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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).
