FEDERAL MEDIATION AND CONCILIATION SERVICE

In the Matter of the Arbitration between FMCS No. 06-58212

UNITED FOOD WORKERS LOCAL 825,

Union,

and

WELCH FOODS, INC,

Company.
_____________________________________/

OPINION OF THE ARBITRATOR

December 23, 2006

After a Hearing Held October 24, 2006

At the Comfort Inn & Suites in Paw Paw, Michigan

For the Union: For the Company:

Edward M. Smith James A. Prozzi

Pinsky, Smith, Fayette & Kennedy Jackson Lewis LLP
146 Monroe Center St, NW, Ste 1515 1 PPG Place, 28th Floor
Grand Rapids, MI 49503 Pittsburgh, PA 15222
 I. Employee Benefits Case

The decision in this case turns upon the interpretation and application of

the provisions of a temporary disability benefit plan established in the collective

bargaining agreement between Welch Foods, Inc. (“Employer” or “Company”)

and United Food Workers Local 825 of the Retail, Wholesale and Department

Store Union, UFCW, AFL-CIO-CLC (“Union”). Article XVI of the labor

agreement states:

TEMPORARY DISABILITY BENEFIT

Payments
Minimum Benefit – $100/week effective 7/1/99
Maximum Benefit – Effective 7-1-03 $355 per week.
Effective 7-1-04 $365 per week.
Effective 7-1-05 $375 per week.
Effective 7-1-06 $385 per week.

All employees with six (6) months seniority are automatically enrolled in
this program. The benefit amount is 60% of the employee’s average
weekly earnings for the eight weeks immediately preceding the disability
in which earnings occur subject to the minimums and maximums above.
The maximum duration of benefits is twenty six (26) weeks per
anniversary year. There is a waiting period of seven (7) calendar days for
disability due to illness. For accidents, hospitalization, or outpatient
surgical procedures, which have been historically treated as inpatient
procedures, benefits will begin immediately.

The Company agrees to offer long-term disability coverage through

Standard Insurance Company at the employee-paid rate of $.91 per $100
of weekly wages. Participation in this plan is optional, but requires a
minimum of 25% of the workforce in order to be offered.

Inasmuch as the long-term disability coverage is not at issue, the term “Plan”

2
will refer to short-term benefits, only.

The Plan is a welfare plan within the meaning of the Employee

Retirement Income Security Act of 1974 (“ERISA”), 29 USC §§ 1001 et seq.

Section 3(1) of ERISA provides:

The terms “employee welfare benefit plan” and “welfare plan” mean any
plan, fund, or program which was heretofore or is hereafter established or
maintained by an employer or by an employee organization, or by both,
to the extent that such plan, fund, or program was established or is
maintained for the purpose of providing for its participants or their
beneficiaries, through the purchase of insurance or otherwise, (A) …
benefits in the event of sickness, …, disability, …, or (B) any benefit
described in section 302(c) of the Labor Management Relations Act,
1947 (other than pensions on retirement or death, and insurance to
provide such pensions). 29 USC § 1002(1).

In turn, “disability and sickness insurance” is described in LMRA §

302(c)(5)(A), 29 USC § 186(c)(5)(A).

The employee benefits questions presented may be couched as follows:

(A) May an employer refuse to pay disability benefits to an employee

who applied for and was qualified for those benefits before his
employment was terminated, but whose application was not
approved until after his termination?

(B) Under a collective bargaining agreement containing a just cause

standard for termination of employment, may an employer
terminate an employee for failing to call in or show up for work
during a period when the employee would have been on disability
leave had his disability application been timely approved?

II. Background

Prior to the events at issue, Grievant was a long-term employee (seniority

3
date 12/28/78) at the Company’s food processing facility in Lawton, Michigan.

For the previous 10 years or so, he had had a clean disciplinary record and had

served for several years as the lead warehouseman at the Company’s offsite

warehouse #2, also known as the Honee Bear warehouse because it is leased

from an organization bearing that name. However, beginning about May of

2005, Grievant’s personal and work life began to unravel. The well documented

story seems best presented chronologically.

At all relevant times, Grievant was a member of the Union. The

collective bargaining agreement between the parties was received into evidence

as JX 1 (“CBA”).

III. Chronology

In a memo to Grievant, dated May 26, 2005, the Company explained:

You were suspended pending the investigation of a situation where you

were found dozing at your work area by Jim Tessar. …

The investigation showed you have been without disciplinary actions for
a few years. Since you were dozing and you were upfront with the facts
of the situation, we do not feel termination would be appropriate.

At this time you are being put at a STEP 2 performance level for dozing
at your work area.

