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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Alaska State Employees Assoc./AFSCME Local 52 v. State (7/25/2003) sp-5713

Alaska State Employees Assoc./AFSCME Local 52 v. State (7/25/2003) sp-5713

     Notice:   This opinion is subject to correction  before
     publication  in  the  Pacific  Reporter.   Readers  are
     requested to bring errors to the attention of the Clerk
     of  the  Appellate  Courts, 303  K  Street,  Anchorage,
     Alaska 99501, phone (907) 264-0608, fax (907) 264-0878,
     e-mail corrections@appellate.courts.state.ak.us.


            THE SUPREME COURT OF THE STATE OF ALASKA
                                

ALASKA STATE EMPLOYEES   )
ASSOCIATION/AFSCME LOCAL )    Supreme Court No. S-10226
52, AFL-CIO,                  )
                              )    Superior Court No. 1JU-00-1209
CI
             Appellant,            )
                              )    O P I N I O N
     v.                       )
                              )    [No. 5713 - July 25, 2003]
STATE OF ALASKA,              )
                              )
             Appellee.             )
________________________________)


          Appeal  from the Superior Court of the  State
          of  Alaska, First Judicial District,  Juneau,
          Larry R. Weeks, Judge.

          Appearances:  Jay W. Trumble, General Counsel
          ASEA/AFSCME   Local   52,   Anchorage,    for
          Appellant.  Patrick J. Gullufsen and Kathleen
          Strasbaugh, Assistant Attorneys General,  and
          Bruce  M. Botelho, Attorney General,  Juneau,
          for Appellee.

          Before:    Fabe,  Chief  Justice,   Matthews,
          Eastaugh, Bryner, and Carpeneti, Justices.

          EASTAUGH, Justice.

I.   INTRODUCTION

            The   Alaska   Child  Support  Enforcement   Division

terminated  an administrative clerk after learning that  she  had

been  convicted of felony theft of public money.   In the ensuing

grievance  proceeding, the arbitrator ruled that the  termination

was  not  for  "just cause" and ordered the grievant  reinstated.

Because  the  grievant's position gave her  access  to  sensitive

information  and  was  potentially  subject  to  intense   public

scrutiny,  we  agree with the superior court that the  arbitrator

committed  gross  error  by  failing  to  find  just  cause.   We

therefore affirm the order vacating the arbitrator's decision.

II.  FACTS AND PROCEEDINGS

           The  grievant  had been employed as an  administrative

clerk  by  the Child Support Enforcement Division (CSED)  of  the

Alaska  Department of Revenue since 1996.  She performed  various

clerical duties, including updating the computerized database for

parents  in  the  child  support system.  The  database  contains

personal  information  about parents, including  Social  Security

numbers,  bank  account  numbers, and  other  sensitive,  private

information.

           In  1999  CSED learned that the employee  had  pleaded

guilty  in 1998 to felony theft of public money, in violation  of

18  U.S.C.   641.   Her written plea agreement  with  the  United

States Attorney stated that between September 1995 and June  1998

she  had knowingly and fraudulently withheld child support income

and  employment  income information when  she  applied  for  food

stamps.   As  a  result, she received food stamps  exceeding  her

legal  entitlement.   The United States District  Court  for  the

District of Alaska ordered her to make restitution of $8,119.

           After the state terminated her employment in 1999, the

Alaska  State Employees Association (ASEA), her Public Employment

Relations  Act  representative, filed  a  grievance  seeking  her

reinstatement.

           In  response  the state maintained that retaining  the

grievant  would  send  the wrong message to other  employees  and

would  place  the  department  in the  position  of  retaining  a

dishonest employee, damaging CSED's "reputation for integrity."

           Per  the collective bargaining agreement (CBA) between

the  ASEA  and the state, the parties arbitrated the  dispute  to

determine  whether  the  grievant had been  discharged  for  just

cause.   The arbitrator ruled in June 2000 that the "[g]rievant's

discharge was not for just cause as required by Article 14 of the

[CBA]." Article 14 requires that "[d]iscipline and discharge .  .

.  be  for  just  cause."  The arbitrator  also  ruled  that  the

discharge  was to be rescinded and that the grievant  was  to  be

reinstated to her former position.

          The state filed a superior court petition to vacate the

arbitration  award.  Both sides then moved for summary  judgment.

The  superior  court  granted  the  state's  motion  for  summary

judgment on the ground that "the arbitrator committed gross error

in  not using the appropriate standard to determine just cause."1

ASEA  then filed a motion for reconsideration, which the superior

court  granted.  On reconsideration the superior court  permitted

the parties to submit additional briefing discussing the standard

for just cause termination.  The superior court's August 28, 2001

order  reaffirmed its earlier order granting summary judgment  to

the state.

