                                                                                                                           Opinions of the United
2004 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


10-14-2004

Citgo Asphalt v. Local 2-991
Precedential or Non-Precedential: Precedential

Docket No. 03-1503




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PRECEDENTIAL
                                                  Opinion Filed: October 14, 2004
       UNITED STATES COURT OF
              APPEALS
        FOR THE THIRD CIRCUIT
                                              Ronald H. DeMaria, Esquire
                                              (ARGUED)
                                              McElroy, Deutsch, Mulvaney, LLP
              Nos: 03-1503                    1300 Mt. Kemble Avenue
                                              Morristown, New Jersey 07962

                                              James J. McGovern III, Esq.
                                              Genova, Burns & Vernoia
       CITGO ASPHALT REFINING                 354 Eisenhower Parkway
              COMPANY,                        Plaza II, Suite 2575
                   Appellant                  Livingston, NJ 07039
                      v.
                                              Attorneys for Appellant
 THE PAPER, ALLIED-INDUSTRIAL,
CHEMICAL, AND ENERGY WORKERS                  Robert F. Henninger, Esquire
INTERNATIONAL UNION LOCAL NO.                 (ARGUED)
             2-991                            Warren J. Borish
                                              Spear, Wilderman, Borish, Endy, Spear
                                              and Runckel
                                              36 Tanner Street, 2nd Floor
 On Appeal from the Order of the United       Haddonfield, New Jersey 08033
              States District
  Court for the District of New Jersey        Attorneys for Appellee
    (Civil Action No. 02-CV-00864)
  District Judge: Hon. Joseph E. Irenas                       OPINION

                                              McKEE, Circuit Judge.
                                                     CITGO Asphalt Refining Company
        Argued December 18, 2003
                                              appeals the district court’s confirmation of
                                              a labor arbitrator’s decision that CITGO’s
   Before: ROTH and M cKee, Circuit
                                              zero tolerance drug abuse policy is
              Judges,
                                              unreasonable. For the reasons that follow,
  and CUDAHY, Senior Circuit Judge *
                                              we will reverse.


   *
    The Hon. Richard D. Cudahy, Senior        Appeals for the Seventh Circuit, sitting by
Circuit Judge of the United States Court of   designation.
                I. FACTS                           them that they were going to
                                                   be scheduled for their
        CITGO Asphalt Refining Company
                                                   physical and requiring them
(“CARCO”) is a New Jersey partnership
                                                   to respon d to th e
involved in the oil refining industry.
                                                   questionnaires. They were
C I T G O Petrole u m C o r p o r a t i o n
                                                   given one or two days
(“CITGO”), is the majority partner of
                                                   advance notice of the annual
CARCO. In December 1998, CITGO
                                                   physical after they had
announced that it was going to implement
                                                   completed the questionnaire.
a new uniform national substance abuse
                                                   Other than this drug testing
policy, which included a zero tolerance
                                                   as part of the annual
policy (the “policy”), at all of its
                                                   physical, there was not
petroleum refining facilities in the nation.
                                                   random testing. Under the
The policy was thereafter implemented at
                                                   new policy, random testing
more than sixty locations. Local 3-0673
                                                   is done immediately after
of the Paper, Allied-Industrial, Chemical
                                                   receiving notice.
and Energy Workers International Union
(“PACE”) challenged the policy after it
was implemented at CARCO’s asphalt
                                                   (2). Under the old policy,
plant in Savannah, and the challenge
                                                   off-duty conduct could not
proceeded to arbitration. The arbitrator
                                                   be a violation, but it is . . .
ruled that the policy was proper, valid and
                                                   under the new policy.
reasonable in all respects, and issued an
opinion and award denying the Union
grievance in its entirety. The policy was
                                                   (3). [Under the old policy]
also challenged at CARCO’s asphalt plant
                                                   [ C] a use , suspic ion o r
in Paulsboro, New Jersey, where the
                                                   t e c h n ic a l p e r f o rm a n c e
hourly workers are represented by PACE
                                                   problems or occurrence of
Local 2-991. There, Local 2-991 argued
                                                   an accident or incident or
that the new zero tolerance policy changed
                                                   safety violation could
the existing policy as follows:
                                                   trigger a drug test as part of
       (1). . . .Under the old policy,             the annual physical. Under
       urine tests for drugs were                  the new policy, drug testing
       given during the annual                     can be done without any of
       physical, with the                          these prerequisites.
       individuals to be given their
       p h y s ic a l e x a m s a n d
       receiving a w ritten                        (4). Under the old policy,
       questionnaire a week or two                 employees who tested
       before the physical notifying               positive during an annual

