in the office and did not expressly authorize Fonseca or any other maintenance employee to use it.[4]

            From 9/22/97 until 9/1/6/98, when he left the Company for employment elsewhere, Christopher Reed served as the facilities manager in Allentown.

            On 10/9/97, Reed had a meeting with Fonseca, who explained that Blick had allowed him to take the Blick PC modem to use on the maintenance PC for access to his personal Internet account for work-related purposes.  Reed agreed to allow him to continue this arrangement.

            On 2/2/98, Reed accessed the maintenance PC for the first time and discovered several hacking directories and a password-cracking system.  As a result, he changed the password to secure access to this information and instructed Jones, Holden, and at least indirectly, when he came in on the next shift, Shively not to touch the machine until further notice.  Fonseca was absent that day.

            On the morning of 2/3/98, Reed and Fonseca had a brief, inconclusive interaction about the maintenance PC.  That afternoon, Fonseca went into the maintenance office, told one or more of the other maintenance employees that he was going to retrieve his audio-board from the maintenance PC, and closed the door.[5]

            Soon after the end of the shift, Reed returned and tried without success to turn on the maintenance PC; the screen indicated a disk error.  He disconnected the PC and took it to the Company's PC technician, who determined that something was wrong with the hard drive.  After consulting with the human resources manager, Reed decided to send out the hard drive to recovery and security specialists.  He also contacted headquarters to have them monitor for security breaches.

            On 2/5/98, Fonseca asked Reed what happened to the PC and when Reed informed him that it didn't work, Fonseca replied: "You must have banged or dropped the hard drive."

            On or about 2/15/98, Reed received the hard drive back from data recovery vendor Ontrack along with a CD-ROM that contained the information recovered from the hard drive.[6]  He sent the CD-ROM to Risk Management Associates (RMA) for further evaluation.

            On 3/24/98, RMA issued a report that specified various downloading sessions, including: 11/11/97 & 12/2/97 - NASCAR and sport-related Internet sites; 1/6/98 - hacking or cracking programs, a single pornographic photo; and password-cracking software; and 1/29/98 - hacking (UNIX, PBX, and VAX) and lock-picking programs.[7]   The report concluded that the hacker files represented a low-level risk and that the "common problem ... [of] unauthorized use of company resources for recreational surfing of the Internet should be addressed by ... corporate policy."  

            On 4/8/98, Ontrack issued its report to the Company, finding that the hard drive included, inter alia, "numerous documents with detailed instructions on 'hacking' for PBX, VAX, and mainframe systems ...,  documents on picking locks, and random credit card number generator ..., and Wesbsites ... HackShack and www.tordata.se/hokum/, both of which have numerous documents available for downloading that refer to hacking or accessing anonymously many different types of systems."[8]

            On 4/14/98, in the presence of the human relations manager and Union representatives, Reed interviewed Fonseca regarding alleged "unauthorized and inappropriate information on the maintenance PC."  Fonseca denied copying or downloading any information or software to the maintenance PC, including hacking, lock-picking, or password-breaking data.  Later that day, the Company issued a memo to Fonseca, suspending him "pending completion of investigation" for "serious misconduct involving the use and abuse of the Company's computer."

            On 4/15/98, RMS informed Reed that its preliminary review of the CD-ROM contained several e-mail messages attributable to Fonseca's e-mail address.  On that same day, in the presence of the human relations and Union representatives, Reed separately interviewed Holden, Jones, and Shively.  They all confirmed that Fonseca was the only one who accessed his Internet account.[9]  Holden and Jones, who were the only ones present at the time, concurred that Fonseca apparently touched the maintenance PC, after Reed's directive to the contrary, for the ascribed purpose of retrieving his sound-board.  Jones reported that he had seen Fonseca downloading lock-picking information from the Internet and that, on another occasion, Fonseca had supposedly said that he'd like to try to break into the Company's computer system just to see if he could do it.[10]

            On 4/20/98, again in the presence of Company and Union representatives, Reed re-interviewed Fonseca, who continued his denials except to the extent of admitting that he "may have downloaded, don't know" some information.

            On 5//1/98, Reed had a Company specialist examine the Blick PC, revealing that someone had installed on it nonstandard, or rogue, software.[11]

            On 5/4/98, with Company and Union witnesses, Reed interviewed Fonseca, who responded that he was "not sure" whether he had his Internet account on the Blick PC.[12]   Reed also reported that the Company had found no security breaches to its system.

            On 5/6/98, after a meeting for this purpose, the Company terminated Fonseca for insubordination,[13] abuse of Company property,[14] plus lacking honesty and remorse in the investigation.[15]  At the time, the Company had no written policy on computer use.

