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09/19/96 AMERICAN FEDERATION STATE v. DEPARTMENT

September 19, 1996

AMERICAN FEDERATION OF STATE, COUNTY AND MUNICIPAL EMPLOYEES, AFL-CIO, APPELLEE,
v.
THE DEPARTMENT OF CENTRAL MANAGEMENT SERVICES ET AL., APPELLANTS.



The Honorable Justice Freeman delivered the opinion of the court: Justice Heiple, dissenting: Justice Harrison, also dissenting: Justice Nickels, also dissenting: Justice Heiple joins in this dissent.

The opinion of the court was delivered by: Freeman

The Honorable Justice FREEMAN delivered the opinion of the court:

Plaintiff, the American Federation of State, County and Municipal Employees, AFL-CIO (AFSCME), brought this action against defendants, the Department of Central Management Services and the Department of Children and Family Services (collectively, DCFS), seeking to confirm an arbitration award and to vacate a supplemental arbitration award. 710 ILCS 5/11, 12 (West 1992). The circuit court of Sangamon County denied the requested relief, and the appellate court reversed, with one justice dissenting. 272 Ill. App. 3d 814, 651 N.E.2d 718, 209 Ill. Dec. 540 (1995). We granted leave to appeal (155 Ill. 2d R. 315) and now reverse the judgment of appellate court.

BACKGROUND

In December 1985, DCFS Child Welfare Specialist II Vera DuBose was assigned the case file of three minor children in DCFS's custody. In February 1990, DuBose stated in a written "uniform progress report" that she had seen the three children in February 1990 and that they were "doing fine." Unfortunately, the children had, in fact, perished in an accidental fire at their home on January 16, 1990. DuBose thereafter transferred from her DCFS regional office to another for unrelated reasons.

When DuBose's replacement conducted a "follow-up" on the children in August 1990, he learned of the children's deaths in the fire. The matter was then assigned to an internal DCFS investigator on August 22, 1990. During the internal investigation, DCFS also discovered that DuBose had failed to submit case plans for the family for the years 1988, 1989, and 1990.

The investigator completed his inquiries and submitted a written report to his superiors on December 13, 1990. No further action was taken in the matter until June 20, 1991, when DCFS informed DuBose that a "predisciplinary" meeting was scheduled for June 24, 1991. Pursuant to the terms of the collective-bargaining agreement, AFSCME was given an opportunity to rebut DCFS's presentation. In the rebuttal, AFSCME maintained that a complete and detailed statement was not possible without certain requested documentation. Moreover, AFSCME argued that disciplinary action could not be taken against DuBose in view of the "extreme time delay." After submission of the rebuttal, AFSCME received a copy of the investigator's summary report. AFSCME thereafter filed an addendum to its rebuttal, reiterating its position that any disciplinary action taken against DuBose would be untimely. On September 2, 1991, a predisciplinary report was issued, containing a recommendation that DuBose receive a 60-day suspension.

Contrary to the recommendation, DCFS notified DuBose nine days later that she was being placed on a 30-day suspension, pending a final determination of discharge. AFSCME then filed a grievance on DuBose's behalf. On October 1, 1991, DCFS notified DuBose that she was being discharged within three days for falsification of the uniform progress report and failure to prepare service plans for the children for three years as required by DCFS's internal rules. The matter then proceeded to arbitration.

At arbitration, AFSCME argued that DCFS failed to impose discipline in a timely manner, and that even if it did, DCFS did not have just cause to discharge the employee. After conducting a hearing, the arbitrator sustained the grievance and reinstated DuBose. The arbitrator ruled that DCFS had breached the parties' collective-bargaining agreement by failing to timely discipline DuBose. Moreover, the arbitrator concluded that the failure to impose discipline in a timely fashion prevented him from "addressing the merits of this dispute."

Rather than reinstating DuBose, DCFS applied to the circuit court of Sangamon County, seeking vacatur of the arbitrator's reinstatement award. In granting the relief, the circuit court agreed with DCFS that the reinstatement violated public policy established in the Abused and Neglected Child Reporting Act (325 ILCS 5/1 et seq. (West 1994)). The court remanded the matter to the arbitrator for a decision on the merits. The circuit court also denied AFSCME's request for certification of the issue for appeal. See 134 Ill. 2d R. 308.

On remand, AFSCME "demurred," electing to stand on the arbitrator's initial decision that the disciplinary action was untimely. As a result, the arbitrator denied the grievance, noting that AFSCME's "demurral" prevented him from hearing the merits of the case as directed by the circuit court.

