CASE STUDY
13-1
Unions Representing Public Employees
In Anywhere, United States, an incident that received national attention occurred. In a gated
neighborhood that had experienced recent frequent crimes, a neighborhood watch group was
formed to provide night watch on traffic in the neighborhood. Late one night, two teenagers were
walking through the neighborhood and Citizen A who was on watch that night and armed with a
pistol observed two teenagers and stopped them. Citizen A asked the teenagers what they were
doing in the neighborhood. One teenager who was quite large for his age answered: “It’s a free
country; this is the direct path to my house; I will walk wherever I want to walk.” Citizen A
responded: “This is a private property and you are not welcome here.” The larger teenager reached
in his pocket. Citizen A later told police that he thought the teenager was reaching for a weapon
and he fired his pistol. A neighbor who heard the shot called 911 and an emergency medic unit
was dispatched. Upon arrival, the teenager was declared dead. Needless to say, the incident drew
much attention locally, even national. Group leaders wanted Citizen A to be arrested and put in
jail. The local police began to conduct their investigations. Citizen claimed self-defense and relied
on the state’s law of “Stay Your Ground”.
The local media began writing articles for the newspapers and the television stations began
interviews with interested parties. The incident became the topic of discussion within the
community. Captain Firefighter, a 15-year veteran of the fire department, became interested in the
subject and, during his off-hours, posted the following on his Facebook page:
I and my coworkers could rewrite an entire book on whether our urban youths are victims of
profiling or products of their failed, pathetic, welfare dependent parents.
Once Captain Firefighter posted this message and the message went viral. Many group leaders
called for Captain Firefighter’s termination. After an investigation into the matter, the Fire Chief
concluded that Captain Firefighter had hurt the public’s trust in the fire department and decided to
suspend Caption Firefighter for two weeks. When the mayor heard of the two-week suspension,
he was upset. The mayor thought that a two-week suspension was an insufficient penalty for
Captain Firefighter’s offense. Instead of a suspension, the mayor decided to demote Captain
Firefighter to a regular firefighter, two ranks below captain.
Upon being notified of his demotion, Captain Firefighter immediately filed a grievance Article
IV (b) of the collective bargaining agreement that stated:
The Fire Chief will make all disciplinary decisions.
The Union’s Position:
The Firefighters union argued that Captain Firefighter had the constitutional right to express
himself even though the city administration did not like his message. Captain Firefighter testified
at the hearing: “I am a private citizen and have the same right to freely express myself on any
subject that anyone else does.” Importantly, Captain Firefighter did not violate the city’s social
media policy and he did not identify himself as a city employee or a captain within the fire
department. Moreover, the city is not in the business of regulating employee’s speech on an
employee’s own time, even if others find it offensive.
The union argued that Captain Firefighter had an impeccable record with no discipline for 15
years.
The union also argued that even though the mayor held a higher officer than the fire chief the
collective bargaining agreement authorizes only the fire chief to make disciplinary decisions. In
addition, the union argued that the disciplinary action was excessive and not progressive.
The union claimed that the publicity given by the news media to this case has caused the city
to overreact and the city administration has tried to appease the loudest voices. This matter is
simply a case where internal labor relations principles should prevail and the city has not proven
that disciplinary action should have been taken. Therefore, the grievance should be sustained,
Captain Firefighter should be returned to his caption position, and he should be made whole for
any loss of benefits, pay, or seniority.
The City’s Position:
The city argued that Captain Firefighter had embarrassed the city and had betrayed the public’s
trust with the fire department. The city argued that, unless it took more serious action than a mere
suspension, the citizens of the city would not have confidence in and support the city’s
administration. With all the attention now focused on this matter, the city was forced to take more
dramatic discipline than a mere two-week suspension. The city argued that there is an important
principle here: “the penalty should fit the crime.” The two-week suspension does not fit the offense
committed by Captain Firefighter.
The position of captain is second highest position in the fire department, just below the chief.