Any further rules violations, performance issues, or poor attendance

while serving out the remainder of the STEP 2 disciplinary action, will be
grounds for progressive discipline including termination. …

If there are any personal issues that you would like assistance with, please
utilize the Employee Assistance Program (HelpNet). It is a strictly

4
 confidential program. They are a confidential counseling and referral
service provided free of charge to Welch’s employees/associates and
immediate family members. The phone number for HelpNet is [toll-free
number]; or [local number]. They do consultation over the phone and/or
face-to-face. CX 2.

A second Company memo to Grievant, dated June 23, 2005, recites an

accusation by a CSI security guard that Grievant had been sleeping on the job

on June 8, 2005. In this instance, the Company accepted Grievant’s explanation

that he was just relaxing on his lunch break. The memo closes:

We discussed and agreed upon the importance that the warehouse lead
must remain alert and attentive at all times while on duty. …

Repeated occurrences will result in appropriate disciplinary action. CX 3.

Yet another Company memo to Grievant, dated July 1, 2005, discusses

an alleged confrontation on June 28, 2005, which Grievant had with the CSI

security guard who reported Grievant for sleeping on the job, and for which

Grievant was suspended pending investigation. That memo concludes:

The investigation determined that there is not enough evidence for an

additional step of discipline. [Grievant] was advised that as the Lead in an
outside warehouse facility, he is the primary Welch’s representative and
is expected to act accordingly. CSI performs required food safety and
security checks at our outside warehouse facilities on a weekly basis. All
areas of the warehouse facilities are subject to the inspection. Any
situations which are potentially confrontational should be avoided and a
union representative or a member of supervision should be contacted
immediately. [Grievant] returned to work as the Warehouse Lead on
Thursday June 30.

… Repeated occurrences will result in appropriate disciplinary action

including the possible loss of Lead role up to and including termination.

5
 CX 4.

The Company issued a FINAL WARNING to Grievant in a memo

dated August 24, 2005. The incidents recited are best understood in light of facts

brought out at the arbitration hearing, namely, that Grievant was having an

affair with the wife of a coworker (TR 139). The wife worked at Welch’s Credit

Union, although she was not a Company employee. The memo recites:

[Grievant] – On Friday August 19, 2005, you were involved in off-site

incidents which lead to police involvement and a significant verbal
altercation at Welch’s Warehouse #2. The incident involved the
following actions:

- As the Lead person at the off-site Welch’s Warehouse #2, you left
the facility during peak operating hours at approximately 4:55 PM
to go to the Welch’s Credit Union which closed at 5:00 PM. …

- An off-site incident [with the coworker’s wife] resulted in Lawton

Police involvement at Warehouse #2.

- There was a major verbal altercation between you and another

Welch employee [the coworker, the woman’s husband] over the
incident.

These actions are in direct violation of earlier discussions with you

regarding expected behavior in a Lead role at the off-site warehouses. …

We are offering you reinstatement of your employment without back pay.

Your reinstatement will be effective Thursday, August 25th, 2005,

providing you agree to accept the following mandatory conditions.

- You will be removed from your Lead role at the off-site

Warehouse. …

- You will receive an additional step of discipline which places you

6
 at the Final Warning / DML level. …

- You will not be eligible to work at the off-site warehouse facilities

during the Final Warning / DML level period (24 months).

- You agree to utilize the Company sponsored Employee Assistance

Program (EAP) if there are issues of a personal nature that you
may need assistance with in an effort to improve your work
performance habits.

- Any further rules violations, performance issues, or poor

attendance while serving out the remainder of the DML level
disciplinary action, may be grounds for termination. … CX 5.

On August 29, 2005, the Union filed the first of two grievances (No. 05-

68, JX 2) at issue, the first contesting Grievant’s removal as warehouse lead. In

denying the grievance at the first step, the Company wrote with respect to the

August 19 incident, “According to Police report and witnesses, behavior was

agitated and aggressive.” JX 2.

At the second step, the Company affirmed its denial and wrote further:

On 9/6, [Grievant] provided a doctor excuse from Lakeview Medical for

9/6—9/12. [Grievant] came in on 9/14 and became agitated & cursed
profusely during a conversation between [Grievant], Marcell Bell & Jim
Tessar. On 9/16 we received an offwork notice from Lakeview for
9/14—9/22. Repeated attempts by HR & the Union to contact [Grievant]
were unsuccessful. [Grievant] left message for Bill Wood & Scott
Schiming on 9/23. Bill Wood could not contact [Grievant] on return calls.
JX 2.

A report to the Company from HelpNet Employee Assistance Program

reported that Grievant attended an assessment session on 10/05/05 (CX 8).

Notes from Lake View Community Hospital record that the next day, 10/6/05,

7
“[Grievant] arrived … for repeat observed urine drug screen as previous

specimen came back diluted.” The notes go on to record Grievant’s lack of

cooperation, his protests over observation of the collection process by hospital

personnel, and his ultimate refusal to provide a urine sample. The notes

conclude, “I asked [Grievant] to leave as we don’t have to be exposed & treated

in this manner.”1 CX 7.

