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Title: Medco Health Solutions of Las Vegas, Inc. and United Steel Workers Local 675 fka PACE Local 8-675
Date: February 5, 2007
Arbitrator: Allen Pool
Citation: 2007 NAC 129


American Arbitration Association
Case No. 79 300 0011805

C. ALLEN POOL, Arbitrator
Arbitrator's Case No. 11-02-06


United Steel Workers Local 675 fka 
PACE Local 8-675


Medco Health Solutions of Las Vegas, Inc.

Discharge – Daniel Chavez C-200 (12-05)




February 5, 2007



            This Arbitration arose pursuant to Agreement between the United Steel Workers Local 675, hereinafter referred to as the “Union, and Medco Health Solutions of Las Vegas, Inc., hereinafter referred to as the “Company”, under which C. ALLEN POOL was selected by the parties through the offices of the American Arbitration Association to serve as the Arbitrator.  The Parties stipulated that the matter was properly before the Arbitrator and that his decision would be final and binding.  The parties also stipulated that if it becomes necessary as part of the remedy, the arbitrator shall retain jurisdiction over the implementation of the remedy.

            The hearing was held in the City of Las Vegas, Nevada on November 2, 2006 at which time the parties were afforded the opportunity, of which they availed themselves, to examine and cross-examine witnesses and to introduce relevant evidence, exhibits, and argument.  The witnesses were duly sworn and a written transcript was made of the hearing.  Post-hearing briefs were timely submitted to and received by the Arbitrator on January 22, 2007 at which time the briefs were exchanged between parties via the Arbitrator whereupon the record was closed


For the Union: For the Employer:

W. Daniel Boone, Esq.
Weinberg, Roger, & Rosenfeld A.P.C.
1001 Marina Village Parkway, Suite 200
Alameda, CA 94501-1091


David R. Miller, Esq.
Medco Health Solutions of Las Vegas, Inc.
100 Parsons Pond Drive
Franklin Lakes, NJ 07417


Whether the Company had just cause to discharge Daniel Chavez; if not, what is the appropriated remedy according to the Collective Bargaining Agreement?        



Article 21:        Discipline/ No Discrimination

A.                 No employee shall be disciplined or discharged except for just cause.


Article 22:        Grievance and Arbitration Procedure

A.        It is the sincere desire of both parties that grievances be settled as fairly and as quickly as possible.


B.4.      In event of a discharge, the power of the arbitrator shall be limited to determining either that the discharge was for just cause, or if not for just cause, that the employee shall be reinstated with or without back pay.  Any award of back pay shall be reduced by any earnings or accruals by the employee during the period of discharge or other monies received or accrued by reason of unemployment.  In no event shall a back pay award exceed the employee’s regular hourly rate of pay for his/her regular working hours lost.      


Article 30         Management Rights

            The Company reserves the right to exercise all the duties and responsibilities of management and to determine all matters of management policy and pharmacy operation, and to direct and control the work force including, but not limited to, the decision to hire, promote, demote, discipline, suspend, discharge for just cause, transfer, and relieve employees from duty because of lack of work or for other legitimate reasons and to direct, schedule, assign and train employees.


            The Company is a mail order business dispensing prescription drugs to patients.  As many as 500,000 mail order prescriptions are processed and mailed out each week.  After receipt of the drugs in bulk form, Company employees, Registered Pharmacy Technicians (RTs), process the drugs and place them into smaller dispensing containers and shelve them.   From these shelved dispensing containers, prescriptions for individual patients/clients are filled as needed. 

            The processing of drugs by the RTs from the bulk inventory to dispensing containers for later transfer to containers for shipment to patients takes place in a department known as the “Bulk & Prep Area”.   For obvious safety reasons, the flow of drugs through the Bulk & Prep Area is regulated by a number of standard operating procedures (SOPs) promulgated by the Company.  The work of processing the drugs for dispensing to patients takes place at individual work stations and only one type of drug is processed at a time.  Again, for obvious safety reasons, the Company requires a daily record to be maintained by each RT of the drugs that he/she processed at their respective work station.  The daily record is titled “Technician Production Log Sheet (C-1 through C-4).[1] 

            In the interest of safety, the Company was adamant that a stray pill from one drug or even dust from one drug must not be permitted to contaminate the container of a of different prescription drug.  In short, a contaminated drug must not be allowed “out the door”.  This requirement necessitates a through cleaning by the RT of his/her work station after processing a drug and before the next drug is processed.