Captain Firefighter has now lost the respect of this fellow firefighters and citizens. Allowing
Captain Firefighter to remain in the captain position would essentially make him nonfunctional.
Moreover, the city called it to the attention of the arbitrator that Captain Firefighter had never
recanted his message and never apologized for his actions. Further, the city called to the attention
of the arbitrator that the mayor is ultimately responsible
for running the city, not the fire chief. Therefore, the mayor’s decision should prevail and the
grievance should be denied.
Questions
1. Which party has the burden of proof?
2. Which level of proof should be used by the arbitrator?
3. Is this matter a contract administration case or a disciplinary case? Which party should go first
at the hearing?
4. Should progressive discipline have been used in this matter? Why? Why not?
5. Which side has the best arguments?
6. How should the arbitrator decide? Give your reasons.
CASE STUDY
13-2
Discharge for Off-Duty Conduct
On March 4, 2011, Mr. Charles Lee was removed from the Postal Service. The Notice of Removal
stated:
You pled guilty to Count 1 of the information charging you with a violation of Title 18 USC § 371,
Conspiracy to Commit an Offense or to Defraud the United States.
In an August 9, 2010 plea agreement that you signed, you engaged in a conspiracy to acquire
financing for two quadruplex homes located at 8416 and 8418 Camden Street, Miami, Florida.
You lacked the necessary financial assets to qualify for these loans. The elements of the conspiracy
follow:
You employed the service of Paldo Corporation to purchase the quadruplexes for $100,000.00 each.
You signed contracts in which you agreed to purchase the same properties from Paldo for $169,000.00
each. As part of the conspiracy, false data were provided to an appraiser to justify the inflated sales
prices for the properties, and in reliance of the fraudulent information, a lending institution extended
loans in amounts substantially in excess of the true values of these properties.
In order to qualify for the mortgage financing, you submitted two mortgage loan applications. In
each application, you falsely stated you had made a $19,000.00 down payment to Paldo Corporation.
In reality, you had agreed with Bert Muscat, Realtor, to accept a “rebate” on your down payment in
the amount of $19,000.00 from his commission. This was accomplished through an exchange of checks.
The purported down payment was thus a sham transaction. The net effect of this scheme was that you
were able to purchase this property with “no money down” on your part. You received an additional
$10,000.00 rebate after the closing, thereby reducing the actual purchase price of the properties. You
agreed with the loan broker and others not to disclose any of this rebate scheme to the financial
institution.
In addition, you also failed to disclose on the loan application, two other mortgage loans on which
you were obligated.
Your plea of guilty to Count 1 of the information was accepted by the United States District Court
for the Southern District of Florida on September 21, 2010, and you were adjudged guilty. On
December 3, 2010, U.S. District Judge William S.
Casta sentenced you to serve six months house arrest, two years probation and ordered you to
make restitution in the amount of $136,398.64 to the lending institution you had defrauded.
Section 2635.101(a) of the Standards of Ethical Conduct for Employees of the Executive
Branch states, in pertinent part:
Public service is a public trust. Each employee has a responsibility to the United States Government
and its citizens to place loyalty to the Constitution, laws and ethical principles above private gain.
Section 661.53 of the Employee and Labor Relations Manual states:
Unacceptable Conduct. No employee will engage in criminal, dishonest, notoriously disgraceful or
immoral conduct, or other conduct prejudicial to the Postal Service. Conviction of a violation of any
criminal statute may be grounds for disciplinary action by the Postal Service, in addition to any other
penalty by or pursuant to statute.
Your misconduct of conspiring to defraud the United States is in direct conflict with the basic
obligations of public service. As a postal employee, you hold a position that requires honesty and
trustworthiness.
You have the right to file a grievance within fourteen (14) days of your receipt of this notice
of removal.