                                               2
       physical were given an                     that is totally unreasonable.”
       opportunity               for
                                                                 The grievances proceeded to
       rehabilitation, i.e., a second
                                                  arbitration after the parties agreed upon
       chance. But, under the new
                                                  the following submission:
       policy, no employee is given
       a second-chance opportunity                       Did CITGO violate Article
       unless they come forward                          X X X o f t h e L a b or
       and admit their drug use                          Agreement by improperly
       prior to any positive drug                        implementing its National
       test, called “self-                               Substance Abuse Policy at
       acknowledgment.”                                  the Paulsboro facility on
                                                         October 1, 1999. If not,
                                                         was     the     policy
Local 2-991's Br. at 9-10.                               unreasonable?
       Local 2-991 challenged the new
policy by filing two grievances. One
                                                          At the arbitration hearing, the
alleged an “Improper implementation of a
                                                  parties stipulated that the Management
‘new’ drug and alcohol policy.” That
                                                  Rights Clause (Article III) and the Future
grievance claimed that CARCO violated
                                                  Bargaining Clause (Article XXX) in the
the controlling collective bargaining
                                                  then current CBA were identical to those
agreement (“CBA”) by not bargaining
                                                  contained in every CBA that had been in
over the new policy,1 and that the policy
                                                  effect at Paulsboro since 1977. Article III,
violated a provision of the CBA dealing
                                                  the Management Rights Clause provides,
with future bargaining.      The other
                                                  in applicable part, as follows:
grievance alleged that the “Company
implemented a drug and alcohol policy
                                                         Except to the extent
  1
    The collective bargaining relationship               expressly abridged by an
between the parties began at Paulsboro in                express and sp ecific
the mid-1970s. The first labor contract at               provision of this
Paulsboro was negotiated in 1997.                        Agreement, the Company
CITGO bought the facility in 1991 and                    reserves and retains all of its
continued both the bargaining relationship               Common Law or other
and the CBA. The Paulsboro facility                      rights to manage the
became a refinery in the late 1970s and is               business as such rights
engaged in the processing of crude oil into              existed prior to the
asphalt and other products. There were                   execution of this or any
some 56 bargaining unit members when                     other previous Agreement
the grievances were filed.                               with the Union or any other

                                              3
      Union.       The rights of              amending, modifying,
      management which are not                supplementing or otherwise
      abridged by this Agreement,             altering in any respect
      shall include, but are not              whatsoever this Agreement
      limited to: . . . make and              or any part thereof.
      enforce rules for the
      maintenance of discipline
      and safety, and to suspend,                     **********
      discharge, or otherwise
      discipline employees for
      just cause. The listing of              25.4. The Union and the
      specific rights in this                 Company both agree that
      Agreement is not intended               the submission to the
      to be nor shall it be                   arbitrator shall be based on
      restrictive of or a waiver of           t h e o r i g inal w r i t t e n
      any of the rights of                    grievance submitted in the
      management not listed and               grievance procedure. . . .
      specifically surrendered
      herein, whether or not such
      rights have been exercised                      **********
      by the Company in the past.

                                              25.6.      The power and
                                              authority of the arbitrator
Article XXV of the CBA, entitled:             shall be strictly limited to
“Grievance Procedure and Arbitration,”        determining the meaning
provides, in relevant part, as follows:       and interpretation of the
                                              explicit terms of this
      25.1.      Grievances are
                                              Agreement as herein
      defined as alleged violations
                                              expressly set forth. The
      of express and specific
                                              arbitrator shall not have
      provisions of this
                                              authority to add or to
      Agreement occurring during
                                              subtract from or modify any
      the term of this Agreement
                                              of said terms, or to limit or
      or any renewal or extension
                                              impair any Common Law or
      thereof. . . . Neither the
                                              other right of the Company,
      Union nor an employee
                                              or to establish or change any
      shall use or attempt to use
                                              wage or rate of pay. .. . The
      the grievance procedure as a
                                              parties agree that the power
      m e a n s o f c h a n gi n g ,
                                              and jurisdiction of any

