FEDERAL MEDIATION AND CONCILIATION SERVICE

In the Matter of the Arbitration between FMCS No. 02-15935

IBT LOCAL NO. 391,

Union,

and

JOHNSON CONTROLS, INC.,

Company.
_______________________________/

OPINION OF THE ARBITRATOR

May 2, 2003

After a Hearing Held March 20, 2003

In Greensboro, North Carolina

For the Union: For the Company:

George Phillips Allan P. Clark

Business Agent and Organizer Foley & Lardner
Teamsters Local 391 Attorneys at Law
PO Box 35405 PO Box 240
Greensboro, NC 27425 Jacksonville, FL 32201-0240
 Introduction

This is a case of alleged fraud in obtaining unemployment benefits

from the North Carolina Employment Security Commission (“NCESC” or

“Agency”). Following an incident on June 25, 2001, in which Grievant was

accused of clocking in late and leaving early, he was terminated by his

employer, Johnson Controls, Inc. (“Company”). Grievant was employed at

the Company’s battery manufacturing facility in Kernersville, North

Carolina, often referred to as the Winston-Salem Plant because of its

proximity to that city. He was a member of Teamsters Local 391 (“Union”).

On July 3, 2001, Grievant filed for unemployment benefits.

After a third-step grievance meeting about Grievant’s termination, he

was reinstated on July 11, 2001, with 6 days’ back pay, under the terms of a

letter agreement (CX 9). Despite his return to work, he continued to file for

and receive unemployment benefits. He filed for the benefit weeks ending

7/7/01, 7/14/01, 7/21/01, 7/28/01, 8/4/01, and 8/11/01, and received benefits

in the amount of $375 per week, totaling $1,875 (CX 10, CX 14, CX 16).

For the payroll periods ending 7/1/01, 7/8/01, 7/15/01, 7/22/01, 7/29/01,

8/5/01, and 8/12/01, the Company paid him $513; $155; $1,027; $1,117;

$1,078; $758; and $1,059, respectively (CX 12, CX 13). The payment of

$1,027 for the payroll period ending 7/15/01 represented back pay per the

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agreement of July 11 (TR @ 72).

On September 10, 2001, Philip Gilbert, the Company’s manager of

human resources, received a call from the Company’s third-party

unemployment claims administrator in Washington, DC, informing him of a

hearing on the Company’s appeal of Grievant’s unemployment benefit claim

(TR @ 44-45, “you all’s appeal to it”). This was the first time that

management at the Winston-Salem Plant became aware that Grievant had

filed for unemployment benefits. The circumstances surrounding this appeal

are inexplicably vague; indeed, according to the HR manager, even the third-

party administrator knew nothing about the appeal (TR @ 45, “I have no

idea”).

On September 19, 2001, a telephonic hearing was held by an NCESC

hearing officer. Because Grievant could not be reached, only the HR

manager and the hearing officer participated. The HR manager informed the

hearing officer that Grievant was employed by the Company and asked the

officer for guidance. The officer responded that the Company should report

the matter to NCESC’s fraud division. No evidence of the officer’s

resolution of the appeal was presented at the arbitration hearing.

The Company did not react immediately, because it needed time to

conduct an investigation. Grievant was told not to report to work on Sunday

3
evening, September 30, 2001, but to come in for a meeting on October 2,

2001. The meeting was attended by Grievant, the shop steward, Grievant’s

department manager, and the HR manager. When confronted with

information obtained from the NCESC and from the Company’s payroll

department, Grievant responded in a manner unsatisfactory to the Company

(CX 15). He was suspended pending investigation. The Company put

information about Grievant’s unemployment benefits and earnings in a letter

to the Union, dated October 4, 2001 (CX 16).

Another meeting was held on October 5, 2001, again attended by

Grievant and the shop steward. This time Grievant was terminated with the

explanation:

Mr. [DT] was making false unemployment claims and received max
unemployment compensation pay during the time he was gainfully
employed w / Johnson Controls, Inc. Winston-Salem Plant. CX 17.

The parties stipulated that a grievance, # 773, was filed, but the

paperwork was lost. A third-step meeting was held on October 10, 2001, at

which Grievant was well represented by the Union. According to notes taken

by the HR manager (CX 18), the Union urged that Grievant be allowed to

repay NCESC for any overpayment and be reinstated to his job. “The Union

would be flexible as to guidelines of reinstatement.” The Company denied

the grievance by letter dated October 19, 2001 (JX 3).

