Professional Documents
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and
May 2, 2003
was reinstated on July 11, 2001, with 6 days’ back pay, under the terms of a
letter agreement (CX 9). Despite his return to work, he continued to file for
and receive unemployment benefits. He filed for the benefit weeks ending
7/7/01, 7/14/01, 7/21/01, 7/28/01, 8/4/01, and 8/11/01, and received benefits
in the amount of $375 per week, totaling $1,875 (CX 10, CX 14, CX 16).
For the payroll periods ending 7/1/01, 7/8/01, 7/15/01, 7/22/01, 7/29/01,
8/5/01, and 8/12/01, the Company paid him $513; $155; $1,027; $1,117;
$1,078; $758; and $1,059, respectively (CX 12, CX 13). The payment of
$1,027 for the payroll period ending 7/15/01 represented back pay per the
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agreement of July 11 (TR @ 72).
(TR @ 44-45, “you all’s appeal to it”). This was the first time that
are inexplicably vague; indeed, according to the HR manager, even the third-
party administrator knew nothing about the appeal (TR @ 45, “I have no
idea”).
manager and the hearing officer participated. The HR manager informed the
hearing officer that Grievant was employed by the Company and asked the
officer for guidance. The officer responded that the Company should report
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evening, September 30, 2001, but to come in for a meeting on October 2,
2001. The meeting was attended by Grievant, the shop steward, Grievant’s
information obtained from the NCESC and from the Company’s payroll
Grievant and the shop steward. This time Grievant was terminated with the
explanation:
Mr. [DT] was making false unemployment claims and received max
unemployment compensation pay during the time he was gainfully
employed w / Johnson Controls, Inc. Winston-Salem Plant. CX 17.
The parties stipulated that a grievance, # 773, was filed, but the
paperwork was lost. A third-step meeting was held on October 10, 2001, at
which Grievant was well represented by the Union. According to notes taken
by the HR manager (CX 18), the Union urged that Grievant be allowed to
repay NCESC for any overpayment and be reinstated to his job. “The Union
4
In a letter dated October 23, 2001 (JX 4), the Union demanded
@ 84). In a letter dated September 9, 2002 (CX 19), the Union requested a
The HR manager drafted, but did not send, a letter to the Union, dated
neutral site in Greensboro, North Carolina. The Company again raised the
issue of timeliness (TR @ 6), to which the Union responded (TR @ 7). The
parties have briefed the issues, the first of which to be decided is the
The Employer and the Union agree that arbitration cases shall be
presented to the arbitrator in chronological order unless changed by
mutual consent. The case must be opened within six months of date
following the third step of the grievance procedure.
The CBA does not explain precisely what steps must be taken to open a
case.
5
There is no debate that far more than 6 months elapsed between the
time of the third-step meeting and the Company’s written denial, and the
Union’s request for an FMCS panel. The Company claims that it expressed
to the Union a desire not to continue discussions about this matter. The
demand for arbitration is made under § 6.04 (“within ten (10) working days
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bargaining agreement, must be enforced when clearly applicable. Elkouri &
agreement, their pendency may explain a lack of timeliness. When the issue
time limits or as to whether they have been met should be resolved against
forfeiture of the right to process the grievance.” Elkouri & Elkouri, supra @
for arbitration, that it will insist upon strict compliance with the time limits
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in the CBA. Elkouri & Elkouri, supra @ 277-278.
The most serious offenses are listed in the “C” Rules. Violation of a “C”
that it was duped into paying Grievant twice, once in the form of wages and
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The Union’s Position
The Union takes the position that the underlying dispute is between
Grievant and the NCESC, not Grievant and the Company. It argues that the
Company has no right to discipline him for events occurring outside the
workplace. The Plant Rules are just that—rules governing conduct on the
job. The Union emphasizes that the NCESC has not ruled that Grievant
committed any kind of fraud and has not even requested any money back
Initial Observations
First, while the Company makes a plausible case that Grievant is guilty of
“stealing” from it, as a technical legal matter, he could not possibly be guilty
North Carolina. Once those taxes are paid to the State, the money no longer
Thus, Grievant did not steal, and could not possibly have stolen, from
the Company. Plant Rule “C” #2 by its express terms is limited to “[s]tealing
obtained from the State of North Carolina. It wasn’t the Company’s money.
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As a result, the Company’s first reason for terminating Grievant cannot be
upheld.
The second important point worth noting is that the Company need
pointed out above, the Company itself introduced the NCESC Booklet,
Detection”:
the Company may have been harmed by Grievant’s actions, although none
point to be realized here is that the Company could not have had its account
10
Limitations On The Arbitrator’s Authority
following considerations:
1
http://www.ncga.state.nc.us/statutes/generalstatutes/html/bychapter/chapter%5F96.html. Regulations
may be found at https://www.ncesc.com/pmi/government/governmentmain.asp.
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unemployment compensation because it fired him (TR @ 47, 110).
after returning to work. There are no facts or law in the record on these
The arbitrator shall not have the power to add to, ignore or to
modify any of the terms and conditions of this Agreement. His
decision shall not go beyond what is necessary for the
interpretation and application of this Agreement or the obligations
of the parties hereunder. He shall justify each award by written
decision and explanation of the rational[e] of said award within
thirty (30) days after the close of the hearing (which may include
the filing of briefs). (Emphasis supplied.)
please, including one over applicable law, Elkouri & Elkouri, supra @
516-524, in this case neither Grievant nor the Union has agreed to
arbitration.