                                          4
     arbitrator chosen hereunder              any attachments hereto
     shall be limited to deciding             during the term hereof.
     whether there has been a
     violation of a provision of
     this Agreement.               The        The parties also stipulated that:
     a r b i t r a t o r s h a l l n ot
                                              (1). The Paulsboro refinery
     substitute his judgment for
                                              is a hazardous work
     that of the Company in the
                                              environment that can
     absence of a clear abuse of
                                              explode and poses a
     discretion. The arbitrator
                                              potential threat to workers,
     shall not be empowered,
                                              the environment, and to the
     and shall have no
                                              public at large.
     jurisdiction, to base his
     Award on any alleged
     practices or oral
                                              (2). The bargaining unit
     understandings which are
                                              positions affected by the
     not incorporated in writing
                                              drug testing policy are
     in this Agreement. . . .
                                              safety sensitive (as defined
                                              in [Department of
                                              Transportation]
Article XXX, the Future Bargaining
                                              regulations).
Clause, provides:

                                              (3). The duties of the
     The parties acknowledge
                                              bargaining unit employees
     that, during the negotiations
                                              are such that their attempts
     which resulted in this
                                              to perform while in a state
     Agr eement and any
                                              of drug impairment may
     attachments hereto, each
                                              pose a threat to co-workers,
     had the unlimited right and
                                              to the workplace, to the
     opportunity to make
                                              environment, and to the
     demands and proposals with
                                              public at large.
     respect to any subject . . .
     not removed from the area
     of collective bargaining . .
                                              (4).      All employees
     .and therefore each waives
                                              (management and
     the right to further
                                              bargaining unit employees
     bargaining on any subject
                                              alike) at Paulsboro play a
     not covered or covered
                                              critical role in both
     under this Agreement and

                                          5
       preventing accidents and                         the bargaining unit and only
       minimizing the effects of                        two people have ever been
       accidents.                                       disciplined in two years.


       (5).      The speed in                           (2). Motiva never requested
       responding to a dangerous                        a zero tolerance program.
       condition is critical to
       limiting potential damage
       and injury.                                      (3). Motiva’s safety record,
                                                        unlike CITGO’s, is just
                                                        “industry standard.”
In addition, Owen Haynes, a CARCO
employee for 30 years and Local 2-991
President for approximately 12 years,                   (4). Motiva, like CITGO,
testified that Paulsboro is a “potentially              needed a standardized
dangerous work environment,” and Mike                   policy, company-wide.
Drager, the manager of the Paulsboro
facility, testified about “toxic and deadly”
gases at the refinery.                                  (5). The policy was adopted
                                                        by “consensus,” not through
       CITGO contends that the only
                                                        negotiations.
evidence Local 2-991 offered to support
its grievance that the Policy was
unreasonable was the testimony of Eric
                                                        (6).        Both employees
Hamilton, the president of the PACE local
                                                        disciplined under Motiva’s
at a company called “Motiva,” and the
                                                        p o l i c y w e r e “repeat
testimony of Timothy Koladi, the
                                                        offenders.” Both violated
chairman of the union grievance
                                                        the policy a second time
committee at Sun Oil. Both men testified
                                                        after not being disciplined
that the substance abuse policies at their
                                                        for an initial violation, and
respective facilities included random drug
                                                        both were detected by
testing.     They also testified that the
                                                        random testing.
Motiva and Sun Oil policies are virtually
identical to the CITGO policy except for
CITGO’s zero tolerance provision.
                                                   As to the policy at Sun, Oil, Koladi
       Hamilton testified as follows               testified:
regarding the policy at Motiva:
       (1). There are 384 people in
                                                        (1).     There    are   525

