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Arbitration is like a box of chocolates: You never know what you’re going to get

Employers love arbitration clauses.  Most believe that arbitrators will treat them more favorably than a judge or jury, and that the process will be faster and less expensive than going to court.  Generally speaking, they are right.  A recent case out of the Supreme Court of Connecticut, State of Connecticut v. Connecticut Employees Union Independent, et al., No. SC 19590, 2016 Conn. LEXIS 244 (August 30, 2016), should serve as a reminder to employers that when you require your employees to sign arbitration agreements, you also must be prepared to live with the result.

The facts of the case would cause most employers to experience a bad case of raised eyebrows.  The employee, one Gregory Linhoff, had been employed as a “skilled maintainer” at the University of Connecticut Health Center for approximately fifteen years.  On March 7, 2012, he was working the 4:00 p.m. to midnight shift when, at 5:50 p.m., a Health Center police officer found him and a co-worker in a state owned van parked in a secluded area of the Health Center Campus.  As the officer approached the van, he observed Linhoff sitting in the passenger seat toking on a glass pipe.  When confronted, he initially denied, but later admitted to smoking marijuana, and surrendered two bags containing about three-fourths of an ounce.  Linhoff was arrested, but criminal charges were later dropped.

On June 22, 2012, the Health Center terminated Linhoff’s employment, citing its Rules of Conduct, and its Drug-Free/Smoke-Free Workplace Policies.  In the grievance hearing that followed, the Health Center presented evidence that the employee had been smoking marijuana in a State vehicle, on State property, during an early part of his shift, and that the employee had keys and access to virtually every part of the Health Center property.  The employer concluded that as a result of this incident, Linhoff simply could not be trusted to work independently on his evening shift.

Linhoff offered only lame excuses in defense.  He testified that he had brought the marijuana to work inadvertently, and when he discovered that the glass pipe in his possession was “smelly,” he decided to smoke the residue to eliminate the odor.  Then, he contradicted his own story by admitting that he had been suffering from anxiety and stress in his personal life and had smoked marijuana as a form of relief.  So, either way, he admitted that he had smoked marijuana in a State vehicle, on State time and on State property; more than sufficient reason to justify termination, right?

Well no.  The arbitrator agreed that the State had met its burden of proving misconduct, and found the employee’s excuses disingenuous, but still found that termination was unwarranted.  The arbitrator did impose a significant penalty; six-months unpaid suspension, followed by one-year of random drug and alcohol testing and a “last chance” warning, but found that the employee’s conduct and the employer’s safety and security concerns were not so overriding as to result in the conclusion that complete termination of employment was the only appropriate penalty.

The State filed a petition to vacate the arbitration award on the grounds that it violated public policy, due to the serious nature of the offense.  The Connecticut Superior Court agreed, State v. Conn. Employees Union Independent, No. CU1460490025, 2014 Conn. Super. LEXIS 2476 (Conn.Super., October 7, 2014), but on appeal, the Supreme Court reversed, effectively reinstating the arbitrator’s decision.

The Supreme Court “put the bunny in the hat” so to speak, by framing the issue as “whether the arbitrator’s award reinstating the grievant after a lengthy unpaid suspension, with various conditions, violates public policy.”  The Court cited the State’s own regulations on employee drug use, which provided that employees unlawfully possessing controlled substances would be subject to disciplinary action “up to and including termination,” as demonstrating that termination of employment was not required in all cases.  In the end, the Court deferred to the arbitrator’s decision, observing that such deference was necessary in order to preserve the efficiency and effectiveness of the process.  In a parting shot, the Court concluded that if the State wished to preserve the right to terminate employees under these circumstances, it was free to negotiate for the inclusion of an appropriate provision in its collective bargaining agreement.

Yes, the arbitrator’s decision in this case was the product of a public sector, collectively bargained agreement, but there are some takeaways for private sector employers.  First, you can decide which disputes you want to be subject to arbitration, and which ones you don’t.  And, once you agree to arbitrate a dispute – any dispute – you are agreeing in advance to the result.  Once you take that bite, you can’t put the chocolate back in the box.

For a confidential analysis of your arbitration issues, or questions about TRC’s employment practice area, please contact Jim Rogers at (412) 316-8651 or [email protected].

Important NoticeThis information is intended for general guidance only, and should not be used as a substitute for specific legal advice.  For specific legal advice applicable to your situation, you should consult an attorney of your choice.  Although believed to be accurate when written, no guarantee of completeness or accuracy to your particular circumstances should be implied.  Laws, regulations, and court decisions in this area change frequently, and you should consult the attorney of your choice for up-to-date information.