On March 16, 2011, a step 1 meeting was held and the following written grievance was filed:
Background: On March 4, 2011, Mr. Lee received written notification that he would be removed from
the Postal Service for violation of the standards of ethical conduct and unacceptable conduct. He pled
guilty to violation of Title 18 U.S.C. 371, Conspiring to Commit an Offense or Defraud the United
States.
Management’s Position: Mr. Lee was removed from the Postal Service for his unacceptable
conduct. He had an obligation as a postal employee to demonstrate honesty and trustworthiness. He
broke this trust when he pled guilty to defrauding the United States.
Union’s Position: Management did not show just cause when it issued a notice of removal to Mr.
Lee. Further, Management currently employ another employee, Scotty Hall, a convicted felon and has
not remove him and other similar-situated employees.
The grievance was denied and was appealed. The step 2 grievance was completed by David
Tover, union steward, who stated:
Violation: Including but not limited to National (Art. & Sect.) 16.1, 16.6, 16.7, 19.
Other Grounds: ELM 661.53, previous arbitration cases.
Facts and Union Contentions: Date, Time & Location: 5 Feb. 94, GMF Miami, Fla.
What Happened: Grievant was issued Notice of Removal dated March 4, 2010. Reason for
removal was cited as: you pled guilty to Count 1 of the information, charging you with a violation of
Title 18, U.S.C. & 371, Conspiracy to Commit an Offense or to Defraud the United States. Grievant
and Union contend that removal is without just cause.
Corrective Action Requested: That Grievant be returned to his job immediately and that he be
made whole in all respects.
Mr. R. H. Gooche, Manager of Distribution Operations (MDO), Tour 3, provided
management’s step 2 answer. He wrote:
On March 16, 2011, a Step 2 meeting was held to discuss the subject grievance.
Union Position: Union Contends:
1. The removal is without just cause.
2. Grievant did not knowingly commit a criminal offense.
3. Grievant was misled and he trusted other people, and therefore unwittingly became involved
in a wrongful act.
4. The Postal Service has not presented any nexus between the grievant’s workplace and the
criminal activity.
5. During the investigative interview, management stated that conviction of a felony is a
removable offense. However there is no provision to automatically remove an employee from
the postal service based simply on the fact that they have been convicted of a felony.
6. The Postal Service infers that being convicted of a criminal offense automatically means that
an employee is no longer loyal and trustworthy and destroys the faith and trust in him by the
U.S. Postal Service and public.
Management responded to each of the union’s contentions:
1. The grievant was removed from the Postal Service for his unacceptable conduct. He had an
obligation as a postal employee to demonstrate honesty and trustworthiness. He broke this
trust when he pled guilty to defrauding the United States.
2. The grievant voluntarily pled guilty. Case No. 93-234-CR-T-15 (A) Plea Agreement Page 6,
Paragraph 5. Second element for the crime: That the defendant willingly became a member of
such conspiracy. Page 9, paragraph 13 states that the grievant will plead guilty because he is
in fact guilty of the charge contained in Count One of the Information.
3. The grievant was part of a conspiracy to defraud financial institutions using the U.S. Mails.
Appraisal on all properties was inflated, which resulted in the subject receiving kickbacks
from the original mortgage company holding the mortgage. The grievant was involved in a
wrongful act for three years. It is reasonable to believe that the grievant had enough
knowledge of the conspiracy to know what he was doing was illegal.
4. The grievant and two others conspired in a scheme to defraud financial institutions using the
U.S. Mails.
5. The grievant conspired in a scheme to defraud financial institutions using the U.S. Mails. By
doing so he violated his obligation as a Postal Employee to demonstrate honesty and
trustworthiness. However he was not automatically removed. An investigation into the
grievant’s conduct was conducted. An investigative interview was held by the grievant’s
supervisor, William Smith, resulting in the grievant being placed in an off-duty status. The
grievant was removed from the Postal Service on March 4, 2011. All actions taken were after
a complete investigation, hardly an automatic removal.