                                               6
      employees in one                                   During his testimony, DeLeon gave
      bargaining unit and 550                    specific reasons for a zero tolerance
      employees in the other.                    provision. He testified that CITGO’s
                                                 safety record is the best in the industry, a
                                                 fact not challenged by Local 2-991, and
      (2). That in the ten years                 that CITGO wanted to maintain its record.
      since 1990, only four to six               He explained that, in CITGO’s judgment,
      employees have been                        offering a second chance “sends a
      disciplined under the policy               message to employees that it’s okay to do
      and they too were all second               drugs until you get caught. . . . [T]hat was
      offenders, after having been               a very strong feeling, . . . .” DeLeon also
      given a “first chance”                     explained that the zero tolerance policy
      without discipline.                        does not apply if an employee comes
                                                 forward and identifies him/herself as a
                                                 person with a substance abuse problem.
        John DeLeon, CITGO’s Manager             He also explained that CITGO’s medical
of Human Resources and Labor Relations,          director was on the team that designed the
testified in defense of CITGO’s Policy and       program, and added that the only union in
explained the steps CITGO took in                the country that had challenged the
designing its national substance abuse           program was the union at the Savannah,
policy. DeLeon testified that CITGO              Georgia, asphalt plant. As noted, the
reviewed the practices of other companies        Savannah arbitration resulted in an award
in the industry and patterned much of its        which found that the CITGO Policy was
policy after the Omnibus Transportation          reasonable in all respects. The president
Employee Testing Act of 1991, 49 U.S.C.          of Local 2-991 testified that the Savannah
§ 31306 et seq. DeLeon also explained            plant is virtually identical to the Paulsboro
that, because a uniform policy was needed,       facility.
all aspects of the program including
                                                        The arbitrator found “no
random testing, zero tolerance, etc. apply
                                                 contractual breach by [CITGO] with
to all employees, from the president of
                                                 respect to its unilateral adoption and
CITGO down. He further explained that
                                                 implementation of a substance abuse
the policy was implemented nationwide,
                                                 program in 1999.” He also found that the
including all facilities where there was
                                                 mandatory, random testing procedure was
union representation, and that he did not
                                                 both proper and reasonable. However, he
know of a major refinery that did not have
                                                 sustained the local’s challenge to the zero
random testing. According to DeLeon,
                                                 tolerance policy. The arbitrator ruled that
Tosco, Marathon and Exxon, three major
                                                 part of the Policy was unreasonable. He
companies in the industry, also had zero
                                                 explained:
tolerance substance abuse polices.
DeLeon’s testimony was unrebutted.                      [T]here can be no serious

                                             7
quarrel with the right of a                   legitimate objective for any
company in this type of                       company, it has not been
industry to make certain that                 shown to my satisfaction
s a f e t y c o n c e r n s a re              that permitting an employee
paramount and should be                       to have a “second chance”
adequately addressed. . . .                   would be inconsistent with
Indeed, it was recited that                   that goal. That being so, the
CITGO has the best safety                     Arbitrator agrees with the
record in the industry and                    Union that the Policy,
wants to keep it that way. I                  without giving a second
therefore will not seek to                    chance for rehabilitation, is
disturb that record.                          unreasonable to that extent
However, there are specific                   and to that extent only. This
areas of the Policy that are                  is especially so where the
troubling to me. . . .                        DOT regulations permit
                                              second chance or
                                              rehabilitation opportunities.
While the Union argued that                   I therefore find that the
mandatory random testing                      Policy should be modified
should be declared                            in that regard.
unreasonable, the Arbitrator
cannot agree with that
position. Having said that,            Thus, “[t]he arbitrator . . . sustained [the
I do nevertheless understand           policy] as written except where it does not
and appreciate the Union’s             permit a (sic) employee second-chance or
argument with respect to               rehabilitation opportunities.” App. at 473.
employees who test positive            The arbitrator held that the policy
as the result of random                (including CARCO’s right to conduct
testing not being given a              random drug testing), was reasonable,
second chance under the                except for the so-called “zero tolerance”
Policy. The facts reveal that          provision. . . .
this is contrary to the
                                           II. DISTRICT COURT
policies in place at the
                                       PROCEEDINGS
Motiva refinery in Delaware
City, Delaware, and at the                     CARCO filed a complaint in the
Sun refinery in Marcus                 district court challenging the arbitration
Hook. While the Arbitrator
fully acknowledges that the
best safety record in the
industry is obviously a

