           RECOMMENDED FOR FULL-TEXT PUBLICATION
                Pursuant to Sixth Circuit Rule 206                       2    Way Bakery v. Truck                        No. 02-2051
        ELECTRONIC CITATION: 2004 FED App. 0099P (6th Cir.)                   Drivers Local 164, et al.
                    File Name: 04a0099p.06
                                                                                            _________________
UNITED STATES COURT OF APPEALS                                                                   COUNSEL
                  FOR THE SIXTH CIRCUIT                                  ARGUED: Daniel G. Cohen, PILCHAK, COHEN & TICE,
                    _________________                                    Farmington Hills, Michigan, for Appellant. Andrea F.
                                                                         Hoeschen, PREVIANT, GOLDBERG, UELMAN, GRATZ,
 WAY BAKERY ,                      X                                     MILLER & BRUEGGEMAN, Milwaukee, Wisconsin, for
         Plaintiff-Appellant,       -                                    Appellees. ON BRIEF: Daniel G. Cohen, Rhonda H.
                                    -                                    Sanko, PILCHAK, COHEN & TICE, Farmington Hills,
                                    -  No. 02-2051                       Michigan, for Appellant. Andrea F. Hoeschen, PREVIANT,
            v.                      -                                    GOLDBERG, UELMAN, GRATZ, MILLER &
                                     >                                   BRUEGGEMAN, Milwaukee, Wisconsin, for Appellees.
                                    ,
 TRUCK DRIVERS LOCAL NO .           -
 164 and JAMES ZENTGRAF,                                                                    _________________
                                    -
        Defendants-Appellees. -                                                                 OPINION
                                    -                                                       _________________
                                   N
       Appeal from the United States District Court                        RONALD LEE GILMAN, Circuit Judge. This case arises
      for the Eastern District of Michigan at Detroit.                   out of an arbitrator’s reinstatement of a white employee who
       No. 01-73392—Avern Cohn, District Judge.                          was terminated for making a racially offensive remark to a
                                                                         black coworker. The employer brought suit to vacate the
                    Argued: March 18, 2004                               arbitrator’s award. After the district court ruled in favor of
                                                                         the employee and Truck Drivers Local No. 164 (the Union),
               Decided and Filed: April 7, 2004                          the employer appealed. For the reasons set forth below, we
                                                                         AFFIRM the judgment of the district court.
        Before: COLE and GILMAN, Circuit Judges;
            SCHWARZER, Senior District Judge.*                                               I. BACKGROUND
                                                                           James Zentgraf worked for Way Bakery and is a member of
                                                                         the Union. In February of 2000, Zentgraf, a white employee,
                                                                         told Diana Thomas, an African-American coworker, to “relax
                                                                         Sambo.” Despite his repeated attempts to apologize to
                                                                         Thomas shortly thereafter, Zentgraf was suspended for
                                                                         making the remark. He then filed a grievance in protest of the
    *
                                                                         discipline. After denying the grievance, Way Bakery
     The Honorable William W Schwarzer, Senior United States District
Judge for the Northern District of California, sitting by designation.

                                  1
No. 02-2051                       Way Bakery v. Truck         3    4     Way Bakery v. Truck                          No. 02-2051
                               Drivers Local 164, et al.                 Drivers Local 164, et al.

terminated Zentgraf because his “conduct clearly violated the      standards of judicial review in all of American
Company’s Equal Employment Opportunity policy.”                    jurisprudence.” Id. at 515. (quotation marks and citation
                                                                   omitted). Disagreement with an arbitrator’s factual findings
   Zentgraf’s grievance against Way Bakery was subsequently        does not constitute grounds for a court’s rejection of those
submitted to arbitration. The arbitrator found for Zentgraf,       findings. Id.
reducing his discharge to six months unpaid suspension and
reinstating him at Way Bakery. But the arbitrator placed              We must enforce the arbitrator’s agreement as long as the
Zentgraf on “probation for a period of five years during which     award “draws its essence from the collective bargaining
a repeat of this type of conduct, that is, racial harassment or    agreement” and is not merely the arbitrator's “own brand of
racially abusive language, would be the basis for immediate        industrial justice.” Id. (quoting United Steelworkers v.