The HelpNet report (CX 8) further indicates that Grievant missed his

appointment of 10/18/05 and exhibited a “resistant” attitude. In the Comments

section, the report’s author states:

Due to client cancelling appts, not rescheduling, not following through

with recommendations, having a belligerent attitude with me, and
swearing at me, I am terminating his job jeopardy case. Id.

The termination of Grievant’s employment was announced in a memo to

him from the Company, dated November 21, 2005:

After multiple performance issues and outbursts of anger in the

workplace, you were told to complete a drug screening and Employee
Assistance Program (HelpNet) evaluation for your anger before being
allowed to return to work.

Since this request, you have purposely avoided taking the drug screening
on multiple occasions and avoided going to the EAP evaluation.

When you made your attempts to go to the drug screening and EAP
evaluation you were reported as belligerent and swore at the employees at
both facilities. …

1
At the arbitration hearing, Grievant admitted that he invited a female hospital employee to hold the collection
vial while he produced a urine sample (TR 165-167).

8
 You were given time off when your father passed away on October 19th,
2005.

Since October 19th, 2005, you have failed to appropriately call in to work
to communicate your absences and ultimately have refused to comply
with the work rules for No Call / No Show.

Since you have at least two consecutive days of a No Call / No Show you
are considered to have resigned. …

After looking at all the facts surrounding your work history with Welch’s
and the events which have occurred in recent months, we have no choice
other than to terminate your employment effective Monday, November
7th, 2005. JX 4.

At the arbitration hearing, the Union produced a printout of the

Company’s record of Grievant’s attendance, on which the following entries

(inter alia) appear:

19-Oct Absent Father passed away.

20-Oct Absent Father passed away.
21-Oct Absent Father passed away.
24-Oct Absent No phone calls or doctor slips. FMLA denied.
25-Oct Absent No phone calls or doctor slips. FMLA denied.
26-Oct Absent No phone calls or doctor slips. FMLA denied.
27-Oct Absent No phone calls or doctor slips. FMLA denied.
28-Oct Absent No phone calls or doctor slips. FMLA denied.
31-Oct Absent No phone calls or doctor slips. FMLA denied.
1-Nov Absent No phone calls or doctor slips. FMLA denied.
2- Nov Absent No phone calls or doctor slips. FMLA denied.
3- Nov Absent No phone calls or doctor slips. FMLA denied.
4- Nov Absent No phone calls or doctor slips. FMLA denied.
7- Nov Absent TERM due to No Call No Shows.

UX 6; emphasis in original.

By letter dated November 29, 2005, on stationery bearing Welch’s logo

9
and with signatory, “INNOVATIVE DISABILITY SOLUTIONS, Medical

Case Manager, Directions Program”, Grievant was informed as follows:

We have completed review of information related to your requested

short-term disability leave and your benefit determination is provided.

Your Short Term Disability Absence is: Approved

Your Short-Term Disability Benefits begin on: 09/13/2005
Your Short-Term Disability has been approved
from: 09/06/2005 through
12/04/2005

Your absence related to this disability has been approved as identified

above, and the requirements of your benefit plan have been met for the
specified period. At the conclusion of the approval period, Innovative
Disability Solutions (IDS) will contact you and your provider shortly
before or on that date to obtain an update of your medical condition and
to discuss return to work options.

If you are eligible and have time available, your time off for this absence
will be applied against your federal and /or state family leave.

If you require an extension or additional leave for the same reason, you
will be asked to furnish another completed Attending Physician’s
Statement (APS) if your leave is after the “approved through date”.

To cancel or change any of the approved leave dates, please contact IDS.
We will be able to make the appropriate adjustments. …

UX 1; emphasis in original. IDS is the Plan’s third-party claims administrator or

“TPA” (TR 82).

On December 1, 2005, the Union filed a grievance over Grievant’s firing

(No. 06-22, JX 3), requesting, “Reinstated with All Back Wage (made whole)”,

to which the Company replied by moving the grievance directly to the fourth

10
step specified in CBA Article XII, § 2(d). A fourth-step meeting was held on

December 13, 2006.

The Company communicated its final position regarding grievances Nos.

05-68 and 06-22 in a letter to the Union, dated January 13, 2006, which states in

pertinent part:

As I [Mgr. Corporate Labor Relations, Safety & Security] indicated to

Rose Dietz [Union International Representative], I had to do further
investigation with our third party disability administrator IDS. The
question posed was why [Grievant] was denied disability for a claim he
initiated on 10/03/05 for the period of 9/5/05 to 10/14/05, then later
Approved for disability via a letter dated 11/29/05 for the period of
9/6/05 to 12/4/05.