                                   8
opinion and award.2 CARCO alleged that             standard the district court should have
the arbitrator: (1) exceeded the power and         applied. Exxon Shipping Co. v. Exxon
authority given to him by the parties; (2)         Seaman’s Union, 73 F.3d 1287, 1291 (3d
rendered an award which did not draw its           Cir. 1996) (“Exxon III”).
essence from the labor agreement; (3)
                                                           Courts play a very limited role in
ignored the plain language imposing
                                                   reviewing the decision of an arbitrator
limitations on his authority; (4) rendered
                                                   appointed pursuant to a collective
an award which was not totally supported
                                                   bargaining agre em ent.             Un ited
by the record; and (5) failed to apply the
                                                   Paperworkers International Union, AFL-
standard of review set forth in the CBA.
                                                   CIO v. Misco, Inc., 484 U.S. 29, 36
Local 2-991 filed an answer and
                                                   (1987). “When the parties include an
counterclaim to enforce the award in its
                                                   arbitration clause in their [CBA], they
entirety. In time, cross-motions for
                                                   choose to have disputes concerning
summary judgment were filed and the
                                                   constructions of the contract resolved by
district court thereafter entered an order
                                                   an arbitrator.” W.R. Grace and Co. v.
granting Local 2-991's motion for
                                                   Local Union 759, International Union of
confirmation of the award in its entirety.
                                                   the United Rubber, Cork, Linoleum and
This appeal followed. The arbitrator’s
                                                   Plastic Workers of America, 461 U.S. 757,
rejection of the zero tolerance provision of
                                                   764 (1983). Consequently, we “are not
the policy is the only issue on appeal.
                                                   authorized to reconsider the merits of an
    III. STANDARD OF REVIEW                        award even though the parties may allege
                                                   that the award rests on errors of fact or on
        We exercise plenary review of the
                                                   misinterpretation of the contract.” United
district court’s confirmation of a labor
                                                   Paperworkers Union v. Misco, Inc., 484
arbitration award and apply the same
                                                   U.S. at 36. This follows from the fact that
                                                   the arbitrator’s judgment was bargained
                                                   for by the parties. United Steelworkers of
    2
     The district court had subject matter         America v. American Manufacturing Co.,
jurisdiction pursuant to Section 301(a) of         363 U.S. 564, 568 (1960). “Full-blown
the Labor Management Relations Act, 29             judicial review of labor arbitrators’
U.S.C. § 185(a), which provides: “Suits            decisions would annul the bargain of the
for violation of contracts between an              parties for an arbitrator’s construction of
employer and a labor organization                  their [CBA]” and replace it with the
representing employees in an industry              court’s con struc tion.       Stroehmann
affecting commerce as defined in this              Bakeries, Inc. v. Local 776, International
chapter, or between any such labor                 Brotherhood of Teamsters, 969 F.2d 1436,
organizations, may be brought in any               1441 (3d Cir. 1992) (citing United
district court of the United States having         Steelworkers of America v. Enterprise
jurisdiction of the parties, without respect       Wheel and Car Corp., 363 U.S. 593, 599
to the amount in controversy . . . .”

                                               9
(1960)).                                             factfinder did not.” Id.
        Therefore, we do not review an                      Nevertheless, “[a]n arbitrator has
arbitrator’s award for legal error. Exxon            the authority to decide only the issues
III, 73 F.3d at 1295. “[A]s long as the              actually submitted.” Matteson v. Ryder
arbitrator’s award draws its essence from            System Inc., 99 F.3d 108, 112 (3d Cir.
the [CBA] and is not merely [the                     1996) (citation omitted). “It is the
arbitrator’s] own brand of industrial                responsibility of the arbitrator in the first
justice, the award is legitimate.” Misco,            instance to interpret the scope of the
484 U.S. at 370 (citation and internal               parties’ submission, but it is within the
quotations omitted). “[O]nly where there             courts’ province to review an arbitrator’s
is a manifest disregard of the agreement,            interpretation.”       Id. at 113 (citation
totally unsupported by the principles of             omitted). Although our review of an
contract construction and the law of the             arbitration award is “highly deferential[,]”
shop, may a reviewing court disturb the              id. we do not “simply . . . rubber stamp
award.” Exxon III, 73 F.3d at 1295                   [arbitrators’] interpretations and decisions
(citations and internal quotations omitted).         . . . .” Id. (citation and internal quotations
 Accordingly, the award stands “even if the          omitted).
court finds the basis for it to be ambiguous
                                                                 IV. DISCUSSION
or disagrees with its conclusions under the
law.” Stroehman Bakeries, Inc., v. Local                     As noted above, the only issue
776, 969 F.2d at 1441 (citation omitted).            before us is the propriety of the arbitrator’s
                                                     determination that CITGO’s zero tolerance
        Therefore, a court can only vacate
                                                     policy is unreasonable. CITGO makes two
an arbitrator’s award “if it is entirely
                                                     separate, yet closely related, arguments in
unsupported by the record or if it reflects a
                                                     support of its challenge to that portion of
manifest disregard of the agreement.”
                                                     the arbitrator’s determination.         First,
Exxon III, 73 F.3d at 1291 (citation and
                                                     CITGO contends that the arbitrator acted
internal quotations omitted).           “An
                                                     outside the scope of his authority and
arbitrator’s decision need be neither wise
                                                     rendered an award that did not draw its
nor internally consistent.” Id. at 1297.
                                                     essence from the CBA.             Second, it
The decision is “subject to a standard of
                                                     contends that the arbitrator’s determination
only minimal rationality.” Id.
                                                     that the zero tolerance policy is
        It follows that a reviewing court            unreasonable is not supported by the
must defer to the arbitrator’s factual               record. We will address each contention in
findings. Id. “[F]indings of fact and                turn.
inferences to be drawn therefrom are the
                                                      A. The arbitrator acted outside the
exclusive province of the arbitrator.” Id.
                                                              scope of his delegated
(citing Misco, 484 U.S. at 36). It is not the
court’s “role to draw inferences that the            authority and rendered an award that


