Waiver of right to grieve an action in "last chance" agreement pertains to penalty, not issue of whether violation occurred

Law Reporter, Oct 2003

Von Roll Isola USA, Inc., v. Int'l Union of Elec. Workers, Local 301, 758 N.Y.S.2d 698 (App. Div. 2003).

A New York appellate court held that an employee who signs a "last chance" agreement precluding the right to grieve termination for violation of a code of conduct does not waive the right to arbitration on the issue of whether a violation has occurred.

Here, Insulating Materials, Inc. (IMI), the predecessor to Von Roll Isola USA, Inc., terminated a member of a labor union. The termination was withdrawn after IMI, the union, and the employee executed a "last chance" agreement, which provided that any further violations of IMPs code of conduct would result in the employee's immediate termination, without any right to grieve the action. IMI subsequently terminated the employee for not following safety rules, and for leaving work early without approval. The union filed a demand for arbitration under the collective bargaining agreement. IMI petitioned the court to stay the arbitration and the trial court granted the stay. The union appealed.

Reversing, the appellate court noted that the last chance agreement does not address the issue of who determines whether a violation of the code of conduct has occurred. In the absence of a person or procedure to determine whether a violation has occurred, the issue cannot simply be ignored, with the employer moving immediately to termination, the court stated.

The court rejected petitioner's argument that the collective bargaining agreement, read with the last chance agreement, precludes arbitration of the issue. Controversies between parties to a collective bargaining agreement fall within the scope of a broad arbitration clause contained in the agreement unless the parties have used language that clearly manifests an intent to exclude particular subject matter from the arbitration, the court stated. In this case, the collective bargaining agreement provided for an initial grievance procedure and, if it were unsuccessful, the matter would move to arbitration. The waiver in the last chance agreement must be read as pertaining only to the penalty-the sole issue addressed in the agreement. Arbitration is still available on the narrow issue of whether the employee violated the code of conduct.

Accordingly, the court reversed.

Union's Counsel

*Thomas E. DeLorenzo, Schenectady, N.Y.