2000 NAC 126 City of Ketchikan Pulic Utilities and IBEW Local Union 1547

Title: City of Ketchikan Pulic Utilities and IBEW Local Union 1547
Date: December 2000
Arbitrator: Jack Calhoun
Citation: 2000 NAC 126

BACKGROUND FACTS

The International Brotherhood of Electrical Workers, Local 1547 (hereinafter the “Union”) and the City of Ketchikan (hereinafter the “Employer” or the “City”) are parties to a collective bargaining agreement that provides, among other things, that the Employer will be the sole judge, not subject to the grievance procedure, of the removal of foremen. The position of foreman is a supervisory position within the bargaining unit.

In November 1999, the Employer removed Mike Carlile from a foreman position and transferred him to another position. The Union grieved the removal and demanded Carlile be reinstated to the foreman position. The Employer denied the grievance contending it did not violate the collective bargaining agreement when it removed Carlile from the foreman position.

The Employer filed a Motion to Dismiss with the arbitrator arguing the grievance is not arbitrable. The Union filed its Opposition to the Motion to Dismiss arguing the matter is arbitrable.

The parties’ collective bargaining agreement requires the arbitrator to hear and decide disputes over procedure in a separate proceeding prior to hearing the merits of the case. Dismissal by the arbitrator bars further arbitration on the issue. The parties filed briefs in support of their positions.

RELEVANT PROVISIONS OF THE AGREEMENT

ARTICLE 2

MANAGEMENT RIGHTS

2.1: The Union recognizes the right of the Employer to operate and manage the Utilities, including but not limited to the right to establish and require standards of performance; to maintain order and efficiency; to direct employees; to determine job assignments and work schedules; to determine the materials and equipment to be used; to implement new and different operational methods and procedures; to determine staffing levels and requirements; to determine the kinds, type and location of facilities; to introduce new or different services, products, methods, or facilities; to extend, limit, contract out, or curtail the whole or any part of the operation; to select, hire, classify, assign, promote, transfer, discipline, demote, or discharge employees for just cause; to lay off and recall employees; to require overtime work of employees; and to promulgate and enforce rules, regulations, and personnel policies and procedures; provided that such rights, which are vested solely and exclusively in the Employer, shall not be exercised by ordinance or otherwise so as to violate any of the specific provisions of this Agreement. The parties recognize that the above statement of management rights is for illustrative purposes only and should not be construed as restrictive or interpreted so as to exclude management prerogatives not mentioned. All matters not covered by this language in the Agreement may be administered by the Employer on a unilateral basis in accordance with such policies and procedures as it, from time to time, shall determine. Any claim that the employer has exercised such rights and power contrary to the provision of the Agreement may be submitted to the grievance procedure contained herein. This section shall not conflict with the union security provisions contained herein.

ARTICLE 3

DEFINITIONS

3.5 Foreman: A Foreman is a bargaining unit member and is a journeyman in his classification who supervises other Employees as assigned. He may work with tools, provided it does not interfere with the supervision of safety. Although covered by this Agreement, foremen and chief powerhouse operators shall be considered supervisory with full supervisory authority and responsibility as directed by the Employer, and the Employer shall be the sole judge, said exercises of such judgment not subject to the grievance procedure herein, of their qualification, selection, performance, and removal. Instructions will normally and usually be given by an Employee’s immediate supervisor.

ARTICLE 4

HIRING, PROBATION AND TERMINATION

4.3: No regular employee shall be disciplined or discharged without just cause. The existence of cause for disciplinary action, if disputed, shall be subject to the grievance procedure contained herein. When appropriate, the Employer will follow the principle of progressive discipline. Except in cases of gross misconduct, an Employee shall receive at least one (1) written warning prior to discharge. Both the Union and the Employee shall receive copies of the warnings and the reasons for discharge. Warnings shall not be subject to arbitration. Upon request by the Employee and review by the Personnel Office, written warnings of a minor nature shall be removed from the Personnel files after two (2) years, provided that there are not other warnings in the files.