                                                10
               did not draw                         Company in the absence of a clear abuse
                                                    of discretion.”4      The arbitrator could
       its essence from the collective
                                                    therefore only conclude that the zero
           bargaining agreement.
                                                    tolerance policy was unreasonable if he
                                                    found that CITGO clearly abused its
                                                    discretion in instituting it. However, the
          The arbitrator made three separate
                                                    arbitrator found no abuse of discretion,
findings. He agreed that there can be no
                                                    and this record supports none. The
“serious quarrel” with CITGO’s right to
                                                    arbitrator found that the zero tolerance
“make certain that safety concerns are
                                                    policy was unreasonable simply because
paramount and . . . adequately addressed.”
                                                    he did not believe that giving an employee
Second, he agreed that CITGO did have
                                                    a second chance was inconsistent with
the best safety record in the industry and
                                                    CITGO’s goal of having the best safety
“wants to keep it that way.”3 Third, he
                                                    record in the industry. He wrote: “[I]t has
agreed that having the best safety record in
                                                    not been shown to my satisfaction that
the industry “is obviously a legitimate
                                                    permitting an employee to have a ‘second
o b j e c t i v e fo r a ny c om pa ny. ”
                                                    chance’ would be inconsistent with that
Notwithstanding this, he stated: “It has not
                                                    goal.” Thus, rather than concluding that
been shown to my satisfaction that
                                                    CITGO abused its discretion in adopting a
permitting an employee to have a ‘second
                                                    zero tolerance policy, the arbitrator
chance’ would be inconsistent with
                                                    simply substituted his own judgment for
[having the best safety record in the
                                                    CITGO’s, and declared CITGO’s zero
industry].” He concluded his analysis
                                                    tolerance provision unreasonable.
with: “[T]hat being so the arbitrator agrees
with the Union that the policy, without                    However, an arbitrator’s opinion
giving a second chance for rehabilitation           a n d a w a r d b a s e d o n “ g e n er a l
is unreasonable.”                                   considerations of fairness and equity” as
                                                    opposed to the exact terms of the CBA,
       However, in finding that the
                                                    fails to derive its essence from the CBA.
absence of a second chance was
                                                    MidMichigan Reg’l Med. Ctr – Clare v.
unreasonable, the arbitrator ignored the
                                                    Professional Employees Div., 183 F.3d
parameters of his inquiry as defined in the
                                                    497, 502 (6th Cir. 1999). As we explain
CBA. As we noted above, Article XXV,
                                                    more fully below, the award here
§ 25.6 of the CBA provides, in relevant
                                                    comported with the arbitrator’s view of
part, that “[t]he arbitrator shall not
                                                    fairness, but did not draw its essence from
substitute his judgment for that of the
                                                    the CBA.


   3                                                   4
   As noted, the arbitrator added that he               According to CITGO, this “is a very
would therefore not “seek to disturb that           unusual provision to have in a labor
record.”                                            agreement.” CITGO’s Br. at 23.