discharge.”                                                        Enterprise Wheel & Car Corp., 363 U.S. 593, 597 (1960)
                                                                   (quotation marks omitted)). “[I]f an arbitrator is even
   Way Bakery brought suit to vacate the arbitration award         arguably construing or applying the contract and acting within
pursuant to the Federal Arbitration Act, 9 U.S.C. §§ 1-16, the     the scope of his authority, the fact that a court is convinced he
Labor Management Relations Act of 1947, 29 U.S.C. § 185,           committed serious error does not suffice to overturn his
and Michigan state law. The complaint alleged that the             decision.” Major League Baseball Players Ass’n v. Garvey,
arbitrator’s award violated public policy, exceeded the scope      532 U.S. 504, 509 (2001) (per curiam) (quotation marks and
of the arbitrator’s authority, and did not draw its essence from   citation omitted).
the Collective Bargaining Agreement (CBA). Both parties
filed motions for summary judgment. Way Bakery sought,             B. Essence of the collective bargaining agreement
among other things, to vacate the arbitration award. The
Union and Zentgraf, on the other hand, sought summary                 Way Bakery argues that the arbitration award fails to draw
judgment. After the district court heard arguments on the          its essence from the CBA because (1) the arbitrator exceeded
respective motions, it granted the Union’s and Zentgraf’s          the authority expressly granted to him by the CBA, and
motion for summary judgment in July of 2002. This timely           (2) the arbitrator based the award upon general considerations
appeal followed.                                                   of fairness. To determine whether an arbitration award fails
                                                                   to draw its essence from the CBA, this court has developed a
                       II. ANALYSIS                                four-pronged test: “[A]n award so fails when: (1) it conflicts
                                                                   with express terms of the agreement; (2) it imposes additional
A. Arbitration awards                                              requirements not expressly provided for in the agreement;
                                                                   (3) it is not rationally supported by or derived from the
  Although we review the district court’s grant of summary         agreement; or (4) it is based on general considerations of
judgment to the Union and Zentgraf de novo, “courts play           fairness and equity instead of the exact terms of the
only a limited role when asked to review the decision of an        agreement.” Int’l Union v. Dana Corp., 278 F.3d 548, 554
arbitrator.” Tennessee Valley Auth. v. Tennessee Valley            (6th Cir. 2002) (quotation marks and citation omitted).
Trades & Labor Council, 184 F.3d 510, 514 (6th Cir. 1999)
(per curiam) (quotation marks and citation omitted). A               In a detailed 35-page opinion, the arbitrator thoroughly
court’s review of an arbitration award “is one of the narrowest    reviewed and analyzed the CBA and Way Bakery’s Equal
No. 02-2051                       Way Bakery v. Truck           5   6      Way Bakery v. Truck                         No. 02-2051
                               Drivers Local 164, et al.                   Drivers Local 164, et al.

Employment Opportunity (EEO) policy. The arbitrator found               Agreement. The arbitrator’s decision shall be final and
that although the CBA authorized Way Bakery to adopt its                binding upon both parties.
EEO policy, the policy was not a part of the CBA:
                                                                      Way Bakery argues that the arbitrator exceeded his
  Section 11 gives the Employer the right to adopt rules ‘in        authority because the EEO policy allowed Way Bakery to
  addition to those’ attached to the Agreement. Thus, the           terminate Zentgraf for a policy violation. The plain language
  progressive discipline in the contract covers those rules         of the EEO policy, however, does not preclude discipline less
  expressly spelled out, but does not by inference apply to         severe than termination. Interpreting similar language, this
  other rules which the Employer may promulgate.                    court has held that arbitrators are within their authority to
                                                                    review and modify penalties imposed by employers. Bruce
He then considered the question of                                  Hardwood Floors v. S. Council of Indus. Workers, 8 F.3d
                                                                    1104 (6th Cir. 1993). In Bruce, the employer discharged a
  what principles govern discipline under the Equal                 worker for sleeping on the job. The employee’s resulting
  Employment Opportunity policy. The policy itself says             grievance was submitted to arbitration, and the arbitrator
  that discipline may be ‘up to and including discharge.’           modified the disciplinary action by reinstating her with back
  This implies a range of discipline. Section 11 permits            pay. On appeal from the district court’s decision to vacate the
  the adoption of ‘reasonable rules and regulations.’ We            arbitrator’s award, this court reversed, reasoning that the
  are not without guidelines.                                       award did not conflict with the CBA. Id. at 1108-09.
