of Puyallup and
Local Union Number 313
Public Employment Relations Commission
This arbitration arises pursuant to a collective bargaining agreement (hereinafter the AGREEMENT) between the Teamsters Local Union Number 313 (hereinafter the UNION), on behalf of James Smith, and City of Puyallup (hereinafter the EMPLOYER), under which DAVID GABA was selected to serve as Arbitrator and under which his Award shall be final and binding among the parties.
A hearing was held before Arbitrator Gaba on December 30, 2004, in Puyallup, Washington. The parties had the opportunity to examine and cross-examine witnesses, introduce exhibits, and fully argue all of the issues in dispute. No transcript of the proceedings was provided. Both parties filed post-hearing briefs on February 14, 2005.
On behalf of the Union:
Jacob H. Black
& Robblee, P.L.L.P.
On behalf of the Employer:
Shannon M. Ragonesi
The parties agreed to the following statement of the issue:
Did the Employer have just cause to discharge the Grievant, James Smith, on
December 16, 2003? If not, then
what is the appropriate remedy?
18.1 The City has the right to discipline employees who have violated Federal, State laws, Union Contract, City Policies and Procedures, and departmental policies, or who reflect a discredit to the city and/or is a direct hindrance to the effective performance of the department.
18.3 The employee [sic] shall seek ways to solve and/or correct those deficiencies that caused the need for disciplinary action by applying appropriate levels of corrective action, dependent upon the severity and frequency of the event(s) warranting such action.
18.4 In most cases progressive discipline may consist of a verbal warning first, a written warning second, temporary suspension without pay third and finally termination of employment with the city. The city retains the right to establish the appropriate level of discipline necessary to fit the event, including demotion and discharge. Discharge from employment with the city could occur as the first and final step in severe misconduct cases, to include but not limited to; theft, dishonesty, discrimination, and the use of or under the influence of drugs or alcoholic beverages on the job.
20.5 The Employer reserves the right to discipline or discharge for cause. The Employer reserves the right to lay off, for lack of work or funds, or the occurrence of conditions beyond the control of the Employer or where such continuation of work would be wasteful a [sic] unproductive.
Teamsters Local 313 and the City of Puyallup are parties to a collective bargaining agreement. The Grievant, James Smith, was hired by the City of Puyallup in July 1994. Smith was initially assigned to a Maintenance 1 position within the City’s water department. Smith was subsequently transferred to the street department and promoted to the Maintenance 2 classification. Smith was promoted to a Maintenance 3 position in 2000. In order to perform his job as a maintenance worker level 3, Smith was required to have unmonitored access to the City’s Corporate Yard warehouse which contains tools, machinery, equipment and other property owned by the City. Smith is also required to go out into the community and to the homes of citizens in order to perform his job duties as a street maintenance worker.
In or around 2002, Smith volunteered to work on a new project, referred to as “pavement management”, within the street department. The pavement management position involved collecting inventory data of the City’s infrastructure and inputting that information into a data base. As part of his training for the new position, Smith enrolled in an online AutoCad engineering class at Pierce College and a GIS training class through Pierce County. Smith attended both classes on his own time. Until his discharge on December 16, 2003, Smith had an unblemished work record with the City of Puyallup.
In 2000, Smith became involved in Internet gambling and lost over $12,000 on Internet gambling sites. After sustaining the heavy losses online, Smith sought help for his gambling problem. He joined Gamblers Anonymous and attended three meetings. The meetings helped curb Smith’s addiction and he stopped gambling for a period of time. At some point, Smith resumed gambling at local casinos such as the Emerald Queen in Tukwila. Smith lost another $3,500 at local casinos.
On the evening of December 1, 2003, Smith visited the Emerald Queen casino. Smith proceeded to lose $600 which he had withdrawn from his joint checking account without his wife’s knowledge. Smith left the casino in the early morning of December 2, 2003 in a state of desperation. On his way home, Smith stopped at a drive-through ATM at a U.S. Bank branch in Puyallup. From approximately 2:00 a.m. to 3:00 a.m. Smith attempted to break into the ATM machine. He was unsuccessful.