            There is a place on the Production Log Sheet were the RT is required to put his/her initials verifying that the work station was cleaned as required after a drug was processed.  As a back up and for further verification that the work station was cleaned, a second person puts his/her initials in the same column next to the RTs initials.  Failure by the RT to initial that the work station was cleaned is a violation of one of the Company’s standard operating procedures (SOPs).   According to Supervisor Jackie Parkin, if the RTs initials are not on the Production Log Sheet, there is an assumption that the work station was not cleaned by the RT (Tr. p. 95).   The Bulk & Prep Area consists of three rooms wherein 41 RTs process the drugs during a normal shift. 

            The Grievant was employed as an RT in 1997.  For several years, he also functioned as a Union Shop Steward.   In addition, in 2004, he became a Unit Chief for the Union.  As a Unit Chief, he was a member of the Union’s Labor Committee, its negotiating team, and the union’s designated representative to handle grievances. 

            On April 18, 2005, the Grievant was issued a Final Warning Letter alleging various violations.  These included several failures by the Grievant to initial his Production Log Sheets verifying that his work station had been cleaned before processing a drug at his work station and failures to notify his supervisor before leaving his work station.  A Final Warning Letter is the last step of the Company’s progressive discipline procedures before termination (Jt-2).  The Union filed a grievance within the next day or two charging that the Company’s action was a violation of the Collective Bargaining Agreement.

            The next month on May 19, 2005, while the above grievance was being processed, the Company issued the Grievant a Termination Notice (Jt-2). The allegations in the Termination Notice included the same allegations, violations cited in the April 18th notice of discipline plus four (4) additional violations of the same type alleged to have occurred in the days following the April 18th notice.  The dates on which the additional violations were alleged to have occurred were April 20th, April 25th, April 27th, and May 3rd.   The day following the May 19, 2005 Termination Notice the Union filed a second grievance challenging the termination

            On June 22nd, the Company and the Union held a Step Three Meeting to discuss the disciplinary notice of April 18th, the Final Warning Letter.  At the Step 3 meeting, they also discussed the second grievance, the termination notice issued on May 19th.   Following the Step Three meeting the parties continued to process the first grievance.  An arbitrator was selected and a hearing was held on April 14, 2006.  The arbitrator, Gerald R. McKay, issued his Award on July 20th, 2006. 

            Following the Step Three meeting on June 22nd, the grievance challenging the termination continued to be processed.  In July 2005, Arbitrator C. Allen Pool was selected through procedures of the American Arbitration Association to arbitrate the matter of the Grievant’s termination.  However, scheduling a hearing day for the termination was put on hold until after Arbitrator McKay’s Award on the matter of the Final Written Letter was issued on July 20th, 2006.  Arbitrator McKay, in his Award concluded that the Company did not have just cause to issue the Grievant the Final Warning Letter of April 18, 2005 and reduced the discipline to a Verbal Warning, the lowest level of the Company’s progressive discipline actions.  

            Following Arbitrator McKay’s Award in the above matter, the grievance challenging the termination of the Grievant continued to be processed through the grievance procedure.  After a couple of postponements, November 2, 2006 was selected as the hearing date.  On that date a hearing held before this arbitrator on the question of whether the Company had just cause to terminate the Grievant.  


            The Company had just cause to terminate the Grievant.  There was a long series of problems with him.  He habitually failed to follow Standard Operating Procedures (SOPs) and committed repetitive violations by failing to get permission from or to notify his supervisor when he would be away from his work area.  The Company worked with the Grievant.  He did not follow directions and did not follow suggestions.  He was trained and retrained but failed to respond. Progressive discipline was followed.  He was put on notice, given ample warning but he took no action to improve.  His prior disciplines provided an adequate record to support the termination.  The Grievant “pushed the envelope” and failed to improve.  The termination should be upheld.