          ASEA appeals.

III. DISCUSSION

     A.   Standard of Review

             While  we  have  in  the  past  declined  to  decide

definitively  the  standard  of review  of  compulsory  grievance

arbitration  awards, we have generally applied  the  gross  error

standard  in  reviewing grievance arbitration  awards.2   But  we

apply "the less deferential `arbitrary and capricious' standard .

.  .  in cases of compulsory interest arbitration."3  We have not

yet    addressed   whether   compulsory   grievance   arbitration

proceedings  like  those  here are subject  to  the  gross  error

standard  of  review.4   We give an arbitrator's  decision  great

deference.5  But this deference need not be as wide-ranging  when

a  dispute is of a "contractually formative nature,"6 because  we

can more easily review the legal relationship between the parties

in  the  dispute.  Grievance arbitration lacks this transparency;

greater deference is therefore appropriate.  Nonetheless,  we  do

not  have to decide here which standard of review applies.  Under

either  standard the result here would be the same.  We therefore

apply the more deferential "gross error" standard.

          B.   Based on the Arbitrator's Findings, the Arbitrator
          Committed Gross Error in Ruling that CSED's Termination
          of the Grievant Was Not for Just Cause.
          
           ASEA  argues that because the arbitrator was not bound

by  Alaska law in determining the meaning of "just cause" as that

term is used in the CBA, the superior court erred by vacating the

arbitrator's decision.  The state responds that because  the  CBA

did not define "just cause," Alaska law applies.  We emphasize at

the  outset  that  we  are reluctant to disturb  an  arbitrator's

decision  even  where  we  might reach a  different  conclusion.7

Moreover,  courts routinely accord arbitrators a  great  deal  of

discretion.8  But we will reverse an arbitrator's decision if our

independent review of the decision indicates that the  arbitrator

has made an "obvious and significant" mistake.9

          1.   Interpreting Alaska's "just cause" decisions

               a.   The Manning and Braun decisions

           The  term  "just  cause"  as it  applies  to  employee

dismissal  has been part of the parties' previous CBAs  since  at

least  1984.   An  early CBA covering the period 1984-86  stated:

"Just   Cause   means  but  is  not  limited  to,   incompetence,

unsatisfactory  performance  of  duties,  unexcused  absenteeism,

drunkenness, dishonesty and gross disobedience."  The  1990-92/93

CBA  included "just cause" in its discussion of management rights

and discharge:

          Article 4 - Management Rights
          [Management's] functions, rights, powers  and
          authority include, but are not limited to:
               . . . .
          6.    Discipline, suspend, demote or  dismiss
          employees for just cause; . . . .

          Article   14  -  Notice  of  Discipline   and
          Discharge
          A.    Discipline and discharge shall  be  for

          just cause.

(Emphasis added.)10

           The superior court ruled in its summary judgment order

that  the arbitrator "committed gross error by imposing  her  own

definition  of  just  cause  over that  of  the  supreme  court."

Because  the  CBA applicable here did not define the  term  "just

cause,"  the  superior court initially based its  ruling  on  our

holding in Manning v. Alaska Railroad Corp.11  Quoting  Braun  v.

Alaska Commercial Fishing & Agriculture Bank,12 we held in Manning

that  "  `just cause' for discharge is one which is not  for  any

arbitrary, capricious, or illegal reason and which is  one  based

on facts (1) supported by substantial evidence and (2) reasonably

believed by the employer to be true."13

           ASEA argues that the superior court erred because  the

arbitrator   was   not   required  to   rely   on   Alaska   law.

Alternatively,   ASEA  argues  that  Manning  is  distinguishable

because  it did not involve a public employee and did not proceed

to   arbitration.    ASEA   similarly  argues   that   Braun   is

distinguishable  because  "there  was  no  collective  bargaining

agreement   extending   just  cause   discharge   protection   to

plaintiff."   The  state responds that Braun  merely  served  the

purpose  of  defining "just cause" in the employment context  and

that  Manning  is  relevant  because  it  involved  a  collective

bargaining agreement like the one in this case.

          The applicable CBA does not define "just cause."14  The

superior  court stated that "arbitrators are . . . bound  by  the

supreme  court's  rulings,  unless the  parties  have  contracted

otherwise.   Here, the agreement did not contain a definition  of

the  term just cause.  Therefore, the arbitrator committed  gross

error  by imposing her own definition of just cause over that  of

the supreme court." (Internal footnote omitted.)