6. The grievant was found guilty of a crime for which a sentence of imprisonment can be
imposed. The grievant pled guilty to Conspiracy to Defraud the United States. A complete
investigation of all facts was conducted; the facts of this case bring into question the loyalty
and trustworthiness of the grievant. The grievant conspired to defraud financial institutions
using the U.S. Mails, compromising the faith and trust in him by the Postal Service.
Based on the facts the grievant was properly removed from the Postal Service.
The grievance is denied.
The grievance was appealed to arbitration.
Issue
Was the removal of Charles Lee for just cause?
If not, what shall be the proper remedy?
Article 16
Relevant Provisions of the Employee and Labor Relations Manual
661.11 This Code of Ethical Conduct is designed to instruct and guide employees entering the
Postal Service, and to remind all employees of the conduct expected and required of them in
performing their official duties and in their general conduct.
661.3 Standards of Conduct
Employees must avoid any action, whether or not specifically prohibited by this Code, which
might result in or create the appearance of:
Using Postal Service office for private gain.
Giving preferential treatment to any person.
Impeding Postal Service efficiency or economy.
Losing complete independence or impartiality.
Making a Postal Service decision outside official channels.
Affecting adversely the confidence of the public in the integrity of the Postal Service.
Unacceptable Conduct. No employee will engage in criminal, dishonest, notoriously
disgraceful or immoral conduct, or other conduct prejudicial to the Postal Service. Conviction of
a violation of any criminal statute may be grounds for disciplinary action by the Postal Service, in
addition to any other penalty by or pursuant to statute.
Positions of the Parties
Management:
Management stated that it is a fact that Mr. Lee pled guilty to “conspiracy to defraud the United
States” and therefore the Postal Service does not have to prove that he was guilty. Management
claimed that Mr. Lee violated that standard of ethical conduct, that the Postal Service and the
public had lost trust in Mr. Lee as a postal employee, and he was not loyal to the Constitution and
the laws of the United States. Therefore, his actions were in violation of several provisions of
the Employee and Labor Relations Manual, and there was an obvious “nexus” between his crime
and his employment.
Management argued that the burden is on the union to prove that there was disparate treatment
of Mr. Lee. There was no disparate treatment of Mr. Lee because Ms. Edwards, the other postal
employee named by the union as a comparison, was not “similarly situated,” was not in the same
department, was not in the bargaining unit, did not plead guilty, and was not found guilty. In the
other comparison case, the union failed in its effort to show disparate treatment by addressing
Scotty Hall’s employment because his case was a hiring decision, not a removal decision.
Moreover, Mr. Hall’s civil rights had been restored prior to the date of his employment by the
Postal Service.
Mr. Lee was afforded the same opportunity as other employees who were judged guilty, that
is, either to resign or to be removed. Mr. Lee chose not to resign; therefore, he was removed from
the Postal Service. Management argued that even though the investigation mentioned that Mr. Lee
was involved in a conspiracy to defraud the financial institution using the U.S. Mails as a reason
for his removal, the union is not justified in using this information to support its claim.
Management explained that it considered the investigation, the plea of guilty, and the
seriousness of the crime. Management conducted its own investigation and gave Mr. Lee an
opportunity to present his side of the case. After its investigation, management found no merit to
Mr. Lee’s explanation and concluded that the removal was justified.
Management argued that the postal employees knew that Mr. Lee had been convicted of a
crime. Management stated: “… our employees knew. It doesn’t take a ‘rocket scientist’ to figure
it out. Everyone was aware.” Management submitted a decision by an appeals referee of the Florida
Department of Labor and Employment Security concerning Mr. Lee’s claim for unemployment
compensation. Management noted the following excerpt:
Consideration was given to the claimant’s contention that he was treated more harshly than other
postal employees who were involved in the same criminal activity. In support of that position, the
claimant provided information that another postal employee was not disciplined. Further information
provided by the claimant including that adjudication was withheld by the court on the other employee.
Since the legal disposition was different in that case, the employer’s failure to discipline with the same
degree of severity is not viewed as disparate treatment. The claimant’s contention is rejected.