             The Company did not have just cause to terminate the Grievant.  The arguments and evidence offered by the Company in this termination hearing were the same as those offered at the arbitration hearing on the matter of the Final Warning Letter.  Arbitrator McKay’s Award reducing the Final Written Letter to a Verbal Warning cannot be ignored.  All the evidence presented in the prior arbitration was evaluated and decided upon by Arbitrator McKay.  That is a fixed record and the Award is final and binding.  The current official status of the Grievant’s disciplinary record is a Verbal Warning.  “Going from a Verbal Warning to Termination is a violation of the just cause standard and the principles of progressive discipline.  The grievance should be sustained and the grievant should be immediately reinstated to his previous position without loss of seniority and he should be made whole for all losses of pay and benefits, minus interim earnings as reflected in the Agreement.  As to all these monies, interest shall be paid


            An interesting twist here is that Arbitrator McKay’s Award dated July 20, 2006 wherein he reduced the Final Written Letter to a Verbal Warning was issued fourteen months after Grievant was served with a Notice of Termination on May 19, 2005.  At this point, the Company could have rescinded the termination notice but did not.  Instead, the Company chose to go forward with the termination arguing that (1) “other disciplinary actions on his record were left undisturbed by the prior arbitrator” and (2) “these prior disciplines of verbal and written warnings stand as a more than adequate record upon which to base termination” (Tr. p. 12).  The Company’s argument lacked merit and was not supported by the evidence record.

            The import of Arbitrator McKay’s Award and his findings therein were final and binding on the Company.  Arbitrator McKay reviewed and evaluated all the documentation presented at the hearing concerning the Final Written Letter and found the Company’s allegations to be lacking in substance.  Arbitrator McKay found that with the exception of some technical violations by the Grievant, the Company’s allegations against the Grievant were the result of disparate treatment by the Company (others, for the same or similar actions, were treated differently) and the Company targeting his role as a union steward and unit chief.  Moreover, the status of the Grievant’s discipline record, as of the date of the Award, became that of a Verbal Warning.  

            In the instant arbitration, all allegations of misconduct that were dated prior to April 18, 2005 the date of the Final Warning Letter were ruled, by this Arbitrator, as inadmissible.  In addition, the Company stipulated that the above allegations were not part of the record in this arbitration (Tr. p. 58).  Only the four allegations of misconduct that took place after that date and before the Notice of Termination dated May 19, 2005 were admissible for this arbitration.   Those four allegations of misconduct were dated April 18, 2005, April 20, 2005, April 27, 2005 and May 3, 2005. 

            In the above, the Grievant was alleged to have, on each of those days, left his work area without permission from a supervisor and that he violated an SOP by not initialing his Production Log Sheet verifying that his work station was clean.  As to being away from his work area without permission, the allegations were not supported by the record.  In Supervisor Parkin’s cubicle, a sign out sheet is kept where the Grievant could sign out when a supervisor was not available.   The sheet was referred to as the “Union Log” (C-9).  The sign out sheet showed that the Grievant had signed out and in on the dates in question.  Supervisor Parkin testified that use of Union Log is an additional requirement to that of receiving permission from a supervisor.   She also testified that the Grievant would fill in the Union Log “after the fact” (Tr. p. 73-75).   In addition, she testified that she assumed that on those occasions when he was away from the area he was on union business (Tr. p. 112).  The TOD Usage Reports C-6, C-7, and C-8 showed him to be on union business for those periods of time when he was away from his work area (Tr. p. 112).   She also testified that on occasion, the Grievant called her office to let her know that he was away from the work area on union business (Tr. p. 112).  The evidence record was void of any showing that the Grievant was issued a discipline for these actions.  The only thing in the record was a document showing that the Supervisor Parkin held a Formal Discussion with the Grievant about the matter on several occasions (C-5).  She also testified that a formal discussion is not a discipline (Tr. p. 85).    The arbitrator’s conclusion is that the Grievant did not violate the attendance rules. 

            Before addressing the issue of alleged SOP violations, it should be noted that there was never an allegation made that the Grievant had not or was not performing his duties as an RT (Tr. p. 34).  Nor was any evidence entered into the record alleging that he had ever failed to clean his work station (Tr. p. 96).   An examination of the Performance Log Sheets for the four days in question showed that on each of the days in question the Grievant cleaned his work station after processing a drug and before commencing to process a different drug (C-1, C-2, C-3, & C-4).   The examination also showed that in each instance the Grievant initialed, as required, that he had cleaned his station and that a second person also initialed the sheet in the proper place further verifying that the station was cleaned before moving on to process a different drug.   

