YOUGHIOGHENY & OHIO COAL
COMPANY, APPELLANT,
vs.
OSZUST ET AL.,
APPELLEES
No. 85-1258
SUPREME COURT OF OHIO
491 N.E.2d 298, 23 Ohio St. 3d 39, 23 Ohio B. Rep. 57
April 2, 1986, Decided
APPEAL from the Court of Appeals for
Harrison County.
HEADNOTE
Unemployment compensation -- Arbitrator's determination as
to discharge for "just cause" not binding on Bureau of Employment
Services, when -- R.C. 4141.29(D)(2)(a), construed.
SYLLABUS
A private arbitrator's determination upholding an employee's
discharge for "just cause" according to the terms of the applicable
collective bargaining agreement does not preclude the Ohio Bureau
of Employment Services from concluding that the employee was not
"discharged for just cause in connection with his work" within the
meaning of R.C. 4141.29(D)(2)(a).
STATEMENT OF THE CASE
Charles M. Oszust was employed by the Youghiogheny & Ohio Coal
Company ("appellant") from 1971 to January 26, 1983. Oszust was a
member of the United Mine Workers of America, which had negotiated
a collective bargaining agreement with appellant.
On April 30, 1982, Oszust sustained a back injury while he was
working for appellant. He was unable to work for some time
thereafter, and received sickness and accident benefits from
appellant's insurance carrier. After having examined Oszust on
behalf of the insurance carrier, Dr. Gene Stunkle issued a report
on August 25, 1982, in which he stated that "[o]n the basis of
objective findings, I see no reason why this man cannot return to
his usual work activities. He does not have a permanent disability
at this time." On September 1, 1982, the insurance carrier notified
Oszust that his sickness and accident benefits would be
discontinued as of August 18, 1982. After receiving that notice and
with the consent of his physician, Oszust returned to work on
September 7, 1982.
Oszust filed a grievance over the denial of his sickness and
accident benefits for the period August 18 to September 7, 1982.
That grievance proceeded to binding arbitration. The arbitrator
denied the grievance, finding that, for the grieved period, and on
the facts presented to him, Oszust was not disabled so as to have
been prevented from performing his usual work. The arbitrator's
decision was dated January 19, 1983; appellant discharged Oszust on
January 26, 1983 for violation of Article XXII of the collective
bargaining agreement, which provides, in pertinent part: "[w]hen
any Employee absents himself from his work for a period of two (2)
consecutive days without the consent of the Employer, other than
because of proven sickness, he may be discharged."
Oszust filed a grievance over his discharge, and that grievance
proceeded to binding arbitration. Based on the above-quoted
contract language, the arbitrator denied the grievance, upholding
the discharge under the collective bargaining agreement which
required "just cause" for discharge.
Oszust also applied for unemployment compensation as the result
of his discharge. The Ohio Bureau of Employment Services initially
denied Oszust's claim but, after a hearing, the referee for the
Unemployment Compensation Board of Review determined that Oszust
had obeyed his doctor's instructions and had returned to work as
soon as authorized by his doctor. Thus, because Oszust's discharge
was not based on any willful or wrongful act, he "was discharged by
Youghiogheny and Ohio Coal Co., without just cause in connection
with work" as contemplated by R.C. 4141.29(D)(2)(a). The board of
review disallowed appellant's application for further appeal.
Upon appellant's appeal from the board of review, the court of
common pleas held that the arbitrator's decision upholding Oszust's
discharge for "just cause" in accordance with the provisions of the
collective bargaining agreement was "preclusive with respect to all
subsequent proceedings involving the identical issue. * * *" The
court of appeals reversed, and remanded the cause to the court of
common pleas to review the facts presented at the hearing before
the board of review to determine whether Oszust had been discharged
for "just cause in connection with work" pursuant to R.C.
4141.29(D)(2)(a).
The cause is now before this court pursuant to the allowance of
a motion to certify the record.
COUNSEL
Hanlon, Duff & Paleudis Co., L.P.A., and
Gerald P. Duff, for appellant.
Anthony J. Celebrezze, Jr., attorney
general, and Patrick A. Devine, for appellee
administrator, Ohio Bureau of Employment Services.
Thomas M. Myers, for appellee Oszust.
JUDGES
BROWN, J. CELEBREZZE, C.J., SWEENEY, LOCHER, HOLMES, DOUGLAS and
WRIGHT, JJ., concur.