At the hearing, the parties agreed that there is a possibility that the claimant will be reinstated in
his job. The notice of removal, however, specifically terminated the claimant from his position and is
viewed as a discharge. The discharge was for misconduct connected with the work and the claimant
was properly disqualified from receiving benefits.
The Postal Service stated that postal employees must be honest and reliable and have good
character. Mr. Lee’s actions were willful and deliberate and were against the interests of the U.S.
government of which the Postal Service is a part. Guidelines for Postal employees are published
in the Employee and Labor Relations Manual to guide employee behavior.
Management responded to the union’s claim that Mr. Lee was an “ideal,” “long-term”
employee with no record of discipline. Management questioned this claim because no evidence
was presented. Mr. Lee was a “good employee” and the decision to remove Mr. Lee was
“difficult.” However, management felt “compelled to take removal action.” His actions were no
different from theft, and Mr. Lee had stolen money from the same institution that employed him.
Management then asked: “If he will steal, how can we trust him? He will have many opportunities
to steal.”
Management objected to the introduction, any consideration, and any comparison to Ms.
Edwards’ employment. The union did not mention any comparison between Mr. Lee and Ms.
Edwards in the processing of Mr. Lee’s grievance. Therefore, the union was estopped from arguing
any comparison at the hearing when disparate treatment had not been mentioned earlier.
Management concluded that a finding that Mr. Lee was removed from the Postal Service for
just cause and that his grievance should be denied.
The Union
The union argued that the Postal Service made its decision to remove Mr. Lee solely on the basis
of his conviction. The union claimed that the Postal Service failed to establish any connection
(nexus) between the crime and Mr. Lee’s ability to perform as a productive employee. The Postal
Service must show a nexus between the crime and the efficiency of the Postal Service and how the
Postal Service was adversely affected, and management failed to do so. The Postal Service claimed
that the public trust was broken, but there was no evidence that anyone in the public knew of Mr.
Lee’s conviction. In fact, there was no evidence that any other employees complained about
working with Mr. Lee.
The union presented numerous arbitration decisions to show that a postal employee may not
be removed from employment based solely on the commitment of a crime. The first arbitrator
wrote: “As many arbitrators have recognized, the Postal Service, among other things, must
establish a nexus between the employees conduct and the employment relationship. It must seek
to determine, for example, whether the occurrences of the off-duty misconduct has destroyed the
basis for continued employment because of adverse impacts on the efficiency, operations, property
or personnel of the Postal Service. To put it another way, the Postal Service must show some harm
to it, to the public, or to fellow employees if the employee continues his employment.”
In a second arbitration case, the grievant was charged with murder and later found guilty of
first degree manslaughter. The grievant shot his wife in the head with a 32-caliber pistol. The
arbitrator wrote in his decision that, “The Grievant’s conviction of first degree manslaughter, his
sentencing and his subsequent placement on probation did not involve an on-the-job action.
Neither did it involve a job related matter with an adverse impact on employee or public relations,
efficiency, etc., or pose a threat to Postal operations, property or personnel.”
In a third case, the grievant was charged with aggravated sexual assault and criminal sexual
conduct. The grievant pled guilty to one count of criminal sexual conduct. The arbitrator
interpreted the CSRA, 5 U.S.C. 2302(b)(10), as prohibiting the termination of a Postal Service
employee for off-duty misconduct absent a showing that such conduct would affect the efficiency
of the service. The Court held that this requirement of a nexus cannot be satisfied by “unsupported
general assertions” or internal regulations prohibiting certain kinds of “immoral” or “disgraceful”
conduct period.” The arbitrator wrote: “The Court read the CSRA as an expression of
congressional intent with respect to termination for off-duty misconduct. Clearly, an arbitrator
operating under a just cause standard in a Postal Service contract should give great weight to such
clearly expressed Congressional intent.”