                                               11
        Local 2-991 defends the arbitrator’s                that go beyond the four corners of a
conclusion by arguing that the parties’                     collective bargaining agreement.” Id.
submission allowed the arbitrator to go                     (citations omitted) (emphasis added).
beyond the § 25.6 “abuse of discretion”
                                                                  As recited earlier, the agreed-upon
standard. We agree that, although the
                                                            submission read:
CBA is the “sole source of the arbitrator’s
authority[,] . . . [t]he parties may . . . agree                  Did CITGO violate Article
to allow an arbitrator to go beyond the                           X X X o f t h e L a b or
express terms” of the CBA.                 High                   Agreement by improperly
Concrete Structures, Inc. v. United                               implementing its National
Electrical, Radio and Machine Workers of                          Substance Abuse Policy at
America, Local 166, 879 F.2d 1215, 1218                           the Paulsboro facility on
(3d Cir. 1989) (citation omitted). “They                          October 1, 1999. If not,
may do so either by providing in the                              was     the     policy
collective bargaining agreement for                               unreasonable?
interest arbitration as well as rights
arbitration,5 or by agreeing, separately, to
submit specific issues to arbitration.” Id.                 As Local 2-991 sees it, even if the
(emphasis added). A submission may be                       language of the CBA prohibited the
“express, may incorporate an antecedent                     arbitrator from substituting his own
grievance, or may be based on other                         judgment for that of CITGO’s absent an
relevant submissions or actions.” Id. at                    abuse of discretion by CITGO, it is the
1219 (citations omitted). “But however                      language of the parties’ submission that
derived, the terms of the submission may                    controls the extent of the arbitrator’s
empower the arbitrator to resolve disputes                  authority. Therefore, argues Local 2-991,
                                                            because the submission required that the
                                                            arbitrator determine, in the event that he
   5
     In “interest arbitration,” the parties ask
                                                            found that the policy did not violate
the arbitrator to set new terms and
                                                            Article XXX (the Future Bargaining
conditions of employment, while in “rights
                                                            Clause) of the CBA, whether the policy
arbitration,” the arbitrator is asked to
                                                            was reasonable, the submission freed the
r e s o lv e d i s p u t e s i n v o l v i n g t h e
                                                            arbitrator from the confines of that
interpretation or application of terms and
                                                            portion of the CBA that prohibited the
conditions of employment already agreed
                                                            arbitrator from substituting his own
to in the CBA.               Local 801, Int’l
                                                            judgment for CITGO’s absent an abuse of
Brotherhood of Boilermakers, Iron
                                                            discretion by CITGO. More succinctly,
Shipbuilders, Blacksmiths, Forgers and
                                                            Local 2-991 argues that the broad
Helpers, ALF-CIO v. Pennsylvania
                                                            language of the last sentence of the
Shipbuilding Co., 835 F.2d 1045, 1046-47
                                                            submission trumped the narrower
(3d Cir. 1987).
                                                            language of § 25.6 of the CBA.

                                                       12
According to Local 2-991, the arbitrator          arbitrator’s conclusion. 6 That failure
merely                                            leads to CITGO’s second argument.
       reviewed the terms of the                   B. The arbitrator’s decision that the
       CBA, listened to the                                 zero tolerance policy
       witn esses’ testi m o n y,
                                                   is unreasonable is not supported by
       reviewed the terms of
                                                               the record.
       documents submitted, and
       considered attorney
       argument. After digesting
                                                          As recited earlier, “[a]n arbitrator’s
       all of this evidence, [the
                                                  award must be enforced so long as it
       arbitrator] addressed the
                                                  draws its essence from the collective
       stipulated issue and found
                                                  bargaining agreement.” United Industrial
       that there was no contract
                                                  Workers v. Government of the Virgin
       violation. Which brought
                                                  Islands, 987 F.2d 162, 170 (3d Cir. 1993)
       the arbitrator to the next
                                                  (citation and internal quotations omitted).
       question placed before him
                                                  “A labor arbitration decision fails to draw
       by the parties: whether the
                                                  its essence from the collective bargaining
       policy was unreasonable.
                                                  agreement if the arbitrator acted in
       The arbitrator answered that
                                                  manifest disregard of the law, or if the
       question and found the
                                                  record before the arbitrator reveals no
       “zero tolerance” portion of
                                                  support for the arbitrator’ s
       the policy unreasonable.
                                                  determination.” Id. (citation omitted)
       [Thus, according to the
                                                  (emphasis added). CITGO argues that,
       union,] [u]nder the
       circumstances, there can be
       no doubt that the award is
                                                        6
       enforceable.                                      Local 2-991's argument seems to
                                                  establish no standard by which to judge
                                                  the propriety of the arbitrator’s decision.
Local 2-991's Br. at 23.                          Once the CBA’s “abuse of discretion”
                                                  standard is jettisoned, the union’s
                                                  argument would allow the arbitrator to
       However, assuming arguendo that            apply any free-floating standard including
the submission trumped the “abuse of              his/her own subjective judgment whether
discretion” standard in the CBA, it is            or not it was supported by the record.
nevertheless still apparent that Local 2-         This gives the arbitrator almost unfettered
991 has only described what the arbitrator        discretion to determine the reasonableness
did. The union has not explained either           of a challenged policy. The union claims
the rationale for, or the basis of, the           that the last sentence of the submission did
                                                  just that.