AUTHOR: BROWN
OPINION
{*40} This appeal requires that we determine whether an
arbitrator's determination upholding an employee's discharge for
"just cause" according to the terms of the applicable collective
bargaining agreement precludes the Ohio Bureau of Employment
Services from concluding that the employee was not "discharged for
just cause in connection with his work" for purposes of R.C.
4141.29(D)(2)(a).
Appellant maintains that the term "just cause" within the
contemplation of its collective bargaining agreement is identical
in meaning to the term "just cause" for purposes of eligibility for
unemployment compensation. If we were to accept appellant's
position, when the parties to the collective bargaining agreement
submit the issue of "just cause" for discharge to binding
arbitration, the arbitrator would for all practical purposes
determine not only the validity of the discharge but also
eligibility {*41} for unemployment compensation. However,
the legislature has not provided that the determination as to
eligibility for unemployment compensation may be made on the basis
of private arrangements for the settlement of grievances.
This court has stated that "[t]he law favors the amicable
adjustment of difficulties, and arbitration has been favored by the
courts in this state from early times. It is considered that
arbitrators are constituted by the parties chancellors, judges and
jurors, having jurisdiction of the law and of the facts. In general
the award is final." Corrigan v. .
Rockefeller (1902), 67 Ohio St. 354, 367. However, we
noted there that the very purpose of arbitration "is to reach * * *
a final disposition of the controversy between
them [the disputants], and to avoid future litigation of
the same matters." (Emphasis added.)
Id. In the case at bar, the issue which was
conclusively resolved by the arbitrator differs significantly from
the issue presented to the Ohio Bureau of Employment Services and
the board of review; thus, the arbitrator's determination, while
final as to the validity of the discharge for purposes of the
collective bargaining agreement, simply did not, and could not,
take into consideration the employee's eligibility for unemployment
compensation.
The General Assembly created the Ohio Bureau of Employment
Services to decide claims for benefits under R.C. Chapter 4141.
Appeals arising from the bureau's determinations are heard by the
Unemployment Compensation Board of Review. R.C. 4141.06. The board
of review has a statutory duty to hear the evidence, develop a
record, and apply the law. On the other hand, an arbitrator's
authority is confined to the resolution of issues submitted
regarding contractual rights. The arbitrator is bound to interpret
and apply the collective bargaining agreement in accordance with
instructions from the parties to the agreement. The arbitrator
simply has no authority to invoke this state's unemployment
compensation laws in reaching a decision, regardless of the
similarity of contractual language found within the substantive
provisions of the statutes.
A private arbitrator's determination upholding an employee's
discharge for "just cause" according to the terms of the applicable
collective bargaining agreement does not preclude the Ohio Bureau
of Employment services from concluding that the employee was not
"discharged for just cause in connection with his work" within the
meaning of R.C. 4141.29(D)(2)(a). Just as the United States Supreme
Court has held that an employee's rights under Title VII of the
Civil Rights Act of 1964 were not foreclosed by submission of a
discrimination claim to arbitration under the applicable collective
bargaining agreement, Alexander v. .
Gardner-Denver Co. (1974), 415 U.S. 36, we conclude that
by filing a claim for unemployment compensation, Oszust was
"asserting a statutory right independent of the arbitration
process." Id. at 54. See, also,
Barrentine v. . Arkansas-Best Freight
System, Inc. (1981), 450 U.S. 728;
McDonald v. . Westbranch (1984),
U.S. , 80 L. Ed. 2d 302.
{*42} In Salzl v. . Gibson
Greeting Cards (1980), 61 Ohio St. 2d 35, 39 [15 O.O.3d
49], we stated that Ohio's Unemployment Compensation Act "was
intended to provide financial assistance to an individual who had
worked, was able and willing to work, but was temporarily without
employment through no fault or agreement of his own." On the facts
of this case, the referee concluded that because Oszust followed
his doctor's advice and returned to work only when so authorized by
his doctor, Oszust's discharge was not through his own fault or
agreement, and thus was not based on acts which constitute "just
cause in connection with work" within the meaning of R.C.