About one week later, Smith was called into his supervisor’s office and questioned by the Puyallup police department. During that interview, Smith was confronted with photographic evidence of his conduct on December 2. Smith initially lied about his activities that night but eventually confessed to the attempted theft of the ATM machine when he was confronted by the photographic evidence. Smith was placed under arrest. Smith had no prior criminal record. Smith was discharged from employment on December 16, 2003 for acts of misconduct, including attempted theft from a bank, destruction of property and evidence, and lying about committing the crime.
The Pierce County Prosecutor’s office charged Smith with attempted theft in the first degree and malicious mischief in the first degree. The prosecutor offered Smith the opportunity to enter into a deferred prosecution program, which Smith accepted. Smith entered the County’s “El Cid” program and his prosecution was deferred under the terms of that agreement. Under those terms, all charges against Smith are dismissed so long as he meets certain conditions. Those conditions include meeting with an El Cid counselor once a month and repaying the bank for the damage caused by Smith’s actions. To date Smith has fully complied with the conditions of the El Cid program.
In December 2003, shortly after the ATM incident, and before his termination, Smith again began attending Gamblers Anonymous meetings. Smith remains in Gamblers Anonymous and attends meetings once a week. Smith also began attending his wife’s church in December 2003, and in June 2004 Smith began attending a twelve-step addictions-related church group called “Celebrate Recovery.” Smith attends those meetings every Friday. Smith has attended both support groups regularly to date.
POSITION OF THE UNION
The Union in its brief correctly argues that an Employer must prove by
clear and convincing evidence that it had just cause to terminate an employee
and that “there is wide agreement
among arbitrators that in cases involving job loss, a mere preponderance of the
evidence is insufficient” and that a clear and convincing standard is most
Further, the Union cites Arbitrator Burton Turkus in Great
Atlantic and Pacific Tea Co.:
In applying the
test of “just cause” the arbitrator is generally required to determine two
factors: (a) has the commission of
the misconduct, offense or dereliction of duty, upon which the discipline
administered is grounded, been adequately established by the proof; and (b) if
proven or admitted, the reasonableness of the disciplinary penalty imposed in
the light of the nature, character and gravity thereof—for as frequently as
not the reasonableness of the penalty (as well as the actual commission of the
misconduct itself) is questioned or challenged in arbitration.
The Union also
cites to the general arbitral rule that an employer may not discipline employees
for off-duty conduct and notes that arbitrators have carved out specific
exceptions to the general rule. The
Union quotes a case in which Arbitrator Louis C. Kesselmen determined that for
an employer to justify a discharge for employee misconduct away from the
workplace, the behavior must harm the employer’s reputation or product, render
the employee unable to perform his duties or appear at work, or lead to refusal,
reluctance or inability of other employees to work with the employee.
The Union argues
that discipline may not be imposed for off-duty conduct without a clear harmful
connection (nexus) to the employee’s job and that the arbitral standards
articulated for the private sector are also applied in the public sector.
The Union believes that primary difference between the private and public
context in this area is a heightened sensitivity in the public context to
considerations of the “public trust” with regard to establishing a nexus
between the [mis]conduct and the employment relationship.
However, in cases of off-duty conduct resulting in discipline,
arbitrators have been conservative in crafting a higher standard for public
employees over private sector employees.
It is the position of the Union that not every public
employee is held to a standard necessarily higher than that of private employees
and, to the extent that public employees are held to a higher standard, that
standard does not excuse employers from proving a direct and demonstrable
relationship between the employment relationship and the off-duty conduct.
was discharged for misconduct that occurred (1) while he was on his own personal
time, (2) while he was pursuing his own affairs rather than any employment
duties, (3) while he was away from the premises of his employer, and (4) outside
the presence of his co-workers. The
Union believes these factors lead to the inescapable conclusion that while Smith
may have been guilty of poor judgment, his actions did not occur within and
during his employment relationship with the City of Puyallup.