           The  superior court did not have to go  so  far.   The

gross  error  in  this case goes more to the application  of  the

chosen  standard than to the choice of a standard.  The  superior

court  is  correct that the absence of an explicit definition  of

"just cause" in the CBA indicates that our prior rulings would be

an  appropriate starting point.  But the arbitrator's  use  of  a

well-reasoned  alternative definition would not alone  constitute

gross  error.  We do not need to address in this case how far  an

arbitrator's  definition of "just cause" could  depart  from  our

prior  rulings, because we conclude that the arbitrator committed

gross error in applying the standard she chose.

           The  arbitrator stated that the "meaning of  the  term

`just  cause'  in the collective bargaining arena  has  developed

over  many  years of arbitration practice."  She did not  explain

how   her  application  of  "traditional  just  cause  standards"

differed,  if  at  all, from our prior cases, but  described  the

standard she applied as follows:

                Under  traditional just cause concepts,
          an  employer must establish the existence  of
          just  cause based on the reasons on which  it
          relied at the time of discipline.  It is  not
          enough that an employer was convinced by  the
          evidence  available to it at the  time.   The
          employer  must  submit that evidence  so  its
          veracity  may be tested and considered  along
          with  evidence  proffered on  the  employee's
          behalf.
               Due process is an essential part of just

          cause.     Before   making   a   disciplinary

          decision,  an employer must make a reasonable

          and   fair   investigation  of  the   alleged

          misconduct.  The accused employee  must  have

          notice   of  the  specific  charges  and   an

          opportunity to give his/her side of the story

          before  a  final decision is  made.   Factors

          upon  which an employer did not rely  at  the

          time,  or  which are not established  by  the

          evidence  at  hearing, do  not  support  just

          cause.

           The  arbitrator  found  that the  "[g]rievant  pleaded

guilty to felony theft of public money."  She also found that the

grievant's plea agreement stated that the grievant "knowingly and

fraudulently withheld child support income and employment  income

information  in  [the grievant's] application for  food  stamps."

The  state offered the affidavit of State Labor Relations Analyst

Melanie  Millhorn  in support of its summary  judgment  motion.15

Millhorn affied that:

          Barbara Miklos, the Director of CSED who made
          the decision to terminate the grievant[,] . .
          .  emphasized  [that] the  nature  of  CSED's
          mission,  collecting  and  dispersing   child
          support money, . . . is a very controversial,
          highly  scrutinized function that  frequently
          generates   attacks   against   the   agency.
          [Miklos]  testified that it was her  opinion,
          and the basis of her decision, that to retain
          an  employee with a conviction of this nature
          could  do  substantial damage to the agency's
          image and reputation and conflicted with  the
          CSED's mission and responsibilities.
          
           There  is  evidence in the record that the  grievant's

position  was one of public trust and that CSED itself relied  on

the  public's  trust in carrying out its duties.   Significantly,

the  arbitrator's  decision quoted the state's  personnel  hiring

rules, which state for applicants with prior felony convictions:

          In  making  the determination of  whether  an
          applicant  should  be  disqualified   for   a
          position,  the  director  may  consider   the
          nature  and  seriousness of the offense;  the
          kind  of position for which the applicant  is
          applying   and  the  requirements   of   that
          position;   .   .  .  and  any   aggravating,
          mitigating,  or other facts or  circumstances
          which  may  have a bearing on the suitability
          of   the  applicant  for  employment  in  the
          position sought.
          
           The  state's hiring rules indicate that the state  may

refuse to examine or may disqualify applicants based solely on  a

conviction   that  may  have  a  bearing  on  their  ability   to

effectively perform their duties.  This is no less true after  an

individual is hired and becomes a permanent employee, even though

the  employee is then offered the CBA's additional protection  of

dismissal only for just cause.16

           The  arbitrator's  decision  stated  that  just  cause

requires "[t]he employer [to] submit . . . evidence so [that] its

veracity  may  be  tested  and  considered  along  with  evidence

proffered  on the employee's behalf."  The grievant's  conviction

was undisputed in this case.  The arbitrator's findings establish

that the grievant had access to confidential information and held

a  position of trust with CSED.  Given the arbitrator's findings,

we  hold that the arbitrator committed gross error in determining

that the termination was not for just cause.

               b.   The Cassel decision

           The  superior court order granting ASEA's  motion  for

reconsideration  of the order vacating the arbitrator's  decision

instructed the parties to consider Cassel v. State, Department of

Administration.17  ASEA argues that Cassel "does not support  the

proposition  that  the  Braun standard of just  cause  should  be

applied  within the public sector collective bargaining context."

