Titan Tire Corp. of Bryan v. United Steelworkers of America, Local 890L

Citations: 656 F.3d 368; 191 L.R.R.M. (BNA) 2641; 2011 U.S. App. LEXIS 18808; 2011 WL 3962694Docket: 09-4460

Court: Court of Appeals for the Sixth Circuit; September 9, 2011; Federal Appellate Court

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Titan Tire Corporation of Bryan appeals a summary judgment from the district court favoring the United Steelworkers of America, Local 890L, regarding the termination of employee Linda Tracy. Tracy injured her wrist on March 8, 2008, and subsequently tested positive for marijuana after being sent to the hospital, leading to her termination based solely on the positive drug test. The Union contested this termination, asserting it was excessive and unjust, and the dispute was submitted to arbitration as stipulated in the collective bargaining agreement (CBA).

During arbitration, the Union argued that Titan did not provide adequate advance notice of the drug policy and its consequences, as required by the policy itself. Titan countered that the policy's language indicated automatic termination for positive tests. The arbitrator ruled in favor of the Union, determining that Titan lacked just cause for Tracy's termination due to insufficient notification about the drug policy. The arbitrator found that the phrase "subject to termination" did not equate to automatic termination, as it was a negotiated compromise between the Union and Continental General Tire, which Titan inherited.

Ultimately, the court affirmed the district court's judgment, supporting the arbitrator's decision that Tracy’s termination was unjustified given her satisfactory employment record and the lack of proper notification regarding the drug policy.

The arbitrator determined that Titan's acceptance of the drug program indicated an intent to bargain despite Titan's lack of awareness that "subject to termination" was a compromise. The arbitrator modified Tracy’s summary discharge to a ninety-day suspension and reinstated her with backpay, allowing Titan to implement unannounced random drug testing for one year post-reinstatement. On December 19, 2008, Titan sought to vacate the arbitrator’s award in the Northern District of Ohio, arguing that the arbitrator improperly relied on negotiating history between Continental and the Union concerning the phrase "subject to termination." Article 19.04 of the Collective Bargaining Agreement (CBA) states Titan is not bound by oral representations from past employers unless documented in writing and requires thirty days' notice from the Union before introducing evidence of negotiating intent in arbitration. On October 26, 2009, the district court ruled in favor of the Union, denying Titan’s motion. The court affirmed the arbitrator’s award, emphasizing that the arbitrator was interpreting the CBA regarding just cause and the disputed terminology. Even if there was an error in referencing negotiating history, it was deemed harmless, as the CBA’s language alone supported the arbitrator’s decision. The court noted that "subject to termination" implies permanent discharge is an available option for employees testing positive for drugs but is not automatic. Titan subsequently filed an appeal. 

The appeal process emphasizes a de novo review of the district court's summary judgment in labor arbitration disputes, focusing on the arbitrator's analysis rather than the district court's. Federal law promotes resolving labor disputes through arbitration, as outlined in Section 203(d) of the Labor Management Relations Act, which supports final adjustments agreed upon by parties. The Supreme Court's Steelworkers Trilogy establishes that federal courts should not assess the merits of arbitration awards but determine if they "draw their essence" from the collective bargaining agreement.

An arbitration order should only be denied if it can be positively assured that the arbitration clause does not cover the dispute, as established in United Steelworkers of America v. American Manufacturing Co. The interpretation of contracts falls within the arbitrator's purview, and courts must defer to the agreed-upon grievance procedures of the parties, which typically lead to binding arbitration. This judicial deference is rooted in the realities of workplace governance under collective bargaining agreements, which serve as a framework for resolving disputes without court intervention. Unlike commercial contracts, which may view recourse to courts as a failure in relationships, collective bargaining agreements emphasize arbitration as a core mechanism for industrial self-governance and conflict resolution. 

Arbitrators, who are often not lawyers, rely on the collective bargaining agreement (CBA) and the customary practices of the industry, rather than traditional contract law. Their role is distinct from that of judges, as they handle grievances with a level of expertise related to the industry that courts may lack. Consequently, courts are limited in their review of arbitration decisions, only intervening in cases of procedural irregularities, such as whether the arbitrator exceeded their authority, acted dishonestly, or failed to appropriately apply or interpret the contract. In the case of Michigan Family Resources, Inc. v. Service Employees International Union Local 517M, the court affirmed that its role is to assess these procedural aspects rather than the substantive merits of the arbitrator's decision.

Judicial intervention in an arbitration decision should be resisted unless the arbitrator fails to meet specific requirements, even if errors are perceived in the merits of the case. The dispute involves Titan and the Union, who submitted a just-cause question to the arbitrator. Titan does not claim any misconduct by the arbitrator, which means the appeal does not concern issues of fraud or dishonesty. The core issue is whether the arbitrator properly construed the collective bargaining agreement (CBA) in determining just cause. Titan argues that the arbitrator improperly considered bargaining history, violating Article 19.04 of the CBA. However, this argument is precluded by the Court's prior ruling in Michigan Family Resources, where it upheld an arbitrator's construction of ambiguous contract language despite similar objections.

The Court emphasized that the relevant inquiry is whether the arbitrator engaged in a permissible interpretation of the contract. In Michigan Family Resources, the arbitrator’s decision was deemed to embody contract interpretation, and even questionable methods did not invalidate the award. Titan did not present its Article 19.04 argument during the arbitration, and the arbitrator noted that Titan did not challenge the bargaining-history evidence. The Court concluded that Titan's argument lacks merit, asserting that the arbitrator's interpretation of the contract, while possibly flawed, did not warrant vacating the award. Ultimately, the arbitrator found that Titan failed to properly inform employees about the consequences of positive drug tests, leading to the conclusion that Titan lacked just cause for terminating an employee based on such a test.

The arbitrator's twenty-four-page opinion demonstrates a good-faith effort to interpret the contract, without suggesting a departure into implementing personal justice. Titan argues that the "subject to termination" language in the drug policy implies automatic termination, but this language is ambiguous and indicates that discharge for a positive test is not automatic. Titan's assertion that the arbitrator's interpretation grossly deviated from the collective bargaining agreement (CBA) is unfounded. The arbitrator's reliance on bargaining history between the Union and Continental to interpret the "subject to termination" language is challenged by Titan, citing Article 19.04 of the CBA. However, it is uncertain whether Article 19.04 applies to the proposed written provisions used by the arbitrator. Even if it did apply, such an error would not undermine the arbitrator’s engagement in interpretation. The arbitrator's construction of the just-cause and subject-to-termination provisions is reasonable and supports his decision. The court notes that a mere error in the arbitrator's justification does not warrant vacating the award. Ultimately, the court affirms the district court's summary judgment in favor of the Union.