Court News Ohio
Court News Ohio
Court News Ohio

Unless Prohibited by Contract, Arbitrator Free to Set Penalty for Workplace Rule Violation

The Ohio Supreme Court today reinstated an arbitrator’s decision that a Findlay Police sergeant deserved a long suspension rather than termination for behavior unbecoming a police officer.

The arbitrator had found that the police chief failed to prove that the sergeant violated the department’s sexual harassment policy. Therefore, as arbitrator, he considered himself not obligated to choose between two options offered by the city – termination or a three-to-10-day suspension. The long suspension, the arbitrator ruled, was the correct remedy.

In affirming the arbitrator’s decision, the Supreme Court dealt with a labor contract device called a “discipline matrix” that spells out specific penalties for transgressions.

The city and its police union disagreed over whether the matrix must be strictly followed when an arbitrator is called in to settle a dispute. The controversy involved Sergeant David Hill.

In writing for the Supreme Court’s 6-1 majority, Justice Terrence O’Donnell spelled out rules for how discipline will be imposed for “just cause” violations. These rules, Justice O’Donnell wrote, must be followed if the employer and union bargain for those rules and incorporate them into a contract. If they are not incorporated, then an arbitrator can use the “discipline matrix” as a guide to help him fashion an appropriate remedy.

In a dissenting opinion, Chief Justice Maureen O’Connor wrote that the Court should not have considered Hill’s appeal, and that the majority’s opinion requiring the discipline to be written into the contract could have unintended consequences.

The Court reinstated Hill’s suspension and remanded the case to the common pleas court to conduct further proceedings.

Findlay Sergeant Was Punished Twice in 2012
Hill became a Findlay Patrolman in 1999 and was promoted to sergeant in 2005. As a police officer he is a member of the Ohio Patrolmen’s Benevolent Association (OPBA), the union representing the city’s police officers.

In July 2012, he was reprimanded for violating the department’s social media policy when he helped develop a video of himself using a Taser against the son of a fellow officer. Later that month, Hill made disparaging comments about a fellow officer’s mental health and made a mocking gesture that included placing the barrel of his service handgun in his own mouth. Chief of Police Gregory Horne recommend that Hill be suspended for 30 days, with 15 days stayed, for conduct unbecoming an officer. Hill filed a grievance to challenge the suspension. It was denied by the city safety director, which led the matter to arbitration.

Two weeks before the arbitration, Hill made a disparaging remark about a female officer, who then filed a complaint against him. She believed the remarks were made because she was scheduled to testify against Hill at the arbitration hearing. She also claimed Hill made and condoned jokes about her.

Following an investigation of the incident, Horne concluded Hill violated several department rules and regulations, “the most serious” being the department’s sexual harassment policy. He recommended Hill’s termination, which led to Hill filing another grievance. Similar to the earlier dispute, Hill took his punishment to arbitration.

Department’s Discipline Procedures Disputed
The police department’s disciplinary procedures include the discipline matrix, a schedule with  increasing levels of discipline based on the seriousness of offenses and the number of prior violations. It provides that if an offense falls on more than one discipline level in the matrix, the police chief has sole discretion in determining which level of punishment is appropriate based on the facts of the case and the history of the involved employee.

The OPBA and the city have a collective bargaining contract that governs the police department. The labor contract contains a provision that discipline shall be imposed only for just cause, and it establishes the grievance procedure that Hill used.

Horne applied the discipline matrix when considering the sexual harassment policy violation and concluded that termination was appropriate.

Arbitrator Reduce Punishments
Jonathan Klein arbitrated the challenge to the 30-day suspension that was levied before the arbitration hearing and before the sexual harassment allegation. Klein found the city had just cause to discipline Hill, but that the police chief’s 30-day suspension with 15 days stayed “exceeded the disciplinary matrix without justification.” He reduced the penalty to a 10-day suspension, which he ruled was in accordance with the matrix.

Horne testified that the city is not required to, and does not always, follow the matrix. As arbitrator, Klein found that under the principles of “just cause” the city cannot pick and choose when it will apply the matrix to an infraction warranting discipline. He noted that the OPBA contended it had never agreed to the matrix, but Klein did not rule on that point.

Another arbitrator, James Mancini, presided over the challenge to Hill’s termination. Mancini ruled that the evidence did not clearly demonstrate that Hill violated the sexual harassment policy. He set aside the discharge penalty, but concluded the city had “just cause to impose severe discipline.” He found Hill engaged in conduct unbecoming an officer and failed to carry out his supervisory duties.

Mancini noted Klein’s arbitration decision concerning use of the matrix and ruled it should be applied in this case. This was one of the circumstances where the facts and the history placed the proposed sanction on two differing levels of discipline. Mancini interpreted the matrix as allowing the penalty to range from a “3-to-10-day suspension up to termination.” He ordered a lengthy suspension with Hill being reinstated with full seniority but not back pay.

The city refused to reinstate Hill. The OPBA and Hill filed an application with a Cuyahoga County Common Pleas Court to enforce the arbitration award, claiming Hill suffered from lost wages, benefits, and seniority. The city countered with an application to vacate or modify Mancini’s ruling.

Citing R.C. 2711.10(D), the trial court concluded that Mancini violated the law by departing from the plain language of the matrix. The court found the matrix did not have a range of penalties from the 3-to10-day suspension “up to” termination, but rather the police chief had sole discretion to choose between the short suspension or termination. It reversed the arbitrator’s ruling and reinstated Hill’s termination, which Hill and the union appealed to the Eighth District Court of Appeals.