ASEA argues that Cassel was an administrative appeal involving  a

probationary employee who "did not have access to the arbitration

procedure  wherein the traditional standard of just  cause  would

apply."  The state responds that Cassel merely imported the Braun

framework "into a collective bargaining agreement covering public

employees  as  the  necessary  basis  for  the  discharge  of   a

probationary employee."

          Because we decided Cassel in 2000, its relevance to the

1996-99 CBA is minimal.  The superior court merely requested  the

parties to consider Cassel in their briefing for reconsideration.

That  case  was not the basis for either of the superior  court's

orders granting summary judgment to the state.18

          2.   The seven tests of just cause

           ASEA  argues  that  the  parties'  bargaining  history

requires  a particular interpretation of just cause that involves

"seven  tests of just cause."19  ASEA argues that "[d]espite  its

recent   assertion   to   the  contrary,  the   State's   history

demonstrates  its  adherence to the seven tests."   ASEA  asserts

that arbitrators routinely employ the seven-tests approach.   The

state  responds that "[t]he evidence ASEA offers to support  [its

proposed] custom or usage . . . is confused, unidentified in many

instances, in part contradictory and often without context."

           The  arbitrator's decision does not explicitly  employ

the  seven  tests of just cause, and there is no indication  that

the  arbitrator  implicitly applied those tests. Similarly,  ASEA

did  not rely on the seven-tests theory in the superior court  in

either moving for summary judgment or opposing the state's motion

for summary judgment.  We will not address for the first time  on

appeal an issue the appellant failed to raise below.20

          We hold that the superior court did not err in vacating

the arbitrator's decision on the grounds of gross error.

               C.    The  Superior Court Did Not Err in  Vacating

               the Arbitrator's Decision Without Remanding to the

               Arbitrator.

           ASEA  briefly  argues that the superior court,  having

vacated the arbitration award, erred by not remanding the case to

the  arbitrator.  ASEA contends that the superior  court's  order

"left  the  Grievant in this case without a remedy."   The  state

responds  that there was no error and that "[n]o legal  authority

is  cited  to  support  this  proposition  and  no  rationale  is

articulated that would justify remand to the arbitrator."

          ASEA cites no legal authority to support its contention

and  its  brief  gives  the issue only  cursory  mention.21   The

superior  court's  order had the intended  effect  of  validating

CSED's  termination of the grievant.  Since the only dispute  was

just cause, the superior court did not err.

IV.  CONCLUSION

          We AFFIRM the superior court's decision.

_______________________________
1     Remarkably,  the  parties have not  included  the  original
summary judgment order in the excerpts of record.  See Alaska  R.
App. P. 210(c)(2).
2     Pub.  Safety Employees Ass'n, Local 92 v. State,  902  P.2d
1334, 1336 (Alaska 1995).
3    Id.
4     The  CBA  is  governed  by  AS  23.40.210,  which  requires
mandatory  grievance  arbitration proceedings.   AS  23.40.210(a)
states in relevant part:

          Upon  the completion of negotiations  between
          an  organization and a public employer, if  a
          settlement  is  reached, the  employer  shall
          reduce  it  to  writing in  the  form  of  an
          agreement.  The agreement may include a  term
          for  which it will remain in effect,  not  to
          exceed  three  years. . .  .   The  agreement
          shall  include  a  grievance procedure  which
          shall  have binding arbitration as its  final
          step.   Either party to the agreement  has  a
          right  of action to enforce the agreement  by
          petition to the labor relations agency.
          
(Emphasis added.)