Union notes that Smith’s actions (1) did not harm the City’s reputation, (2)
render Smith unable to perform his duties or appear at work, or (3) lead to
refusal, reluctance or inability of other employees to work with Smith. The
Union contends that the burden is now on the City to demonstrate that the
particular misconduct at issue here bears a sufficiently close relationship to
the employment relationship as to disqualify Smith from continuing employment
and that the City has not met its burden.
The Union also believes that the parties’ contract does not provide the City unfettered authority to terminate employees who have violated State law and notes that the City relies heavily on the language of Sections 18.1 and 18.4 of the parties’ collective bargaining agreement to support its decision to discharge Smith. The Union does not dispute that those provisions are relevant to the instant discussion, but does believe that in interpreting those provisions it is critical to determine what they do not say. Nowhere does the contract mandate discharge in a case of off-duty conduct involving a criminal act. Moreover, the Union believes that the relevant question under the contract is not whether Smith committed a crime, but rather whether the City, under well-established arbitral principles, had just cause to discharge Smith for his off-duty conduct.
It is the Union’s position that the Contract grants the City the authority, in appropriate cases, to exercise its discretion and terminate an employee for a first offense of violating State law, however, this is tempered by clear reference to progressive discipline. Moreover, the language does not specifically state that off-duty conduct is subject to disciplinary action and finally, the entire Article is subject to the language indicating that the City may only terminate that employee if it can establish that such action is warranted under generally accepted principles of just cause.
The Union also notes Smith’s stellar employment record over the course of his nine years as an employee of the City’s street department, his lack of dishonesty at work, his efforts to make restitution to the bank, as well as the hard work he put in to rehabilitate himself through the Gamblers Anonymous program. The Union believes that these as well as other mitigating factors weigh in favor of reinstatement.
The Union also brings forward the fact that there was no publicity concerning the attempted theft and that the public at large are unaware of Smith’s off-duty actions. Since the public at large is unaware of Smith’s legal problems, it would naturally follow that his actions could not bring discredit upon the employer. The Union also correctly notes that it is mere conjecture on the part of the employer that the citizenry of Puyallup would object to the continued employment of Smith by the City.
The Union also contends that the City failed to prove that Smith’s
off-duty conduct, in any way, adversely affected his ability to satisfactorily
carry out his normal job duties. A
major consideration in this case is the nature of Smith’s job and how the
off-duty conduct affected his job responsibility or relates to his ability to
perform his employment duties. The
Union notes that at the time of his discharge, Smith had been working as a City
maintenance employee for nearly ten years and for the year leading up to his
discharge, Smith worked in the City’s maintenance department in a “pavement
management” capacity. Smith’s
primary duties during that time involved collecting and inputting City
infrastructure data into a “map” using engineering software referred to as
AutoCad and that the bulk of Smith’s duties in the months leading up to his
discharge involved office, and not field, work.
The Union correctly points out that the record does not establish that
Smith has any regular contact with the general public.
The Union also correctly argues that under well-settled authority,
something more is required to establish a direct and demonstrable nexus to the
employment relationship than the fact that an employee has the opportunity for
on-the-job recidivism and notes that this is particularly true in cases
where the employee, such as Smith, is not employed in sensitive capacity.
Lastly, the Union is correct in stating that should the City argue that termination was appropriate because a number of Smith’s coworkers expressed concern over his return to the workplace that the arbitrator should disregard this evidence as being merely, hearsay, rumor and innuendo.
POSITION OF THE EMPLOYER
The Employer in its brief argues that there was just cause for the Employer to terminate Mr. Smith. The employer believes that theft of another’s property is universally regarded as a serious offense, and generally recognized by arbitrators and labor agreements as just cause for summary discharge. Although Smith presented testimony that he attempted to steal from the bank because he has a gambling problem for which he is now getting treatment, the Employer contends that this does not mitigate the fact that he used extremely poor judgment in his decision to steal money. The Employer believes that it is reasonable to demand a high standard of conduct when its employees have unobserved access to property of the employer or its patrons.