The arbitrator finally determined that although the EEO               The relevant sections of the CBA in Bruce provided that the
policy was not subsumed by the CBA, the same disciplinary           employer could discharge an employee for committing an
principles should apply. He concluded that                          offense enumerated in the CBA, and allowed the company to
                                                                    discipline and discharge employees for “just cause.” Id. at
  [t]he contract rules, taken as a whole, contemplate               1108. Nevertheless, this court held that the arbitrator’s award
  progressive discipline in a host of situations. The Equal         was rationally derived from the terms of the CBA, did not
  Employment Opportunity policy may be enforced by                  conflict with the CBA’s express terms, and did not add
  discipline ‘up to’ discharge. Clearly, there may be               requirements not expressly provided in the CBA. Id.; see also
  discipline less than discharge. Based on these elements,          Eberhard Foods, Inc. v. Handy & Local 406, 868 F.2d 890,
  the undersigned finds that progressive discipline should          892 (6th Cir. 1989) (reinstating an arbitrator’s award that
  apply.                                                            modified an employer’s disciplinary action, reasoning that
                                                                    “nothing . . . in the CBA or work rules . . . expressly limits or
 Article 17 of the CBA prescribes the grievance procedure,          removes from the arbitrator the authority to review the
which limits an arbitrator’s authority as follows:                  remedy in this case”).
  The power of the arbitrator shall be limited to the written         The arbitrator in the present case had the authority to
  contract and/or he shall have no power to modify,                 review Way Bakery’s termination of Zentgraf, and his award
  change, add to or subtract from, the terms of this                does not conflict with the CBA or add requirements not
                                                                    present in the CBA; rather, the award is, as discussed above,
No. 02-2051                       Way Bakery v. Truck        7    8      Way Bakery v. Truck                          No. 02-2051
                               Drivers Local 164, et al.                 Drivers Local 164, et al.

derived from and based upon the CBA. As the Union and             Newsday, Inc. v. Long Island Typographical Union, No. 915,
Zentgraf note, the parties “bargained for an arbitrator’s         915 F.2d 840 (2d Cir. 1990). The employer in Stroehmann
interpretation of the Agreement, and they received the product    discharged an employee for sexual harassment. An arbitrator
of that bargain.”                                                 subsequently reinstated the employee without determining
                                                                  whether the sexual harassment charge was true. 969 F.2d at
C. Public policy considerations                                   1437-38. The Third Circuit held that the district court
                                                                  properly vacated the arbitrator’s award as against public
  Way Bakery next argues that the arbitrator’s award should       policy, reasoning that the arbitrator’s award
be vacated because Zentgraf’s reinstatement violates public
policy, which supports an employer’s efforts to comply with           would allow a person who may have committed sexual
Title VII and to “purge the workplace of harassment.” This            harassment to continue in the workplace without a
court has held that when an arbitration award is challenged on        determination of whether sexual harassment occurred.
public policy grounds, “the court must determine whether the          Certainly, it does not discourage sexual harassment.
arbitrator’s interpretation of the contract jeopardizes a well-       Instead, it undermines the employer’s ability to fulfill its
defined and dominant public policy, taking the facts as found         obligation to prevent and sanction sexual harassment in
by the arbitrator.” MidMichigan Reg’l Med. Ctr.-Clare v.              the workplace.
