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J.F. Kiely Construction Co v. Utility Workers Union of

January 3, 2011


The opinion of the court was delivered by: Cooper, District Judge



Petitioner, J.F. Kiely Construction Co.("petitioner"), filed a petition requesting that this Court vacate the arbitration award issued in J.F. Kiely Constr. Co. v. Util. Workers of Am. Local 409, No. 09-0702, June 22, 2010 (Restaino, Arb.). (Dkt. entry no. 1, Pet. To Vacate; dkt. entry no 2, Ex. C, Restaino Op.) Petitioner also moves for an order vacating the arbitration award. (Dkt. entry no. 2, Mot. to Vacate.) Respondent, Utility Workers Union of America, AFL-CIO, Local 409 ("Union") opposes the motion. (Dkt. entry no. 8, Opp'n Br.) The Court determines the motion on the briefs without oral argument, pursuant to Federal Rule of Civil Procedure 78(b). The Court, for the reasons stated herein, will deny the motion to vacate.


Petitioner is a New Jersey corporation. (Pet. To Vacate at 2.) Respondent Union is a labor organization. (Dkt. entry no. 8, Opp'n Ans. at 2.) On March 26, 2005, the parties entered into a collective bargaining agreement ("CBA") for a five-year term. (Restaino Op. at 1; dkt. entry no. 2, Ex. A, CBA.) Keith Kirsch ("Kirsch") has been an employee of petitioner since 1993 and is a member of the Union. (Restaino Op. at 1, 4.)

On November 19, 2009, Kirsch was working as a Foreman on a job site when he was approached by a Supervisor. (Id. at 4, 6.) The Supervisor testified that he thought he detected the presence of alcohol on Kirsch. (Id.) Upon inspecting Kirsch's truck, the Supervisor found a cooler containing six to eight unopened beers. (Id.) The Supervisor consulted the Health and Safety Director, who said possession of alcohol in a company vehicle was automatic grounds for termination. (Id. at 5)

The Supervisor returned to the job site with a Risk Manager to administer a "reasonable cause analysis," but Kirsch was gone; Kirsch later testified that he left for a doctor's appointment. (Id.) After an investigation, petitioner determined Kirsch had possessed alcohol on a job site, in a company truck, while doing company work. (Id.) At a subsequent "first step grievance meeting" petitioner terminated Kirsch's employment, rather than giving him a second chance. (Id. at 5-6.)

Petitioner based its decision on the "Alcohol Policy," which is part of petitioner's Health and Safety Plan and states: "[t]he purchasing, carrying or consumption of all alcoholic beverages while on the job, in any Company vehicle, or on Company property is strictly prohibited. Any violation of this rule will be considered just cause for discharge." (Id. at 3-4.) However, another paragraph in the Health and Safety Plan ("Drug and Alcohol Policy") states:

Possessing, distributing, transferring, purchasing, selling, using or being under the influence of alcoholic beverages or illegal drugs while on our property, while attending business-related activities, while on duty, or while operating a vehicle or piece of equipment will be subject to a reasonable case drug/alcohol test and can result in disciplinary action, including suspension without pay or possible termination. (Id. at 4.)

Kirsch brought a timely grievance, which was processed and then referred to arbitration in accordance with the CBA. (Restaino Op. at 1; CBA at 29.) Arbitrator Restaino ("the Arbitrator") conducted a hearing on May 12, 2010. (Restaino Op. at 1) The Arbitrator decided in favor of the Union, in part, concluding that petitioner had "breached its discretionary authority and set forth an extreme penalty not supported by the facts in evidence." (Id. at 10-12.) The Arbitrator ordered petitioner to reinstate Kirsch, but without back pay and pursuant to a "Last Chance Agreement" whereby Kirsch would be subject to termination if he violates any of petitioner's drug or alcohol policies. (Id.) Petitioner now moves to vacate the arbitration award. (Mot. To Vacate.)


I. Legal Standards

The Federal Arbitration Act ("FAA"), 9 U.S.C. § ("Section") 1, et seq., permits a district court to vacate an arbitration award upon application by either party if (1) it was procured by corruption, fraud, or undue means, (2) there was "evident partiality or corruption" with respect to the arbitrator, (3) the arbitrator committed misconduct by refusing to postpone the hearing, refusing to hear pertinent and material evidence, or otherwise committing misbehavior that prejudiced the rights of a party, or (4) the arbitrator exceeded his or her powers or failed to reach "a mutual, final, and definite award." 9 U.S.C. § 10(a). The FAA, however "was enacted to foster the public policy favoring arbitration and to give effect to parties' contractual agreements to arbitrate." Jeereddi A. Prasad, M.D., Inc. v. Investors Assocs., Inc., 82 F.Supp.2d 365, 368 (D.N.J. 2000). "When the parties include an arbitration clause in their [CBA], they choose to have disputes concerning constructions of the contract resolved by an arbitrator." Citgo Asphalt Refining Co. v. Paper, Allied-Indus., Chem., & Energy Workers Int'l Union Local 2-991, 385 F.3d 809, 815 (3d Cir. 2004).

A district court, thus, has very limited authority to vacate an arbitration award, and cannot overrule an arbitrator simply because the court disagrees with the arbitrator's construction of the contract at issue. United Transp. Union Local 1589 v. Suburban Transit Corp., 51 F.3d 376, 379 (3d Cir. 1995); see also Dluhos v. Strasberg, 321 F.3d 365, 370 (3d Cir. 2003) (stating that a district court may vacate an arbitration award "only under exceedingly narrow circumstances"). An arbitration award must be enforced as long as the arbitrator arguably construed or applied the contract, and even if the arbitrator has committed a serious error. Suburban Transit, 51 F.3d at 379. A district court may not correct legal or factual errors made by an arbitrator. Brentwood Med. Assocs. v. United Mine Workers of Am., 396 F.3d 237, 240 (3d Cir. 2005); see also News Am. Publ'ns, Inc. Daily Racing Form Div. v. Newark Typographical Union, Local 103, 918 F.2d 21, 24 (3d Cir. 1990). "Accordingly, the award stands 'even if the court finds the basis for it to be ambiguous or disagrees with its conclusions under the law.'" Citgo, 385 F.3d at 816 (citing ...

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