Since Smith’s job as a maintenance worker requires that he have unobserved access to the warehouse where all of the City’s property, tools, machinery and computer equipment is stored, the Employer believes the City owes a duty to the public to ensure the security of the property. The Employer quotes the testimony of Andreotti and Heinecke who indicated they no longer have confidence in Smith’s integrity and who believe that with the knowledge of Smith’s attempted theft and dishonesty, the City cannot allow Smith unobserved access to the warehouse. Therefore, the Employer argues Smith would be unable to perform his job duties and this would be a direct hindrance to the effective performance of the department.
Additionally, the Employer believes that Smith’s attempted theft, malicious mischief, and subsequent lies to cover up his crimes bring great discredit upon the City and his fellow employees.
The Applicable Standard is Just Cause.
Where there is no contractual definition, it is reasonably implied that the parties intended application of the generally accepted meaning that has evolved in labor-management jurisprudence: that the “just cause” standard is a broad and elastic concept, involving a balance of interests and notions of fundamental fairness. Described in very general terms, the applicable standard is one of reasonableness:
…whether a reasonable (person) taking into account all relevant circumstances would find sufficient justification in the conduct of the employee to warrant discharge (or discipline.)
As traditionally applied in labor arbitrations, the just cause standard of review requires consideration of whether an accused employee is in fact guilty of misconduct. An employer’s good faith but mistaken belief that misconduct occurred will not suffice to sustain disciplinary action. If misconduct is proven, another consideration, unless contractually precluded, is whether the severity of disciplinary action is reasonably related to the seriousness of the proven offense and the employee’s prior record. It is by now axiomatic that the burden of proof on both issues resides with the employer.
Arbitrator Carroll Daugherty has seminally defined the just cause standard as follows:
1. Did the company give the employee forewarning or foreknowledge of the possible or probable disciplinary consequences of the employee’s conduct?
2. Was the company’s rule or managerial order reasonably related to (a) the orderly, efficient, and safe operation of the company’s business and (b) the performance that the company might properly expect of the employee?
3. Did the company, before administering discipline to an employee, make an effort to discover whether the employee did in fact violate or disobey a rule or order of management?
4. Was the company’s investigation conducted fairly and objectively?
5. At the investigation, did the “judge” obtain substantial evidence or proof that the employee was guilty as charged?
6. Has the company applied its rules, orders, and penalties evenhandedly and without discrimination to all employees?
7. Was the degree of discipline administered by the company in a particular case reasonably related to (a) the seriousness of the proven offense and (b) the record of the employee in his service with the company?
If one or more of these questions is answered in the negative, then normally the just cause requirement has not been satisfied.
The Applicable Burden of Proof is Clear and Convincing Evidence.
In a case involving the discharge of an employee, the burden is on the employer to sustain its allegations, and to establish that there was just cause for the termination. As the leading treatise in the area noted:
Discharge is recognized to be the extreme industrial penalty since the employee's job, seniority and other contractual benefits, and reputation are at stake. Because of the seriousness of the penalty, the burden generally is held to be on the employer to prove guilt of wrongdoing, and probably always so where the agreement requires "just cause" for discharge.
In this context, it is appropriate for an arbitrator to demand clear and convincing evidence. As Arbitrator Richman explained:
The imposition of a lesser burden than clear and convincing proof fails to give consideration to the harsh effect of summary discharge upon the employee in terms of future employment.
Therefore, only if misconduct in the instance that led to the termination is proven can an arbitrator go on to address the question of appropriateness of disciplinary action.
Has the Just Cause Standard Been Met?