My investigation revealed that IDS was not aware of [Grievant]’s

disciplinary suspension nor any of his legal problems, nor of the fact that
he was already terminated in November for failing to meet his obligations
under his final Warning, his termination from the EAP Program for non-
compliance and his failure to contact us or show up for work. This was
clearly due to a communications breakdown between our HR Department
and IDS and any approval for disability leave while he was suspended
and terminated is clearly an error. …

Given the fact pattern associated with [Grievant]’s problems we must

respectfully deny this grievance at the fourth step. CX 9.

An arbitration hearing was held at a neutral location in Paw Paw,2

2
From http://www.pawpaw.kysu.edu/ppf/about.htm:

The pawpaw is a true American native. The fossil record indicates that the pawpaw's forebears established
themselves in North America millions of years before the arrival of humans. The Native Americans were
great lovers of the pawpaw and introduced it to European explorers: the DeSoto expedition of 1540
reported encountering tribes that cultivated the fruit. In 1736, Quaker botanists John Bartram and Peter
Collinson arranged for specimens to be sent to England. European settlers from the East Coast westward to
Michigan, Oklahoma, and Louisiana named towns, creeks, and islands after the pawpaw. John James
Audubon painted the yellow-billed cuckoo on the branches of a pawpaw tree. Yet, the only way most
Americans know of pawpaws today is from the traditional folk song, "'Way Down Yonder in the Paw Paw

11
Michigan, on October 24, 2006. The parties have briefed their respective

positions, and the matter is before the arbitrator for decision. Relevant portions

of the CBA will be referenced and quoted as needed.

IV. Grievance No. 05-68 Over Loss Of Lead Position

In its brief @ 15, the Union concedes with respect to the first grievance:

The union withdraws its request to reinstate [Grievant] to his lead person
position. The question is within the discretion of the Employer.

This is just as well, as the arbitrator would be compelled to deny the grievance.

However, the arbitrator will return to the events surrounding the first grievance,

in fashioning a remedy with respect to the second.

V. Grievance No. 06-22 Over Termination Of Employment

V.A. The Rules Of The Game

Had the Company fired Grievant for his behavior up through his outburst

at his supervisor on September 14, this case would be open and shut. However,

having forgone the opportunity to discharge him for really good cause, the

Company must live with the consequences of subsequent events. As the

arbitrator explained in Bard Mfg Co, 91 LA 193, 200; 15 LAIS 4277 (1988):

The irony of the Company’s position is that it easily could have avoided
becoming embroiled in this controversy over Grievant’s moral character
simply by waiting until Grievant was thrown into jail and then firing him
for unexcused absences, under express authority of other provisions of
the Work Rules. … Instead, the Company elected to play the game of
Patch." Cf. Bad Axe, Pace Local 6-0628 and Tower Automotive, Inc, 06-2 ARB ¶ 3546, 34 LAIS 90 (Arb
2006), fn 1.

12
 moralizing over Grievant’s off duty misconduct and hence must be held
to the rules of that game. …

In the case before the arbitrator, ERISA intruded, and its rules must be followed.

V.B. The Specific Reason Why Grievant Was Fired

Although the Company’s termination notice to Grievant (JX 4) recites

various misconduct dating back to May or June of 2005, the specific reason for

his discharge was his alleged violation of CBA Article III, § 3.e:

Any of the following events will terminate the seniority of an employee:

… If the employee is absent for two (2) consecutive working days
without notifying the Company, unless such failure to notify is beyond
the control of the employee for reasons acceptable to the Company.

This contractual provision is embodied in the work rules (CX 1):

Table of Offenses – Violations of any of the following will result in

disciplinary action up to and including termination of employment:
… No Call/No Show for two (2) consecutive days—termination of
employment Article III Section 3. (Emphasis in original.)

This ultimate offense is addressed in the termination notice as follows:

Since you have at least two consecutive days of a No Call / No Show you
are considered to have resigned. JX 4.

The fact that Grievant was terminated for No Call/No Show is

documented in the Company’s own records which it routinely transmits to the

Union:

7- Nov Absent TERM due to No Call No Shows.

UX 6; emphasis in original.

The precise reason for Grievant’s termination is germane to his rights under

13
ERISA and to the Company’s just cause defense.

V.C. Grievant’s ERISA Rights

In Smith v ABS Industries, Inc, 890 F2d 841, 845-846; 11 Employee

Benefits Cas (BNA) 2242, 2247-2248 (6th Cir 1989), the Sixth Circuit set

forth the principles to be followed in interpreting benefit rights under a

collective bargaining agreement:

… In International Union, United Automobile, Aerospace and

Agricultural Implement Workers of America v. Yard-Man, Inc., 716
F.2d 1476 (6th Cir. 1983), cert. denied, 465 U.S. 1007, 104 S. Ct.
1002, 79 L. Ed. 2d 234 (1984), this court discussed some of the
factors to be taken into account when attempting to discern the intent
of the parties in the collective bargaining context:

Many of the basic principles of contractual interpretation are

fully appropriate for discerning the parties' intent in collective
bargaining agreements. For example, the court should first look
to the explicit language of the collective bargaining agreement
for clear manifestations of intent. [Kellogg Co. v. NLRB, 457
F.2d 519, 524 (6th Cir. 1972)]. The intended meaning of even
the most explicit language can, of course, only be understood in
light of the context which gave rise to its inclusion. See Randall
v. Lodge No. 1076, International Ass'n of Machinists and
Aerospace Workers, AFL-CIO, 648 F.2d 462 (7th Cir. 1981);
Forrest Industries, Inc. v. International Woodworkers of
America, 381 F.2d 144, 146 (9th Cir. 1967); United
Steelworkers of America v. American Manufacturing Co., 363
U.S. 564, 570, 80 S. Ct. 1343, 4 L. Ed. 2d 1403 (1960)
(Brennan, J., concurring). The court should also interpret each
provision in question as part of the integrated whole. If
possible, each provision should be construed consistently with
the entire document and the relative positions and purposes of
the parties. Kellogg Co., supra, 457 F.2d at 524. See Randall,
supra, 684 F.2d at 466; Florida Canada Corp. v. Union
Carbide & Carbon Corp., 280 F.2d 193 (6th Cir. 1960). As in

14
 all contracts, the collective bargaining agreement's terms must
be construed so as to render none nugatory and avoid illusory
promises. See Cordovan Associates, Inc. v. Dayton Rubber
Company, 290 F.2d 858, 861 (6th Cir. 1961). Where
ambiguities exist, the court may look to other words and
phrases in the collective bargaining agreement for guidance.
Variations in language used in other durational provisions of
the agreement may, for example, provide inferences of intent
useful in clarifying a provision whose intended duration is
ambiguous. [See Upholsterers' International Union v. American
Pad & Textile Co., 372 F.2d 427, 428 (6th Cir. 1967)]; Kellogg
Co., supra, 457 F.2d at 524. Finally, the court should review the
interpretation ultimately derived from its examination of the
language, context and other indicia of intent for consistency
with federal labor policy. This is not to say that the collective
bargaining agreement should be construed to affirmatively
promote any particular policy but rather that the interpretation
rendered not denigrate or contradict basic principles of federal
labor law.

Yard-Man, 716 F.2d at 1479-80. …

Under the foregoing guidelines, Grievant is entitled to temporary

disability benefits under the Plan, the language of which is quite clear: “All

employees with six (6) months seniority are automatically enrolled in this

program.” It is undisputed and indisputable that Grievant had six months’

seniority. In other provisions of the CBA, benefits are restricted to various

classes of employees; e.g., Art XIV, §§ 1.a, 2 & 3 (holiday pay restricted to

“regular employees”), Art XIX, § a (life insurance restricted to “eligible regular

active employees”), Article XX, § c (retirement option restricted to “Qualified

employees hired prior to 7-01-03”). “All employees with six (6) months

15
seniority” in no way excludes an employee who has disciplinary problems, who

has been suspended, or who has been arrested.

The Company’s rationale for not paying Grievant’s benefits under the

Plan was articulated by its manager of corporate labor relations, safety &

security (“Manager”), in CX 9 and at the arbitration hearing. It was the

Manager, whose office is in Pennsylvania, who made the final decision to

terminate Grievant (TR 76-77). As quoted in Section III, supra, in the

Manager’s letter of January 13, 2006 (CX 9), he interjected Grievant’s many

personal, work and legal problems, concluding that “any approval for disability

leave while he was suspended and terminated is clearly an error.”

The Manager’s assertion that Grievant was suspended following his

September 14 altercation with his supervisor (TR 74, 80-81) is belied by the

Company’s own records (TR 108-110). The only suspensions listed in UX 6 are

May 24-25 for sleeping on the job and August 19-26. Although no reason is

given for the August suspension, it was, of course, for the tawdry incident

involving the coworker’s wife (CX 5). Grievant was not in fact suspended on or

after September 14, 2005, and the arbitrator so finds. Even had Grievant been

suspended, the language of the CBA would not preclude him from applying for

and receiving disability benefits under the Plan, because he still would have

been an “employee[] with six (6) months seniority”.

16
 The reasons for the delay in processing Grievant’s disability claim were

never made clear. The TPA handles both Family and Medical Leave Act

(“FMLA”) and temporary disability applications (TR 82). UX 6 reflects that

Grievant’s request for FMLA leave initially was denied for the period October

24-November 4, yet the TPA’s belated letter of November 29 stated, “If you are

eligible and have time available, your time off for this absence will be applied

against your federal and/or state family leave.” Some testimony suggests that

Grievant’s initial application for Plan benefits was denied (TR 147), but the

November 29 letter makes no mention of any earlier determination, and neither

party produced a copy of one (TR 83).