            On 5/6/98, Fonseca filed a grievance, alleging that his suspension and subsequent termination were without just cause and, thus, in violation of the CBA.[16]

 

 

CONTRACTUAL PROVISIONS

 

ARTICLE II  -  GENERAL TERMS

 

Section 4.  The sole and exclusive rights of Management which are not abridged by this Agreement shall include ... to suspend or discharge employees for proper cause, subject to the grievance procedure....

 

ARTICLE V  -  SENIORITY

 

Section 2.  An employee's ... employment relationship with the Company shall terminate when an employee ... is discharged for justifiable cause....

 

 

ISSUE

            Did the Company have proper or justifiable cause for terminating the Grievant?  If not, what shall the remedy be?

 

 

OPINION

            Justifiable or proper cause[17] is generally understood to have two aspects, whether the Employer had cause, or reason, for discipline and whether the discipline was proper, or proportional. [18]

            In this case, the insubordination charge is weakened by the lack of a Company policy and the less than complete directive from the supervisor Reed, particularly in light of the prolonged, relaxed position of former supervisor Blick.  Reed was too absolute to be completely credible.[19]  For example, he testified that he first issued the directive on 2/2/98 to not only Jones and Holden, but also Shively.  Yet, Shively's testimony was that he learned about it from Jones and Holden.  Similarly, Reed testified that he issued the directive on 2/3/98 to the grievant not only at 7:30 am but also at 10:30 am when the grievant asked him why the maintenance PC would not respond to his password.  Yet, if he had instructed the grievant at 7:30, there would have been no reason for him to have tried his password and ask Reed why it was not working.  It is just as believable that Reed did not directly and specifically tell the grievant about his no-touch directive until the end of the day.

            This inference, however, does not excuse the grievant's action that day.  Even if Reed did not tell him not to touch the maintenance PC until after the damage was done, one can objectively conclude that Jones and Holden told him during that day, before he entered and closed the interior maintenance office, of Reed's directive.  The evidence is also relatively clear that the grievant damaged the hard drive in an attempt to cover his tracks.  He had the requisite motive, opportunity, and knowledge.  The odds of the machine just happening to malfunction in such a dramatic way in the relatively brief and isolated interim between Reed's discovery and his return to retrieve it are much too remote, particularly when there was no damaging electrical charge to any other device in the environs.  The grievant's conclusory comment about the physical trauma being the source of the problem was all too correct.

            Thus, as to the first charge, the grievant engaged in misconduct, but it was not clear insubordination.  Rather, it fits better with the second charge, abuse of Company property, along with the referenced 1) downloading inappropriate materials that had no business-related purpose and, in part, were potentially harmful and 2) unauthorized use of the Blick PC.

            The unauthorized use of the Blick PC is unsubstantiated in light of 1) the credible testimony about Blick's relaxed regime with regard to the grievant's use of PC's and 2) the outside reports revealing that the inappropriate items were relatively limited and all pre-dating Reed's regime.[20]  The downloaded materials in the maintenance PC were more serious in scope and timing, but not as serious as Reed's reaction, or the Company's characterization, for several reasons.  First, as the Company's expert testified, part of the downloading was merely attributable to viewing information on the PC.  What was more serious in terms of its potential use and impact but more limited in its actual extent in terms of the grievant's action was preserving the information on site, via compressing or printing it.  Second, there was no evidence of a security breach or of an intent on the grievant's part to interrupt or otherwise do damage to the Company's proprietary functioning.[21]   The Company had reason for action, but not overreaction.[22]  Third, as the outside report concluded, these materials constituted a relatively low-level risk, and the "common problem ... [of] unauthorized use of company resources for recreational surfing of the Internet should be addressed by ... corporate policy."[23]

            The relatively low level of risk and the lack of a Company policy mitigate but do not excuse the grievant's conduct.  In line with the third charge, the arbitrator finds that the grievant was indeed dishonest during the investigation.  Although it is not unusual for a person to be defensive or evasive in the face of charges of misconduct, including denials and cover-ups, such behavior can compound the problem in comparison to the partially mitigating effect of fully and promptly owning up to one's missteps. Although an express Company policy would have provided clearer boundaries in terms of contents and consequences, the grievant had reason to know that what he had not only accessed but preserved on Company property and Company time was subject to at least moderate discipline and his unduly smooth and almost arrogant attitude in the various investigatory interviews and in his testimony, although not here an independent basis for discharge, gives all the more reason for strong, corrective discipline.