In the instant case the facts are generally not in dispute, and the only question truly presented is the appropriateness of the penalty applied for off-duty conduct. The general rule regarding off-duty misconduct is that an employee places himself under the jurisdiction of the employer so far as their joint relationship is concerned. In the areas having to do with the employer’s business, the employer has the right to terminate the relationship if the employee’s wrongful actions injuriously affect the business. The connection between the facts which occur and the extent to which the business is affected must be reasonable and discernible. They must be such as could logically be expected to cause some result in the employer’s affairs. Each case must be measured on its own merits. Factors to be considered include:
The nature of the conduct; is it a crime (misdemeanor or a felony)?
The case at hand clearly illustrates the difficulty of cases of this type. The grievant in this matter had clearly made a grave mistake that directly resulted from his addiction to gambling. The arbitrator truly believes that Smith is remorseful for his actions, truly cured, and if I represented the City I would rehire him at the earliest opportunity. Unfortunately, the decision is not mine to make and it is the Employer who must decide whether it is in their interest to risk rehiring Smith.
While the record
indicates that at the time of his discharge Smith spent most of his time in an
office working on CAD projects, the City’s witnesses testified that Smith’s
other duties required that he be entrusted with keys giving him access too much
of the City’s property, and that such access is granted on a 24 hour basis
seven days a week. They further
testified that Smith has access to City property when no other employees are
present and that he had authority to access property and equipment without any
supervision. The City has even
entrusted the grievant with a City credit card and he is allowed to purchase
items when needed. The troublesome nature of this case is created by the
independent nature of Smith’s job and the wide degree of access he has to City
property when there would be no supervisor or coworkers present.
If Smith’s job had been limited to sitting in an office doing CAD work,
the result in this case would be different.
In short, the
nature of Smith’s crime, attempted theft, has a direct impact on the Employer.
If Smith had been charged with DUI, solicitation, or DV assault, the
outcome in this case would be reversed; there simply would have been no
workplace nexus. Likewise, if
Smith’s job had been different (if he were a gardener, a secretary, or working
on a production line) he wouldn’t have unfettered access to his employer’s
property and there would be no just cause for his termination.
It is the unique nature of Smith’s job and his independence in
performing his duties that attach a workplace nexus to this case. The
Employer has determined that it would be unwise to give an employee with
Smith’s background continued unsupervised access to a vast array of City
property and that to do so might injuriously affect the City’s business. One can easily argue that the prudent course (although not
necessarily the humane course) for the City is to separate Smith from his
employment. While I might disagree
with the City’s actions based on my level of empathy for the grievant, I must
allow the Employer some latitude in determining their business needs once a
workplace nexus has been established.
The Union is correct that Smith had an exemplary
employment record free of even the accusation of dishonesty and that even in his
most desperate moment, Smith’s indiscretion took place away from his workplace
and did not involve City property. Yet,
the facts indicate that the City did manage to become entangled in Smith’s
Tim Marron was the Police Officer assigned to the case. Several days after being assigned the case, after having no success in locating a suspect, Officer Marron noticed a pickup truck parked in the City’s employee parking lot that looked very similar to the truck photographed during the attempted theft at the bank. On a hunch, Officer Marron showed pictures of the truck used during the crime to Rob Andreotti, the Operations and Maintenance Manager of the City’s Department of Development Services. Mr. Andreotti recognized the truck, and informed Officer Marron it belonged to his employee, Jim Smith.
The next day, Officer Marron and Detective Dan Pashon arranged to interview Smith at work in connection with the attempted theft at the bank. When questioned about his involvement, Smith lied to the officers and denied he had been in the area at the time of the crime. The officers then showed Smith the pictures of his truck parked at the ATM on the night of the theft. Faced with incontrovertible evidence, Smith finally admitted he had tried to steal money from the ATM, and had stolen the security camera to hide the evidence of his crime.
Smith’s crimes were not ones that took place in a fit of passion or when presented with an opportunity. To dismantle and remove the security camera, and then to return to the cash machine took time, time Smith could have used to reassess his actions. After the crime Smith had most of a week to try to resolve the situation but didn’t avail himself of the opportunity. When confronted by Officer Marron at work, Smith’s first reaction was to lie. Based on the facts presented to the Employer, a nexus can be found to the particular nature of Smith’s former job.