In the fourth case, the grievant was charged with knowingly receiving child pornography
through the mails, a violation of 18 U.S.C. 2252(a)(2). The grievant was found guilty of knowingly
receiving child pornography through the mails and was sentenced to a ten year suspended sentence,
five-year probation, and a fine of $50. The arbitrator wrote: “Under this contract, employees may
only be discharged or disciplined for just cause. Arbitrators and courts have interpreted this
requirement and similar statutory standards, as prohibiting the discharge of a Postal Service
employee
for off duty, off-premises, misconduct unrelated to the employee’s job. In such cases, the
Postal Service must show that the retention of the employee will have some adverse impact on the
employee relationship. This principle has often been interpreted as requiring a showing of a nexus
between the off-duty misconduct and the ability of the employee to function in his job.”
In a fifth case, the arbitrator wrote: “Ms. Nichole’s conviction on charges associated with her
fraudulent application for housing subsidy funds is unrelated to her employment. Her conduct was
not prejudicial to the Postal Service. (661.53 E&LM). There is no showing of an adverse impact
on the employer or its employees. For these reasons this removal is not for just cause.”
In a sixth case, the arbitrator wrote in his opinion: “The weight of arbitral authority requires
that a nexus be shown before an employee may be discharged for off-duty, off-premises
misconduct.” See, for example, Elkouri and Elkouri, How Arbitration Works, Seventh Edition,
page 15–11 and cases cited.
The union argued that Mr. Lee was an excellent employee for 13 years with the Postal Service.
During these 13 years, Mr. Lee had no discipline issues and continued to perform effectively for
several months even after his conviction. Since the Postal Service was not adversely affected
during this time, the return of Mr. Lee to his former job had not and would not adversely affect the
performance and efficiency of the Postal Service. Management claimed that its trust of Mr. Lee
was broken, but offered no evidence.
The union claimed that the Postal Service failed to take any action against another employee
who was charged with the same crime and who continues to be employed as a postal employee.
Other employees who were involved in the “scheme” were offered to resign or told they would be
fired. However, no evidence was presented.
In regard to the charge and conviction, the union contended that the management incorrectly
used the postal inspector’s memos wherein Management indicated that Mr. Lee had conspired to
“defraud financial institutions using the U.S. Mails.” The fact is Mr. Lee was not charged with
misuse of the U.S. Mails. The Postal Service falsely charged him and this charge contaminated the
cause for removal.
The union addressed two arguments made by management: (1) unemployment compensation
claim and (2) knowledge about continued employment of Ms. Edwards. First, the unemployment
compensation decision referred to “misconduct connected with work,” and the arbitrator is not
bound by this decision. Unemployment compensation is another forum with different rules.
Second, the union did not find out that Ms. Edwards’s employment had been continued even
though she was involved in the same financial scheme as Mr. Lee and that she had been charged
with the same crime until after Mr. Lee had filed an EEO claim, just before the date of the
arbitration hearing. During the processing of this EEO claim, the grievant and the union were made
aware of the fact that Ms. Edwards remained on the payrolls as a postal employee.
The union contended that the burden of proof rests with the Postal Service and it has failed to
prove just cause for the removal of Mr. Lee. As a result, the union requested that Mr. Lee be
returned to his former position, that his back pay and benefits including overtime and interest be
restored, and that all references to this removal be expunged.
Questions
1. What are the rules for discharge for off-duty conduct?
2. Explain the term nexus as used in labor arbitration.
3. Does equal treatment have any bearing on the outcome of this decision?
4. What is the rule concerning use of the employer’s submission of the unemployment
compensation claim in the labor arbitration proceedings?
5. How much weight should be given to Mr. Lee’s job performance after his conviction but
before his termination?
6. Should the arbitrator consider the union’s submission of evidence of the continued
employment of Ms. Edwards and Mr. Hall? Give your reasoning.
7. How much weight should be given to previous arbitrators’ decisions? Explain.
8. What will the arbitrator decide? Why?
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