ARTICLE 5

WORK SCHEDULE AND OVERTIME

5.2: Anytime an Employee’s work day schedule, including days off, is changed with less than one (1) week’s notice, the Employee shall be compensated at the overtime rate for the days which would have been considered the days off. The foregoing shall not apply to shift changes such as change from day shift to swing shift. The work week schedule of Shift Employees shall not exceed five (5) days on, with two (2) days off in seven (7). All Shift Employees shall have at least eight (8) hours of break between shifts. Any employee not having an eight (8) hour break between shifts shall be paid the overtime rate for those hours falling during the eight (8) hour relief period. Travel time shall not be considered work time for purposes of this section. This rule shall not apply to Employees in the job classifications of Custodian and Utilities Inspector.

ARTICLE 7

SWAN LAKE

7.11: Employees assigned to Swan Lake Special Projects:

A. Definition of special project: A project that requires personnel other than, or in addition to, the Swan Lake attendants with work taking place at or in the vicinity of Swan Lake, inclusive of the 115-KV transmission line.

B. Employees considered for assignment for Swan Lake special projects shall be given at least one (1) week prior notice, if possible. The personal obligations and commitments of Employees shall be given full consideration prior to an assignment to Swan Lake. If possible, assignments shall be made on a voluntary basis.

ARTICLE 21

GRIEVANCE AND ARBITRATION

21.1: A grievance is an alleged breach of this Agreement raised during its term.

21.5: The Arbitrator’s function is to interpret the Agreement. The Arbitrator shall consider only the particular issue presented in writing by the Employer and the Union. The Arbitrator shall have no authority or power to add to, delete from, disregard, or alter any of the provisions of this Agreement, but shall be authorized only to interpret the existing provisions of the Agreement as they may apply to the specific facts of the issue in dispute. The arbitrator shall not decide on the merit or wisdom of any action or failure to act, but only on the contractual obligation inherent in this Agreement. If the Arbitrator shall find that the Employer was not prohibited by this Agreement from taking, or not taking, the action grieved, he or she shall have no authority to change or restrict the Employer’s action or inaction or to substitute his or her own judgment for that of the Employer. Unless a specific provision of this Agreement expressly grants the Union or employees a right, privilege, or benefit claimed by it or them, the Arbitrator shall not award any such right, privilege, or benefit to the Union or employees.

21.6: Any dispute as to procedure shall be heard and decided by the Arbitrator in a separate proceeding prior to any hearing on the merits. Any dismissal of a grievance by the Arbitrator, whether on the merits or on procedural grounds, shall bar any further arbitration. Each party shall bear one-half (1/2) of the fee of the Arbitrator and any other expense jointly incurred by mutual agreement incidental to the arbitration hearing. All other expenses shall be borne by the party incurring them, and neither party shall be responsible for the expense of witnesses called by the other party, except that witnesses who are Employees of the Employer shall be paid by the Employer for normal working time spent testifying at the hearing.

ARTICLE 24

NONDISCRIMINATION

24.1: The Employer and the Union agree that there shall be no unlawful discrimination against any Employee or applicant for employment because of race, color, religion, age, sex or national origin, except as permitted by law and unless one of the foregoing factors constitutes a bona fide occupational qualification; provided, however, that a claim that this provision has been violated shall not be subject to Step III of the grievance procedure of this Agreement if the grievant has also filed a charge or claim with an administrative agency or court of law, and provided further, that any claim, complaint or charge that this provision has been breached or violated shall be deemed waived and unenforceable and the Employer and Union thereby released from any liability if not filed with the appropriate administrative agency and/or court of law within one hundred eighty (180) days of the alleged act of discrimination.

ISSUES

The parties agreed that the question of arbitrability was raised when the Employer made its motion to dismiss the grievance filed by the Union over the Employer’s removal of Mike Carlile from a foreman position. The parties also agreed that a pay issue remains to be resolved if the arbitrability issue is decided in the Employer’s favor.

SUMMARY OF THE EMPLOYER’S POSITION

The Employer contends that Section 3.5 of the collective bargaining agreement governs the hiring and removal of foremen. Management is the sole judge and that judgment is not subject to the grievance procedure. First, the Section states that management shall be the sole judge of, among other things, removal of foremen. Second, it prohibits grievances over the Employer’s removal of foremen.