Based upon the Manager’s testimony (TR 74-75) and the fact that FMLA

leave and temporary disability benefits under the Plan are separate and distinct

rights,3 the arbitrator infers that Grievant made two applications, one for FMLA

leave and the other for Plan benefits. Pending a determination of these

applications, the Company delayed firing him. When his request for FMLA

leave was denied, the Company acted precipitously. Only later did the parties

learn that Grievant’s application for Plan benefits had been approved.

At the hearing, the Union produced four doctor’s statements on Lakeview

Medical Center forms, concerning Grievant. The statements cover the period
3
For example, FMLA leave is a right founded upon a federal statute, PL 103-3, and covers situations such as the
adoption or illness of a child (29 CFR Part 825), whereas Plan benefits are conferred by the CBA and cover only
an employee’s disability. Entitlement to one does not mean entitlement to the other.

17
9/14/05—12/4/05, approximately the period specified in the TPA’s approval

letter of November 29, 2005 (UX 1), namely 9/6/05—12/4/05, with payments

beginning 9/13:

UX 5:

9/15/05
Please Excuse The Above Named Patient From Work… The Following
Dates: Wed. 9/14/05 Through Thurs. 9/22/05
The Above Named Patient Was Seen And Treated In My Office Today.
/s/ M.D.

UX 4:

9/22/05
[Grievant] needs off work until 10/6/05 may return Oct 7/05
/s/ M.D.

UX 3:

10/3/05
[Grievant] needs off work until 10/15/05
/s/ M.D.

UX 2:

11/18/05
Please Excuse The Above Named Patient From Work… The Following
Dates: 10/15/05 Through Sun 12/4/05
Return To Work… Mon 12/5/05
/s/ M.D.

Characteristically, none of the doctors’ signatures is legible.

The Union steward testified that there was some problem in getting the

doctors’ statements to the TPA (TR 104-108), as the Company was missing

18
some. He stated that he turned them in to the Company. The supervisor testified

that he was aware of some of them, which were supposed to be handled by the

human resource department (TR 68). But the Manager (TR 81-82) and Grievant

himself (TR 147-148) testified that they should have been sent directly to the

TPA. Misunderstandings as to the proper procedures may have led to the delay

in processing Grievant’s application for Plan benefits. In any event, the TPA

apparently received the required information and approved Grievant’s

application.

The arbitrator is unable to accept the Company’s argument that Grievant

is not entitled to Plan benefits because he was terminated before the TPA made

a decision on his claim (Company brief @ 8-9). Under ERISA, a plan must be

administered “in accordance with the documents and instruments governing the

plan …” Curtiss-Wright Corp v Schoonejongen, 514 US 73, 82; 18 Employee

Benefits Cas (BNA) 2841, 2845 (1995), citing 29 USC §1104(a)(1)(D). No

provision in the Plan authorizes nonpayment merely because a person is no

longer an employee at the time his application is approved. Indeed, under a

disability plan, a seriously ill participant could die before his claim is processed

or even filed. If such reasoning were carried to extreme, then no participant

could ever receive a death benefit, because he would have to an employee to

qualify for coverage but once he died, he no longer would be an employee.

19
 According to the Company’s brief @ 8, Grievant applied for benefits in

September of 2005, while he was off work. His absence from work is

corroborated by UX 6, which shows him off on September 3. The arbitrator

concludes that the Manager’s letter of January 13, 2006 (CX 9) contains a

typographical error and should read 09/03/05 instead of 10/03/05, as the date of

Grievant’s application. That would comport better with the disability date of

09/06/2005 recited in the TPA’s approval (UX 1). It is undisputed that Grievant

was an employee with six months’ seniority at the time.

The Manager testified as follows about the TPA’s role in determining an

employee’s eligibility for Plan benefits:

Q: And what they [i.e., IDS, the TPA] do is they handle FLMA, short-
term disabilities, those types of issues. And you pretty much leave it up to
them … to do their thing, because they are experts at it; is that a fair
statement?
A: Well, they have medical professionals. You know, it was
historically an issue between us and the union, you know, who are we to
question somebody's disability or whether they are off. So we subbed that
out. …
But, essentially, we handle … writing the checks for short-term
disability based upon what they tell us. You know, we verify this is an
authorized disability and then we write the checks.

Q: So when they issue a letter indicating that the person is out on short-
term disability, you'll accept that.

A: Generally. Generally. Not always. Generally.

Q: But you give it to them because of their expertise. You don't question
their judgment on whether the person is eligible for short-term disability,

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 do you?

A: We may question whether they have all the facts that they need. But,
generally, no, not their medical expertise.

Q: You didn't object to this one, did you?