AFSCME then filed a petition in the circuit court of Cook County, seeking to vacate the subsequent arbitration order and to confirm the arbitrator's initial award. Venue was subsequently transferred to the circuit court of Sangamon County, which, as noted, denied AFSCME's petition.

On appeal, the appellate court reversed the judgment of the circuit court, holding that the time provisions contained in the collective-bargaining agreement could not be relaxed in favor of public policy. The court noted the well-recognized policy of establishing time frames within which various types of actions must be commenced. The effects of such policy, the court reasoned, often produced harsh consequences--the "guilty" may go free or those tortiously injured may be uncompensated. 272 Ill. App. 3d at 818. The court concluded that the initial arbitral award, DuBose's reinstatement, merely upheld the "essence" of the collective-bargaining agreement and, as such, could not be vacated in favor of public policy.

The dissent, although acknowledging the collective-bargaining agreement's express language regarding time limits, questioned the majority's disregard of the paramount considerations of public policy. Specifically, the dissent focused upon the result created by the majority's analysis, i.e., that "DCFS must be forced to hire back some social worker no matter how egregious" the conduct. 272 Ill. App. 3d at 821 (Steigmann, J., dissenting).

For reasons that follow, we reverse the judgment of the appellate court.

ARGUMENT(S)

Resolution of this appeal requires that we consider whether public policy concerns may be used to override an arbitral award. DCFS argues that public policy dictates that the arbitrator's award of reinstatement be vacated because of the severity of DuBose's alleged conduct. AFSCME responds that the arbitrator's award reflects a proper interpretation of the collective-bargaining agreement, an agreement which contains certain procedures which must be followed in order for discipline to be imposed.

The Standard of Review

This court has consistently recognized that the judicial review of an arbitral award is extremely limited. American Federation of State, County & Municipal Employees v. State of Illinois, 124 Ill. 2d 246, 254, 124 Ill. Dec. 553, 529 N.E.2d 534 (1988); Board of Trustees of Community College District No. 508 v. Cook County College Teachers Union, Local 1600, 74 Ill. 2d 412, 418, 24 Ill. Dec. 843, 386 N.E.2d 47 (1979). This standard reflects the legislature's intent in enacting the Illinois Uniform Arbitration Act--to provide finality for labor disputes submitted to arbitration. See 710 ILCS 5/12 (West 1994) (denying judicial authority to vacate arbitral awards except on grounds recognized at common law). The Act contemplates judicial disturbance of an award only in instances of fraud, corruption, partiality, misconduct, mistake, or failure to submit the question to arbitration. Board of Education v. Chicago Teachers Union, Local No. 1, 86 Ill. 2d 469, 474, 56 Ill. Dec. 653, 427 N.E.2d 1199 (1981). Thus, a court is duty bound to enforce a labor-arbitration award if the arbitrator acts within the scope of his or her authority and the award draws its essence from the parties' collective-bargaining agreement. Board of Trustees, 74 Ill. 2d at 421.

To this end, any question regarding the interpretation of a collective-bargaining agreement is to be answered by the arbitrator. Because the parties have contracted to have their disputes settled by an arbitrator, rather than by a judge, it is the arbitrator's view of the meaning of the contract that the parties have agreed to accept. We will not overrule that construction merely because our own interpretation differs from that of the arbitrator. American Federation of State, County & Municipal Employees, 124 Ill. 2d at 254.

Application of the Standard of Review

In this case, the arbitrator based his award of reinstatement upon the fact that DCFS breached the collective-bargaining agreement by failing to discharge DuBose seasonably. Article IX, section 1, of the parties' collective-bargaining agreement, which governs discipline, states in pertinent part:

"Discipline shall be imposed as soon as possible after the Employer is aware of the event or action giving rise to the discipline and has a reasonable period or time to investigate the matter.

In any event, the actual date upon which discipline commences may not exceed forty five (45) days after the completion of the predisciplinary meeting." (Emphasis added.)

In the present case, DCFS offered no explanation to the arbitrator for the seven-month interval between the conclusion of the investigation and the commencement of disciplinary proceedings. As a result, the arbitrator concluded that the delay was unreasonable and that DCFS had violated the contractual time provision. The arbitrator further ruled that the entire disciplinary proceeding was "procedurally defective" and that the only remedy appropriate under the circumstances would be reinstatement. The arbitrator rejected DCFS's argument that DuBose suffered no prejudice from the delay because the contract made timeliness a condition precedent to the imposition of discipline.