                                             13
regardless of the scope of the last sentence        tolerance policies certainly casts doubt
of the submission, the award must still be          upon the arbitrator’s focus on Motiva and
supported by the record, and this award is          Sun Oil, and the arbitrator never explained
not. We agree.7                                     why he elevated the importance of Motiva
                                                    and Sun Oil refineries over larger ones
          The arbitrator relied only on two
                                                    with better safety records.
“facts” to support his determination that
the zero tolerance policy was                               The arbitrator also relied upon
unreasonable. First, the arbitrator noted           provisions of the Omnibus Transportation
that neither Motiva nor Sun Oil have zero           Employee Testing Act of 1991, 49 U.S.C.
tolerance policies at their refineries.             § 31306 et seq., and the Department of
However, the fact that two companies with           Transportation regulations promulgated
safety records that are inferior to CITGO’s         under it, 49 C.F.R. § 382.101 et seq. That
do not have zero tolerance policies does            Act and its regulations allow employees a
not establish that CITGO acted                      second chance for rehabilitation.
unreasonably in adopting a zero tolerance           However, that does not mean that a
policy. In fact, considering the stipulated         decision to the contrary is unreasonable.
catastrophic repercussions of a safety              This is especially true when we consider
lapse at the Paulsboro plant, and CITGO’s           the hazardous nature of CITGO’s
superior safety record, one could just as           facilities, the need for prompt and
readily conclude that it was unreasonable           unimpaired action in the event of an
for Sun Oil and Motiva not to have a zero           emergency, and the exception for
tolerance policy.           Moreover, the           employees who step forward seeking help
a r b i t r a tor’s f i n d in g o f th e           for a substance abuse problem that CITGO
unreasonableness of the zero tolerance              has included in its policy.8 Indeed, the
policy completely ignores DeLeon’s                  Supreme Court has noted that the statute
unrebutted testimony that the three largest         and the regulations at issue leave it to the
companies in the industry – Exxon,                  parties to define appropriate discipline.
Marathon and Tosco –              have zero         The Court explained the backdrop of the
tolerance policies exactly like CITGO’s.            safety regulations as follows:
The undisputed fact that the three largest
                                                              [W]hen promulgating these
companies in the industry have zero


   7                                                      8
    We do not believe that the arbitrator’s                   We do not understand how the
determination that the zero tolerance               arbitrator could conclude on this record
policy is unreasonable is supported by the          that it is unreasonable for CITGO to adopt
record under CITGO’s narrow “abuse of               a policy that attempts to pressure impaired
discretion” standard” or under Local 2-             employees into stepping forward and
991's broader “submission trumps the                seeking help before their impairment
CBA” standard.                                      results in a catastrophe.

                                               14
       regulations, DOT decided                       employed in safety-sensitive positions
       not to require employers                       there, and that impaired employees pose a
       either to provid e                             threat to co-workers, the work-place, the
       rehabilitation or to hold a                    environment and to the public at large.
       job open for a driver who
                                                             Since the Managements Rights
       has tested positive, on the
                                                      Clause of the CBA (Article III), expressly
       basis that such decisions
                                                      gives CITGO the right “to make and
       should be left to
                                                      enforce rules for the maintenance of
       m anagement/driver
                                                      discipline and safety” and since CITGO §
       negotiation.          That
                                                      25.6 of Article XXV precludes either the
       determination reflects basic
                                                      union or CITGO from using the grievance
       background labor law
                                                      process to amend the CBA, we are hard-
       principles, which caution
                                                      pressed to understand how the arbitrator
       against interference with
                                                      could have concluded that the zero
       labor-management
                                                      tolerance policy is unreasonable without
       agreements about
                                                      substituting his own judgment for
       appropriate emplo yee
                                                      CITGO’s and ignoring CITGO’s expressly
       discipline.
                                                      reserved right “to make . . . rules for . . .
                                                      safety.”
Eastern Associated Coal Corp. v. United                          V. CONCLUSION
Mine Workers of America, District 17, 531
                                                             For the above reasons, we will
U.S. 57, 65 (2000) (citations omitted)
                                                      reverse the district court’s order enforcing
(emphasis added). The arbitrator’s award
                                                      the arbitrator’s decision and award, and
here ignores that caution as well as the
                                                      remand to the district court for an order
express reservation of the employer’s
                                                      vacating the arbitration award.
prerogatives as set forth in Article III, the
Management Rights Clause.
       Thus, the fact that Motiva and Sun
Oil do not have zero tolerance policies and
the fact that a particular federal statute and
its implementing regulations allow a
second chance, are not sufficient to
support a finding that CITGO’s zero
tolerance policy is unreasonable. This is
especially true given the undisputed
evidence that the Paulsboro facility is a
hazardous work environment susceptible
to explosions, Local 2-991 members are


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