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 In a letter dated October 23, 2001 (JX 4), the Union demanded

arbitration. Contract negotiations intervened and lasted some 4 months (TR

@ 84). In a letter dated September 9, 2002 (CX 19), the Union requested a

panel of arbitrators from the Federal Mediation and Conciliation Service.

The HR manager drafted, but did not send, a letter to the Union, dated

September 26, 2002 (CX 20), in which he wrote, “Company considers

Grievance # 773 to be Untimely under Section 6.06 of CBA.” The parties

discussed timeliness in a telephone conversation on October 2, 2002.

An arbitration hearing on the merits was held on March 20, 2003, at a

neutral site in Greensboro, North Carolina. The Company again raised the

issue of timeliness (TR @ 6), to which the Union responded (TR @ 7). The

parties have briefed the issues, the first of which to be decided is the

threshold one of procedural arbitrability.

The Threshold Issue Of Arbitrability

Section 6.06 of the collective bargaining agreement between these

parties (JX 1 or “CBA”) provides in pertinent part:

The Employer and the Union agree that arbitration cases shall be
presented to the arbitrator in chronological order unless changed by
mutual consent. The case must be opened within six months of date
following the third step of the grievance procedure.

The CBA does not explain precisely what steps must be taken to open a

case.

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 There is no debate that far more than 6 months elapsed between the

time of the third-step meeting and the Company’s written denial, and the

Union’s request for an FMCS panel. The Company claims that it expressed

to the Union a desire not to continue discussions about this matter. The

Union claims that the parties have a practice of continuing discussions

beyond the 6-month period specified in the CBA, so long as a timely

demand for arbitration is made under § 6.04 (“within ten (10) working days

after the receipt of the written answer … in Step 3”).

At the arbitration hearing, the testimony as to a fixed deadline was not

very emphatic. For example, the HR manager testified as follows:

It was sometime in October/November [2002] I did mention to him

about the timeliness and I was, you know, surprised that this had been
this long. I kind of understand due to the fact we had negotiations. But
we hadn’t heard anything. Mr. Phillips [the Union’s representative in
arbitration] is right, we do talk about cases going forward. But this
one we had not talked about for – since we had gave him the third-
step answer and he had said arbitration. And we told him we were –
we were done with it. TR @ 86.

And I just talked to him about the timeliness of moving grievances

forward and that we thought this – this grievant was a moot point
because we had not talked about it. And, you know, Mr. Phillips,
understand, response was we’ve both been busy with negotiations and
all that. We wished we could move forward quicker, but this is where
we’re at. And I said I understand. TR @ 88.

See also TR @ 116-119.

A deadline for arbitration, like any other provision of a collective

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bargaining agreement, must be enforced when clearly applicable. Elkouri &

Elkouri, How Arbitration Works (ABA/BNA 5th ed 1997) @ 276-277.

However, circumstances may create flexibility, especially where, as here, the

parties have a history of continuing discussions beyond deadlines. While

contract negotiations may not toll time limits in a collective bargaining

agreement, their pendency may explain a lack of timeliness. When the issue

of timeliness arose, the Company did not take a strong stand.

“It has been held that doubts as to the interpretation of contractual

time limits or as to whether they have been met should be resolved against

forfeiture of the right to process the grievance.” Elkouri & Elkouri, supra @

277; footnote omitted. This arbitrator has been quoted as opining:

If at all possible, disputes should be resolved on the merits and

procedural violations should be addressed separately, in order to
maintain public confidence and protect the integrity of the dispute
resolution process. Employee Benefits Law (ABA/BNA 1991) @ 759,
quoting Oolite Industries, Inc and Central States, Southeast and
Southwest Areas Pension Fund, 8 EBC 2009, 2026-2027 (Cornelius
Arb 1987).

Based upon such considerations, the arbitrator concludes that the

instant dispute is arbitrable. If the Company wishes to halt the practice of

continuing discussions beyond deadlines generally or in particular cases, all

it has to do is to inform the Union in writing, as soon as it receives a demand

for arbitration, that it will insist upon strict compliance with the time limits

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in the CBA. Elkouri & Elkouri, supra @ 277-278.

The Company’s Position

In CX 17, the Company cited 3 violations of Plant Rules (JX 2) as

giving it just cause to terminate Grievant:

Mr. [DT] is being terminated for violation of a Plant “C” Rule #2

“Stealing” Plant “C” Rule #3 “Falsifying records or intentionally
giving false information to anyone whose duty it is to make records.”
Mr. Timmon’s also violated a Plant Rule #1 “Other actions or
offenses detrimental to the welfare of the Company or anyone
associated with the Company.”