            Thus, moving to the second aspect of justifiable or proper cause, the arbitrator concludes, not without reservation in giving due regard for managerial discretion, that termination is not quite warranted in this case. Rather, although the Company's investigation was certainly thorough and fair, the cumulative mitigating effects were 1) the lack of a specific policy, 2) the proven degree of seriousness of the offenses, and 3) the grievant's long and valuable service to the Company.[24]   In light of the grievant's abuse of Company property and disavowal of responsibility, a sustained suspension is warranted, clearly extending beyond the intervening year so that the grievant has the time and incentive to realize and correct the almost fatal position in which he put himself.  Specifically, the Company shall reinstate the grievant on 8/14/99, without any back-pay or benefits.  The intervening period shall serve on his record as a suspension and final warning.[25]   

 



                [1] In January 1998, he stopped working on individual PCs, per supervisory directive.

                [2] Shively's shift started at approximately 3:30 pm.  Their hours would overlap with his when any of the first three worked overtime.

                [3] Fonseca also had access to the Company's intranet via PCs that he had installed, as assigned, in the machine shop.

                [4] It would be fair to say that he did not explore this matter in either direction with Fonseca or the other maintenance employees; his interaciton with them was relatively limited.

                [5] Fonseca did not have a audio-board on the PC at the time.  In his testimony, he admitted telling them that he was going into the office for this purpose but, instead, used the phone there to call home.

                [6] The Ontrack representative told him that the hard-disk problem was attributable to a physical or electrical shock.

                [7] In assessing the potential business impact, the report included a copy of a Pennsylvania statute the makes it a crime, inter alia, to "access [or] damage any computer ... with the intent to interrupt the normal functioning of an organization." 18 P.S. 3933.

                [8] The Company has both a PBX and a VAX system.

                [9] Although he testified that he had written his taped it under the machine for their use, they credibly denied knowing or having access to his password.

                [10] Holden also admitted seeing information downloaded from the Internet; the reasonable inference, in the context, was that he was likely referring to Fonseca.  Additionally, although he did not report it at the time, Shively testified at the hearing that he had observed Fonseca downloading NASCAR information from the Internet.

                [11] In a brief report to Reed, the specialist opined:

                                This software should have, at no time been loaded or installed on  

                                any company owned machine....  [T]he individual(s) that were                                   using these tools had the skill or technical breadth to compromise

                                our systems corporate wide....  The bottom line is that ... all the

                                applications or programs found were rogue and should have

                                never been on or network....

RMA's final report, which was issued on 1/9/99, revealed that this software had been installed on 9/10/97.     

                [12] Based on phone logs and testimony, the evidence is preponderant that Fonseca accessed his Internet account from the Blick PC between 8/22/97 and 9/19/97, including six sessions of exceeding 29 minutes.

                [13] The termination letter explained this charge in terms of disobeying Reed's directive not to touch the computer until further notice.

                [14] The termination letter explained this charge in terms of "downloading [during work time] inappropriate materials from the Internet which had no business-related purpose, and, in some cases, had the potential to harm the Company."  It also added the unauthorized use of the Blick PC.

                [15] The letter explained that "[t]his behavior is independently dischargeable, and, in any case, is a factor which supports the Company's decision to discharge you."

                [16] On 4/24/98, he had also separately grieved his 4/14/98 suspension.  It is understood that the 4/24/98 grievance is merged into the scope of the 5/6/98 grievance.  Subsequent to the grievance, specifically on 1/8/99, RMA submitted a report on its analysis of the hard drives from the Blick PC, revealing a few nonbusiness-related items, such as NASCAR images, with none dated after 9/20/97.  

                [17] There is no significant difference between these phrases; they are understood to be among the various terms for the concept most often called "just cause."  See, e.g., ELKOURI & ELKOURI, HOW ARBITRATION WORKS 887 (M. Volz & E. Goggin eds. 1997).

                [18] See, e.g., MARVIN HILL & ANTHONY SINICROPI, MANAGEMENT RIGHTS 98 (1986).  In Daugherty's famous seven criteria, items 1-6, which include the Employer's forewarning and investigation, relate largely to the first aspect, while the second aspect is addressed by item 7: "Was the degree of discipline ... reasonably related to (a) the seriousness of the employee's proven offense and (b) the record of the employee in his service with the Company?   See, e.g., Enterprise Wire Co., 46 Lab. Arb. (BNA) 359 (1966)(Daugherty, Arb.).

                [19] Although obviously competent and conscientious, he had a tendency to overstate the facts.  His assertion that the Company had an applicable policy exemplified his otherwise admirable posture; he was by-the-book even when there was no book.

                [20] See supra notes 11-12 and 16.

                [21] See supra note 7. 

                [22] Cf. Wesley College v. Pitts, 974 F. Supp. 375 (D. Del. 1995).

                [23] See supra text accompanying note 7.

                [24] See supra note 18 (Daugherty's considerations).

                [25] If the grievant shows sufficient remorse and rehabilitation, the Company may decide upon an earlier reinstatement, but that choice is entriely within the Company's discretion and is not arbitrable.

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