In order for the term “sole judge” to have any meaning, it must be interpreted as excluding the possibility of arbitration. Management cannot be the “sole judge” if its decision is subject to arbitration.

The parties to the agreement intended, by their language in other provisions therein, to limit management’s rights. In Section 3.5, however, they agreed not only to eliminate such limitations, but to explicitly grant management the authority to act as the “sole judge” over foremen. This is evidence the parties intended to make management’s decision final and non-appealable. Moreover, the parties went further and clarified management’s authority beyond question. They agreed that management’s exercise of its authority as sole judge would not be subject to the grievance procedure.

Section 3.5 states that the grievance procedure cannot be used to submit the grievance to final and binding arbitration as that procedure is set forth in Article 21. The arbitrator cannot have authority to rule on a matter the parties have specifically agreed cannot be submitted to him.

Section 21.5 incorporates the rule that no provision of the contract may be disregarded or altered; therefore, the arbitrator cannot disregard Section 3.5's determination that management is the sole judge over the removal of foremen, nor can the arbitrator substitute his judgment for that of the Employer. The arbitrator’s role is not to rule on the merits or wisdom of management’s decision, but to determine the parties’ contractual obligations.

In contract construction, an interpretation that tends to nullify any part of the contract is to be avoided because the parties are presumed not to have written language that they intended to have no effect. Under Section 3.5 the Union’s obligation is clear. It agreed that the removal of foremen would not be subject to the grievance procedure.

Management agreed to have foremen in the bargaining unit, but in return it reserved the right to remove them without interference from the Union. The power of an arbitrator is limited to that conferred by the agreement. Since the parties specifically denied the arbitrator power to arbitrate the removal of foremen, Carlile’s grievance over his removal is not arbitrable.

The Union’s attempt to substitute the general disciplinary language of Section 2.1 for the specific language of Section 3.4, on removal of foremen, is contrary to basic contract interpretation principles. Where two contract clauses bear on the same subject, the more specific should be given preference. The specific language of Section 3.5 describes the decision in Carlile’s case as a “removal,” not as a “demotion.” The parties knew what a demotion was because they used it in general terms in Section 2.1.

SUMMARY OF UNION’S POSITION

The Union contends there is credible evidence the Employer acted maliciously and with intent to punish Carlile for being a whistle blower. If that is the case, the Employer violated the covenant of good faith and fair dealing when it demoted and transferred him. If the Employer engaged in bad faith conduct, it violated the collective bargaining agreement. For those reasons, the grievance should not be dismissed.

An Employer-operated hydroelectric plant is located approximately 25 miles from the City of Ketchikan. The plant supplies electricity to the city. Three city employees live and work at the site. During 1999, Mike Carlile was the foreman at the site.

Carlile learned of a fuel spill and reported it to his supervisor, who did little to investigate the matter. Carlile later discovered contaminated water at the site and reported it to his supervisor. Carlile later received a call from the site owner who told Carlile the contamination would be taken care of immediately. Carlile reported the water contamination and possible fuel spill to the Alaska Department of Environmental Conservation (DEC). DEC officials investigated Carlile’s report. Carlile’s supervisor was present.

Carlile discovered more contaminated water in sump pumps at the powerhouse and reported it to the Coast Guard. When the Coast Guard arrived, Carlile’s supervisor would not allow Carlile to be interviewed.

Based on information learned at the site, the Coast Guard investigators recommended a criminal investigation be conducted. When Carlile’s supervisor returned to Ketchikan, he called Carlile and said the site owner wanted Carlile removed as foreman and returned to Ketchikan. Later Carlile’s supervisor informed him he had received complaints about Carlile harassing employees. The employees denied complaining about harassment. Carlile gave testimony about the spill to Coast Guard investigators. The Employer ordered him to take leave until the Employer could look into the harassment complaints.

The Employer refused to allow Carlile to return to the site and ordered him to report to Ketchikan. The Employer found Carlile’s behavior toward fellow employees at the site to border on harassment and reassigned him permanently to Ketchikan.