The most serious offenses are listed in the “C” Rules. Violation of a “C”

Rule may result in immediate discharge.

The Company alleges that Grievant committed fraud in continuing to

draw unemployment benefits after he returned to work. The Company feels

that it was duped into paying Grievant twice, once in the form of wages and

a second time in the form of unemployment benefits charged to its account

with the NCESC. It offers the Agency’s Claimant Information and

Identification Booklet (CX 11 or “NCESC Booklet”) as evidence of

Grievant’s wrongdoing. The Company argues that it suffered a negative

financial impact when Grievant’s unemployment benefits were charged to its

account. The Company insists that he is guilty of stealing and that it

accordingly had just cause to fire him.

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 The Union’s Position

The Union takes the position that the underlying dispute is between

Grievant and the NCESC, not Grievant and the Company. It argues that the

Company has no right to discipline him for events occurring outside the

workplace. The Plant Rules are just that—rules governing conduct on the

job. The Union emphasizes that the NCESC has not ruled that Grievant

committed any kind of fraud and has not even requested any money back

from him. It requests that Grievant be reinstated and made whole.

Initial Observations

At the outset of the discussion, it is worth noting that two of the

Company’s underlying assumptions about this case are simply incorrect.

First, while the Company makes a plausible case that Grievant is guilty of

“stealing” from it, as a technical legal matter, he could not possibly be guilty

of such an offense. The Company pays unemployment taxes to the State of

North Carolina. Once those taxes are paid to the State, the money no longer

belongs to the Company.

Thus, Grievant did not steal, and could not possibly have stolen, from

the Company. Plant Rule “C” #2 by its express terms is limited to “[s]tealing

… Company property”. All of Grievant’s unemployment benefits were

obtained from the State of North Carolina. It wasn’t the Company’s money.

9
As a result, the Company’s first reason for terminating Grievant cannot be

upheld.

The second important point worth noting is that the Company need

not suffer any loss as a result of Grievant obtaining unemployment benefits

to which he was not entitled, whether he acted innocently or fraudulently. As

pointed out above, the Company itself introduced the NCESC Booklet,

which refers the reader to the Agency website, www.ncesc.com. On that

website appears the following statement, under “Fraud Prevention and

Detection”:

No overpayment of benefits, whether fraudulent or nonfraudulent, is

charged to an employer’s account.
http://www.ncesc.com/business/UI/UiOverview2.asp.

Company witnesses spent a great deal of time speculating as to how

the Company may have been harmed by Grievant’s actions, although none

of the testimony was persuasive, because no one had any personal

knowledge of the rate-setting process for unemployment insurance taxes.

There is no evidence of any financial injury to the Company. The important

point to be realized here is that the Company could not have had its account

charged with Grievant’s benefits or experienced any increase in its

unemployment taxes as a result of those benefits, had it obtained a ruling

from the NCESC that Grievant was not entitled to them.

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 Limitations On The Arbitrator’s Authority

In ruling upon the Union’s objection, that the Company and

derivatively the arbitrator lack authority to determine Grievant’s

unemployment compensation rights, the arbitrator is persuaded by the

following considerations:

1. North Carolina’s Employment Security Law, General Statutes Chapter

96,1 is a comprehensive and reticulated statute, the administration of

which is entrusted to the NCESC. Cf. Nachman Corp v Pension Benefit

Guaranty Corp, 446 US 359, 361 (1980) (describing ERISA as “a

comprehensive and reticulated statute”).

2. The CBA contains no provision expressly authorizing the Company to

rule on an employee’s rights to unemployment compensation. The

Company concedes that a determination of eligibility for benefits is for

the State to make (TR @ 103).

3. The Company has no expertise to interpret and apply the State’s

Employment Security Law. Moreover, the Company failed to cite any

statutory provision or regulation which it claimed Grievant violated but

relied solely upon the NCESC Booklet to justify its action.

4. The Company concedes that Grievant was entitled to some

1
http://www.ncga.state.nc.us/statutes/generalstatutes/html/bychapter/chapter%5F96.html. Regulations
may be found at https://www.ncesc.com/pmi/government/governmentmain.asp.

11
 unemployment compensation because it fired him (TR @ 47, 110).

Thus, the issues are not cut-and-dried. It may be that an employee’s

unemployment benefits are not offset dollar-for-dollar by wages earned

or that he is allowed to continue drawing benefits for a period of time

after returning to work. There are no facts or law in the record on these

issues, and the NCESC Booklet is too superficial to address them.