As noted, we will disturb an arbitral award only if it fails to derive its essence from the collective-bargaining agreement at issue. Significantly, the parties' agreement here does not delineate the precise time frames within which disciplinary action must be commenced. Similarly, the agreement is silent as to what remedies are available once an infraction is found. Thus, these matters were left for the determination of the arbitrator. In addition, when an agreement contemplates that the arbitrator will determine remedies for the contractual violations, courts have no authority to disagree with his honest judgment in that respect. See United Paperworkers International Union v. Misco, Inc., 484 U.S. 29, 38, 98 L. Ed. 2d 286, 299, 108 S. Ct. 364, 371 (1987). Given the limited nature of our review, we simply may not substitute our interpretation of the time provision clause for that of the arbitrator when the arbitrator's interpretation is clearly drawn from the essence of the collective-bargaining agreement. In deed, DCFS does not dispute the arbitrator's contractual interpretation and even concedes that it violated the agreement's time provision.

What DCFS does urge, however, is that public policy dictates that the award of reinstatement be vacated in light of the circumstances of this case. AFSCME counters that public policy is not violated in this instance because the enforcement of the contract's time provisions do not violate any express public policy.

The Public Policy Exception

Courts have crafted a public policy exception to vacate arbitral awards which otherwise derive their essence from a collective-bargaining agreement. The historical context of the exception is grounded in the common law. As with any contract, a court will not enforce a collective-bargaining agreement that is repugnant to established norms of public policy. Likewise, we may not ignore the same public policy concerns when they are undermined through the process of arbitration. Board of Trustees, 74 Ill. 2d at 424.

However, in order to vacate an arbitral award upon these grounds, the contract, as interpreted by the arbitrator, must violate some explicit public policy. American Federation of State, County & Municipal Employees, 124 Ill. 2d at 261; W.R. Grace & Co. v. Local Union No. 759, 461 U.S. 757, 766, 76 L. Ed. 2d 298, 307, 103 S. Ct. 2177, 2183 (1983). In this respect, the exception is a narrow one and is invoked only when a contravention of public policy is clearly shown. American Federation of State, County & Municipal Employees, 124 Ill. 2d at 261, citing United Paperworkers International Union v. Misco, Inc., 484 U.S. 29, 43, 98 L. Ed. 2d 286, 302, 108 S. Ct. 364, 373-74 (1987). Moreover, the public policy must be "well-defined and dominant" and ascertainable "by reference to the laws and legal precedents and not from generalized considerations of supposed public interests." W.R. Grace, 461 U.S. 757 at 766, 76 L. Ed. 2d at 307, 103 S. Ct. at 2183. This court has stated that it will look to our "constitution and *** statutes, and when cases arise concerning matters upon which they are silent, then in its judicial decisions and the constant practice of the government officials" when determining questions regarding public policy. Zeigler v. Illinois Trust & Savings Bank, 245 Ill. 180, 193, 91 N.E. 1041 (1910).

Thus, application of the public policy exception requires a two-step analysis. The threshold question is whether a well-defined and dominant public policy can be identified. If so, the court must determine whether the arbitrator's award, as reflected in his interpretation of the agreement, violated the public policy. Applying these two steps, we find there is a well-defined public policy in favor of truthful and accurate DCFS reporting and that the arbitral award in this case violates that policy.

Review of Cases Applying the Public Policy Exception

The seminal case involving the exception is United Paperworkers International Union v. Misco, Inc., 484 U.S. 29, 98 L. Ed. 2d 286, 108 S. Ct. 364 (1987). There, the United States Supreme Court examined the role of public policy in vacating an arbitral award which reinstated an employee discharged for violation of the employer's drug policy. The employee had been arrested on company premises in another's car that was filled with marijuana smoke, and traces of marijuana were found in his own car on the company lot. The arbitrator found that there was no evidence that the employee had used drugs during working hours. The district court vacated the award on public policy grounds, and the circuit court of appeals affirmed. The Supreme Court held the reversal of the arbitral award improper because the award did not contravene public policy. Specifically, the Court faulted the circuit court of appeals for making "no attempt to review existing laws and legal precedents in order to demonstrate that they establish a 'well-defined and dominant' policy." Misco, 484 U.S. at 44, 98 L. Ed. 2d at 302, 108 S. Ct. at 374. Moreover, the court of appeals inappropriately drew factual inferences from evidence which had been rejected by the arbitrator. Misco, 484 U.S. at 44, 98 L. Ed. 2d at 303, 108 S. Ct. at 374.