5     Dep't  of  Pub. Safety v. Pub. Safety Employees Ass'n,  732
P.2d 1090, 1093 (Alaska 1987).
6     Pub.  Safety Employees Ass'n, Local 92, 902  P.2d  at  1336
(discussing  review  standard when dispute is  of  "contractually
formative nature").
7     We  held  in  Department of Public Safety v. Public  Safety
Employees  Ass'n that "[a]s a matter of policy and  law,  we  are
[loath] to vacate an award made by an arbitrator. . . .  A  court
may  not  vacate an arbitrator's interpretation of  a  collective
bargaining agreement in favor of its own merely because it  finds
its own to be better reasoned."  732 P.2d at 1093.
8    "Arbitrators often construe collective bargaining agreements
in  light  of statutes and case law[, but in] some cases  .  .  .
arbitrators have refused to apply external law in rendering their
decisions."   MARLIN  M.  VOLZ  & EDWARD  P.  GOGGIN,  ELKOURI  &
ELKOURI,  HOW  ARBITRATION WORKS, at 486 &  nn.76,  78  (5th  ed.
1997).   The  authors cite a number of cases,  including  Peabody
Coal  Co. Mine No. 10, 98 LA 882, 884 (1992) (stating arbitrators
do  not  generally base their decisions upon external law  unless
contract  directs arbitrator to do so).  See  id.   But  see  St.
Louis  Tel.  Employees'  Credit Union,  97  LA  412,  416  (1991)
(affirming  arbitrator's ruling to uphold employer's  termination
based on employee's violation of state law, despite lack of "just
cause" as defined by contract).
9     State  v. Pub. Safety Employees Ass'n, Local 92,  798  P.2d
1281, 1285 (Alaska 1990).
10     The  record  does  not  contain a  complete  copy  of  the
applicable 1996-99 CBA.
11    853 P.2d 1120 (Alaska 1993).
12    816 P.2d 140 (Alaska 1991).
13    Manning, 853 P.2d at 1125.
14     One  of  the  tests ASEA articulates for  the  just  cause
standard is discussed in Part III.B.2.
15     ASEA argues that Millhorn's recounting of Barbara Miklos's
testimony  is  inadmissible hearsay and that the  superior  court
erred  in  not ruling on admissibility.  We disagree.  Millhorn's
testimony  was  not  offered "to prove the truth  of  the  matter
asserted" - i.e., that the grievant's position with CSED was  one
of  public  trust.  Alaska R. Evid. 801(c).  Instead,  Millhorn's
affidavit  explained  the  CSED director's  own  belief  why  she
thought  the  grievant's termination was  for  just  cause.   The
arbitrator's findings taken alone were sufficient indication that
the  grievant's position was one of public trust and  potentially
subject  to  great public scrutiny.  For instance,  her  findings
establish  the  grievant's  access to  confidential  information,
including   bank   account  numbers,  Social  Security   numbers,
employment information, and addresses.
16     ASEA argues that the state should have "convey[ed] to  the
Union  that  Braun's wrongful discharge definition of just  cause
somehow  set  aside  the parties agreed upon definition  of  just
cause."   But there was no "agreed upon" definition in  the  CBA.
The  state  therefore  had no duty to  make  ASEA  aware  of  the
likelihood of Braun's application to the CBA.
17    14 P.3d 278 (Alaska 2000).
18    The discussion of Cassel in the superior court's August 2001
order  was only tangential to its holding.  Indeed, the  superior
court's reason for granting reconsideration was to allow ASEA  an
opportunity to provide support for its claim that there  were  no
cases  applying  Braun to a collective bargaining  context.   The
court stated:

          [U]pon  review  the court  has  decided  ASEA
          should   be   allowed  to  present  arguments
          regarding the use of the just cause  standard
          in  a  collective bargaining context focusing
          on  cases such as Manning.  To aid counsel in
          this quest the court notes that both ASEA and
          the  State  of  Alaska  .  .  .  should  also
          consider  Cassel  v.  State,  Department   of
          Administration.
          
19    The seven tests, stated in question format, are:

          1.    Did  the employer give to the  employee
          forewarning or foreknowledge of the  possible
          or  probable disciplinary consequences of the
          employee's conduct?
          
          2.    Was  the  employer's rule or managerial
          order  reasonably related to (a) the orderly,
          efficient,   and   safe  operation   of   the
          employer's  business and (b) the  performance
          that  the  employer might properly expect  of
          the employee?
          
          3.    Did  the employer, before administering
          discipline to an employee, make an effort  to
          discover  whether the employee  did  in  fact
          violate  or  disobey  a  rule  or  order   of
          management?
          
          4.     Was   the   employer's   investigation
          conducted fairly and objectively?
          
          5.    At  the  investigation did the  "judge"
          obtain substantial evidence or proof that the
          employee was guilty as charged?
          
          6.    Has  the  employer applied  its  rules,
          orders,   and   penalties  evenhandedly   and
          without discrimination to all employees?
          
          7.      Was    the   degree   of   discipline
          administered by the employer in a  particular
          case   reasonably   related   to   (a)    the
          seriousness of the employee's proven  offense
          and  (b)  the record of the employee  in  his
          service with the employer?
          
Enterprise Wire Co., 46 LA 356, 362 (1966).

20    Wells v. State, 46 P.3d 967, 970 n.7 (Alaska 2002) (citation
omitted).
21     Petersen v. Mut. Life Ins. Co. of New York, 803 P.2d  406,
410 (Alaska 1990) (holding claim given only cursory treatment  in
party's brief is waived).