A: No. We -- no need to object to it. He wasn't granted it. He wasn't

granted it until after he was terminated. TR 82-83.

At the hearing, the Company offered no evidence that Grievant was not

disabled and makes no argument to that effect in its brief. As a result, the

arbitrator finds that the Company was not justified in failing to pay Grievant his

benefits under the Plan. Payment is required to make him whole, as requested in

his grievance (JX 3).

The Company’s attempt to impose additional conditions upon Grievant’s

receipt of benefits is at best an attempt to “‘informally’ amend [the Plan] one

participant at a time,” Inter-Modal Rail Employees Ass’n v Atchison, Topeka

and Santa Fe Railway Co, 520 US 510, 516; 20 Employee Benefits Cas (BNA)

2825, 2828 (1997), in contravention of the CBA’s restrictive amendment clause:

… The Contract alone embodies the agreement between the parties on all
bargainable issues and is the sole source of arbitrable claims. This
contract may be amended only by written agreement of both parties. Art
XII, § 3.c.

Curtiss-Wright Corp, supra.

In a worst case scenario, especially when combined with attempts to

deprive Grievant of benefits on account of his personal, work and legal

21
problems, the Company’s actions might be construed as serious interference

with his ERISA rights. Inter-Modal Rail Employees Ass’n, supra; Schweitzer v

Teamsters Local 100, 413 F3d 533; 35 Employee Benefits Cas (BNA) 1161 (6th

Cir 2005).

V.D. The Issue Of Termination For Just Cause

Merely because Grievant was improperly denied Plan benefits does not,

of course, mean that he was unjustly terminated; that is yet another issue, albeit

a related one. A quick review of the pertinent dates illustrates the decision

facing the arbitrator:

9/3/05 Grievant applies for Plan benefits, application for FMLA leave
presumably is filed at same time
10/24/05—11/4/05 FMLA leave denied
11/21/05 Grievant terminated effective 11/7/05
11/29/05 Grievant’s application for Plan benefits approved for period
9/6/05—12/4/05

It is clear from the Plan language and the TPA’s approval letter that Grievant

was determined to be ill (as opposed to injured), as his weekly payments were

not to begin until a week after the onset of his illness.

The Manager addressed this sequence of events as follows:

Q: Okay. Larry, can you explain one question, which is the gap in time
between November 1st and November 21st, the three weeks or so
between, you know, the last thing from the EAP provider and the
determination to terminate on November 21st. Can you explain that?

A: My mind is a little foggy on it, but around -- around that time, I got a
call from Scott with regard to what was going on.

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 Q: "Scott" being whom, Larry?

A: Scott Schiming, who was the HR assistant, who was filling --

actually, filling in for the HR manager, who had left the company the
beginning of September. And I was aware that there were issues with
[Grievant] and his compliance with his direction to go for a urine test
and, also, to register with EAP for evaluation. The reason for the gap is
around about that time, it was brought to my attention from Scott that he -
- he was also trying to get on sick leave. And that's the gap. He was
attempting to get on sick leave at the same time that he was supposed to
be giving his urine sample and enrolling with EAP prior to returning to
work. So, essentially, he was on suspension.

Q: The reason for the determination, then, at the end of November -- was
there the end of something or the end of any process or what?

A: Well, from a corporate standpoint, we're sensitive about terminating

somebody when they are trying to apply for sick leave or FMLA or
whatever. So I instructed Scott, let the thing play out and we'll deal with
him when he's back. And, apparently, we were notified that his attempts
to get sick leave, you know, weren't -- weren't approved. And so we
moved on it. TR 73-74.

It appears to the arbitrator that the Company somehow failed to realize

that Grievant had filed two, independent applications, either or both of which

could have entitled him to sick leave, an oversight which possibly resulted from

the HR director’s recent departure. As soon as one of the applications was

denied—the one for FMLA leave—the Company acted precipitously to

terminate Grievant, without awaiting the outcome of his second application.

When it was approved, the Company refused to acknowledge its mistake.

But for the Company’s haste in terminating Grievant before the TPA had

acted on his application for Plan benefits, Grievant would be deemed to have

23
been on disability leave from September 6, 2005, through December 4, 2005, a

90-day period which encompasses all of the days for which he was charged with

failing to call in (10/3—10/7, 10/10—10/14, 10/17—10/18), or failing to call in

or produce a doctor slip (10/24—10/28, 10/31—11/4), the actual date of his

firing (11/21), and its effective date (11/7). Under these facts, the arbitrator

cannot agree that Grievant was terminated for just cause. Therefore Grievance

No. 06-22 is sustained.