The Employer’s power to remove a foreman is not absolute. It is limited by its obligation under the agreement to treat foremen fairly. If the employer acts in bad faith in demoting or transferring a foreman it has violated its duty to act in good faith, and any claim alleging such a violation is arbitrable. The removal of a foreman must be done in good faith and not for discrimination, illegal, or retaliatory reasons.

Employers in Alaska must act in good faith and deal fairly with their employees. Every contract is subject to an implied covenant of good faith and fair dealing, and that requires the parties to act in a manner that a reasonable person would regard as fair.

Once Carlile “blew the whistle” on the spill and contamination, the Employer reacted maliciously. It tried to muzzle him, accused him of fabricating a story, and made a veiled threat to him. The Employer’s behavior toward Carlile also violated public policy. By statute, a public employer may not threaten or otherwise discriminate against an employee because the employee reports to a public body a matter of public concern. A fuel spill and water contamination are matters of public concern. The Employer discriminated against Carlile when it removed him from the foreman position. Under Alaska law, an employer who disciplines an employee in violation of public policy commits an objective breach of the covenant of good faith and fair dealing.

Carlile can legitimately claim that the Employer exercised its right and power to remove him contrary to the covenant of good faith and fair dealing and his claim is arbitrable.

To allow the Employer to remove a foreman with no ability to challenge the removal on good faith grounds would open up the ability for the Employer to treat its employees unfairly. If the Employer is given immunity from arbitration over the removal of a foreman, a foreman would never be able to argue that the Employer discriminated against him and the Employer could ignore Article 24 of the collective bargaining agreement.

Arbitration of this case would force the Employer to demonstrate it complied with the contract’s provision of good faith. The contract relies on the good faith of both parties to carry out the agreement. The Employer should be prepared to present a reasonable basis for Carlile’s removal. Dismissal of the case would allow the Employer to misuse Section 3.5 and ignore other sections of the contract.

OPINION

The issue to be decided is whether the grievance filed over the removal of Carlile from a foreman position is arbitrable. Any issue the resolution of which forecloses consideration of the merits of the dispute is an issue of arbitrability. Where the arbitrator cannot or should not hear the merits, he has no jurisdiction or the case is not arbitrable. Arbitrators who have jurisdiction to decide a dispute on the merits have implied authority to rule on procedural challenges to arbitrability because those issues are matters of contract interpretation and application, and are incidental to the merits of the dispute. City of Corpus Christi and Corpus Christi Police Officer Association, 99 LA 77 (1992 Marlatt). The broad view is that arbitrability means the right to have a dispute determined by an arbitrator whether the dispute is over procedural matters or over the subject matter of a grievance. In the instant case, the parties agree that the Employer’s Motion to Dismiss raises the question of arbitrability.

The basic test for determining whether a grievance should be heard in arbitration was set by the U. S. Supreme Court in United Steelworkers v. Warrior & Gulf Navigation Co., 363, U.S. 574 (1960), one of the Steelworker Trilogy cases. If there is an arbitration clause in the parties’ contract, the test is whether there is an express provision excluding a particular grievance from arbitration. If not, only the most forceful evidence of a purpose to exclude the grievance from arbitration can prevail.

In AT&T Technologies, Inc., v. Communications Workers of America, 475 US 643, (1986), the court reaffirmed the test. The language in Warrior & Gulf created an almost unrebuttable presumption of arbitrability once a showing is made that the labor agreement contains an arbitration clause and that clause does not clearly and specifically exclude the subject matter of the grievance. Labor and Employment Arbitration Section 8.01[1], Matthew Bender & Co., Second Edition, Bornstein, Gosline, Greenbaum, Gen. Editors.

In the instant case, Section 3.5 of the collective bargaining agreement prohibits clearly and specifically arbitration over the selection, qualifications and removal of foremen by making management the sole judge of those decisions. The provision goes on to expressly prohibit grievances over management’s decisions on those matters.

The Union argues that the implied covenant of good faith and fair dealing changes the

under the terms of their labor agreement. I have concluded it is not. Section 3.5 cannot be ignored. It explicitly grants the Employer the authority to act as sole judge over the removal of foremen from a foreman position, and it prohibits the arbitration over such removals through the grievance procedure. Accordingly, it will enter an order granting the Employer’s Motion to Dismiss.