            The charge levied against the Grievant was very narrow, very specific.  He was charged with failure put his initials on the first line of the Production Log Sheets under the column heading “Clean Station Initial / N15” showing that he had visually examined the work station on arrival at the start of his shift to ensure that it had been properly cleaned, apparently by the last person to use the work station, and was therefore ready for processing a drug.  In short, he was not required to clean the work station but to the visually examine the station for cleanliness and, if clean, enter his initials on the sheet verifying the station was clean.  (There is an assumption that if the station was found to be unclean that it would automatically be cleaned.)

            On each of the days in question, the Grievant did not enter his initials on the first lines as required as required by the SOP.  Though it was not required by the SOP, he did, on each of the days, on arrival at his work station, enter a “Start Time” and a “Finish Time” on the first line.  For example, on April 20, 2005 the Grievant, on the first line, entered “Station” under the column for Drug Name/Strength, entered 6:12 as his “Start Time” and 6:13 as his “Finish Time, and entered “P-2” to identify the work station, and a “No” to show no “Mid-Run” was executed (C-1).   These failures, at most, were technical violations of the SOP.  The question became that of whether they were severe enough to warrant discharge.

            The answer is no.  Embodied in the concept of progressive discipline is a system of fairness and due process. It is not punitive in nature, it is corrective.  It means that a valued and productive employee will be given the opportunity to correct the behavior identified as unacceptable.  It also means that, except for egregious types of misbehavior, discipline will be applied with increasing severity from one step to the next with notice that future infractions of the same or similar type will result in further discipline up to and including discharge.  

            The record showed that the Company embraces the concept and practice of progressive discipline.  The Company also argued that it was not bound to follow the progression of steps in the application of discipline (Tr. p. 182-184).  The Company is correct.  It can bypass a step or leap steps but the Company must show that infraction at the time was severe enough to warrant bypassing steps on progressive discipline ladder. 

            The Company contended that the Grievant’s failure to enter his initials was a safety matter and severe enough to warrant discharge.  The Company’s argument was not supported by the record.  Supervisor Parkin testified that with the Grievant’s failure to enter his initials she assumed that the work station was not clean which could lead to the possibility of contaminated drugs going out the door to patients (Tr. p. 182-184).  However, the Company’s response to the absence of the Grievant’s initials did not reflect a determination that drugs may have been contaminated.

On those occasions when the Grievant failed to enter his initials, Supervisor Parkin did not, ever, notify the Quality Control Department that because the Grievant failed to initial the log sheet there was a possibility of contaminated drugs on the shelves ready for dispensing to patients.  The Quality Control Manager, Stephen Parnes, testified that if the Supervisor had notified him of such a failure, he would have automatically conducted an internal examination of the drug in question.  Manager Parnes, however, testified that he had never been notified that a contaminated drug may be on the shelf as a result of an RT, including the Grievant, failing to initial his Production Log Sheet (Tr. p. 160-162).  The obvious conclusion is the Grievant’s failure to initial the Log sheets were technical violations and not really taken seriously by the Company except, perhaps, to target him further for his role as union steward and unit chief. 

            For the reasons discussed in the foregoing, the conclusion of the Arbitrator is that the Grievant did not violate the attendance policy / rules and that the technical violations of the SOP, as determined by the Company’s response to the absence of the Grievant’s initials, lacked any basis to warrant discharge or to warrant any additional discipline above the existing Verbal Warning. 

The grievance is sustained.  The Company did not have just cause to discharge the Grievant. The Company is ordered to immediately reinstate the Grievant to his previous position without loss of seniority and he shall be made whole for all losses of pay and benefits from the date of discharge to the date of reinstatement, minus interim earnings as reflected in the Agreement.  As to these monies, the Company is ordered to pay the Grievant interest.



            The Grievance is sustained.  The Company did not have just cause to discharge the Grievant, Daniel Chavez.




            The Company is ordered to immediately reinstate the Grievant to his previous position without loss of seniority and he shall be made whole for all losses of pay and benefits from the date of discharge to the date of reinstatement, minus interim earnings as reflected in the Agreement.  As to these monies, the Company is ordered to pay the Grievant interest.


            As stipulated by the parties, the Arbitrator retains jurisdiction over any dispute that may arise over the implementation of the remedy.

Date: _____________________________                 _________________________________

                                                                                    C. ALLEN POOL, Arbitrator   

[1] Company exhibits are referenced as C-1, C-2, etc.  Joint exhibits are referenced as Jt-1, Jt-2, etc.  Union exhibits are referenced as U-1, U-2, etc. Citations from the transcript are referenced as Tr. p. 34, Tr. p. 155, etc.

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