5. Section 6.05 of the CBA narrowly prescribes the arbitrator’s authority:

The arbitrator shall not have the power to add to, ignore or to
modify any of the terms and conditions of this Agreement. His
decision shall not go beyond what is necessary for the
interpretation and application of this Agreement or the obligations
of the parties hereunder. He shall justify each award by written
decision and explanation of the rational[e] of said award within
thirty (30) days after the close of the hearing (which may include
the filing of briefs). (Emphasis supplied.)

6. While parties may submit to arbitration virtually any dispute they

please, including one over applicable law, Elkouri & Elkouri, supra @

516-524, in this case neither Grievant nor the Union has agreed to

submit the issue of his unemployment compensation rights to

arbitration.

Based upon these considerations, the arbitrator concludes that neither

the Company nor he is authorized to determine Grievant’s rights to

unemployment compensation. Those rights must be determined by the

NCESC and courts with jurisdiction to review decisions of that Agency. To

12
date, the NCESC has made no determination. The arbitrator does not want to

be put in the unenviable position of ruling on Grievant’s eligibility for

benefits, only to have the State’s duly authorized Agency reach a different

conclusion.

The Company’s Rights

In this case, the Company arrogated to itself the right to act as

prosecutor, judge and jury with respect to Grievant’s unemployment

compensation rights. While the Company may have exceeded its authority, it

does not follow that it is helpless to protect itself against questionable

unemployment claims. Section 2.01 of the CBA expressly grants to the

Company the right “to suspend, discipline or discharge employees for just

cause” and “to make plant rules and regulations”. Its rule-making authority

is reaffirmed in § 14.03.

Grievant’s conduct occurred outside the workplace. The law regarding

an employer’s right to discharge an employee on the basis of such conduct is

explained in Elkouri & Elkouri, supra @ 896-898:

The right of management to discharge an employee for conduct

away from the plant depends upon the effect of that conduct upon
plant operations. In this regard, Arbitrator Louis C. Kesselman
explained in one case:

The Arbitrator finds no basis in the contract or in

American industrial practice to justify a discharge for
misconduct away from the place of work unless:

13
 1) behavior harms Company’s reputation or product
***
2) behavior renders employee unable to perform his
duties or appear at work, in which case the discharge would be
based upon inefficiency or excessive absenteeism ***
3) behavior leads to refusal, reluctance or inability of
other employees to work with him ***.

Arbitrator D. Emmett Ferguson also spoke of the extent to

which management may consider conduct away from the plant as the
basis for discharge:

While it is true that the employer does not [by virtue of the
employment relationship] become the guardian of the
employee’s every personal action and does not exercise parental
control, it is equally true that in those areas having to do with
the employer’s business, the employer has the right to terminate
the relationship if the employee’s wrongful actions injuriously
affect the business.
The connection between the facts which occur and the
extent to which the business is affected must be reasonable and
discernable. They must be such as could logically be expected
to cause some result in the employer’s affairs. Each case must
be measured on its own merits.

Another arbitrator also stressed that the effect of the employee’s

outside activity on the employer’s business must be reasonably
discernable, mere speculation as to adverse effect upon the business
not sufficing.
In many cases discharge for conduct away from the plant was
held improper because the requirement of adverse effect of the
conduct upon the business was not met. However, in many other cases
the employee’s conduct away from the plant was found to be related
to his or her employment or was found to have an actual or reasonably
foreseeable adverse effect upon the business, thus discharge (or in
some instances a lesser penalty) was found to be justified. In one case,
Arbitrator Roger I. Abrams noted that certain conduct was “so
obviously wrong that employees must know that they cannot retain
their jobs if they do those things.” (Footnotes omitted.)

14
For application of these principles, see Bard Mfg Co, 91 LA 193, 15 LAIS

4277 (Cornelius Arb 1988).

In this case, there has been no official determination that Grievant

wrongfully received unemployment benefits. As a result, the Company’s

action in discharging him was premature. However, the Company has raised

serious questions about Grievant’s eligibility for benefits and has

demonstrated that his conduct has a sufficient impact upon it to justify

disciplinary action. Although the Company is incorrect in asserting that his

improper receipt of benefits will be charged against it and cause its

unemployment taxes to increase, the record is clear that the Company has

been and will continue to be put to considerable time, effort and expense in

opposing his benefit claims. If the Company consistently failed to oppose

questionable claims, its rates very likely would go up.2

In administering discipline to Grievant, the Company cited 3

violations of its “C” Rules. While the charge of stealing from the Company

cannot be upheld, Grievant’s conduct assuredly fell within the pale of the

catch-all “C” Rule #1. It thus is unnecessary to determine whether it also

may have violated “C” Rule #3 against providing false information (to the

NCESC as opposed to the Company). The difficulty with this case is that

15
there has been no official determination of Grievant’s wrongdoing, only a

showing of possible misconduct.