In a 2-1 decision, the Eighth District affirmed the trial court, concluding the arbitrator’s decision did not “draw its essence from the CBA (labor contract)” and was arbitrary, capricious, and unlawful. Hill and the union appealed that decision to the Ohio Supreme Court, which agreed to consider just one of Hill’s objections: that any limit on an arbitrator’s ability to review and modify a disciplinary action for just cause has to be bargained for between the employer and the union and must be written into the labor agreement.

Court Review of Arbitrator Awards Limited
The opinion indicated that courts have limited authority to vacate an arbitrator’s award, and that arbitrators get their authority from the terms of a collective bargaining agreement. Arbitrators act within their authority when they craft an award that “draws its essence” from the contract and where there is a rational connection between the agreement and the arbitrator’s decision.

The opinion cited provisions of the Findlay police labor contract that stated an arbitrator had no power to add to, subtract from, or alter any specific terms of the contract or make any award that violates the terms and conditions of the agreement. One of the contact’s terms states that “discipline shall be imposed for just cause,” and gives the city the right to “suspend, discipline, demote, or discharge for just cause.”

Mancini stated the while he believed the matrix should be applied, he did not find a specific provision of the labor contract that mandated it, nor any indication from the terms of the agreement that its use was mandatory.

“The CBA does not mention the police department’s disciplinary procedures or the matrix, and no language in the CBA restricts an arbitrator’s authority to review the appropriateness of the type of discipline imposed after the arbitrator has determined that there is just cause to discipline an employee for the type of misconduct at issue in this matter,” the Supreme Court decision states.

The city maintained that two clauses of the labor contract state it has all rights to manage the police department operations including developing work procedures and rules, and the union agrees to follow all the work rules as long as there is a grievance procedure to dispute a violation. That means the discipline matrix is a work rule and the union agreed it must be followed, the city maintained.

The Court, citing its 2001 Southwest Ohio Regional Transit Auth. v. Amalgamated Transit Union, Local 627(SORTA) decision, ruled the city confused the right to implement rules with the right to set the penalties. In the SORTA case the employer adopted a drug policy that called for automatic termination of a worker who tested positive for marijuana, and a worker who tested positive challenged his termination. An arbitrator ruled the union contract called for termination only for “good and sufficient cause” and the automatic termination conflicted with the contract. The Supreme Court affirmed the arbitrator’s award finding that the city could not unilaterally make its own rules for violations that are not negotiated with the union and adopted by their contract.

The Supreme Court held that Findlay has the right to develop its own rules, but the discipline matrix is not a rule about “working conditions, conduct, and performance.” Even if it were, the police union had the right to notice and to be heard concerning the adoption of the matrix. Under the terms of the city’s labor contract, that matrix would have had to be agreed to by both the city and the union and placed in the contract, the Court concluded.

Findlay also noted that Klein stated the city had to use the matrix, and it indicated that the union and Hill used the matrix to justify a shorter suspension when he was first being disciplined. The Court noted the labor contract does not prevent the city from using the matrix as a guide but, similar to the SORTA decision, the penalties in the matrix cannot be different than the penalties defined by “just cause” in the contract. Unless the city and union agree that the penalties in the matrix meet the just cause standards in the contract, an arbitrator does not have to follow the matrix as long as the penalty follows the essence of the contract.

Justices Sharon L. Kennedy, Judith L. French, William M. O’Neill, Patrick F. Fischer and R. Patrick DeWine joined the majority opinion.

Not a Case for Broad Legal Holdings, Dissent Asserts
In her dissent, Chief Justice O’Connor argued the case should have been dismissed as having been improvidently allowed by the Supreme Court. She wrote the parties allege that the lower courts misapplied well-settled law and are asking the Court to correct the error in interpreting their contract. The Supreme Court’s role is to resolve uncertainties in the law, clarify confusing constitutional questions, and address issues of public or great general interest, none of which are issues in this case, she asserted.

She noted the arbitration record lacks sufficient evidence to determine whether the discipline matrix was incorporated into the labor contract, and noted that Hill used the matrix to his own advantage in the earlier arbitration. One city witness testified during the proceedings that Hill helped negotiate the matrix, she noted.

The chief justice also cautioned that the majority’s conclusion that the discipline imposed for just cause must come from terms in the written contact is “overbroad and may have unintended consequences.”

She noted that application of the broad holding could violate at least one longstanding provision of labor law, which allows an arbitrator to find a past practice is the basis for a penalty. In some cases, an employer premises an action on an accepted past practice between the parties that has not been written into a contract, for instance applying the same punishment for similar infractions. This ruling could prevent employers from using past practice as a defense when an employee challenges a disciplinary action, which would be contrary to decades of labor law, the chief justice concluded.

2015-1581. Ohio Patrolmen’s Benevolent Assn. v. Findlay, Slip Opinion No. 2017-Ohio-2804.

Video camera icon View oral argument video of this case.

Please note: Opinion summaries are prepared by the Office of Public Information for the general public and news media. Opinion summaries are not prepared for every opinion, but only for noteworthy cases. Opinion summaries are not to be considered as official headnotes or syllabi of court opinions. The full text of this and other court opinions are available online.

Adobe PDF PDF files may be viewed, printed, and searched using the free Acrobat® Reader
Acrobat Reader is a trademark of Adobe Systems Incorporated.