4141.29(D)(2)(a). The referee found that "at no time was * * *
[Oszust] ever advised by * * * [appellant] that he should return to
work effective August 18, 1982, or be subject to termination under
the provisions of the contract with the United Mine Workers of
America. In effect, * * * [Oszust] has been told by his former
employer that since he was told sometime after September 1, 1982,
that he was able to work effective August 18, 1982, his not
returning to work on August 18, 1982, constitutes an absence
without a proven illness." That result may indeed be correct by the
terms of the applicable collective bargaining agreement, but the
arbitrator's determination did not foreclose the possibility that
Oszust may nonetheless be eligible for unemployment compensation
benefits.1
Appellant, by its reliance on Ivy v. .
Dudley (1966), 6 Ohio St. 2d 261 [35 O.O.2d 423];
Dowler v. . Bd. of Review (1967),
9 Ohio St. 2d 42 [38 O.O.2d 101]; Marcum v.
. Ohio Match Co. (1965), 4 Ohio App. 2d 95 [33
O.O.2d 148], and similar cases, entirely misses the point. In each
of those cases, it was the statutorily designated tribunal that
made the determination for or against the employee as to
eligibility for unemployment compensation, not an arbitrator merely
agreed-to by the parties to the applicable contract.
Accordingly, we hereby affirm the judgment of the court of
appeals, and remand the cause to the trial court for further
proceedings consistent with this opinion.
Judgment affirmed and cause remanded.
DISPOSITION
Judgment affirmed and cause
remanded.
CONCURRENCE
WRIGHT, J., concurring.
I agree that an arbitrator's decision that an employee was
discharged for just cause within the meaning of a collective
bargaining agreement does not preclude the administrator from
determining whether a claimant was terminated for just cause within
the meaning {*43} of R.C. 4141.29. Our conclusion that
employees, in the position of appellee, are not limited to
contractual remedies under the collective bargaining agreement has
been reached in many other jurisdictions.2
Although courts should certainly defer to an arbitration
decision when the employee's claim is based on rights arising out
of the collective bargaining agreement, different considerations
apply when the employee's claim is based on rights arising out of a
statute.
These considerations were the basis for the United States
Supreme Court's decision in Alexander v. .
Gardner-Denver Co. (1974), 415 U.S. 36. In that case the
court held that an arbitrator's decision pursuant to provisions in
a collective bargaining contract was not binding on an individual
seeking to pursue his Title VII remedies in court. The court
reasoned that the contractual rights under a collective bargaining
agreement and the statutory right provided by Congress under Title
VII "have legally independent origins and are equally available to
the aggrieved employee." Id. at 52.
In concluding that arbitration did not provide an adequate
substitute for judicial proceedings in adjudicating claims under
federal statutes, the court in Alexander,
stated:
"As the proctor of the bargain, the arbitrator's task is to
effectuate the intent of the parties. His source of authority is
the collective bargaining agreement, and he must interpret and
apply that agreement in accordance with the 'industrial common law
of the shop' in the various needs and desires of the parties. The
arbitrator, however, has no general authority to invoke public laws
that conflict with the bargain between the parties:
"'[A]n arbitrator is confined to interpretation and application
of the collective bargaining agreement; he does not sit to dispense
his own brand of industrial justice. He may, of course, look for
guidance from many sources, yet his award is legitimate only so
long as it draws its essence from the collective bargaining
agreement. * * *' United Steel Workers of America
v. . Enterprise Wheel & Car Corp., 363 U.S.
593, 597 (1960).
"* * * Thus the arbitrator has authority to resolve only
questions of {*44} contractual rights, and this authority
remains regardless of whether certain contractual rights are
similar to, or duplicative of, the substantive rights secured by
Title VII." Alexander, supra, at 53-54.
The Supreme Court again rejected the contention that an award in
an arbitration proceeding brought pursuant to a collective
bargaining agreement precludes a subsequent suit in federal court
in Barrentine v. . Arkansas-Best Freight
System (1981), 450 U.S. 728. In that case the court held
that an employee could bring an action in the federal district
court, alleging violation of the Fair Labor Standards Act, even
though he had already unsuccessfully pursued the same dispute
through the collective bargaining procedure. In its conclusion, the
court cited Alexander, supra, at 49-50, which
stated:
"In submitting his grievance to arbitration, an employee seeks
to vindicate his contractual right under a collective bargaining
agreement. By contrast, in filing a lawsuit under * * * [the
statute], an employee asserts independent statutory rights accorded
by Congress. The distinctly separate nature of these contractual
and statutory rights is not vitiated merely because both were
violated as a result of the same factual occurrence. And certainly
no inconsistency results from permitting both rights to be enforced
in the respectively appropriate forums."