The Company’s Failure To Pursue Its Administrative Remedies

The Company’s failure to pursue its administrative remedies through

the NCESC is truly puzzling. While the Company belatedly seems to

recognize that it should have (TR @ 21, 46, 113), it provides no good

explanation for its failure. At the very least, it could be encouraging the

NCESC to request a refund of overpayments. If it seriously believes that

Grievant is guilty of criminal fraud, it could urge that he be prosecuted. The

record reveals that the Company has not pursued the matter with the State.

As a result, the Company must bear the brunt of the delay in State action.

The Company’s failure to introduce evidence as to the hearing

officer’s decision on its appeal of Grievant’s claim might suggest that it lost

the appeal, although the arbitrator draws no inference. At first glance, NCGS

§ 96-4(t)(8) might seem to be an impediment to admissibility, at least for

purposes of res judicata or collateral estoppel:

Any finding of fact or law, judgment, determination, conclusion or

final order made by an adjudicator, appeals referee, commissioner,
the Commission or any other person acting under authority of the
Commission pursuant to the Employment Security Law is not
admissible or binding in any separate or subsequent action or
2
The factors which may affect unemployment insurance tax rates are numerous and complex; e.g., the
balance of and return on the State’s Unemployment Insurance Trust Fund. See “Tax Information” at
http://www.ncesc.com/business/UI/uiTax.asp.

16
 proceeding, between a person and his present or previous employer
brought before an arbitrator, court or judge of this State or the
United States, regardless of whether the prior action was between
the same or related parties or involved the same facts.

At most this statutory provision is a rule of evidence that may be

waived if prompt objection is not interposed. In the face of an objection over

use for a preclusive purpose, a final determination made in an

unemployment compensation proceeding might still be admissible to

establish the basis for an employer’s disciplinary action. In any event, the

Company did not even offer any evidence as to the outcome of its appeal of

Grievant’s benefit claim.

The Company furnished the arbitrator with copies of two cases

upholding discharge for unemployment compensation fraud, Leestown Co,

102 LA 979 (Sergent Arb 1994) and Sheraton Waikiki Hotel, 114 LA 1595

(Nauyokas Arb 2000), the outcomes of which the arbitrator wholeheartedly

endorses, while disagreeing with some of the reasoning. It’s just that they

are readily distinguishable on the ground that the state issued a

determination of wrongdoing. Here the State of North Carolina has done

absolutely nothing, quite possibly as a result of the Company’s failure to

pursue the matter with the NCESC. Not only has the State not charged

Grievant with fraud, it has not even requested a refund of any alleged

overpayment.

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 Why The Company Fired Grievant

In its brief, the Company asserts that Grievant was fired for giving

false information to the NCESC and also to the Company. The distinction is

not without a difference. Had the Company fired him for furnishing false

information to it in violation of “C” Rule #3, the Company would not have

to contend with issues under the North Carolina Employment Security Law.

However, the record is clear that Grievant was fired for allegedly obtaining

unemployment benefits through fraud and misrepresentation.

The HR manager’s notes of his conversation with an NCESC claims

supervisor (CX 10) conspicuously document the Subject as “Unemployment

Fraud”. The Notice Of Disciplinary Action (CX 17) describes the

INCIDENT as “making false unemployment claims and received max

unemployment compensation pay”. At the arbitration hearing, Company

counsel stated that “the Company terminated Mr. [DT] after finding out that

he had falsely and fraudulently obtained unemployment benefits …” (TR @

14). The plant manager, who made the final decision to fire Grievant,

testified that he did so because of “falsified information which he [Grievant]

supplied to the Unemployment Commission” (TR @ 151). Having fired

Grievant for alleged fraud in obtaining benefits from the NCESC, the

Company may not now change the rationale for its action.

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 The Burden And Standard Of Proof

In this disciplinary action, the burden of proof is on the Company.

Elkouri & Elkouri, supra @ 447-449, 905-906; Hill & Sinicropi, Evidence

in Arbitration (BNA 2nd ed 1987) @ 39-41 (“As a general practice, … in

disciplinary cases the burden is on management both to proceed first with its

evidence and to prove employee guilt or wrongdoing.”). In a case involving

allegations of fraud, the proof of fraud must be clear and convincing. Elkouri

& Elkouri, supra @ 906-908.