A number of arbitrators have found that almost any crime involving dishonesty can support the discharge of an employee. I am not one of those arbitrators and I sincerely wish that there were some way I could send Mr. Smith back to work at the City of Puyallup. This is indeed a very close case, one that I have truly agonized over, it is extremely unfortunate that the unique properties of Mr. Smith’s job allow the Employer to discharge him for his off duty conduct.
The burden is on the Employer to show by clear and convincing evidence that just cause existed to suspend and subsequently terminate the Grievant, Jim Smith. The Employer has shown a nexus between the grievant’s conduct and the City’s business needs, therefore, I find the Employer has met its burden of proof, and Mr. Smith’s termination is upheld.
The grievance is denied. All fees and expenses charged by the Arbitrator shall be borne equally by the parties, as provided for in Article 19.7.6. of the parties Collective Bargaining Agreement.
David Gaba, Arbitrator
February 21, 2005
 Section 18.3 contains a typographical error. As supported by the context of the provision, the word “employee” in the first sentence should read “employer”.
 Joint Exhibit 1.
 See, Intermountain Rural Electric Association, 86 LA 540, 543 (Watkins, 1985), Vista Chemical Co. & Oil, 104 LA 818 (Nicholas, Jr., 1995); J.R. Simplot Co., 103 LA 865 (Tilbury, 1994); Atlantic Southeast Airlines, Inc., 101 LA 515 (Nolan, 1993); MacMillan Bloedel Containers, 92 LA 592 (Nicholas, 1989); Chase Bag Co., 88 LA 441 (Strasshofer, 1986).
 Great Atlantic and Pacific Tea Co., 63-1 Arb. ¶ 8027, 3090 (Turkus, 1962)
 W.E. Caldwell Co., 28 LA 434, 436-37 (Kesselman, 1957).
 RCA Communications, Inc. 29 LA 567, 571 (Harris, 1961). See also Riley Stoker Corp., 7 LA 764, 767 (Platt, 1947).
 Enterprise Wire Co., 46 LA 359, 363-4 (1966).
 Enterprise Wire Co., 46 LA 359, 362 (1966).
 Elkouri and Elkouri, How Arbitration Works 905 (7th Ed. 2003).
 General Telephone Co. of California, 73 LA 531, 533 (Richman, 1979). See also: Atlantic Southeast Airlines, Inc., 101 LA 515 (Nolan, 1993) (using clear and convincing standard); J. R. Simplot Co., 103 LA 865 (Tilbury, 1994) (same); Collins Food International, Inc., 77 LA 483, 484-485 (Richman, 1981) (same). The Employer bears this burden of proof both with respect to proving the alleged violation, and with respect to demonstrating the appropriateness of the penalty. Pepsi-Cola Co., 104 LA 1141 (Hockenberry, 1995).
 Inland Container Corp., 28 LA 312 (Ferguson, Scanlon, Stineman, 1957).
 Safeway Stores, Inc., 74 L.A. at 1294 (honesty and complete trustworthiness are recognized as important qualifications for jobs where the employee is involved in handling the employer’s money and property); CSX Hotels, 93 L.A. 1037 (Zobrak, 1989) (employer had just cause to discharge employee who plead guilty to stealing tires while off duty because he had unobserved access to the property of patrons of the hotel); Alpha Beta Co., 91 L.A. 1225 (Wilmoth, 1988) (discharge of employee for off duty crime of accepting stolen property was upheld); Northwestern Bell Telephone Co., 79 L.A. 79 (Eisele, 1982) (Requirement of honesty and trustworthiness is reasonably related to effective operation of employer where employees have opportunities to steal company property. Since no amount of security devices or procedures could eliminate this condition without strangling the operation, the only alternative is to have employees who are honest and trustworthy).