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AMOCO Oil Co. v. Oil

decided: January 24, 1977.


Appeal from the United States District Court for the Northern District of Indiana, Hammond Division No. H 75-243 - Allen Sharp, Judge.

Hastings, Senior Circuit Judge, Moore, Senior Circuit Judge,*fn* and Sprecher, Circuit Judge. Moore, Circuit Judge, dissenting.

Author: Sprecher

SPRECHER, Circuit Judge.

This case involves the narrow questions of whether the arbitrator exceeded the authority accorded him under the collective bargaining agreement and whether the award rendered reinstating the grievant with full seniority rights but without back pay is so arbitrary and capricious as to warrant denial of enforcement by this court. We resolve both questions in favor of appellees and order enforcement of the award in all respects.


The peculiar circumstances which give rise to this case must be set forth in detail. Appellee Seman, the grievant in this matter, has been employed by appellant Amoco Oil Company (hereinafter referred to as the "Company") for more than three decades. The record indicates that Seman maintained throughout his life an extraordinarily active interest in civic affairs, often inciting controversy through his vocal opposition to governmental decisions and actions which he deemed not in the public interest. In the words of the arbitrator, Seman remained "active in civic affairs, pollution, and school affairs, had been active in suits against the Company and the City Administration, had taken pictures of Company facilities (indicating violation of anti-pollution laws and ordinances), disrupted City meetings, delayed City projects, was an outspoken critic of City Administration, and was getting in everyone's hair and causing problems." App. at 8. He had instituted litigation against the City and against the Company, had been arrested at the order of the Mayor and won a dismissal of charges, and "in general had driven the City Administration of Whiting to the point of distraction." Id.

On September 11, 1973 at 11:00 p.m., while Seman was at home with his wife, son and two guests, members of the Whiting Fire Department arrived at his residence in response to a "fire in progress" call. A small fire in Seman's basement was extinguished. Although the Chief of the Whiting Fire Department is customarily summoned only to witness a conflagration of some magnitude, the Chief was called for assistance in this instance by the fire captain on the scene. The Chief arrived soon thereafter, accompanied by a photographer and a Captain of Detectives. The fireman observed equipment with Amoco markings branded thereon in the basement.

On the following day, September 12, 1973, at approximately 10:00 a.m., fire and police investigators returned to the scene of the fire to photograph the basement, which contained many items of equipment clearly designated as the property of Amoco. The Company was notified of the discovery of its equipment in Seman's basement, and the house was placed under surveillance by the Whiting Police Department in order to prevent unobserved removal of the Amoco material prior to the initiation of further action.

On September 13, 1973, at approximately 6:00 p.m., police, accompanied by Company officials, served a search warrant upon Seman and began the task of removing the Company equipment and loading it onto flat bed trucks. Between four to six hours was required to complete this chore. Approximately $30,000 worth of equipment was removed, including 43 chain lifts, seven chipping guns, 11 ladders, and three jackhammers; the items removed occupied space in a warehouse which measured approximately 30feet X 15feet, and were stacked several feet high. Spectators to this removal process included virtually every member of the Whiting City Government, such as the City Judge, the City Attorney, the City Engineer, six of the seven Councilmen, and the Mayor. The carnival atmosphere surrounding this spectacle was enhanced when wives and secretaries of the aforementioned city officials set up a table and proceeded to dispense coffee and doughnuts to the audience. Seman was absolved of any criminal taint as a result of the discovery of $30,000 worth of Amoco equipment in his home.*fn1 A private fire investigator hired by an insurance company determined after investigation that the fire was ignited in two distinct locations in the basement with petrochemical incendiary devices, and involved a clear case of arson.*fn2

On September 14, 1973, the Company discharged Seman. A grievance filed on his behalf was processed to arbitration before an impartial arbitrator selected by the parties, pursuant to the collective bargaining agreement between the Company and Oil, Chemical and Atomic Workers International Union, Local 7-1, Inc. (hereinafter referred to as the "Union"). The agreement delineated the rights retained by the Company as follows:

It is not the purpose of this Agreement in any way to infringe or impair the normal Management rights of the Company except as otherwise expressly provided. Included among the Management rights unaffected are the right to hire and the right to discipline or discharge employees for just cause.*fn3

App. at 2. The authority conferred upon the arbitrator during the arbitration of grievances is expressed in the following language:

Discharge and suspension grievances shall be introduced directly to the third stage of bargaining and shall become eligible for arbitration as promptly as possible. . . . If the Management action of discharging such employee is reversed, and the employee is reinstated with no disciplinary action taken in lieu thereof, then the employee will be paid in full by the Company for all wages lost as a result of the discharge.

App. at 12.

The arbitrator articulated the salient question as follows:

Was the Grievant, Paul Seaman [sic] discharged for just cause? If not, what is the remedy?

The defendants assumed the position throughout the course of the arbitration hearing that no just cause for Seman's discharge existed, because his possession of Company property resulted not from wrongful conduct on his part which might justify termination of his employment, but rather was a stratagem of a group of unknown conspirators who sought to incite his discharge. To buttress this contention, defendants stressed Seman's role as the self-appointed community conservator of citizens' interests, a role which earned him the opprobrium of city officials. Further, defendants maintained that the bizarre sequence of circumstances surrounding the discovery of the Company equipment*fn4 pointed inexorably to the conclusion that a group of unidentified conspirators had schemed to finally "get the Grievant out of the hair of the City." App. at 11.

The Company countered these assertions by reiterating that Amoco property had been unauthorizedly possessed by Seman, and urging that the Union's mere allegations of conspiracy did not constitute proof that this material had been secreted in Seman's home without his consent or knowledge.

After reviewing the factual background and the contentions of the parties, the arbitrator initiated his discussion of the case with the observation that:

To begin with, the Company on September 14, 1973, had just cause to discharge the Grievant. He admittedly had in his possession Company equipment valued at over $30,000, which equipment he had no right to have. The question with which we must grapple is whether the Company still had just cause at the conclusion of the arbitration hearing. As will be shown, it is the finding that the Company did not ultimately have just cause to discharge the Grievant.

App. at 13-14.

In a well-reasoned opinion, the arbitrator catalogued those points he deemed supportive of Seman's allegation that the Amoco material found in his basement was deliberately secreted there by persons unknown, and that this placement reflected a conspiracy by these persons to provoke his discharge. Conceding that Seman was "not an ordinary man" either in the civic and moral values he espoused or in the elements of his individual life style, the arbitrator commented that:

He evidenced an extraordinary contempt for the indicia of success common to most: he did not drive nor own a car, dressed in a most odd manner, and patently held the opinion that most people had of him in complete contempt. His life style was also different; few of us keep our refrigerators in our dining rooms, and have to eat standing up because there is no room to sit down. From the photographs admitted in the Hearing, he had an extraordinary tolerance for disorder in his home, to the point where he was unable to promptly differentiate between his kitchen and his dining room when ...

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