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National Children's Ctr., Inc. v. Service Employees International Union

United States District Court, D. Columbia.

September 19, 2014

NATIONAL CHILDREN'S CENTER, INC., Plaintiff,
v.
SERVICE EMPLOYEES INTERNATIONAL UNION, LOCAL 500, Defendant

For NATIONAL CHILDREN'S CENTER, INC., Plaintiff, Counter Defendant: Charles Frederick Walters, SEYFARTH SHAW LLP, Washington, DC.

For SERVICE EMPLOYEES INTERNATIONAL UNION, LOCAL 500, Defendant, Counter Claimant: Darin M. Dalmat, Kathy L. Krieger, LEAD ATTORNEYS, Ryan Edward Griffin, JAMES & HOFFMAN, P.C., Washington, DC.

OPINION

Page 97

ROSEMARY M. COLLYER, United States District Judge.

A collective bargaining agreement can grant to management exclusive authority over certain subjects. When an agreement includes such provisions, an arbitrator acts outside his authority when he performs tasks reserved for management under the agreement. Because the arbitrator did just that in this case, his award will be vacated. However, whether the grievant's discharge was arbitrary and capricious is a question reserved for the arbitrator on reconsideration. Accordingly, the arbitration award will be vacated and remanded for further proceedings consistent with this Opinion.

Page 98

I. FACTS

National Children's Center, Inc. (NCC), is a community-based non-profit which serves high-risk children and adults with moderate to severe mental retardation and developmental disabilities. NCC's Early Intervention Program [1] provided child care and therapeutic services for children from birth through age five. See NCC Mot. for Summ. J. [Dkt. 11-1] at 1.

Local 500, Service Employees' International Union (SEIU or Union) represented certain employees in NCC's Early Intervention Program. The Union and NCC negotiated a collective bargaining agreement for the period February 1, 2008, through January 31, 2011. See id., Ex. 4 (2008 Collective Bargaining Agreement) [Dkt. 11-7]. On October 3, 2011, SEIU and NCC agreed to a second collective bargaining agreement, which governs this action. See id., Ex. 5 (2011 Collective Bargaining Agreement) [Dkt. 11-8].

A. The Nix Grievance

Rachel Nix worked for NCC as a Teacher Assistant in the Early Intervention Program until May 18, 2012.[2] The instant dispute arose from an incident in which Charese Drake, a former NCC employee, was fired from NCC and subsequently asked Ms. Nix to remove Ms. Drake's personal belongings from NCC's premises. According to NCC, Ms. Nix removed " wagons full" of Ms. Drake's belongings, including a television set that had been used in the classroom but was owned by Ms. Drake. See Compl. [Dkt. 1] ¶ 16. NCC was unaware that Ms. Nix had removed Ms. Drake's belongings until Ms. Nix herself informed her supervisor and NCC's Principal so that NCC could replace the television.

In 2004, before NCC and the Union had executed a collective bargaining agreement, NCC had implemented a work rule that defined " gross misconduct." See NCC Mot. for Summ. J., Ex. 1 (NCC Employee Handbook) [Dkt. 11-4] at 37. Specifically, Section 703.6 of NCC's Employee Handbook provided that " gross misconduct include[s], but [is] not limited to . . . Stealing or removing, without permission, NCC property or property of another Employee, individual, or visitor." Id. Ms. Nix received NCC's Employee Handbook on two separate occasions in 2004 and 2008. Despite the fact that she signed a form on February 17, 2004, acknowledging her obligation to " read, understand, familiarize [herself] with, and adhere to the policies contained in the Employee Handbook," id., Ex. 3 (Acknowledgement and Receipt of NCC Handbook) [Dkt. 11-6] at 2, Ms. Nix did not review the Handbook prior to her removal of Ms. Drake's belongings from NCC's premises. Nor did she ask any NCC supervisor for permission to do so.

Ms. Nix was suspended from NCC pending an investigation into whether her removal of Ms. Drake's property constituted " gross misconduct" under Section 703.6. During NCC's investigation, Ms. Nix candidly admitted that she had taken Ms. Drake's personal belongings from NCC. Shortly thereafter, NCC discharged Ms. Nix for " gross misconduct." See NCC Employee Handbook at 37 (providing that if an employee commits gross misconduct, " [s]uch behaviors/actions may lead to any of the following forms of discipline: verbal warning, written warning, probation/suspension, or termination from employment" ). Ms. Nix grieved her discharge. After the parties failed to resolve the grievance, SEIU presented Ms. Nix's grievance to an arbitrator.

Page 99

B. Relevant Contract Terms

The NCC disciplinary process was set forth in its 2011 collective bargaining agreement and gave NCC the discretion to implement rules regarding subjects not expressly covered by the contract.[3] Specifically, Article 25, " NCC Policies," provided that, " [t]o the extent a subject or matter is not specifically and directly covered by this Agreement, the applicable NCC policies . . . shall govern. NCC shall have the right and authority to modify, eliminate or create new policies . . . to the extent their specific subject matter is not covered by this Agreement." 2011 Collective Bargaining Agreement at 15. Relatedly, Article 42 of the 2011 contract stated that " [a]ll management rights, authority, functions and responsibilities which are not unequivocally and expressly restricted or limited by a specific provision of [the collective bargaining agreement] are retained by NCC and shall remain vested exclusively in its sole discretion to manage NCC . . . ." Id. at 25.

Based on these provisions, NCC re-published and distributed its Employee Handbook in 2008, which defined " gross misconduct" as, inter alia, " [s]tealing or removing, without permission, NCC property or property of another Employee, individual or visitor." NCC Employee Handbook at 37. Thus, NCC re-published its Employee Handbook to implement its reserved management authority under the 2008 collective bargaining agreement. NCC relied on the same reserved authority, as provided in its 2011 collective bargaining agreement, to maintain its work rules through 2013.

Article 37 of the 2011 contract established the standard of review for challenges to NCC's disciplinary decisions. Titled " Discharge and Discipline," Article 37 provided that:

NCC shall have the authority to discipline and discharge employees for just cause. It is recognized and agreed between the parties that NCC must maintain and impose high standards of performance, quality of work and care. Accordingly, it is agreed that " just cause" is defined as NCC's determination that an employee does not meet this high standard, so long as NCC does not exercise its discretion in a manner that is arbitrary, capricious, or without foundation and NCC bears the burden of showing that just cause existed.

2011 Collective Bargaining Agreement at 21 (emphasis added). The collective bargaining agreement therefore authorized NCC to discharge employees subject to the limited caveat that this discretion could not be exercised " in a manner that ...


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