Prof’l Employees Div. of Local 79, 183 F.3d 497, 504 (6th
Cir. 1999) (quotation marks and citation omitted). The            Id. at 1442.
relevant public policy is ascertained “by reference to the laws
and legal precedents and not from general considerations of         Similarly in Newsday, the employer discharged an
supposed public interests.” Id. (quoting W.R. Grace & Co. v.      employee for sexually harassing a coworker. An arbitrator’s
Local Union 759, 461 U.S. 757, 766 (1983)) (quotation marks       award reinstated the employee. 915 F.2d at 841. The Second
omitted).                                                         Circuit held that the reinstatement award “completely
                                                                  disregarded the public policy against sexual harassment in the
  Courts do not possess a “broad power to set aside an            work place,” and reasoned further that the award condoned
arbitration award as against public policy.” Tennessee Valley     the employee’s misconduct, thus perpetuating a hostile work
Auth. v. Tennessee Valley Trades & Labor Council, 184 F.3d        environment. Id. at 845. Way Bakery argues that these cases
510, 520 (6th Cir. 1999) (per curiam). The issue is “not          show that “reinstatement undermined the employers’ duty to
whether grievant’s conduct for which he was disciplined           protect their employees from further harassment.”
violated some public policy or law, but rather whether the
award requiring the reinstatement of a grievance, i.e., the         Although we have no particular disagreement with Way
contract as interpreted, violated some explicit public policy.”   Bakery’s characterization of Stroehmann and Newsday, the
Id. (quotation marks and citations omitted).                      present case is clearly distiguishable. The arbitrator in
                                                                  Stroehmann reinstated the offending employee without
  In support of its argument that the arbitrator’s award          making a determination of whether sexual harassment had
reinstating Zentgraf violates public policy, Way Bakery           even occurred. In Newsday, the discharged employee was
primarily relies upon Stroehmann Bakeries, Inc. v. Local 776,     reinstated despite having sexually harassed female coworkers
Int’l Bhd. of Teamsters, 969 F.2d 1436 (3d Cir. 1992), and
No. 02-2051                       Way Bakery v. Truck         9    10   Way Bakery v. Truck                         No. 02-2051
                               Drivers Local 164, et al.                Drivers Local 164, et al.

on a number of occasions and having previously been                  wages; it requires him to pay the arbitration costs of both
disciplined for his misconduct.                                      sides; it insists upon further substance-abuse treatment
                                                                     and testing; and it makes clear (by requiring Smith to
  Zentgraf, in contrast, did not have a prior disciplinary           provide a signed letter of resignation) that one more
record for purposes of progressive discipline. Furthermore,          failed test means discharge.
the arbitrator’s award in this case did not condone or fail to
discourage hostile behavior in the workplace. Recognizing          Id. at 65-66 (citation omitted).
that “a serious offense ha[d] occurred,” the arbitrator’s award
subjected Zentgraf to a six-month loss of pay and placed him         Similarly, the arbitration award in the present case did not
on probation for five years “during which a repeat of this type    condone Zentgraf’s behavior, but rather punished him by
of conduct, that is, racial harassment or racially abusive         depriving him of his salary for six months and placing him on
language, would be the basis for immediate discharge.”             probation for five years. Way Bakery cites no case, nor have
Zentgraf, moreover, had to “acknowledge this in writing.”          we found any, that establishes a public policy of flatly
The arbitrator concluded that Zentgraf “must demonstrate that      prohibiting the reinstatement of a worker who makes a
he understands that he can remain in the work site only if he      racially offensive remark. We therefore hold that the
understands what he has done and complies with the                 arbitrator’s award in this case did not violate public policy.
Employer’s policies in this area.”
                                                                                       III. CONCLUSION
  As framed by the Supreme Court, “the question to be
answered is not whether the [employee’s conduct] itself              For all of the reasons set forth above, we AFFIRM the
violates public policy, but whether the agreement to reinstate     judgment of the district court.
him does so.” Eastern Associated Coal Corp. v. United Mine
Workers, Dist. 17, 531 U.S. 57, 62-63 (2000). In Eastern, the
Supreme Court held that public policy considerations did not
require courts to refuse to enforce an arbitrator’s award
reinstating a truck driver who twice tested positive for
marijuana use. Id. at 59. The Court reasoned that the
arbitrator’s award was not contrary to the relevant public
policies, including policies “against drug use by employees in
safety-sensitive transportation positions” and policies in favor
of drug testing, id. at 65, holding as follows:
  The award before us is not contrary to these several
  policies, taken together. The award does not condone
  Smith’s conduct or ignore the risk to public safety that
  drug use by truck drivers may pose. Rather, the award
  punishes Smith by suspending him for nearly three
  months, thereby depriving him of nearly $9,000 in lost
