As we all know, a disappointing arbitration award can sting, especially in disciplinary actions where an employer is attempting to balance workplace standards and liability concerns with fair treatment and accountability. In UNITE HERE Local 1 v. Magnificent Mile Hotel Management LLC, the defendant hotelier, Magnificent Mile Hotel Management (the “Defendant”) opposed confirmation of an arbitrator’s decision in a disciplinary matter on grounds of public policy.

Defendant terminated a hotel employee (“Grievant”) after he displayed a knife at work, which another employee found threatening. At the time of the incident, police were called and the knife confiscated but no criminal charges were brought against the Grievant. The Grievant’s Union, UNITE HERE Local 1 (the “Plaintiff”) grieved the termination.

At arbitration, the arbitrator determined the knife incident, which was recorded in a closed-circuit video, did not appear violent. Despite the fearfulness of the co-worker, the arbitrator  characterized the Grievant’s conduct as non-threatening, finding he appeared to be “playing with the knife” while looking at his co-worker “with a goofy expression.”  Further, the arbitrator found Defendant was aware the Grievant carried the knife and occasionally pulled it out. The arbitrator found no just cause for termination and reinstated the Grievant with a 10-day unpaid suspension.

Defendant refused to comply with the decision and upon Plaintiff’s motion to compel, was ordered to do so by the district court. Defendant appealed to the Seventh Circuit Court of Appeals, claiming “the public policy of Illinois condemns violence in the workplace.”

The appellate court found the policy was directed at those who “employ violence, not against employers trying to curtail violence.” Defendant admitted that a suspension instead of a termination would not have violated statute, regulation, or judicial doctrine. The Court found the public policy did not address the employer’s response to threats of violence in the workplace. Defendant had a legal right to issue a suspension rather than terminate the Grievant and public policy did not prohibit the arbitrator from doing the same.

Arbitration awards are difficult to challenge. Given the high stakes involved in removing an employee from employment, employers faced with decisions to terminate should carefully consider the legal framework and principles of just cause when implementing discipline. If you or your organization need assistance evaluating and defending disciplinary decisions, contact Wiley Reber Law for legal advice that works.