Here the Company has not proved by clear and convincing evidence

that Grievant is guilty of fraud. Most of its “evidence” is mere supposition as

to what information Grievant must have input into the NCESC’s telephonic

data system in order to collect benefits. None of the Company’s witnesses

had any personal knowledge of Grievant’s dealings with the NCESC. The

Company called no witness and produced no ruling from that Agency. This

case contrasts markedly with those such as Sheraton Waikiki, supra, in

which the employer produced altered data forms. What the Company has

done is to raise troubling questions about Grievant’s conduct sufficiently

serious to justify his suspension pending the outcome of an investigation by

the NCESC.

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 Terms And Conditions For Grievant’s Reinstatement

Grievant’s termination is reduced to the level of discipline originally

imposed by the Company, a suspension pending investigation, to afford the

Company the opportunity to pursue the matter before the NCESC, an

opportunity of which the Company heretofore inexplicably has failed to

avail itself. Whether Grievant will be reinstated will depend upon the

Company’s decision to pursue the matter, and the NCESC’s determination if

the Company does.

The pertinent regulation prohibits the Agency from excusing

Grievant’s conduct if it was indeed fraudulent:

Regulation No. 20A - Waiver of Overpayments

20A.10 The Commission is without power to waive repayment of

overpayments caused by fraud of the claimant and request for waiver
of such overpayments will not be considered.
http://www.ncesc.com/pmi/government/Regulations2.asp?init=true.

The NCESC may, of course, decide not to press criminal charges against

Grievant for purely practical reasons (TR @ 112-113), but surely the

Agency will issue some kind of report about culpable conduct if the facts

support such a finding. It is up to the Company to pursue the matter.

If the NCESC determines that Grievant is guilty of misconduct, then

the Company may terminate him. If the NCESC determines only that

Grievant made an honest mistake, then he must be reinstated. If the Agency

20
determines that Grievant was entitled to the benefits he received, or if the

Company decides not to pursue the matter, then, of course, he must be

reinstated.

Equities do not seem to weigh in Grievant’s favor. The plant manager

described him as having “a long history of aggravated work record” (TR @

149). As a result, if and when he is reinstated, his reinstatement is made

subject to a number of terms and conditions. First, the violations listed in the

Letter Of Agreement dated July 11, 2001 (CX 9) will remain on his record

for one year following the date of his reinstatement, and he may be

disciplined accordingly, irrespective of the dates those violations actually

occurred. Second, back pay will be limited to $500 per week without offset

for outside income. Seniority and benefits are to be restored in a manner

consist with these two conditions.

The rationale for setting back pay at $500 per week without offset is

that Grievant was making about $1,000 per week at the time of his

termination. At the arbitration hearing, he testified that he has been doing

odd jobs for which he is paid in cash. The Company is entitled to offset such

earnings against back pay. Elkouri & Elkouri, supra @ 592-595.

Realistically, there may be little chance of documenting his income with any

degree of certainty. To make the arithmetic simple and to spare the parties

21
the ordeal of another arbitration over back pay, the arbitrator sets the rate at

the fixed amount of $500 per week without offset.

There is ample authority to set such conditions. CBA § 14.01

provides, “The terms and conditions of such reinstatement may provide for

full, partial or no compensation for time lost.” At the third-step meeting on

October 10, 2001, the Union indicated that it “would be flexible as to

guidelines of reinstatement” (CX 18). In the Union’s brief, the ISSUE is

posed as, “Was the grievant discharged for just cause, and if not what is the

remedy?” The arbitrator has specified the remedy.

In Leestown, supra, the employer did not take action against the

employee until after the state agency had made its determination of fraud. In

Sheraton Waikiki, supra, the state’s and the employer’s investigations appear

to have proceeded in parallel and reached the same conclusion of dishonesty

at virtually the same time. The complications resulting here from the

Company’s failure to press its case expeditiously and diligently before the

NCESC are clear.

This Opinion Is Not To Be Used Before The NCESC

To help ensure that Grievant receives unbiased treatment before the

NCESC, based upon the results of its own independent investigation, this

opinion should not be submitted to that Agency by Grievant or either party.

22
 Award

For all the foregoing reasons, the grievance is SUSTAINED IN PART

AND DENIED IN PART.

Dated May 2, 2003 _____________________________

E. Frank Cornelius, Arbitrator

23