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date, the NCESC has made no determination. The arbitrator does not want to
benefits, only to have the State’s duly authorized Agency reach a different
conclusion.
compensation rights. While the Company may have exceeded its authority, it
Company the right “to suspend, discipline or discharge employees for just
cause” and “to make plant rules and regulations”. Its rule-making authority
is reaffirmed in § 14.03.
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1) behavior harms Company’s reputation or product
***
2) behavior renders employee unable to perform his
duties or appear at work, in which case the discharge would be
based upon inefficiency or excessive absenteeism ***
3) behavior leads to refusal, reluctance or inability of
other employees to work with him ***.
While it is true that the employer does not [by virtue of the
employment relationship] become the guardian of the
employee’s every personal action and does not exercise parental
control, it is equally true that in those areas having to do with
the employer’s business, the employer has the right to terminate
the relationship if the employee’s wrongful actions injuriously
affect the business.
The connection between the facts which occur and the
extent to which the business is affected must be reasonable and
discernable. They must be such as could logically be expected
to cause some result in the employer’s affairs. Each case must
be measured on its own merits.
14
For application of these principles, see Bard Mfg Co, 91 LA 193, 15 LAIS
action in discharging him was premature. However, the Company has raised
unemployment taxes to increase, the record is clear that the Company has
been and will continue to be put to considerable time, effort and expense in
violations of its “C” Rules. While the charge of stealing from the Company
cannot be upheld, Grievant’s conduct assuredly fell within the pale of the
may have violated “C” Rule #3 against providing false information (to the
NCESC as opposed to the Company). The difficulty with this case is that
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there has been no official determination of Grievant’s wrongdoing, only a
recognize that it should have (TR @ 21, 46, 113), it provides no good
explanation for its failure. At the very least, it could be encouraging the
record reveals that the Company has not pursued the matter with the State.
As a result, the Company must bear the brunt of the delay in State action.
officer’s decision on its appeal of Grievant’s claim might suggest that it lost
the appeal, although the arbitrator draws no inference. At first glance, NCGS
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proceeding, between a person and his present or previous employer
brought before an arbitrator, court or judge of this State or the
United States, regardless of whether the prior action was between
the same or related parties or involved the same facts.
establish the basis for an employer’s disciplinary action. In any event, the
Company did not even offer any evidence as to the outcome of its appeal of
102 LA 979 (Sergent Arb 1994) and Sheraton Waikiki Hotel, 114 LA 1595
endorses, while disagreeing with some of the reasoning. It’s just that they
pursue the matter with the NCESC. Not only has the State not charged
Grievant with fraud, it has not even requested a refund of any alleged
overpayment.
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Why The Company Fired Grievant
In its brief, the Company asserts that Grievant was fired for giving
false information to the NCESC and also to the Company. The distinction is
not without a difference. Had the Company fired him for furnishing false
information to it in violation of “C” Rule #3, the Company would not have
to contend with issues under the North Carolina Employment Security Law.
However, the record is clear that Grievant was fired for allegedly obtaining
counsel stated that “the Company terminated Mr. [DT] after finding out that
14). The plant manager, who made the final decision to fire Grievant,
Grievant for alleged fraud in obtaining benefits from the NCESC, the
Company may not now change the rationale for its action.
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The Burden And Standard Of Proof
Elkouri & Elkouri, supra @ 447-449, 905-906; Hill & Sinicropi, Evidence
disciplinary cases the burden is on management both to proceed first with its
allegations of fraud, the proof of fraud must be clear and convincing. Elkouri
Here the Company has not proved by clear and convincing evidence
to what information Grievant must have input into the NCESC’s telephonic
had any personal knowledge of Grievant’s dealings with the NCESC. The
Company called no witness and produced no ruling from that Agency. This
which the employer produced altered data forms. What the Company has
the NCESC.
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Terms And Conditions For Grievant’s Reinstatement
avail itself. Whether Grievant will be reinstated will depend upon the
The NCESC may, of course, decide not to press criminal charges against
Grievant for purely practical reasons (TR @ 112-113), but surely the
Agency will issue some kind of report about culpable conduct if the facts
the Company may terminate him. If the NCESC determines only that
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determines that Grievant was entitled to the benefits he received, or if the
reinstated.
subject to a number of terms and conditions. First, the violations listed in the
Letter Of Agreement dated July 11, 2001 (CX 9) will remain on his record
for one year following the date of his reinstatement, and he may be
occurred. Second, back pay will be limited to $500 per week without offset
The rationale for setting back pay at $500 per week without offset is
that Grievant was making about $1,000 per week at the time of his
odd jobs for which he is paid in cash. The Company is entitled to offset such
Realistically, there may be little chance of documenting his income with any
degree of certainty. To make the arithmetic simple and to spare the parties
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the ordeal of another arbitration over back pay, the arbitrator sets the rate at
provides, “The terms and conditions of such reinstatement may provide for
posed as, “Was the grievant discharged for just cause, and if not what is the
In Leestown, supra, the employer did not take action against the
employee until after the state agency had made its determination of fraud. In
Sheraton Waikiki, supra, the state’s and the employer’s investigations appear
at virtually the same time. The complications resulting here from the
Company’s failure to press its case expeditiously and diligently before the
NCESC, based upon the results of its own independent investigation, this
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Award
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