Jottings By An Employer's Lawyer

Saturday, September 27, 2003

Deception During Arbitration - Caught (Finally) In A Lie - Could Lead To Award Being Set Aside

If you happened to be near Waterloo, Iowa on the night of June 1, 2001, you might be unnerved to know that the sole employee responsible for monitoring a facility that held millions of gallons liquid natural gas had turned off more than 40 monitoring and safety devices and departed the facility for more than 3 hours. He purposely took a company van so he could leave his car parked and escape detection. Fortunately for those in Waterloo, an anonymous caller reported to his supervisor a van was being driven about town, and the supervisor getting no answer when he called the plant, discovered his absence leading to his termination. Being covered by a collective bargaining agreement, he grieved and the arbitrator issued an award that many will find all too familiar. He had testified that he had received a call from his wife that his son had been possibly injured in gang activity. Although finding his conduct egregious, the arbitrator noted his long, previously unblemished service and the fact that he had at all times admitted his guilt and wrongdoing and reinstated him without backpay.

Following the award, there was yet another anonymous phone call, intimating that the company should contact a certain individual who might have knowledge of his whereabouts the night in question. That individual was contacted, and later testified in her deposition that she had been having an extramarital affair with the grievant and he was with her on the night of June 1.

Armed with this duplicitous behavior, the company sought to vacate the award on grounds of public policy and that the award had been obtained by fraud. The trial court granted summary judgment on both grounds.

The 8th Circuit rejected the grounds of public policy, finding no specific statutory violation which would clearly establish public policy and that the arbitrator had clearly allowed him to be reinstated to a position where he would be directly supervised. It also reversed the grant of summary judgment on the issue of fraud in the arbitration, agreeing with the union that at this point there was merely a disagreement in the testimony. MidAmerican Energy v. IBEW Local 499 (8th Cir. 9/25/03) [pdf].

However, the Court went on to specifically disagree with the union's argument that the lie, if it proved to be that, was not relevant to the arbitrator's decision, saying clearly the perceived truthfulness of the grievant had made a difference. While it reversed the summary judgment, it sent it back to the trial court for further proceedings. Leaving little doubt in my mind as to the ultimate outcome. Two cheers for anonymous phone calls.


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