In Delta Airlines, Inc. v. Air Line Pilots Ass'n International, 861 F.2d 665 (11th Cir. 1988), a pilot, while intoxicated, flew a commercial airliner on its scheduled flight. His employer discharged him after discovering the misconduct. Pursuant to a collective-bargaining agreement, the pilot complained that his conduct was insufficient to establish just cause for discharge. The arbitrators in that case agreed and ordered his reinstatement. A federal district court overturned the award as violative of public policy. In affirming the decision, the court of appeals noted:

"[When a] person performs his employment duties and, in doing so, violates standards, restraints and restrictions on conduct, clearly and explicitly established by the people in their laws, a requirement that the employer suffer that malperformance and not discharge the offender does itself violate the same well established public policy." (Emphasis in original.) Delta, 861 F.2d at 674.

The court of appeals stressed that the employer, Delta, was under a duty to prevent the wrongdoing of which the employee was guilty and it could not agree to arbitrate that issue. Thus, the collective-bargaining agreement, as interpreted by the arbitrator, violated public policy.

Similarly, in Iowa Electric Light & Power Co. v. Local Union 204, 834 F.2d 1424 (8th Cir. 1987), a nuclear power plant employee--in a hurry to leave his work area to go to lunch--ordered a foreman to disconnect a safety device on a doorway designed to protect the public from harmful radiation. After being discharged for this misconduct, an arbitrator ordered his reinstatement. The district court overturned the award as incompatible with public safety concerns. The court of appeals affirmed, noting that Congress had established a strict nuclear regulatory scheme which the worker willingly contravened. The court concluded that the worker could "no longer *** be trusted to work in such a critical environment when he shows no respect for the safety implications of his actions and when he is willing to jeopardize the safety of the public." Iowa Electric, 834 F.2d at 1429. See also United States Postal Service v. American Postal Workers Union, 736 F.2d 822, 825 (1st Cir. 1984) (vacating, on public policy grounds, an award reinstating postal worker convicted of embezzling postal funds because the offense "went to the heart of the worker's responsibilities," and because the employee "represented a branch of the federal government and was imbued with the public trust. His actions directed violated that trust").

We have previously considered whether the public policy exception may be used to vacate an arbitral award in American Federation of State, County & Municipal Employees v. State of Illinois. There, this court was presented with the case of two mental health technicians who were away from their workplace, a facility for the mentally disabled, for an unauthorized time. While they were away, an unattended patient at the facility died. The patient, however, was not assigned to the ward where the technicians should have been on duty. For this reason, among others, the arbitrator reduced their subsequent discharges for conduct constituting mistreatment of a mental health recipient to mere suspensions.

In upholding the award, this court rejected the Department of Mental Health's public policy argument, mainly because it could not identify a well-defined and dominant public policy:

"There is simply no policy that mandates the discharge of all employees found guilty of mistreatment of a service recipient when the arbitrator expressly finds that the grievants were exemplary mental health employees, when punishment has been imposed, and where no nexis [sic] exists between the infraction and the patient's tragic death." American Federation of State, County & Municipal Employees, 124 Ill. 2d at 262-63.

In contrast, our appellate court has invoked the public policy exception to vacate an arbitral award which reinstated a school bus driver whose unsafe driving had caused her discharge. The court identified a dominant and well-defined public policy favoring the safe transportation of school children and held that the reinstatement of an unsafe driver would contravene that policy. Board of Education of School District U-46 v. Illinois Educational Labor Relations Board, 216 Ill. App. 3d 990, 159 Ill. Dec. 802, 576 N.E.2d 471 (1991).

Finally, the appellate court has vacated an arbitral award in which a DCFS worker was discharged from and then reinstated to her position after falsifying a case report concerning the veracity of a report of child abuse, a factual situation somewhat akin to that presented here for review. The arbitrator found that discharge violated the collective-bargaining agreement's "progressive discipline" provision. Finding that the safety and well-being of children required "zealous" investigation and "honest" reporting, the appellate court held that the worker's reinstatement to her former position violated that explicit public policy. See Department of Central Management Services v. American Federation of State, County & Municipal Employees, 245 Ill. App. 3d 87, 98, 185 Ill. Dec. 379, 614 N.E.2d 513 (1993).

The above cases demonstrate that although a rote recitation of the exception's two-prong test can be easily made, the exception's ultimate applicability to a case is necessarily fact dependant. With these principles in mind, we turn to the facts of the present case.

Statutes and Legal Precedents

To be sure, the welfare and protection of minors has always been considered one of the State's most fundamental interests. This court long ago acknowledged the right and duty of the General Assembly to ...


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