SFIC Properties, Inc. v. International Ass'n of Machinists & Aerospace Workers, District Lodge 94, Local Lodge 311

Opinion by Judge BRUNETTI; Dissent by Judge RYMER.

An arbitrator ruled in favor of SFIC Properties, Inc., employee Julio Rodriguez and ordered his reinstatement with back pay. The district court granted summary judgment to SFIC and vacated the award, concluding that the arbitrator erred in finding an implied just cause requirement. Rodriguez’ union, the International Association of Machinists & Aerospace Workers, District Lodge 94, appealed. We review the district court’s award of summary judgment de novo, Warren v. City of Carlsbad, 58 F.3d 439, 441 (9th Cir.1995), and we reverse.

I.

SFIC terminated employee Julio Rodriguez purportedly for sexually harassing a female employee and other workplace violations. After inferring a just cause requirement from the collective bargaining agreement (“CBA”), an arbitrator ordered Rodriguez’ reinstatement based on a finding that the company had failed to provide Rodriguez with any notice of his wrongdoing and an opportunity to correct his behavior. The arbitrator found that Rodriguez was never apprised of many of the reasons for his dismissal at the time he was dismissed. The arbitrator inferred a just cause requirement in the CBA from the…

dissenting:

While there is no question that the scope of review of an arbitrator’s decision in a labor dispute is extremely narrow, still awards must represent a “plausible interpretation of the contract.” Phoenix Newspapers, Inc. v. Phoenix Mailers Union Local 752, 989 F.2d 1077, 1080 (9th Cir.1992). When the CBA has a management rights clause that explicitly gives the company the exclusive right to discharge employees, 1 and that right is unfettered by any constraint elsewhere in the agreement which could arguably import a “cause” requirement into the process,-1 have a hard time understanding how the arbitrator’s finding that “sufficient or just cause will be inferred in all modern day collective bargaining agreements which do not contain an express ‘just cause’ standard for discharge provision” can possibly “draw its essence from the collective bargaining agreement.” Federated Dep’t Stores v. United Food & Commercial Workers Union, Local 1442, 901 F.2d 1494, 1496 (9th Cir.1990) (noting this as exception to general deference to arbitrator’s award).

We have previously considered when a cause standard can, and when it cannot, be implied in a collective bargaining agreement. On…