VI. The Remedy

VI.A. Generalities

Despite sustaining the grievance over job loss, the arbitrator has serious

doubts about Grievant’s willingness to do the things required to integrate

himself back into the Company’s workforce. Indeed, Grievant may prefer

simply to pocket his Plan benefits and find employment elsewhere, as he is free

to do. But if he elects to return to work for the Company, he must clearly

understand that it will be on the terms and conditions set down by the Company

in its FINAL WARNING of August 24, 2005 (CX 5), and in its Work

Requirement of September 29, 2005 (CX 6).

The CBA provides for flexible remedies:

In the event of a discharge of an employee, the arbitrator shall have the

power in accordance with the circumstances to direct reinstatement or no
reinstatement with or without back pay, in whole or in part. If an award
of back pay is made, any sum received by the dischargee from other

24
 employment or from unemployment shall be deducted from the award.

For the reasons explained below, there will be no award of back pay.

Grievant testified that he was under a great deal of stress during the

summer and fall of 2005 (TR 137-149), so much so that he needed Xanax to

relax him (TR 146). Among the factors contributing to his stress were his illicit

relationship with his coworker’s wife, her filing of criminal charges against

him,4 his father dying of cancer, and a drug arrest. At the arbitration hearing,

Grievant was still visibly upset over his father’s death, remarking, “I mean,

that’s never gonna be behind me, but I’m dealing with it a lot better.” TR 149.

While sympathetic with Grievant’s loss of his father, the arbitrator—

after hearing all of the testimony, reviewing all of the exhibits, and reflecting

upon all of the evidence—is convinced that the primary cause of Grievant’s

stress was the improper relationship with his coworker’s wife. He brought most

of his troubles upon himself. Carrying on with a coworker’s wife is a time-

tested recipe for disaster in the workplace. Grievant has no one but himself to

blame.

Grievant, however, does not agree; to the contrary, he blames her (TR

152-153). In a meeting with his supervisor on September 14, 2005, Grievant

insisted that his paramour was harassing him with cell phone calls, and
4
Alleging that Grievant gave her date rape drugs, stole her panties, took her cell phone, and stalked and harassed
her. TR 137-140. Although Grievant was arrested on her complaint, she later dropped the charges, because—
according to Grievant—“I had pictures of her at my house and stuff.” TR 140-141.

25
presented cell phone records in an effort to document her fault. When the

supervisor was unable to buy the story that some little girl with a cell phone was

harassing this burly, motorcycle-riding warehouseman, Grievant unleashed a

fusillade of profanity (TR 153-159), even threatening to sue his supervisor (TR

68). The arbitrator doesn’t buy it either.5 Because of Grievant’s culpability, the

arbitrator declines to award back pay.

VI.B. Specifics

VI.B.1. If Grievant Elects To Return To The Company

If Grievant decides to attempt to redeem himself with the Company, he

must begin by accepting the terms of the Company’s FINAL WARNING and

Work Requirement. He, or his counsel acting on his behalf, should indicate his

willingness to do so by writing a letter to the Manager and Company counsel,

postmarked no later than January 15, 2007. The dates in the WARNING and

the Requirement will, of course, need to be adjusted. The 24-month DML

period is to run from the date Grievant returns to work. Company counsel

should prepare revised documents for Grievant to sign. Grievant then must

follow any and all directives which the Company gives him to carry out the

terms of those revised documents.

Grievant also must provide the TPA with an update on his medical

5
Grievant would have the lyrics go, “Some people claim there’s a woman to blame, and they’re right—it couldn’t
be my fault.” Apologies to Jimmy Buffett.

26
condition, as specified in the TPA’s approval letter, and obtain medical

clearance to return to work. If there is any disagreement over Grievant’s fitness

to return, it should be resolved under the procedures described in CBA Article

V, § 1 (Grievant’s attending physician), and Article VI, §§ 2.a (Company’s

doctor) & b (third doctor).

As to benefits and seniority, Grievant is to be treated as if he were on

disability leave 9/6/05—12/4/05 and then on authorized leave from 12/5/05

until he returns to work, or fails to qualify for return to work.

VI.B.2. If Grievant Elects Not To Return To The Company

If Grievant decides that he does not wish to return under the strictures

imposed, he should so inform the Company—politely. As to benefits and

seniority under those circumstances, Grievant is to be treated as if he were on

disability leave 9/6/05—12/4/05 and then resigned effective December 5, 2005.

VII. The Award

For all the foregoing reasons, Grievance No. 05-68 is DENIED, and

Grievance No. 06-22 is SUSTAINED IN PART AND DENIED IN PART.

Grievant is awarded benefits under the temporary disability plan, as specified in

IDS’ approval letter of November 29, 2005. The terms and conditions for

Grievant’s reinstatement are set forth in the opinion above. Because of the

complexity of the factual situation and issues which may arise over

27
implementation of this award, the arbitrator retains jurisdiction until the parties

jointly notify him that all issues have been resolved.

Dated December 23, 2006 _____________________________

E. Frank Cornelius, Arbitrator

28