By instituting an action under the unemployment compensation
laws, appellee was not seeking a review of the arbitrator's
decision. Rather he was asserting a statutory right independent of
the arbitration process. The arbitrator's task is to effectuate the
intent of the parties rather than the requirements of the statute.
When the collective bargaining agreement conflicts with the
statute, the arbitrator must follow the agreement. When an
arbitrator's determination gives full consideration to an
employee's statutory rights, a court may properly accord it great
weight. Nevertheless, an arbitrator's power is both derived from,
and limited by, the collective bargaining agreement. The
arbitrator's competence pertains primarily to an interpretation of
the collective bargaining agreement and not the ultimate legal
issue of whether an employee's statutory rights have been
violated.
Arbitral procedures, while well suited to the resolution of
contractual disputes, make arbitration a comparatively
inappropriate forum for the final resolution of rights under the
unemployment compensation laws, R.C. Chapter 4141. As the court
noted in Alexander, at 57-58, the fact-finding
process in arbitration is usually not equivalent to judicial
fact-finding. The record of the arbitration proceedings is not as
complete; rules of evidence do not usually apply; and the rights
and procedures common to civil trials, such as discovery,
compulsory process, cross-examination and testimony under oath, are
often severely limited or unavailable. The court also recognized
that the employee's statutory rights might not be adequately
protected by the union, which, without breaching its duty of fair
representation, might decide not to support the claim vigorously in
arbitration. On {*45} the other hand, the resolution of
statutory questions is primarily the responsibility of courts.
Not only are arbitral procedures less protective of individual
statutory rights than are judicial procedures, but arbitrators very
often are powerless to grant the aggrieved employees as broad a
range of relief. An arbitrator can award only that compensation
authorized by the wage provision of the collective bargaining
agreement. He "is confined to interpretation and application of the
collective bargaining agreement" and his "award is legitimate only
so long as it draws its essence from the collective bargaining
agreement." United Steel Workers, supra, at
597.
Accordingly, I respectfully concur.
OPINION FOOTNOTES
1 Of course, we express no opinion as to the merits of the
referee's findings; that issue is left for the court of common
pleas on remand.
CONCURRENCE FOOTNOTES
2 See Delaware Auth. for Regional
Transit v. . Buehlman (Del. Super. 1979),
409 A. 2d 1045; Foremost-McKesson, Inc. v.
. Doyal (La. App. 1977), 353 So. 2d 360;
Schock v. . Bd. of Review (1965),
89 N.J. Super. 118, 214 A. 2d 40, affirmed (1966), 48 N.J. 121, 223
A. 2d 633; Matter of Guimarales (1985), 109 App.
Div. 2d 1042, 487 N.Y. Supp. 2d 162; Warner Co. v.
. Unemp. Comp. Bd. of Review (1959), 396 Pa. 545,
153 A. 2d 906; Perryman v. .
Bible (Tenn. App. 1983), 653 S.W. 2d 424;
Willard v. .
Emp. Security Dept. (1974), 10 Wash.
App. 437, 517 P. 2d 973; Kisamore v. .
Rutledge (W. Va. 1981), 276 S.E. 2d 821;
Streeter v. . Indus. Comm.
(1955), 269 Wis. 412, 69
N.W. 2d 583. See, also, Midgett v. .
Sackett-Chicago, Inc. (1984), 105 Ill. 2d 143, 473 N.E.2d
1280; Metro. Distrib. v.
. Ill. Dept. of
Labor (1983), 114 Ill. App. 3d 1090, 449 N.E.2d 1000;
Whirlpool Corp. v. . Review Bd.
of Ind. Emp. Security
Div. (Ind. App. 1982), 438 N.E.2d 775; Fruehauf
Corp. v. . Review Bd. of Ind. Emp. Security
Div. (1971), 148 Ind. App. 627, 269 N.E.2d 184;
Central Foam Corp. v. . Barrett
(Iowa 1978), 266 N.W. 2d 33; Waters v. .
State, ex
rel. Maryland Unemp.
Ins. Fund (1959), 220 Md. 337, 152 A. 2d 811.